Informational advertising.

Coercive advertising (Question: Is there any such thing?)

Deceptive advertising

Misleading advertising. Question: Where do we draw the line between puffery and misleading advertising?

"Puffery"

Bombardment, or name recognition advertising.

Associational advertising.

Question: Is it a form of dishonesty to suggest "false" association?

Question: Is it immoral to use associations that play on people’s insecurities or baser impulses?

John Kenneth Galbraith, The Affluent Society (1958).

The demons analogy: "Were it so that man on arising each morning was assailed by demons which instilled in him a passion sometimes for silk shirts, sometimes for kitchenware, sometimes for chamber-pots, and sometimes for orange squash, there would be every reason to applaud the effort to find the goods, however odd, that quenched this flame. But should it be that his passion was the result of his first having cultivated the demons, and should it also be that his effort to allay it stirred the demons to ever greater and greater effort, there would be questioned as to how rational was his solution. A loss of restrained by conventional attitudes, he might wonder if the solution lay with more goods or fewer demons."

The "Dependence Effect:" "As a society becomes increasingly affluent, wants are increasingly created by the process by which they are satisfied. . . . [P]roducers may proceed actively to create wants through advertising and salesmanship. Wants thus come to depend on output. . . . [I]t can no longer be assumed that welfare is greater at an all-around higher level of production than at a lower one. It may be the same. The higher level of production has, merely, a higher level of wants creation necessitating a higher level of want satisfaction. There will be frequent occasion to refer to the way wants depend on the process by which they are satisfied. It will be convenient to call it the ‘Dependence Effect.’"

The Dependence Effect and the Trade-Off between Private and Public Consumption: "Presumably a community can be as well rewarded by buying better schools or better parks as by buying bigger cars.... It is scarcely sensible that we should satisfy our wants in private goods with reckless abundance, while in the case of public goods,... we practice extreme self-denial.... The conventional wisdom holds that the community, large or small, makes a decision as to how much it will devote to its public services. This decision is arrived at by democratic processes.... It will be obvious, however, that this view depends on the notion of independently determined consumer wants. . . . But given the Dependence Effect – given that consumer wants are created by the process by which they are satisfied – the consumer makes no such choice.... Car demand which is expensively synthesized will inevitably have a much larger claim on income than parks or public health or even roads where no such influence operates. The engines of mass communication, in their highest state of development, assail the eyes and ears of the community on behalf of more beer but not of more schools."

F. A. von Hayek, "The Non-Sequitur of the ‘Dependence Effect’"

According to Hayak, Galbraith’s argument depends on the claim that "a great part of the wants which are still unsatisfied in modern society are not wants which would be experienced spontaneously by the individual if left to himself, but are wants which are created by the process by which they are satisfied. It is then represented as self-evident that for this reason such wants cannot be urgent or important. . . . This crucial conclusion appears to be a complete non-secretary.... the first part of the argument is of course perfectly true: we would not desire any of the amenities of civilization... if we did not live in a society in which others provide them.... to say that a desire is not important because it is not in eight is to say that the whole cultural achievement of man is not important."

Hayek’s examples of "synthesized" wants: Literature, art, music.

Hayek’s reductio ad absurdum: "If the fact that people would not feel the need for something if it were not produced did prove that such products are a small value, all those highest products of human endeavor would be a small value."

Hayek on conclusion about advertising: "It is because each individual producer thinks that the consumers can be persuaded to like his products that he endeavors to influence them. But though this effort is part of the influences which shape consumers taste, no producer can in any real sense ‘determine’ them.... If the producer could in fact deliberately determine what the consumers will want, Professor Galbraith’s conclusion would have some validity. But though this is skillfully suggested, it is nowhere made credible, and could hardly be made credible because it is not true."

Questions: Does advertising allow production to drive demand rather than the other way around? If so, is this a bad thing?