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felice
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Postby felice » Mon Dec 02, 2002 11:46 pm

> I think 10Ts was frustrated, Felice, because you've> been adapting your argument as we've gone onAdapting, yes, but not fundamentally changing.> So in fact 10T was making many of the same points I> was but just lost patience with the, ah, elasticity of> your arguments a bit faster. Yes, very fast. His _first_ reply to me contained:"you're talking absolute nonsense [...] I mean come on! What you're saying, out of context, just doesn't make any sense at all. [...] Well, you gotta laugh I spose, tax increases to subsidise cheap DVDs? Classic, absolute classic!"What it didn't contain was any meaningful content. He was clearly at no point trying to understand my argument, instead deliberately interpreting it in the least rational way possible, and ignoring the salient points. And he explicitly stated that he was trying to ridicule my argument, not to counter it logically. It all seems very troll-like to me.> So rather than being a debate this is really just a> discussion of a hypothesis where the hypothesis is> getting revised. Yes. That's much more interesting than debating as far as I'm concerned.> I think it's fair to say that you've had to give ground on> some of your more extreme suggestionsSuch as? I don't recall any significant ground-giving. On occasion I've posted clarifications to explain that what I'd intended to suggest was less extreme than the way my statements had been interpreted...> At this point I'm going to call time on this thread as the> topic's gone well off the beaten track for this forum, but> if anyone wants to carry on feel free to do so in> "Everything Else"...Ok 8)Ah, a question for you. Can you suggest any _specific_ existing programs that you think might not have been made, or would have suffered quality-wise, under socialised entertainment production?

AndyThomas
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Postby AndyThomas » Tue Dec 03, 2002 2:52 am

I'm not sure if that's a question that can be answered, if only because the BBC is a publically funded channel which produces the sort of material that commercial channels wouldn't necessarily make anyway.  Also, the whole question is very dependent on your short-lists, isn't it?  So it really depends what your starting point is, and how the public might vote.  Plus, as I don't get satellite channels I may not appreciate the full, ah, range of programming choices available!Ok, so let me assume that the public is voting just for broad categories.  You see, this is difficult, because without knowing what the underlying ideals of the Organisation are it's impossible to say.  Even if, for example, science fiction obtained a reasonable amount of funding - would it be high-brow, low-brow, in space, on Earth in the future?  Would it be for adults, teenagers, kids?  What does "science fiction" even mean?Also, a lot of our programming was made elsewhere - for example, there's no way Lexx would have been made in Britain.  It's just too #### odd to have mainstream appeal and therefore I doubt it'd attract enough mainstream interest to get made.  It'd be a cultural thing.Let me come at this from the other end, if I may.  Consider BBC programming.  Could any of that have been better quality if made under commercial circumstances?  Now, I actually consider the BBC to be quite commercial these days, so let's consider older shows.  For example, Doctor Who.  Don't get me wrong, scared me rigid when I was little, but - I'm reasonably confident that if it had got funding on a level with Star Trek it would have looked better.  It would probably have been a different sort of show of course, but...Also, the BBC alone probably couldn't have done both Star Trek, and Doctor Who, and the Incredible Hulk, and Invaders, and Quantum Leap etc all at the same time.  Finite number of studios, creative people, special effects people and so on - plus competition for those limited creation resources from every other show the BBC has to make.Ah.  I've just come up with quite a broad category of shows that would get reduced - cartoons.  No Thundercats.  No He-Man.  No Pokemon.  No Centurions.  Maybe even no Terrahawks.  Why?  Merchandising.  Entertainment they might be, but they're commissioned by toy companies.  So if entertainment is being voted for, a smart socialist economy would consider those cartoons advertising, ergo a waste of resources that wouldn't get made - particularly not if other options were more desirable. Again, though, that's dependent on whether the Organisation is 100% responsible for producing everything.  As you've mentioned, having state subsidised cheap DVDs might well knock everything else out of the market - if the quality was adequate of course.   Consider that for a moment.  If the Organisation has that much power over the market, independent companies couldn't survive.  That would mean that everyone would have to work for the Organisation.  What level of funding would the Organisation have to have to be able to support them?  Could it offer enough incentive to the best people to keep them working for the Organisation?  If they had no choice but to work there, with too little incentive, would their quality of work suffer?I suspect you'll say, no, not everyone has to work for the Organisation directly but the Fund will subsidise independent production studios who will have to make their material available once they've made it.  Well, again, where's the incentive?  It's human nature to expect adequate reward for skilled work - witness the current firefighters strike here in the UK.  Public workers do not always smile and continue working in the face of poor pay.  The tax bill required to effectively support the Fund in the way you suggest would, I think, be disproportionate to the societal benefits the Fund would deliver.  Unfortunately you can't prove that the reverse would be true any more than I can give you figures to prove my point of view, except to say that vital public services appear to be underfunded with taxation relatively high as it is.  No-one would sanction compulsory taxation for entertainment while that was the case.
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felice
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Postby felice » Tue Dec 03, 2002 5:15 am

> Ok, so let me assume that the public is voting just for> broad categories. > Even if, for example, science fiction obtained a> reasonable amount of funding - would it be high-brow,> low-brow, in space, on Earth in the future? Would it be> for adults, teenagers, kids? What does "science fiction"> even mean?That could be decided by a combination of the choices of the fund management, and votes from the minority of more in-depth voters (with sub-categories as a level of voting in between broad categories and specific programs, eg "high-brow teen space shows", "adult future earth shows", etc).> Also, a lot of our programming was made elsewhereThat wouldn't change.> for example, there's no way Lexx would have been> made in Britain. It's just too #### odd to have> mainstream appeal and therefore I doubt it'd attract> enough mainstream interest to get made. It'd be a> cultural thing.No, it might not have been made in Britain. But I see no reason it wouldn't have been made in Canada if Canada was using a socialist system (Lexx is Canadian, yes?). And there would be more scope than currently exists for international co-productions (which Lexx is, yes?), since the various national funds wouldn't be competing with each other. If a proposed show got a very enthusiastic response from a minority too small to fully fund it, it could then be proposed in other countries as well, and the funds pooled.> Let me come at this from the other end, if I may. > Consider BBC programming. Could any of that have> been better quality if made under commercial> circumstances? > For example, Doctor Who. Don't get me wrong, scared> me rigid when I was little, but - I'm reasonably> confident that if it had got funding on a level with Star> Trek it would have looked better. Trek had a bigger budget because it was made in a country with several times the population of the UK. And I believe the powers that be at the BBC have usually looked down on Doctor Who and underfunded it despite its popularity.> Also, the BBC alone probably couldn't have done both> Star Trek, and Doctor Who, and the Incredible Hulk, and> Invaders, and Quantum Leap etc all at the same time.No, and it shouldn't attempt to. I don't advocate an increase in the amount of tv production (quite the reverse, if anything), just a change in how it's funded.> Ah. I've just come up with quite a broad category of> shows that would get reduced - cartoons. No> Thundercats. No He-Man. No Pokemon. No> Centurions. Maybe even no Terrahawks. Why? > Merchandising. Entertainment they might be, but> they're commissioned by toy companies. > So if entertainment is being voted for, a smart socialist> economy would consider those cartoons advertising,> ergo a waste of resources that wouldn't get madeCartoons created as advertising for toys wouldn't be made, true. But that wouldn't stop cartoons from being made altogether! And they'd be better, because they wouldn't be creatively constrained by the toy companies. And to be honest, I don't really think the toy-cartoon link is necessarily a bad thing; it's bad when profit driven, but not if both toy manufacturing and cartoon making were being done purely to satisfy the desires of the public.> everyone would have to work for the Organisation. > What level of funding would the Organisation have to> have to be able to support them? Significantly less than the total amount currently spent on tv production, because there'd be no need to waste money on advertising or returning a profit to the shareholders, and economies of scale would bring down costs.> Could it offer enough incentive to the best people to> keep them working for the Organisation? If they had> no choice but to work there, with too little incentive,> would their quality of work suffer?The best people wouldn't need an incentive; they'd be there because they _wanted_ to make television. And they'd have the choice of working in other fields.> I suspect you'll say, no, not everyone has to work for> the Organisation directly but the Fund will subsidise> independent production studios who will have to make> their material available once they've made it. That possibility hadn't occured to me, but I'd have no objections to it as long as it doesn't seriously impact on efficiency.> Well, again, where's the incentive? It's human nature> to expect adequate reward for skilled work> Public workers do not always smile and continue> working in the face of poor pay. Of course not! There's no reason pay rates would have to be any different than they are under the current system.> The tax bill required to effectively support the Fund in> the way you suggest would, I think, be> disproportionate to the societal benefits the Fund> would deliver.The tax bill would be big, yes, but the _total_ amount that the public paid for entertainment would go _down_ slightly. Programs are _not_ made for free at the moment! The public already pay for them, just in an indirect manner with a lot of money siphoned off as private profit before it gets to the tv producers. And it wouldn't be a poll tax; people on high incomes, who generally spend more on entertainment now, would pay more tax in to the fund.> vital public services appear to be underfunded with> taxation relatively high as it is. No-one would sanction> compulsory taxation for entertainment while that was> the case.A good point. But entertainment _currently_ has vast amounts of money spent on it, while vital public services go underfunded. Under my proposal, the public would be able to choose to redirect funds from entertainment to vital public services - surely that would be an improvement on the current situation? And a tax increase would be balanced out by the free-ish entertainment and cheaper goods due to reduced advertising budgets.

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Postby AndyThomas » Wed Dec 04, 2002 12:00 am

> No, and it shouldn't attempt to. I don't advocate an > increase in the amount of tv production (quite the> reverse, if anything), just a change in how it's funded.But the primary aim of this Fund is to better represent what people want to be made, yes? But you're now saying you don't want more shows to be made? If, as you maintain, the commercial system isn't making shows people want how will reducing choice improve things? Sorry, but if you're going to cater to more tastes, especially all these vocal minority tastes who vote so carefully, you'll have to make more shows. Your entire argument, these lists that people can vote on, are intended to allow for as much input into the creative process by the public as possible so you're bound to end up with more shows getting made.> Significantly less than the total amount currently > spent on tv production, because there'd be no need> to waste money on advertising or returning a profit to> the shareholders, and economies of scale would bring> down costs.TV production doesn't waste money on advertising; it gets revenue from advertising and even the BBC advertises its own shows - any TV station would because it needs to do so to keep viewing figures up. Also, economies of scale only work up to a point. One of the reasons that giant monopolies are a bad thing is that dis-economies of scale start to enter into things. The bigger an organisation gets the harder it is to monitor wastage and efficiently control all the arms. Middle managers will often misrepresent what's going on to protect their own positions. Bigger is not necessarily better, nor is a lack of competition. > The best people wouldn't need an incentive; they'd > be there because they _wanted_ to make television. In part, certainly - but they've still got to look after their families. They might also demand certain privileges for being the best. The majority aren't going to want to live like monks! Plus you also say later:> There's no reason pay rates would have to be any> different than they are under the current system. But as you've already mentioned, there's no advertising revenue for the Fund, and it's not getting any real return for the shows it creates because DVDs are being sold at cost. So right there you have a big funding gap that direct taxation would have to try and meet. There's a reason why the BBC is so keen to make shows that it can sell abroad...> The public already pay for them, just in an indirect> manner with a lot of money siphoned off as private > profit before it gets to the tv producers. And it> wouldn't be a poll tax; people on high incomes, who> generally spend more on entertainment now, would> pay more tax in to the fund. You're overlooking something. I pay the government tax on every conventional DVD I buy today. Take that away, and you're not just damaging the commercial economy, you're damaging public spending power. Also, whilst the public do fund production up to a point, don't forget the role that advertising will have in funding as well. Direct sales of DVDs probably make up a relatively small percentage of a studio's income - advertising revenue and general subscription revenue will be far more important. So the consumer, in the current model, is probably paying relatively little direct to any given production company (who are also paying taxes to the government on their corporate profits, incidentally). You also maintain that goods will be cheaper if there's less advertising, but remember that an efficient economy needs information about prices - and more products sold means cheaper average prices. Advertising will only have a major impact on luxury/fashion item prices, because those are the sort of goods that rely particularly heavily on advertising to sell. Think about it - isn't a lot of advertising actually linked to sales, special offers - promoting a reduction in prices of consumer goods?As for making entertainment tax income dependent - well that's new. You're seriously saying the people on the highest incomes, who work the longest hours and therefore have the least free time to spend on entertainment, are the highest users of entertainment? I seriously doubt it, personally. Clearly if you're going to bring down entertainment costs then it's those less able to pay for entertainment now who will benefit most. So that's kids or the unemployed. Tax payers aren't happy about their taxes paying unemployment benefit, and you want them to fund cheap DVDs from a percentage of their salary as well?! I mean, it's not as if your Sky subscription is income determined, is it?!So, let me just sketch out the funding arguments here. Considering both scenarios, on a DVD sale:10% to manufacturer/processor of raw materialsSame in both scenarios.10% to distributor of finished productSame in both scenarios.15% to government as sales taxProbably not in funded example.65% to cover promotion of DVD, production costs of content, profit elementNot in funded example.Further down the line, in the non-funded example, a percentage of the profit made by:the advertising companiesthe distributorsthe manufacturerthe content creator/licensoralso goes back to the government as corporation tax.So, in the Funded model, the government loses out on sales tax, corporation tax - say an eventual 50% of the DVD's sale price. Additionally, the Fund doesn't get any revenue from the sales of DVDs it's created to offset its production costs in making the DVD. It also doesn't get any revenue from advertising in your model, because you believe advertising causes higher pricing.So where does that leave you? Well, it leaves you with a government with less tax revenue to spend on general public spending. So general taxation on other items might need to rise to cover essential public spending. Public not happy.The Fund has no revenue from advertising, or from the content it produces. It has large fixed and average costs and is trying to pay commercial wages without 2 of the main funding pillars available to commercial companies. As every other country producing material swaps it, rather than selling it, it can't derive revenue by selling content abroad either. So in fact ALL its revenue must be derived from taxation. The government is forced to raise taxation significantly, again, because it's already stretched due to the sudden mysterious loss of lots of sale and corporation tax that happened when the Fund crippled the commercial entertainment market.The public is, once again, not impressed. Even if they would previously have bought below the average number of DVDs in a year, they now have to pay an equal share of the cost of producing every single DVD (content wise) in the country regardless of their interest in the content. As well as higher general taxation because the media industry has been replaced by a nationalised industry which operates in a non-commercial fashion.So y'see, it ain't going to happen. A social democracy just wouldn't go for entertainment funding because its impact would be too wide. Result? Compromise. You end up with requirements for content production on commercial companies who comply because otherwise they don't get a broadcasting licence. Even the BBC gets to line its pockets with the profits it makes from its DVDs - they're no cheaper than anyone else's because the BBC, even with some public funding, can't hope to cover its costs in that way alone.I hadn't considered the wider taxation impact before - now that I have, I just don't think it would work because the net effect would be an increase in taxation which would actually exceed that required to support the Fund in isolation, which would mean much less disposable income to be spent in the rest of the economy.
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felice
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Postby felice » Wed Dec 04, 2002 3:58 am

> But the primary aim of this Fund is to better represent> what people want to be made, yes? It's to ensure that what _is_ made better represents what people want (and to eliminate piracy, and to maximise the value of what is made).> But you're now saying you don't want more shows to> be made? That's right; I've never wanted more shows made, just to ensure that those that are made better reflect the wishes of the people.> If, as you maintain, the commercial system> isn't making shows people want how will reducing> choice improve things? Reducing choice isn't necessary (unless funds are redirected elsewhere, in which case the improvement will be in other fields such as healthcare). But having said that, at the moment shows are made to compete with each other for the same audience. I doubt a reduction in the number of new sitcoms or soap operas being made would be a terrible loss to society; a lot of them are more or less interchangable. This is the "vegetate in front of the TV watching whatever happens to be on" segment of the audience.> Sorry, but if you're going to cater to more tastes,> especially all these vocal minority tastes who vote so> carefully, you'll have to make more shows. No, just more varied shows. Not everyone will get everything they want; that would require an unlimited budget. And anyway, improved catering to minority tastes is only a side effect; the real point of the system is to deal with the fact that it's very difficult to charge for non-diminishable goods directly, and the most value is obtained from them if access is unrestricted.> TV production doesn't waste money on advertising; it> gets revenue from advertising and even the BBC> advertises its own shows - any TV station would> because it needs to do so to keep viewing figures up. Er, I think you're contradicting yourself there. And there is no social benefit to be gained from keeping viewing figures up; if people don't want to watch TV of their own free will, why should we be encouraging them to do so?> Also, economies of scale only work up to a point. One> of the reasons that giant monopolies are a bad thing is> that dis-economies of scale start to enter into things.> The bigger an organisation gets the harder it is to> monitor wastage and efficiently control all the arms. > Middle managers will often misrepresent what's going> on to protect their own positions.You have a point there, but I think such problems can be dealt with. For a start, being a non-commercial organisation, there'd be no such thing as commercial sensitivity, so all information could be readily available for _anyone_ to monitor. And the organisation could be broken up in to a number of semi-independent units.> In part, certainly - but they've still got to look after their> families. They might also demand certain privileges for> being the best. The majority aren't going to want to> live like monks! They wouldn't have to; they'd be paid a decent wage that would be quite capable of comfortably supporting a family. And the best can demand all they like; that won't stop them from being the best. If they choose not to work because they're not getting special treatment, that's their perogitive; the organisation can make do with the pretty good. But I don't think many would make that choice; they're unlikely to be the best at something unless they really _want_ to do it.> You're overlooking something. I pay the government> tax on every conventional DVD I buy today. Take that> away, and you're not just damaging the commercial> economy, you're damaging public spending power.Unlikely. Presumably you're going to spend your money on something else instead, and you'll be paying tax on that.> Also, whilst the public do fund production up to a point,> don't forget the role that advertising will have in> funding as well. And who pays for advertising? Companies who sell things to the public, yes? And where do they get their money from? From charging the public extra for their goods. So the public _is_ already completely funding the _entire_ cost of production. Money doesn't come from nowhere!> So the consumer, in the current model, is probably> paying relatively little direct to any given production> companyYes, they pay _indirectly_ instead, which is worse because the total payment is bigger - the intermediary's profit is added on to the production company's share.> (who are also paying taxes to the government on their> corporate profits, incidentally). Which again is a portion of the money paid to them by the public. Corporations don't generate money, they take it off the public.> You also maintain that goods will be cheaper if there's> less advertising, but remember that an efficient> economy needs information about prices Making price information available to those who want it isn't advertising.> and more products sold means cheaper average prices. Cheaper averages are no use if you buy more in total. And if you buy less in total without advertising, then you were previously wasting money on things you didn't really want.> Advertising will only have a major impact on> luxury/fashion item prices, because those are the sort> of goods that rely particularly heavily on advertising to> sell. True. It would probably make more sense to raise corporate taxes than to allow prices to fall on luxury goods.> As for making entertainment tax income dependent -> well that's new. I took it for granted earlier.> You're seriously saying the people on the highest> incomes, who work the longest hours and therefore> have the least free time to spend on entertainment,> are the highest users of entertainment? What makes you think that the people on the highest incomes work the longest hours? I would say the opposite is often true; the people in the lowest paying jobs have to work the longest hours to make enough to live on, and those on the very highest incomes don't have to work at all. And yes, I think the people on the highest incomes spend the most money on entertainment (some of it indirectly by buying the products of advertisers), and those with the most free time spend the most time on it.> Clearly if you're going to bring down entertainment> costs then it's those less able to pay for entertainment> now who will benefit most. Is it? They'll get more entertainment, yes, but they won't save as much money.> So where does that leave you? Well, it leaves you with> a government with less tax revenue to spend on> general public spending. So general taxation on other> items might need to rise to cover essential public> spending. Public not happy.A better option; raise corporate tax, since they've suddenly acquired a huge windfall through longer spending moeny on advertising. Corporations no worse off, public happy.> So in fact ALL its revenue must be derived from> taxation. Just as now it's ALL derived from the public being overcharged for goods and services.> I hadn't considered the wider taxation impact before And now you're not considering the taxation levied by businesses (aka profit). If that hidden taxation isn't been spent on advertising, it can either be reduced, leaving the public with more money to pay the governmental tax, or paid directly to the government. And since nothing is being wasted on production of ads any more, the amount freed up by this is _greater_ than the revenue that had been generated from advertising, so either taxes go down or public spending goes up.

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Postby AndyThomas » Wed Dec 04, 2002 5:26 am

> I doubt a reduction in the number of new sitcoms or> soap operas being made would be a terrible loss to> society; a lot of them are more or less interchangable. > This is the "vegetate in front of the TV watching> whatever happens to be on" segment of the> audience. Well, perhaps, but they command the lion's share of viewing figures so logically more of those shows should be produced under your democratic system.  Don't forget that what you would consider good value for your tax pounds/dollars isn't necessarily what your neighbour will consider good value.> And there is no social benefit to be gained from > keeping viewing figures up; if people don't want to> watch TV of their own free will, why should we be> encouraging them to do so?I'm not sure I see your issue here.  All I'm talking about is trailers for new shows - trailers to let people know what new material their tax funds have paid for.  Don't forget, viewing figures are still going to have an influence on how long a show survives so it seems only fair that each show get some degree of promotion (perhaps advertising is too strong a term) in order that those who might be interested in watching it are aware that it's going to be on.  Surely maximising viewing figures maximises the efficiency of the resources used to make the shows? > Unlikely. Presumably you're going to spend your> money on something else instead, and you'll be> paying tax on that. No - because the money you might have paid for DVDs will now go directly out of your pocket as direct taxation to pay for the Fund.  That taxation decreases your disposable income, hence your spending power decreases and sales tax revenue decreases.> And who pays for advertising? Companies who sell > things to the public, yes? And where do they get their> money from? From charging the public extra for their> goods. So the public _is_ already completely funding> the _entire_ cost of production. Money doesn't come> from nowhere!Alright, you're obviously convinced that advertising has this massive effect on the pricing of all goods in the economy despite the fact that it leads to economies of scale and despite the fact that relatively few companies actually advertise on television.  But the fact remains that if you take advertising revenue out of the equation, the Fund loses a potential revenue stream and advertising companies lose contracts, generate less profit and therefore get charged less corporation tax.Incidentally, you're also ignoring the fact that whilst the public may eventually fund production the companies have to find the money first, and hope they recoup it.  If they don't break even then the public hasn't wholly funded the production at all.  In your system, all the risk is with the public in committing funding which you hope will make good shows.> Corporations don't generate money, they take it> off the public.Companies add value to goods and services - if they were charging too much the public wouldn't pay for them.  They add value, and therefore they contribute to the economy and do make money.  Plus you're ignoring businesses that trade with one another.  The public is not always the end consumer.  They also give consumers money in the first place by employing them.> Making price information available to those> who want it isn't advertising.Perhaps not in the sense you mean, but all businesses advertise in some way or another.  The greengrocer on the high street advertises his latest prices in order to try and win custom from another shop.  Another word for it might be "marketing".  Price is a fairly fundamental factor in selling goods and services so all businesses have to advertise it one way or another.> And if you buy less in total without advertising, then> you were previously wasting money on things you> didn't really want. That's only one viewpoint - another is that without advertising you weren't aware of certain products, or that you bought more at a cheaper price because you thought prices might rise later.  Or you chose more expensive items because they were advertised as being better quality than items that were cheaper but you believed were inferior.  Whilst your argument is not unreasonable, there are several more which show that advertising is good because it creates a better-informed consumer.> They'll get more entertainment, yes, but they won't > save as much money.Yes, but we're talking about the societal value of entertainment here - it's a notional good.  Those who could afford entertainment before won't really notice the difference because they were already entertained, those who couldn't will now be able to be more entertained.  Hence, those not earning a lot get more benefit than those who could previously afford it.> A better option; raise corporate tax, since they've> suddenly acquired a huge windfall through (no) longer> spending moeny on advertising. Corporations no> worse off, public happy. Um, in a word, no.  Just because TV isn't an advertising avenue, do you think every company that was using TV is just going to stop advertising altogether?  Unlikely.  They'll shift spending elsewhere in an attempt to keep demand up.  Also, you seem to be forgetting that you've just wiped out a) commercial TV channels b) lots of companies making TV ads c) some commercial distributors of DVDs.  In other words, the collateral corporate fall out of the Fund is huge.  No TV advertising probably also means reduced short term revenue for those companies that manage to survive.  So corporation tax revenue radically falls - and if you increase it to compensate, more companies go under.  Plus, guess what - lots of people unemployed as a consequence of the above.  Corporations not happy, public not happy.> Just as now it's ALL derived from the public being> overcharged for goods and services. You still haven't proved this.  As sweeping statements go, it's pretty, well, sweeping.  As I stated above, the original funding for production comes from companies taking risks.  They may not recover their outlay.  Hence investment in production does not ALL come from the public - but the company hopes that merchandise sales, general advertising revenue etc may cover the production cost.  Profit is a return on risk taking.> And now you're not considering the taxation levied by> businesses (aka profit). If that hidden taxation isn't> been spent on advertising, it can either be reduced,> leaving the public with more money to pay the> governmental tax, or paid directly to the government.> And since nothing is being wasted on production of> ads any more, the amount freed up by this is > _greater_ than the revenue that had been generated> from advertising, so either taxes go down or public > spending goes up.Your logic escapes me here.  You're assuming that every business has a massive advertising budget which is passed on the consumers.  You haven't proved that.  You're assuming that if TV advertising disappears, businesses won't find alterntative methods to advertise (which will probably be less efficient, and more costly, than reusing a single ad on hundreds of channels).  You're assuming that businesses will reduce prices to consumers if sales fall due to reduced advertising.  On the contrary - if they can get away with it, they'll increase prices to keep their revenue up.  Less consumer spending.  If, on the other hand, they reduce prices to try and keep demand up but demand doesn't keep up - the government loses tax revenue while consumers may have a little more to spend.Plus you also claim that despite the fact that you've wiped out a whole industry, causing mass unemployment and reduced consumer spending/taxation, there will somehow be a net benefit from the cessation of TV advertising.  In real
ity all that would really happen is that the volume of junk mail consumers receive would quadruple and many highly skilled members of the work force would end up delivering that mail.  Not good.  Unless you can provide me with some figures that advertising really is "bad and evil" in terms of basic consumer goods I really don't think your argument holds any water.
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felice
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video cd's

Postby felice » Wed Dec 04, 2002 11:27 pm

> Well, perhaps, but they command the lion's share of> viewing figures so logically more of those shows should> be produced under your democratic system. Uh-uh. What should be produced is _up_to_ as much as is wanted. If 90% of the population want to watch a small set of inexpensive programs to the exclusion of all else, that doesn't mean they should get 90% of the total budget; they should get as much as they need up to a limit of 90%; they might only need 20% of the budget to do whatever they want, leaving 80% to make a variety of other, more expensive shows. At the moment I think far too many "mainstream" shows are made; there's no way their target audiences could watch them all. There's certainly no need to make more than there are now.> Don't forget that what you would consider good value> for your tax pounds/dollars isn't necessarily what your> neighbour will consider good value.True. But if my tastes are too idiosyncratic, then I can't expect them to be subsidised by others. I'll have to make do with ultra-low budget shows (though things like Sapphire & Steel show that very good shows can be made on limited budgets).> I'm not sure I see your issue here. All I'm talking about> is trailers for new shows - trailers to let people know> what new material their tax funds have paid for. Trailers should be available for people to watch if they want to do so; they shouldn't be forced upon them. Though I don't really have a problem with trailers being run between programs on TV (as long as all trailers get equal time).> Don't forget, viewing figures are still going to have an> influence on how long a show survives so it seems only> fair that each show get some degree of promotion> (perhaps advertising is too strong a term) in order that> those who might be interested in watching it are aware> that it's going to be on. There would be reviews, word of mouth, etc, but not paid-for promotion. And "when it's going to be on" is a great deal less relevant with video-on-demand (downloadable or from local DVD-burners). If people wanted to watch something, they could seek out information on what's available (which wouldn't be difficult).> Surely maximising viewing figures maximises the> efficiency of the resources used to make the shows?Possibly, but it reduces total efficiency, by preventing people from doing whatever they would have done if they weren't watching shows. Encouraging people to watch shows does not benefit society; if people don't watch them of their own free choice, then stop making them and put the money to better use!> No - because the money you might have paid for DVDs> will now go directly out of your pocket as direct taxation> to pay for the Fund. Not all of it. Only a small portion of the current DVD retail price goes to paying for production; the rest goes on advertising, excessive packaging, and a whole lot of profit for various different companies. And if the fund is, er, funded from corporate tax (as tv production is now, in a way), then the money you would have spent on the DVD remains entirely yours.> Alright, you're obviously convinced that advertising has> this massive effect on the pricing of all goods in the> economy despite the fact that it leads to economies of> scaleEconomies of scale are only a good thing if increased production is actually useful. And for most goods, consumption wouldn't change without advertising; people wouldn't stop eating baked beans if they were no longer advertised, though relative popularity of brands might change. At the moment, the unadvertised brands tend to be cheaper, eg the "no frills" range at some supermarkets over here.> and despite the fact that relatively few companies> actually advertise on television. It's the ones that do who currently fund tv production.> advertising companies lose contracts, generate less> profit and therefore get charged less corporation tax.And the companies who previously paid the advertising companies generate more profit and pay more tax (or their previously-non-advertising competitors do so).> Incidentally, you're also ignoring the fact that whilst the> public may eventually fund production the companies> have to find the money firstWhere do they find it? In the revenue they obtain from the public, yes?> and hope they recoup it. If they don't break even then> the public hasn't wholly funded the production at all.But on avergae, they do make a bigger profit through advertising, otherwise they wouldn't do it.> In your system, all the risk is with the public in> committing funding which you hope will make good> shows.Fortunately the public won't go bankrupt if they don't like a particular show.> Companies add value to goods and services - if they> were charging too much the public wouldn't pay for> them. They add value, and therefore they contribute> to the economy and do make money. The people who work for the companies add value to goods and services; the companies themselves do nothing. If they weren't charging too much, they wouldn't make a profit, so shareholders would have no reason to invest in them.> Plus you're ignoring businesses that trade with one> another. The public is not always the end consumer.Yes it is. A business may trade only with other businesses, but those other businesses trade with the public. There may be a long chain of businesses involved, but eventually the public always pays for everything. I'd be most interested to know what any business which didn't have the public as eventual end consumer was doing, and where it got its money from.> They also give consumers money in the first place by> employing them.Not give; they pay consumers for their labour. And then they charge the consumers more for the goods than they paid them to make them. Which leads to the question of who buys the goods? The answer is, some people need to be paid now for work that increases the _future_ revenue, eg to increase production capacity. So a capitalist system relies on continual growth; without it, the whole house of cards comes tumbling down.> Perhaps not in the sense you mean, but all businesses> advertise in some way or another. The greengrocer on> the high street advertises his latest prices in order to> try and win custom from another shop. And the other shop advertises to try to win them back. End result; no effect. Why can't customers check both shops, and shop at whichever they prefer, without the greengrocers trying to persuade them one way or the other? Prices shouldn't be hidden, but there's no need for shopkeepers to go out of their way to draw attention to them.> Another word for it might be "marketing". Price is a> fairly fundamental factor in selling goods and services> so all businesses have to advertise it one way or> another.The information has to be available; it doens't have to be advertised.> Or you chose more expensive items because they were> advertised as being better quality than items that were> cheaper but you believed were inferior. But were they _really_ better quality? Ads are no subsitute for independent reviews and personal examination/experimentation.> Whilst your argument is not unreasonable, there are> several more which show that advertising is good> because it creates a better-informed consumer.*LOL* Advertising is _not_ about creating a better-informed consumer; it's about convincing the consumer to buy a particular product, using whatever half-truths, omissions, and contentless emotional manipulation the advertisers can get away with.> Yes, but we're talking about the societal value of> entertainment here - it's a notional good. Those who> could afford entertainment before won't real
ly notice> the difference because they were already entertained,> those who couldn't will now be able to be more> entertained. Hence, those not earning a lot get more> benefit than those who could previously afford it.Yes, that's true, but we're talking about the societal value of entertainment here - people's incomes are irrelevant. So the overall effect is some people benefit, and some don't notice a difference, ie a net improvement. And if we do look at the financial element, those who could afford it before pay more taxes, but they don't have to pay for it directly any more, so there is no net change on average.> Um, in a word, no. Just because TV isn't an advertising> avenue, do you think every company that was using TV> is just going to stop advertising altogether? Unlikely. > They'll shift spending elsewhere in an attempt to keep> demand up. Ban advertising in any form, then.> Also, you seem to be forgetting that you've just wiped> out a) commercial TV channels b) lots of companies> making TV ads c) some commercial distributors of DVDs. > In other words, the collateral corporate fall out of the> Fund is huge. But where does all the money that was previously supporting these companies go? People spend it on other things, so other, more useful companies increase production and hire more staff.> As I stated above, the original funding for production> comes from companies taking risks. They may not> recover their outlay. Profit is a return on risk taking.No, there is no real risk. Companies take lots of little risks, some of which fail, but more often than not they suceed. Any company that doesn't suceed on average closes down, and is replaced by another. Until the risks become too great, in which case the companies stop taking them, and the entire economy collapses (seen to a mild extent in recessions/depressions).> Your logic escapes me here. You're assuming that> every business has a massive advertising budget which> is passed on the consumers. You haven't proved that. Not every business, but it's the ones who do that fund tv production, and it _is_ passed on to the consumers (as are all costs; a business that doesn't pass all its costs on will go bankrupt very quickly).> You're assuming that businesses will reduce prices to> consumers if sales fall due to reduced advertising. On> the contrary - if they can get away with it, they'll> increase prices to keep their revenue up.On luxury goods, perhaps. Sales for necessities wouldn't fall, and either prices would drop or the manufacturors would pay more tax. And competition or falling demand should bring the price of luxuries back down to a reasonable level.> Plus you also claim that despite the fact that you've> wiped out a whole industry, causing mass> unemployment and reduced consumer> spending/taxation, there will somehow be a net benefit> from the cessation of TV advertising. There will be growth in other industries to compensate. The wiped-out industry was a parasite, not providing any benefit to society.> In reality all that would really happen is that the> volume of junk mail consumers receive would quadrupleBan junk mail.> and many highly skilled members of the work force> would end up delivering that mail. Not good. Highly skilled advertising executives? Their skills aren't of any benefit to society. They can learn to do something useful, or do unskilled work, as they prefer.> Unless you can provide me with some figures that> advertising really is "bad and evil" in terms of basic> consumer goods I really don't think your argument> holds any water.I can't provide figures, but you agree that it costs money to make ads (in addition to the money paid to get them show, which is the bit that pays for TV production)? And you agree that watching ads takes up time that people could more profitably spend doing other things? So you need to show that the net benefit to society from advertising exceeds those costs. I don't see that it has _any_ net benefit; it only helps some companies do better at the expense of others. And keeping advertising executives employed isn't a benefit; paying people to dig holes and other people to fill them up again keeps people employed, but it doesn't add to the net wealth of society.

AndyThomas
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video cd's

Postby AndyThomas » Thu Dec 05, 2002 12:44 am

Sorry, Felice, but a) it's taking too long to reply to these posts and b) I agree less and less with the logic of the arguments you're putting forward. If you eradicate advertising from society there will be short term harm done to the economy at the very least. People who were employed in high salaries will be redundant so consumer spending drops. You've ignored the massive commercial TV industry which would also disappear overnight causing even more job losses. Wipe out ALL forms of advertising and you no longer have most magazines, newspapers, radio stations and so on. Freedom of information suffers as a consequence. The more harm you do the commercial economy, the more harm you do to public revenue, the more harm you do public revenue, the higher taxes have to go to compensate and pay for essential services, the higher taxes go, the more harm you do to the commercial economy because consumer spending is reduced.Can you not accept that I might want to see an advert for a new computer game, because I might want to buy it? If I don't see that advert, I might not buy the game because I might not happen to go to the video game store when it was released and happen to see it. If I don't know it exists, how can I look up an independent review for it? Advertising is persuasive, certainly, but it is also informative at the same time. You seem to assume it's creating some sort of false demand all the time, when in reality it's simply informing consumers that a particular good is being supplied. If they were uninformed, the good could go to waste - where's the benefit in that? What if a new medicine was being advertised? What if a new car that was particularly safe was being advertised? Both of those advertisements have the potential to benefit society above and beyond any commercial consequences they may or may not have.I mean, at the end of the day, you don't have to watch adverts if you think your time would be more valuably spent elsewhere. But I don't actually think a socially democratic state would ban advertising because it would have to recognise the negative impact that would have on many sectors of the economy. What you're proposing would interfere with consumers' knowledge of the economy at large (e.g. not knowing that a superstore offering cheaper goods has opened in their area) resulting in an economy which was way off what its natural equilibrium should be. Remember, efficient allocation of resources requires maximum information for the public about availability of supply, not just prices themselves.What this boils down to is simple economics. If you remove advertising at all levels, you reduce demand for items people may actually want/need to buy and limit their ability to make informed decisions about what the equilibrium price should be. Have a look at the graphs here:http://www.pigstuy.com/resources/econ/0 ... hs.htmlThe Demand curve would shift left, causing prices to fall and, critically, fewer goods to be supplied. If fewer goods are supplied, the companies move further away from their most efficient production point where they would be maximising economies of scale. If that price isn't sufficient to sustain all the companies supplying that good, companies drop out and supply is reduced - causing prices to rise (the supply curve shifts left).Assuming demand remains constant, you then end up with a few companies scraping by and prices no lower than when advertising was still in place. But crucially, those companies still producing are producing less efficiently than they were before (being unable to take advantage of economies of scale) and probably employing fewer people. Fewer people employed means less overall demand in the economy. So you hit recession.So, yes, in the short term advertising might lead to price decreases - but not because spend on advertising is out of the equation, because demand has been reduced economy-wide. Speaking of which, consider a supermarket chain advertising itself. Consider all the lines it sells. Do you think that advertising is going to raise the cost of every single good that supermarket chain sells, across the whole economy, by any appreciable amount? Seriously? Any cost will be outweighed by the ability to buy in bulk as a result of reasonably high demand. You also forget that some companies will loss lead if necessary, enabling the consumer to get some items at below cost.Basically, Felice, I think that what you're proposing would cause a communist style scenario where market forces were so heavily restricted that the economy would not function as efficiently as it could, harming the overall public good. You've also taken this discussion well beyond its original parameters so I'm not going to engage in it any further.My final thought - a simple solution to the original issue would be to change copyright law so that failure to commercially exploit a licence within a shorter period of time than is currently the case would render it "public domain", allowing distribution at near cost as is the case, for example, with Shakespeare's plays available as cheap "classics" in book stores because no royalty fee is payable on the content. That would retain the initial incentive for copyrighted work to be produced while allowing for societal benefit from the work once the commercial interest had been exhausted.
Andy Thomas - SFXB Webmaster and Forum Moderator

felice
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video cd's

Postby felice » Thu Dec 05, 2002 4:07 am

> If you eradicate advertising from society there will be> short term harm done to the economy at the very least. Short term, perhaps. But when it recovers, it will be stronger than before.> People who were employed in high salaries will be> redundant so consumer spending drops. You've> ignored the massive commercial TV industry which> would also disappear overnight causing even more job> losses. All of that should be matched by new jobs in the industries which were previously paying to support the vanished industries, or the owners of those industries will become richer and spend more themselves. The money that was paying for the vanished industries doesn't vanish with them; it has to go somewhere, and whereever that somewhere is, it will generate new jobs to replace the ones that had been lost.> Wipe out ALL forms of advertising and you no longer> have most magazines, newspapers, radio stations and> so on. Radio would have to be state funded; magazines and newspapers would simply be priced according to their real cost of production (which we currently pay anyway, by buying the things advertised in them). I expect there'd be a massive rise in popularity for online information (another thing that needs to be changed; bandwidth should be paid for entirely by the user, not by the content provider).> The more harm you do the commercial economy, the> more harm you do to public revenue, the more harm> you do public revenue, the higher taxes have to go to> compensate and pay for essential services, the higher> taxes go, the more harm you do to the commercial> economy Hmm... I'm not entirely sure you're wrong there. It's crazy, but the capitalist system _is_ crazy. I'm beginning to think that it might not be possible to gradually introduce bits of rational socialism without triggering the collapse of the unstable capitalist system. But if we take this argument further... what if some other industry collapses? Does that inevitably lead to the collapse of the whole economy? What if someone invents a cheap, pollution-free car that will run on tap water, say? Every petrol station in the world goes out of business, along with oil refinieries, etc. So the development of such a car would be a bad thing under capitalism...I'm sure there have been industry collapses in the past, and the economy has survived somehow.> Can you not accept that I might want to see an advert> for a new computer game, because I might want to buy> it?If you're interested in computer games, you should read computer game magazines or web sites to keep you informed on new developments.> You seem to assume it's creating some sort of false> demand all the time, when in reality it's simply informing> consumers that a particular good is being supplied. If> they were uninformed, the good could go to waste -> where's the benefit in that? I'm all in favour of informed consumers, but advertising is a very poor source of information; the signal-to-noise ratio is very low.> What if a new medicine was being advertised? Medicine shouldn't be advertised; it should be reported in independent medical journals, so doctors can stay informed and prescribe the best option for their patients. > What if a new car that was particularly safe was being> advertised? If it's a drastic improvement in safety, then it's general interest news, and should be widely reported. If it's a marginal improvement, car retailers should be informed. In either case, evidence to prove the claimed increased safety should be provided.> I mean, at the end of the day, you don't have to watch> adverts if you think your time would be more valuably> spent elsewhere. You really think most people watch ads by choice? The point of advertising is to put propaganda in places where people can't help seeing at least some of it (such as interspersed with things you do want to see).> (e.g. not knowing that a superstore offering cheaper> goods has opened in their area) That counts as news, I think.> Remember, efficient allocation of resources requires> maximum information for the public about availability of> supply, not just prices themselves.Yes, maximum _availability_ of information is good. Forcing propaganda down our throats whether we want it or not is not so good.> What this boils down to is simple economics. If you> remove advertising at all levels, you reduce demand for> items people may actually want/need to buy and limit> their ability to make informed decisions about what the> equilibrium price should be.Do you? I'm not convinced that removing advertising would reduce demand. It would certainly change it, but as long as their income is the same, people will still want to spend just as much. Removing advertising merely lets them make a more free choice as to what they spend it on. Information (as opposed to propaganda) regarding purchasing options should be easily available (as opposed to being forced upon them).> consider a supermarket chain advertising itself. > Consider all the lines it sells. Do you think that> advertising is going to raise the cost of every single> good that supermarket chain sells, across the whole> economy, by any appreciable amount? Depends on your point of view. Perhaps it raises the cost of each item by half a penny. Trivial? But what if that half was paid to the checkout operators instead? How many items do they process in an hour - hundreds? Thousands? So that would be several extra pounds an hour for them.> Any cost will be outweighed by the ability to buy in bulk> as a result of reasonably high demand. No, because people wouldn't stop going to supermarkets if they stopped advertising.> You also forget that some companies will loss lead if> necessary, enabling the consumer to get some items at> below cost.Only in order to put competition out of business, build customer loyalty, etc, in order to allow them to charge more later.> Basically, Felice, I think that what you're proposing> would cause a communist style scenarioIt would certainly be a lot less messy under a fully socialist system than mixed in with capitalism.> where market forces were so heavily restricted that> the economy would not function as efficiently as it> could, harming the overall public good. I want market forces to be given more freedom to operate, not less. But we'd be dealing with different curves: Demand would be the same, but without the profit motive to push supply up as price increases, supply would be a function of quantity and production costs, sloping in the _same_ direction as demand (because per unit price increases as quantity drops). The quantity produced would still be the meeting point of the two lines.> You've also taken this discussion well beyond its> original parameters so I'm not going to engage in it any> further.I wasn't aware that conversations had to stick to defined parameters...> My final thought - a simple solution to the original issue> would be to change copyright law so that failure to> commercially exploit a licence within a shorter period of> time than is currently the case would render it "public> domain"I'm not sure that would work very well... for media, it could prevent the release of high-quality versions, since the original masters wouldn't be available. And it doesn't prevent piracy of new items. For books, publishers would be tempted to let books go out of print quickly, so they can re-release them later without having to pay royalties - not good for the writers.

AndyThomas
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Postby AndyThomas » Thu Dec 05, 2002 9:29 pm

> All of that should be matched by new jobs in the> industries which were previously paying to support> the vanished industries, or the owners of those> industries will become richer and spend more> themselves. The money that was paying for the> vanished industries doesn't vanish with them; it has> to go somewhere, and whereever that somewhere is,> it will generate new jobs to replace the ones that had > been lost. But this doesn't magically happen overnight, even if people's skills were directly transferable.  You also assume that removing advertising, removing demand, will actually encourage growth.  Why would it?  If the industries were the sort that needed to advertise, then clearly their sales will suffer from lack of advertising, which means that whatever savings they make (how much do you think advertising actually costs, incidentally? ) from stopping advertising will be cancelled out from their reduced revenue.  No new jobs would be created.  The turnover the dead companies were producing WILL disappear - it will no longer be on the GDP balance sheet for the country in question, and you'll probably find that the government is having to increase spending on re-training and unemployment.> Radio would have to be state funded; magazines and> newspapers would simply be priced according to their> real cost of production (which we currently pay> anyway, by buying the things advertised in them). I> expect there'd be a massive rise in popularity for > online information (another thing that needs to be > changed; bandwidth should be paid for entirely by the> user, not by the content provider). Oh goody, more state funded media empires.  More expensive newspapers because they can no longer sell advertising space to subsidise production costs.  Fewer sales, fewer newspapers, more job losses.  Going well.  Massive rise in demand for on-line information?  How do you think free-information sites fund themselves?  Yes, you've guessed it, advertising.  Even I try and use a bit to subsidise my overheads!  Plus, now you're going to make it more expensive for the consumer to get content in the first place!  The burden you're placing on consumers here is massive...> I'm beginning to think that it might not be possible to> gradually introduce bits of rational socialism without> triggering the collapse of the unstable capitalist> system. But if we take this argument further... what if> some other industry collapses? Does that inevitably> lead to the collapse of the whole economy?Ah, but you're missing something there.  You say that a capitalist system is "unstable".  But critically, it's dynamically unstable.  Over time, it will re-establish an equilibrium if disturbed, just like natural systems do.  So, there will be times where some industries are doing better than others.  When an entire industry collapses, it does cause an economy problems - take the steel and coal industries here.  It's taken 20 years for regeneration to take place, and it's still ongoing - there's still high unemployment in some areas, still a need for retraining.  Business may not do that, so it's down to the government - so at the same time as commercial revenues fall, government spending needs to increase.  That's why we need taxation at all - the government is able to act as a security blanket and to some extent can help ease recession, if it gets things right.Hence, just suddenly coming along and ripping out several industries at a time with all the after effects that would bring could actually be catastrophic, yes.  Most industries decline over time if they're going to.  After all, if you take the biological example, we might survive the loss of a finger, a toe, but lose a leg and although we might survive it'll take a lot of adaptation to return to something like the state you were in before.  So if you're arguing for the social good, rapid and drastic change is seldom a good idea.> If you're interested in computer games, you should> read computer game magazines or web sites to keep> you informed on new developments. Both of which would be heavily reliant on, yes, you guessed it, advertising revenues to exist.  So maybe they'd be too expensive for me to buy.  ####, if you can't advertise at all, then maybe they don't even get review copies of the game!  So the cost of their buying the game gets passed on to me!> Medicine shouldn't be advertised; it should be > reported in independent medical journals, so doctors> can stay informed and prescribe the best option for> their patients.Yes, there's nothing I like better on a quiet Sunday afternoon than smoking my pipe and reading through the latest independent medical journals to see if there's a cure for my athlete's foot!  I don't know how it works abroad, but I don't have to see my doctor - or a pharmacist - to buy certain medicines.  Oh, and doctors often can't afford to prescribe the best option available - so I might want to know about other options.  This in a publically funded health service, incidentally.> You really think most people watch ads by choice?Perhaps not.  Do you really think all people turn into zombies when they see ads, immediately walk out the door and start buying everything that was advertised?  Some might do, I'm sure.  I also know of some people who actually *gasp* turn the sound off during ads!  Or just watch BBC!  If you feel that society is being brainwashed by ads, well, perhaps that's more of an educational issue!  You are talking about this in terms of mind control by using the term propaganda:> Removing advertising merely lets them make a more > free choice as to what they spend it on. Information> (as opposed to propaganda) regarding purchasing> options should be easily available (as opposed to> being forced upon them).Consumers aren't forced to buy anything.  Advertising presents them with choices, which they may not even be able to action if the store/good isn't local to them.  All that advertising is doing is either a) making out goods to be cheaper than others (if they weren't the advert would get pulled) or b) making goods look more desirable than others.  Being a reasonably rational individual, I do shop around quite a lot as most people probably do.  I'm not convinced that advertising has the level of impact you describe.  In fashion-led industries, perhaps, because there the quality issue is paramount and can be quite notional.  Hey, there's another industry gone from lack of advertising...!  Advertising actually keeps a lot of very smart, inventive people in work as well if you think about it - it'd be a shame to see those talents be wasted.  I don't know, perhaps advertising is heavier elsewhere than in Britain?> Depends on your point of view. Perhaps it raises the> cost of each item by half a penny.It doesn't depend on your point of view at all.  It's an objective measurement.  If it isn't, you can't prove your case one way or another.  Basically, all consumer facing businesses will advertise either by having big signs, or whatever.  I imagine that, as with all the supermarket's other costs which it needs to cover, an advertising budget will be a factor affecting what the supermarket needs to charge at to break even.  Even the low-priced supermarkets over here advertise.  If it's so expensive, how can they afford to do it and still remain low-priced?  Simple.  Advertising lets people know they're low-priced, so more people come to buy from them.  More people buy from them, their ability to supply goods increases and the average price of the goods can stay low - and more people get goods at lower prices.  Plus more revenue to get taxed on.  Advertising might be an "evil" but it's a necessary one for efficiency.  Oh, and you don't really thing check-out staff would see the benefit of cost cu
tting on advertising do you?  Even if there were any?  > Only in order to put competition out of business, build> customer loyalty, etc, in order to allow them to charge> more later. You can't generally loss lead long enough to put similar competitors out of business.  Customer loyalty is certainly a reason they do it - but if they then started ripping people off do you really think people would hang around?  Smart shoppers would take advantage of whatever the best deal at the time was - assuming it was advertised, of course ;)> I want market forces to be given more freedom to> operate, not less.  But we'd be dealing with different> curves: Demand would be the same, but without the> profit motive to push supply up as price increases, > supply would be a function of quantity and production> costs, sloping in the _same_ direction as demand> (because per unit price increases as quantity drops). Well, if the supply curve sloped in the same way it'd never meet the demand curve so there'd be no way of determing a price.  You say you want market forces to be given more freedom, but the profit incentive is the fundamental market force.  Note that quantity isn't quantity produced in demand graphs, it's quantity SOLD at the MARKET price.  Hence the supply curve is a hypothetical of what would be produced, for a given price level.  So that's a critical difference.  You're right in that it's very costly to produce few a few units, which is why there's little incentive to do it.  However, the supply/demand graph is a behaviorual thing.If you want to remove the profit element then you have to decide how much you're going to supply without reference to profit.  Hence the price is irrelevant and you supply a fixed amount at whatever price.  What THAT gives you isn't a curve, it's a vertical line.  This is the classic communist set-up incidentally - market forces be damned, you take a best guess at how much people want and you supply that many regardless of the cost.This can causes difficulties for a number of reason.  An example will help.  Suppose I guess that 100 cars will be demanded by people.  I build a factory and employ enough people to meet that demand and set a price.  Unfortunately demand for motorbikes goes up.  There's only demand for 80 cars at my price.  But hey, that's OK, I've got 100 made and I'm not bothered about profit so the other 20 will just rust because all I want to do is meet demand.  If I did sell them at a cheaper price, I'd make even more of a loss than I did on the first 80.If the guy was responding to market forces, he'd only supply 80 cars and his workforce, raw material costs etc would be lower - and he might make what's known as "normal" profit - the profit required to keep resources where they are.The next year I make 100 cars again.  Motorbikes turn out to have a bad safety record.  People want cars again.  The people ask for 120 cars.  Oh dear.  I only have 100.  I'm sold out.  But as I don't care about profit, I don't make any more, even though my factory is standing idle along with my workforce.If the guy was responding to market forces, there'd be no shortage of cars because he'd expand his factory and workforce.  Because demand has gone up, he can earn more for each car too.  If, at this point, he earns abnormal profit - profit above "normal" profit, then other businessmen will be encouraged to start making cars.  Supply will increase, reducing prices again as the businessmen compete for business.So you see, if you ignore profit, your ability to supply is very rigid.  A surplus may not be a problem (although it's not economically efficient because you're probably not maximising economies of scale) but a shortage could be if you're trying to produce something vital and don't have the spare production capacity.  The profit incentive causes players to enter the market when prices rise and leave it when prices decrease - the benefit being that supply increases with demand whilst prices remain within a reasonable range.This is not without its problems, obviously.  If a firm becomes able to block competitors from entry, then it can exploit high demand and keep making abnormal profits.  Production costs may not be minimised due to diseconomies of scale, so that's not healthy for the overall use of resources, which is why governments monitor monopolies closely.This sort of thing would have been great revision for my A-Level economics years back...  Oh, and hey, if we want to talk about uplifts on consumer goods - consider how much government taxes add to prices across the board.  The government distorts prices far more than advertising costs, but of course they need that revenue to produce "public goods" as opposed to "private goods".  Which actually brings us back to the beginning again - this whole debate has revolved around whether entertainment should be treated as a "private good" made by private firms with profit incentives or a government-supplied tax funded "public good" because it's non-diminishable and of some notional benefit to society.Incidentally, just to close up the economic argument - in either of the economic situations where the fixed supply doesn't meet demand there's wastage.  In the first example the factory was too big, the work force was too big and too many raw materials were used.  In the second example, the resources to make the cars were probably there but weren't employed meaning that the fixed and average costs (factory maintenance, wages) which could have been met by selling more cars, weren't.  So in example one, the government has to subsidise the plant because it isn't self-sufficient.  In example two, the government fails to meet demand and the factory doesn't operate as efficiently as it could do because manpower goes to waste.In these examples I assume that the cars wouldn't be sold at cost - that at least most of the cost of production would be covered by 100 cars being sold.  Consider that in your state-funded DVD model, only the materials costs were being covered by the sale price.  None of the manpower in terms of actors, directors, editors, DVD creators, or fixed costs like buildings, set design, props etc were being cost.  If the demand for your entertainment is not high, then the demand curve is way off to the left and your supply curve, being vertical, might not even meet the foot of your demand curve.  So, you'd certainly meet demand, but you'd have the equivalent of a skyscraper of unwanted cars - all of which would have to be funded from taxation.  There's a reason communist states ran into financial difficulties...> I'm not sure that would work very well... for media, it> could prevent  the release of high-quality versions, > since the original masters wouldn't be available. And> it doesn't prevent piracy of new items. For books,> publishers would be tempted to let books go out of > print quickly, so they can re-release them later> without having to pay royalties - not good for the> writers.On the first point - why shouldn't the masters be available?  It's something of a moot point for digital media anyway, one copy's as good as another.  For physical media, the masters could be placed in what's called escrow - effectively archived until needed in a central storage area.  It might not prevent piracy of new items (what would? ) but it would allow enthusiasts to reproduce items at cost later - which is relevant in the context of video CDs of shows like Star Fleet of course (yes, dragged it back on-topic)!On the second topic - unless the book was massively popular, interest in it would probably decrease over time.  I've no idea what the shelf-life of an average book is, but I would think the author would get the bulk of their royalties pretty quickly.  However, it's a good point.  Books are unusual of course in that it's generally a private individual making them.  Items produced by companies
are group efforts, and of course it's the company that would tend to reap the benefits because it owns the copyright.  So perhaps where a company has dissolved and no other company has picked up the rights, or where a company hasn't made any use of them at all, there'd be an argument for reduced copyright.  It's actually an interesting legal question that I'm not sure of the answer to - I would guess that company media rights ownership passes to an administrator for sale when the company is wound up, but if no-one takes it up it might revert to joint ownership amongst the surviving authors.  Mmm.  Tricky.
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