[Merovius]

> I've been tracking this debate (or, until recently, lack thereof) for years and no one is articulating this well, myself included. Specifically, no one is articulating how this doesn't even make sense from an economics perspective.

That sounds like very bad economics. Because a) Either the spending power of the population is constant. In that case, there is no cost (for consumers), because they don't spend more, they just spend differently. b) Or, spending power increases as a function of amount of ads. In that case, there is no cost (for consumers), because their increase in spending due to ads is precisely offset by the increase in spending power.

Unless you are somehow suggesting that people would just insanely accumulate wealth, instead of spend their income, if only there where no advertising.

[jacquesm]

The reasoning goes (and I have absolutely no idea if there is an element of truth to this or not so don't hold this against me) that advertising increases the velocity of the total amount spent and as such can actually increase the size of the total economy. So even if people do not insanely accumulate wealth it does leave their pockets faster essentially causing a decrease in total savings.

[Merovius]

> So even if people do not insanely accumulate wealth it does leave their pockets faster essentially causing a decrease in total savings.

That argument doesn't sound right to me. From an a priori standpoint (and I am happy to accept a posteriori arguments, i.e. studies), people will on average invest a fixed percentage of their income into long-term savings (i.e. pension) and the rest on various goods. I read your "people do not accumulate wealth" as a general agreement to that premise. But if that's the case, then there really is nothing bad going on here. Your total spending power is independent of whether you buy one large good A, or instead a series of smaller goods B that sum to A.

The latter is, what I interpret as your "increase in velocity of spending". But that has no negative impact on you as a customer, whereas it is good for the economy, no? Because money that is churned in the economic cycle produces wealth, whereas money standing still doesn't.

And that's what I mean by my alternatives: Either my premise is true, in which case your total spending power won't really change and advertising only redistributes this spending power amongst several competing companies. Or my premise is false, in which case advertising would cause us to sacrifice long-term savings in pensions for short term satisfaction for buying goods (which might be bad).

But I see no reason, a priori, why that premise should be false. It actually sounds pretty ridiculous to me, tbh.

Overall, my (very limited) understanding of economics for this problem is based on two rough fundamental principles: a) The amount of value (≈ money after accounting for inflation) in the economy is more or less constant (i.e. people have more or less "money you need to afford food and shelter"xC, where C is a constant). And b) Money produces wealth, when it is spent (i.e. is exchanged for goods).

[jacquesm]

Given that people are going in debt to buy stuff they don't need I think there may actually be a point to the reduced savings. Advertising and cheap credit go hand in hand.