[mkn]

Your argument is essentially "marketing is bad". Which is a shadow argument for "capitalism is bad".

While your formulation is deliberately obtuse, the underlying sentiment can be quite damning for a certain kind of free market fan-boy, the kind who insists that buyers in a market are rational in some individual or even collective sense, that they somehow optimize their own happiness or utility function.

That notion is patently absurd, and is actually flatly and irrefutably countered by the mere existence of marketing. If the decision-making process is rational, then there is no need, nor even ability, to forge emotional connections with brands through marketing. This is a plain fact that you do not seem to get. To wit:

Ads are often aspirational and emotional, and do not necessarily contain false information. Sure, paying tuition at a school won't get you into a prestigious school and owning a MB Air won't make you happy. But an ad communicating the virtues of a great product is a good thing if it informs consumers of the product.

You've cited two examples where ads are certainly misleading, and then seemed to imply that those ads "do not necessarily contain false information," as if they were therefore not deceptive. By attempting to short-circuit the decision-making process, by putting the emotional cart before the rational horse, the ads you describe are fundamentally deceptive. That ads like that exist, that they are paid for by people with skin in the game, and that they work, are all testament to the fundamental irrationality of market players on both an individual and aggregate level. Namely, they can be swayed by a manufactured emotional response before even having gone through the rational decision-making process.

So, the argument for which your reduction ad absurdum is actually a shadow is, "Marketing exists, therefore there is a fundamental problem with the underpinnings of free market theory. It does not match reality in one of the important ways that it purports."

You conclude:

[I]f you think ads are bad then the only solution is for the government to start its own version of 'consumer reports' and to publish a simple list of products ranked according to attributes. Hardly a remotely practical or plausible solution.

I have to say, that's quite a gem. In reverse order, I guess, is the best way to address it. Last, your point about it being impractical or implausible is vacuous and, further, not germane. How would the impracticality of any given solution affect the existence or nature of the underlying problem? Second-to-last, if you really believe that the solution you offered is the "only solution", then that is a failure only of your own imagination. One could at least imagine a tighter regulation of advertising claims, for example. (It's suspicious that the "only solution" you offer is the most oppressive and impractical one. Triumphalism like this is rarely the hallmark of independent thought, but often stems from having swallowed someone's propaganda whole.) Third-to-last and finally, the "if you think ads are bad" remark is hardly the most charitable characterization of the author's original point, and is in fact what is termed an "overgeneralization," a kind of straw man. Some more charitable attempts might be, "If you think that advertising about such important and life-changing things like which school to go to will carry unsustainable hazards,..." See how much closer we are to a solution just by framing the question fairly? Granted, the solutions one might come up with from there are perhaps less simplistic and less susceptible to vilification on ideological grounds, and that might not suit your rhetorical purpose. However, I submit that this approach has a countervailing good quality that ultimately recommends it. It shows good manners, maturity, and a willingness to actually further the discussion.

[grandalf]

I appreciate your boisterous rejoinder to my comment.

I think you are mistaken in your understanding of rationality. Emotion is part of rationality, not separate from it. To make a rational decision, a rational person ought to consider his/her emotional response as input to the decision function, not throw it away.

Also, different individuals have different utility functions, and not all are practical, far-looking, mature, or wise.

Your view of humanity seems rather grim if you think that people are so easily misled by advertising. While dishonest claims in ads are a bad thing, those fall under the category of "dishonesty" and not "advertising". An ad touting an inaccurate gas mileage for a car is no more abhorrent than a window sticker or owner's manual stating inaccurate gas mileage figures, and of course laws exist to discourage companies from engaging in either practice.

If anything, advertising omits negative facts about a product or service. But in a competitive marketplace firms have an incentive to publicize negative aspects of competing products (note the Velveeta ad claiming "Cheddar's lumpy, cheddar's oily..."). So the complaint about ommitted negatives is actually a complaint about an insufficiently competitive marketplace.

[jshen]

Check the study below, and think about the implications.

"Anchoring Bias: Phone Numbers Used as Anchors When Estimating the Prices of Goods"

[grandalf]

By that logic, you may have been duped into liking that article b/c the last word in its title is a variation of the word "good".

While those sorts of biases are interesting, the impact on human rationality of such techniques (used intentionally or by accident) is probably a wash. I'd be curious if there's a study that shows otherwise -- such as that people with certain phone numbers are more likely to declare bankruptcy.

[jshen]

"the kind who insists that buyers in a market are rational in some individual or even collective sense, that they somehow optimize their own happiness or utility function."

This is my core point as well, thanks for taking the time to lay out a better case than I did. It's rather shocking once you realize that the human brain is not rational in the way we often think it is. I find this fact to completely destroy most libertarian principles.

[mindcrime]

I find this fact to completely destroy most libertarian principles.

How does it do anything of the sort? The most fundamental libertarian principle is simply that one should not use force/aggression/fraud to compel someone to do something against their will[1]. That people should be free from use of oppressive force does not require that they be purely rational.

As for the economic arguments that libertarians often use... understand that consequentalist libertarians like to demonstrate that free market principles usually result in better outcomes for most people, most of the time. I don't know any libertarian or free-market advocate who will contend that there are no pathological edge cases to the free-market / laissez-faire approach. They simply accept that as part of the system and acknowledge the role of private charity to fill gaps.

And to add one more point... while the Austrian School of economics, which is very influential to libertarians, and may sometimes be thought of as almost synonymous with libertarianism, does indeed put a strong emphasis on deductive logic and universal laws, I don't find many (if any) libertarians / austrian economists, who contend that humans are strictly rational, all the time.

[1]: http://en.wikipedia.org/wiki/Non-aggression_principle

[pemulis]

Actually, the granddaddy of libertarian economics, F.A. Hayek, spent his whole career arguing that people are irrational (which is to say, they do not all share the same preferences), and that attempts to shape the economy based on a presumption of the existence of rational utility are doomed. Most non-libertarian economic systems are based on the assumptions that,

1. There is such a thing as rational utility, and 2. Bureaucrats can figure out what it is.

[jshen]

"Most non-libertarian economic systems are based on the assumption ..."

Huh? So you're saying there is only libertarianism or bureaucratly controlled economies? That's wrong on it's face.

Here's my idea of a good economy, markets for most things with good government regulation of health, safety, etc. And, a few public industries like water, power, and healthcare. This system doesn't fit your model at all.

[RickHull]

Note that this criticism does not apply to the Austrian school of thought. In Human Action, Ludwig von Mises establishes that humans reveal their preferences through action. There are no hangups about whether these preferences are "rational" or free of mistakes.

[klbarry]

First, I agree that human beings often make wrong decisions. However, it is completely wrong to blame that on emotion.

"By attempting to short-circuit the decision-making process, by putting the emotional cart before the rational horse, the ads you describe are fundamentally deceptive. That ads like that exist, that they are paid for by people with skin in the game, and that they work, are all testament to the fundamental irrationality of market players on both an individual and aggregate level. Namely, they can be swayed by a manufactured emotional response before even having gone through the rational decision-making process."

What makes an emotional response any less worthy than a rational response? Plato's ideas on rationality are just plain wrong- the cart before the horse is a poor metaphor. If you look at any neuroscience research in the area, you soon see that that good decision making is completely impossible without both, together. I highly recommend Jonah Lehrer's "How We Decide" as a highly readable book on the subject.

Following emotional cues is not "short-circuiting the decision-making process", and is not in any way "fundamentally deceptive".

EDIT: Not to mention that intangible value is still value. If marketing makes an item higher status, and you value items based on the status they confer on you, then that marketing is creating enormous value. Branding literally makes a product more valuable in a consumer eye, and that is the only measure of value that matters.