Wednesday, September 29, 2010

Economics for Everyone

I don't have a lot of time to blog today (busy making reading notes for Social Theory!) so I thought I'd give an example of the anti-orthodoxy that is ISS. Here's a funny excerpt from 'Economics for Everyone' by Jim Stanford, a required reading for my Introduction to Economics course.

Useless and Destructive Activities that Also Happen to be Profitable

Activities performed by Profit-Seeking Companies that are Socially Useless:
- Advertising
- Spending to develop copycat products (such as imitation pharmaceuticals) that have no real additional value
- Excess packaging added by producers to attract buyer interest
- Maintaining more capacity than required, in order to "catch" new sales or supplies before a competitor does
- Producing things designed to break down or become obsolescent, forcing customers to buy new ones

Activities performed by Profit-Seeking Companies that are Socially Destructive:
- Selling products that are harmful, unsafe or dangerous
- Tricking customers into thinking they are buying something they're not
- Spending to directly undermine competitors (by spying or sabotage)
- Spending to prevent others from duplicating your work (such as patents or anti-copying protections)
- Limiting production of a useful product in order to boost profits
- Shifting costs (including hidden costs like pollution) to consumers, suppliers, or the public at large
- Advertising that makes people feel inferior or inadequate if they don't purchase a product


adeline said...

haha actually i find this to be a liiiittle too emotional to be convincing/taken as serious argument also. PLUS actually advertising serves as information, to provide info for ppl to make choices, if i am applying my econs right. but then again, stuff always gets screwed up, or rather econs make very erm unrealistic assumptions. they don't take distortions into account.

aren't i totally living up to my promise of being a pain in the ass and commenting on every post :)

Sya said...

i think he's criticising that assumption of perfect information. in a world of ceteris paribus, everyone would have perfect information about every product, so you don't need advertising? to turn that around, every product should have advertising. haha.
yes you are, and that's great :)


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