[LINK] Keynesian vs Stiegler vs Google and Apple - Was Do Not Track Bill Threat to American Way of Life

[Tom Koltai]

> -----Original Message-----
> From: link-bounces at mailman.anu.edu.au 
> [mailto:link-bounces at mailman.anu.edu.au] On Behalf Of Roger Clarke
> Sent: Tuesday, 10 May 2011 1:47 PM
> To: link at anu.edu.au
> Subject: Re: [LINK] Do Not Track Bill Threat to American Way of Life
> 
> 
> At 12:43 PM +1000 10/5/11, Tom Koltai wrote:
> >Actually, as much as I abhor advertisers pushing their wares onto me 
> >without the option of changing channels, the reality is that our 
> >economic growth is very closely aligned with the advertising take-up 
> >numbers.
> 
> Classic error, Tom.
> 
> Confusing correlation with causality.
> 
> Compounded by asserting which is the cause and which is the effect.
> 
> A more tenable proposition is that the two have a common cause.
> 
> But most likely the minimally-complex-but-still-useful model of the 
> system comprises many influences and feedback loops, and hence trying 
> to ascribe causality is a waste of time for everyone except academic 
> econometricians.
> 

Oh dear.  You are right, I included both together. 

Normally I don't enter slanging matches, quite happy with the
opportunity to have put forward my point of view for peer review and
consequent acceptance/rejection/discussion yeast.

However I did qualify my anecdotal dissertation with the statement:

> >Both advertising responders and CPI are suspiciously aligned.

I consider that clearly this was not an attempt at a formal proof and I
supplied that in the well known econometric term "Suspiciously aligned".

If I was writing for only an Academic audience, doubtless I would
utilise the currently popular again Keynesian terminology only.
However, as we all know, Link is one of the incubators for what passes
these days as our leading news services.

Therefore holding the halters I shall argue the chicken and the egg;
wherein I can safely say, that advertising predated [1] Keynesian
considerations by at least 200 years and on that basis, there is a good
reason to believe that persons who followed on from that first advert
did so because of word of mouth referrals. Therefore I think we can
empirically deduce that it is generally accepted by the public that
advertising drives sales or at the very least human curiosity. 

Unfortunately, because economists can be bought and sold for a few
shekels, much of the work on the topic has been paid for by those with a
commercial interest in promoting the concepts of advertising.

However, let's start with the unarguable;

Roger as a person that charges for his time, no doubt you would remember
Stigler's premise [from the seminal work on the topic -IMHO] that the
main cost of information is time (Stigler, 1961)[2]. (Anyone that hasn't
read this - should!)
Of course your very fine web page is in fact an advertising resource
that has no doubt handsomely repaid you over the years, just as your
overly large SIG file also gets the phone ringing...

I need to stipulate that I am not a Keynesian, however, Maynard's theory
of glut induced depression brings to mind the negative aspects of too
much advertising and the ability of the human race to retain in memory
all advertising which then brings us to branding.
To whit, Roger, if advertising has no basis in fact then there is a
question over the validity of the concept of trademarks and almost all
intellectual property claims.

As this is clearly the fundamental basis of industrialisation and
innovation, I think we can therefore safely argue that advertising
maketh the brand and supports the economy. 

The causality is probably the media players... [Search eBay for Media
players for confirmation] combined with low cost hard disks and
advertising free alternative entertainment options.

The correlation is the increasing queue at the unemployment window
and... [amongst many others] Decreasing prices at Coles and Woolworths
in their house brands resulting in decreased spending by consumers
(approx. $6.00 per week) over the last 12 months. [3]

Regardless of how that is prettied up by the creative accountant
spruikers, that is a negative CPI.

Doubtless caused by Coles and Woolworths forcing merchant discounts so
that they could push their own brands to the point where the only
difference is now in the advertised discounted price.

OUCH. Or should I say oops here we go again.


[1] http://adage.com/century/timeline/

[2] The Economics of Information - George J. Stigler The Journal of
Political Economy, Vol. 69, No. 3. (Jun., 1961), pp. 213-225.
http://www.jstor.org/pss/1829263 ALT.
http://home.uchicago.edu/~vlima/courses/econ200/spring01/stigler.pdf

[3]
http://www.afr.com.au/p/business/marketing_media/big_retailers_bet_the_h
ouse_OSY8myrjXYM8StgipHLWCK ALT.
http://sl.farmonline.com.au/news/nationalrural/agribusiness-and-general/
general/big-retailers-bet-the-house/2156817.aspx?src=rss


/body