Galbraith Was Right About Advertising

6673Robert Batemarco writes in today’s Mises Daily

Rest assured that even when John Kenneth Galbraith got something right, he got it wrong. One of the signature ideas for which Galbraith is known is the Dependence Effect, which states that advertising convinces people that they need things that they don’t really need. In Galbraith’s own words, “If the individual’s wants are urgent, they must be original with himself. They cannot be urgent if they must be contrived for him. … One cannot defend production as satisfying wants if that production creates the wants. … The even more direct link between production and wants is provided by the institutions of modern advertising and salesmanship.” Galbraith uses this concept to undermine the foundations of microeconomics in the personal preferences of individuals.

Where Galbraith is right is that such salesmanship does indeed get people to demand things that are not in their best interests. Where he goes terribly wrong is in finding producers in the marketplace as the primary perpetrators of this effect. In fact, it is the State that makes greatest use of salesmanship to obtain the consent of people for things that do not only not make them better off, but usually do them harm. What makes the State’s behavior even worse is that when the State’s salesmanship fails, the State can fall back on the use of force to get people to satisfy the wants “that production creates.” Private firms, unless they are in league with the State, do not have that ability.

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