Over at Offsetting, Eric mentions that there is a view that we need to start banning fast food advertisements. Personally I think this is a dumb idea, but when it’s people’s job to make up arbitrary interventions to “save the world” they will.
More importantly, it reminds me of one of the first posts I wrote on the blog:
So food with a McDonalds wrapper does taste better. Now I’m sure many people will take this as a sign that advertising is evil, as it can lead to children being overweight, however I think it is an awesome service provided by McDonalds. You see McDonalds advertising makes food taste better, they increase the value of the product to an individual by advertising it, and getting all your senses excited. Although two otherwise identical products might seem homogeneous to you, the fact that the McDonalds wrapper is on one and not the other implies that one has the value associated with advertising while one doesn’t. As all McDonalds is doing is increasing the value of their product, thereby increasing demand I don’t have a problem with it.
Advertising creates value. Also, I haven’t mentioned here that advertising provides information. There may be a case to regulate advertising given perceived misinformation, or we could even stretch this to a concern about children (as long as we are honest that this belief is based on targeting “bad parents”). However, even when we head this far an advertising ban is overkill.
Remember, the goal of policy is to “maximise happiness”, where what gives people subjective happiness may differ from what we believe or assume – not to make people do the things we want, and target things we don’t like. This involves using mechanisms that allow people to reveal preferences (markets for example), and avoid bans and direct regulation as a last resort.