Thursday, 10 August 2017

To understand what's good marketing and what's bad marketing watch the rent-seekers

I'm a marketer. Got all the badges. Used to have a big job telling folk how to to it. And I'm here to remind you that there's two sorts of marketing - the good sort that's about a conversation with consumers so we can meet their needs (and maybe prompt them towards something they'd not thought about) and the bad sort that's about persuading authorities to fix the market so as to allow the client a temporary monopoly or other unfair advantage.

Of course, dear reader, I did the first sort and got plenty of flak for doing so. "Where did you get my name and address", "you're manipulating people with your clever personalisation", and "these profiling systems are exploiting people's personal data". But at no point did I collect, analyse or otherwise use data for any other purpose than to make my advertising and marketing pound stretch a little further - I just wanted to sell you what we'd got in the warehouse.

The bad marketing doesn't get the same criticism, we say little or nothing when the farmers' union lobbies for protectionism or the steel companies rant about 'unfair dumping'. Yet these businesses want to fix the market so as to profit - and that profit comes at your and my expense. It's like this:
Yet lobbying requires resources: the building and office supplies used by lobbyists, the fuel used to ferry lobbyists to and fro in their privilege-seeking efforts, but mostly the time and effort of the lobbyists themselves. And the greater the expected benefit of securing a special privilege, the greater is the amount of resources those in search of such privileges will use in that search. Such resource expenditures are beneficial to the rent-seekers themselves, for these expenditures increase these rent-seekers’ prospects of actually securing the sought-after special privileges that yield rents (that is, excess profits). But from society’s perspective these expenditures are wasteful: the building used to house lawyers who seek rents for their clients is not available to be used for genuinely productive activities (such as serving as office space for tech start-ups, or for lawyers who specialize in helping commercial clients write better contracts).
For lawyers in Don Boudreaux's screed you could insert 'lobbyists', 'PR Agencies', 'Public Affairs Consultants' and a host of other titles all dedicated to the job of getting politicians and bureaucrats to fix markets to the benefit of these agents' clients or employers.

So next time someone has a go at people like me - the good marketers who just use data and information to get you better products and services - point to the lobbyists and ask when that will stop. That is corporate welfare, market fixing and it happens at our cost - Boudreaux gives one example:
I have no idea what Mr. Stohr is paid. So let’s low-ball it – I mean really low-ball it: let’s assume that he’s paid a mere $100,000 annually. If so, then at least $33,333 worth of valuable resources – Mr. Stohr’s time, effort, and creativity – are spent simply trying to maintain that which ought not be maintained, namely, subsidies – a special privilege – for American aircraft manufacturers.
Multiply this a thousand - maybe ten thousand - times just for the USA and you see the extent to which the brilliance of us marketers is turned to the dark side promoting the market-fixing interests of large corporations, labour unions and NGOs. And then the same for every country on earth, the cost of lobbying and those fixed markets to us ordinary consumers is immense. If you want a campaign that will really change the world - put an end to rent-seeking driven by the lobby and by the avarice, the ignorance of politicians.


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