Another Instance of Political-Market Failure

by Don Boudreaux on November 29, 2011

in Other People's Money, Politics

Here’s a letter to Economist.com:

The distinction that “M.S.” highlights between commercial advertising and political advertising – namely, that “In commercial advertising, making a demonstrably false or misleading negative statement about a competitor’s product would be legally actionable” – isn’t the only distinction of interest (“Corporate and political advertising,” Nov. 29).

Here’s another: false and misleading commercial advertising harms only those people who fall for it.  And because cause and effect is much more direct and less mistakable when using commercial products than when using political products, even many gullible folks become appropriately jaded when confronted with commercial advertising claims.  Bubba’s purchase of penis-enlargement pills inflicts no costs on others, and soon his endowment of useful information is enhanced as that of other of his features is not.

False and misleading political advertising, in contrast, invites the gullible to impose the costs of their credulity on everyone.  If enough Joneses recklessly clamor to buy the latest Save the World political elixir, even the alert and wary Smiths must share in the resulting harm.  And too often the swindler – skilled, after all, in the cunning arts – can for a long time successfully, if falsely, blame his elixir’s failure on dozens of extraneous circumstances.

Sincerely,
Donald J. Boudreaux

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{ 39 comments }

Invisible Backhand November 29, 2011 at 11:44 am

Here’s another: false and misleading commercial advertising harms only those people who fall for it.

BS. You (intentionally) forget the 3rd party effects. Why are you always on the side of the vultures?

Invisible Backhand November 29, 2011 at 12:21 pm

For example, it should be obvious to everyone that the good people of Greece are suffering more from the 3rd-party effects of commercial advertisements for male-enhancement pills than they are from the 3rd-party effects of political advertisements for cushy government retirement plans.

And if you can’t see that, then — to quote Nikolai — “go F!!! yourself!!”

Invisible Backhand November 29, 2011 at 1:24 pm

It’s not my fault Don “brief policy papers for busy policy makers” Boudreux is a koch sucker. If you can’t see that…

Nuke Nemesis November 29, 2011 at 2:59 pm

Didn’t you get the memo? Everything is Grover Norquist’s fault now. Koch out, Norquist in. Bush and his puppet masker (AKA Lord Vader) are always fallbacks, of course.

Invisible Backhand November 29, 2011 at 5:08 pm

Koch out, Norquist in

I’m more of a follow the money type guy, so Boudreaux’s leash leads back to Koch, Scaife, Peterson, and the elusive Earhart Foundation. You keep chasing the shiny things if you want.

Invisible Backhand November 29, 2011 at 7:00 pm

Boudreux is a koch sucker.

Whereas I am a dingbat, a moonbat, and a paid shill for organizations on the Far Left. I say, to each his own! The French say a chacun son gout . . . (Speaking of French, remind me to tell you guys about the time I buggered a French poodle. It was at a fundraiser for Hugo Chavez, and she starts wagging her tail at me…)

We should stick together, Nikolai. You can fling your scum at Russ and I can fling mine at Don. “Division of labor” — just like capitalism! Ha, ha, haaaa, ha, ha!!!

Greg Webb November 29, 2011 at 11:08 pm

LOL!

Invisible Backhand November 29, 2011 at 6:37 pm

Bubba’s purchase of penis-enlargement pills inflicts no costs on others, and soon his endowment of useful information is enhanced as that of other of his features is not.

Wait a minute, wait a minute, wait a minute! You mean those “male-enhancement” pills I just ordered online won’t really work? But there were photographs! There were testimonials! My handlers at Anonymous and MoveOn.org swore that they worked for them and that they would work for me (in addition to some manual exercise that they were kind enough to teach me).

Well, shiiiiit…

Invisible Backhand November 29, 2011 at 7:20 pm

You on a loop there Regards Ken? Running out of fresh material?

Invisible Backhand November 30, 2011 at 3:18 am

Running out of fresh material?

That was false modesty on my part. After all, with me as a model jackass, how could anyone ever run out of fresh material?

I’m an inexhaustible fountainhead of insipid unctuousness and uninspired stupidity! I can spontaneously alternate from being dull one moment to being wan the next. As the saying goes, “I can turn on a dime, and give nine cents change!”

There’s enough crap in me to keep a decent parodist going for years; an indecent one, even longer.

Invisible Backhand November 30, 2011 at 11:33 am

I’m an inexhaustible fountainhead

You said fountainhead. Heh heh, heh heh.

Ryan Vann November 30, 2011 at 10:17 am

“BS. You (intentionally) forget the 3rd party effects. Why are you always on the side of the vultures?”

I have too agree with you in this rare occassion.

Don Boudreaux November 30, 2011 at 10:25 am

What 3rd party effects? Bubba falls for a false-advertising claim; he pays the price asked for the bottle of worthless pills – both the money price to the snake-oil salesman and the price of not suffering disappointing results. Who else in this scenario is affected in policy-relevant ways?

And, btw, to point out that the downside of falling gullibly for a false-advertising claim is internalized on the gullible people who fall for it is not to endorse such claims; it is not to “side” with the false advertiser.

Nikolai Luzhin, Eastern Promises November 30, 2011 at 10:35 am

Don

You silly silly man. The most important effect is right here before you eyes.

Third parties who witness the fraud stop buying from honest businesses in the space because they cannot tell honest from dishonest firms. Look at people who (perhaps wisely) don’t buy stocks or bonds because of the fraud prevalent in such markets. Look at people who still keep money in the liner of their favorite suit instead of a bank (did you miss the story of the fellow who gave away his suit and is now looking for his cash to pay for his wife’s cancer treatment).

Of, take all the people hear who have lost confidence in gov’t because, seeking the trees for the forest, they focus on this abuse or that act of what they call crime or cronyism or what ever.

Bourke Cockran, you know is role in history I hope, taught Winston Churchill, “Underlying the whole scheme of civilization is the confidence men have in each other, confidence in their integrity, confidence in their honesty, confidence in their future.”

Thus fraud is an attack on the very foundation of ourselves.

Gil November 30, 2011 at 10:38 am

Fraud really isn’t a crime at all then? Libertarians need only worry about force?

Jon Murphy November 30, 2011 at 10:47 am

Fraud is a crime. But it’s effects are internalized. Only those who get sucked into the fraud are harmed. That’s not to say con-men shouldn’t be punished. As Don said, “to point out that the downside of falling gullibly for a false-advertising claim is internalized on the gullible people who fall for it is not to endorse such claims; it is not to “side” with the false advertiser.”

When Bubba finds the pills don’t work, whom does it harm? Bubba, of course. But who else? One could make the claim that now Bubba won’t shop and that it’ll harm the other businesses in his community. But is that true? We’ve all bought something bad from a company. Did that make you curl into the fetal position and never shop again? Of course not! You say “what a dupe I was! I’ll be more careful next time!”

So, again, I ask: Who, besides Bubba, did this transaction harm?

And don’t lose sight of this fact: we are not condoning fraud.

Invisible Backhand November 30, 2011 at 2:13 pm

What 3rd party effects? Bubba falls for a false-advertising claim; he pays the price asked for the bottle of worthless pills – both the money price to the snake-oil salesman and the price of not suffering disappointing results. Who else in this scenario is affected in policy-relevant ways?

The Bubba who falls for the anti-vaxer propoganda harms his child and potentially many other children. The Bubba who doesn’t take his child to the hospital because of the worthless pills.

The reason you’re so touchy is you do the same thing. You’re just exchanging the influence your academic credentials has on a gullible few to delay any action on climate change. You run a factory to churn out randroids for Exxon and Koch to expend.

Colin November 29, 2011 at 12:01 pm

FYI, M.S.=Matt Steinglass.

Greg G November 29, 2011 at 1:22 pm

This sounds like it has the potential to make us consider the possibility that speech and money might be two different things.

nailheadtom November 29, 2011 at 1:56 pm

Mendacity and politics play in the same puddle.

SaulOhio November 29, 2011 at 2:20 pm

Those “extraneous circumstances” are usually the absence of their snake oil elixirs. In other words, the free market.

Darren November 29, 2011 at 2:28 pm

You probably should have used an example other than “Bubba” and “penis enlargement pills”. It detracts from your point.

Jon Murphy November 29, 2011 at 2:30 pm

Yeah, I kinda agree.

Dan Hill November 29, 2011 at 3:16 pm

I actually think “.. soon his endowment of useful information is enhanced as that of other of his features is not.” is possible Don’s best line ever!

vidyohs November 29, 2011 at 5:50 pm

Agree. It is a great line.

brotio November 30, 2011 at 12:41 am

Hiya, Dan Hill!

Another 70s music icon joins our Cafe! John K used to comment here (wish he still did – he usually made sense), and we’ve had a couple other famous names show up. Had any hits since, “Sometimes When We Touch”?

:P

BTW: I agree with your comment.

Dan J November 29, 2011 at 3:29 pm

‘green technology’ – windmills and solar panels. The political products of 21st century.

kyle8 November 29, 2011 at 5:59 pm

Windmills and solar panels, – Penis enlargement products for the modern left wing gentleman.

Adam Smith November 29, 2011 at 3:46 pm

In contrast to Bubba, consider this audacious and hopeful message provided to Lady Liberty, recently found to be afflicted with ovarian cysts.

http://www.doxil.com/doxil-supply-shortage

Due to artificial scarcities created by market tampering, she is left with only the placebo effect of the president’s sadness to avoid an existence that is nasty brutish and short.

Jeffrey Neal November 29, 2011 at 4:22 pm

We minimize the damage that a lying politician can do by minimizing the amount of power we give the government, i.e. by limiting its power to tax us, which means limiting how much government spends – since every dollar of spending eventually has to be met with a dollar of taxation (+ interest when we defer the taxation by borrowing). In other words, government spending is a form of control and power

As long as the current crop of ‘leaders’ are calling the shots, we’re in for some wild rides that will make the disappointed Bubba wish he’d spent the $$ on booze.

Ubiquitous November 29, 2011 at 5:00 pm

Hi…. Ubiquitous has been consistently posting under the screen name muirgeo. If there is any confusion or some one else is using your screen name to defame you just be sure to link your account to an outside account. That way when people press the sceen name link they will see who really wrote the post. I am sure Ubiquitous apoligizes for being such a JA DB but apparently my post have frustrated him to the point that he has needed to stoop this low in an attempt to undermined and defame me since he can’t argue on the issues and facts person to person.

Methinks1776 November 29, 2011 at 5:07 pm

You need to thank Ubiquitous or whoever was posting as you, Muirdiot. Whoever it was had you looking 10,000x smarter and 100,000x more sane than you actually are.

You should really consider letting him post in your stead from now on.

Ubiquitous November 29, 2011 at 6:23 pm

Ubiquitous has been consistently posting under the screen name muirgeo.

Nonsense. I am the very soul of integrity. Additionally, I make use of no gravatar and my username links to no site.

If you had an imagination, I’d say you were imagining things. Instead, I believe that you are desperately lashing out in search of a scapegoat. Pathetic.

muirgeo November 29, 2011 at 6:55 pm

It’s easy enough for people to click on the screen name links and see where they go.

muirgeo November 29, 2011 at 7:05 pm

Indeed. And we all know how careful people are when they’re on the Internet. I’m such a brilliant thinker! That’s why mom called me “sonny” (er, “sunny”. Get it???)

Hey, everyone. Does this cigarette holder make me look fat?

muirgeo November 30, 2011 at 7:09 am

I get that you claim to be a libertarian but have to resort to annoymously defaming people because you are yourself too embarrassed or unable to debate man to man. You aren’t defaming me in the end you just prove to the man in the mirror what a low life you are and whata great representative you are for libertarians. No problem bro continue on being the lowlife you are… I’m just glad I don’t have to hide like coward abnd I am glad to know I drove you to such pathetic extremes. You lose Bro…

muirgeo November 30, 2011 at 6:23 pm

@muirgeofraud:
“…but have to resort to annoymously defaming people”

I expose, not defame. You’re a fatuously ignorant, empty-headed little twit, muirgeofraud. You don’t like that I expose you as the vacuous troll you are? Go pound sand.

vidyohs November 29, 2011 at 5:58 pm

It is redundant to Don’s post for me to say so, but when people become as skeptical of political advertising as they should be of commercial advertising perhaps fewer of the political cockroaches of life will become elected, much less re-elected after one term to expose themselves.

In the meantime we know that advertising is advertising and as for the use of advertising, the skills of the advertisers is available to those who can pay, and that means political candidates as well as soap makers.

Hell, Daddy Bush even used a Las Vegas choreographer to plan his visit (every single detail of his trip from start to finish) to the troops in Saudi Arabia after victory was declared in Desert Storm.

Those who leave things to chance, lose.

Sam Grove November 29, 2011 at 9:13 pm

It is ironic that the left frequently complains about the susceptibility of people to marketing ploys yet they do not see how they have completely swallowed the marketing of Marxism.

For many, college hammers in the final nails in the coffin that was begun in primary education; the coffin where there intellectual ability is confined.

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