The goals of sales people and producers are generally not aligned with the goals of consumers. In an ideal world all consumption would be 'pull'.
Consumers would be informed about the available products in a neutral way, would know about the ins and outs of all the products they could choose from and would have an idea of the long-term benefits of the products if purchased.
Clearly, we do not live in an ideal world.
Most consumption of 'primary needs goods' is still on 'pull' basis, at least it is in most parts of the world.
But even there advertising is shaping consumers decisions more and more. Branding and marketing are gaining a bigger foothold than ever before even when it comes to buying everyday needs items such as drinking water, bread, rice, clothing and so on.
For other goods 'regular consumption goods and luxury goods' the situation is even more extreme.
> That's circular. How do you define what objectively benefits someone?
It's not circular, it is recursive ;)
But the recursion bottoms out where you run out of funds to buy something that you really need. Most income spent on useless stuff (for instance to feed addictions) goes at the expense of a real need (for instance to feed or clothe children). By having individuals compete with companies that have meanwhile spent upwards of a century honing their skills we are creating a completely uneven battle.
Nobody is able to make their decisions about what they need with any degree of impartiality.
The best way to describe 'to benefit someone' is to say that their lives have a maximized sense of happiness.
So all other things being equal, if you buy the 'wrong' car because a salesman pushed it down your throat somehow then your happiness will not be as high as it would have been had you gone through with what would have been the most rational decision.
If you look for a definition of what is in the common best interest I would suggest you look everywhere but to your government, almost by definition it does not have the common best interest at heart. In theory it does, in practice I don't think there is a single government on earth that would be able to make that claim and withstand an investigation into the veracity of that claim.
Maybe I'm old and cynical, but where ever I've lived I did not have the feeling the government had my interests in general at heart.
There are a whole lot of people in this thread who don't seem to understand modern economics. Economics is the study of why people make choices: why they forgo one opportunity in favor of a different one.
These choices need not have anything to do with money. In Russell's example, it would seem that there was something about the (contrived) piano purchase that made the buyer prefer buying that piano to using the money for some the other possible choices. And per Mises, we really can't know what those reasons are. Maybe he's lazy and thinks the cost of thinking things through exceeds the monetary value of the piano. Perhaps it was worth more to the buyer to preserve his politeness and civility, rather than giving the salesman the bum's rush. Perhaps he genuinely values giving his daughter the musical education that the piano would enable.
But in a society that we like to claim is tolerant of all values, who are we to say that any of the buyer's values -- his motivations for making some choice -- are wrong in any objective way?
In the bigger picture, it's incorrect to think of transactions as "pushing" or "pulling". In a free market, every transaction is by definition both a push and a pull. Both parties believe that the net result is a net gain to their total utility. The farmer's got tons of wheat and all his capital is tied up in it; the family's cupboard is bare, and you can't eat dollars. Trading a pound of wheat for a couple of dollars is advantageous to both.
These problems of advantage for one side or the other occur in distorted markets where one side doesn't want to execute the transaction, but is coerced into doing so because it's necessary to continue their overall business.
But in a society that we like to claim is tolerant of all values, who are we to say that any of the buyer's values -- his motivations for making some choice -- are wrong in any objective way?
Well, in the extreme cases there are things that society agrees are wrong, such as murder, theft, etc. Whether or not those are objectively wrong is a topic of much discussion in philosophy classes but society in general agrees they are.
What we can often say objectively is that certain actions are detrimental to that person's stated goals. If your goal is to save enough to buy a new car with cash as quickly as feasible, then buying that piano at all is probably not smart, and doing so in the name of politness and civility is certainly contrary to his stated goal.
"But in a society that we like to claim is tolerant of all values, who are we to say that any of the buyer's values -- his motivations for making some choice -- are wrong in any objective way?"
If he regrets his decision, we're not judging him, but sympathizing with him. The salesman would have been more helpful to say, "I think what I'm offering is great. Here is all the information on it. Why don't you take some time to think it over?"
Then the man could take the time to separate his momentary emotions from his actual priorities. And he would be happier in the end.
Any salesman who is willing to do this earns my respect. There are salespeople who genuinely want to help their customers. The one described in this article does not.
> There are a whole lot of people in this thread who don't seem to understand modern economics.
The thread is mainly about marketing, not about economics, marketing changes the dynamics of why people make choices.
> Economics is the study of why people make choices: why they forgo one opportunity in favor of a different one.
Economics involves much more than that:
- production of goods
- logistics
- consumption
And plenty of people would include
- the services branch of commerce
- utilities
- government
> In Russell's example, it would seem that there was something about the (contrived) piano purchase that made the buyer prefer buying that piano to using the money for some the other possible choices.
Indeed, he valued the absence of the salesman more than his money.
> But in a society that we like to claim is tolerant of all values, who are we to say that any of the buyer's values -- his motivations for making some choice -- are wrong in any objective way?
Such as: Buying drugs ? Spending a lot of money to keep up with the Joneses ? (arms race on a small town level)
Teenagers spending a fortune on ringtones, phone applications ? (and they're buying this stuff on credit)
Some choices are simply objectively wrong. There are even some laws to protect consumers against this kind of thing, for instance in some countries if you buy something on-line you have a right to a refund within a certain period.
> The farmer's got tons of wheat and all his capital is tied up in it; the family's cupboard is bare, and you can't eat dollars. Trading a pound of wheat for a couple of dollars is advantageous to both.
The farmer is not 'pushing' his wares though, he makes them available at a fair price on a market. The family is free to buy their wheat from another farmer based on the objective criteria of quality, price and convenience. He's not going to go out of his way to try to get people to buy his produce at the expense of his neighbour.
Farmers are a particular bad example by the way, most individual farmers (at least those that I'm familiar with, there are probably plenty of counterexamples) are held by the throat by 'buying consortia' that consist of large supermarket chains. They set the price, not the sellers.
Hardly any consumers go and buy their food from the farmers directly, unless you live near a 'farmers market' in a rural area.
This is one reason why plenty of farmers go out of business, only to have their bankrupt farms bought up by fronts operated by those consortia.
Transactions on the free market have a 'middle ground', unfortunately the free market is an illusion, no transaction is completely free.
A 'free market' for instance assumes that parties do not collude.
> In an ideal world all consumption would be 'pull'.
I'm not sure that would be ideal. Well, yeah, sure -- but it's so abstract that it doesn't make sense. Even the simplest product has dozens of properties, which again are complicated to understand. There will always be some level of not understanding something, and then you fall back to rely on trusting someone, and that's the end of pure-to-the-core pull.
> Most consumption of 'primary needs goods' is still on 'pull' basis,
I don't agree. There has been advertising long before the ordinary consumer could afford anything luxurious. I'm talking about stuff like this: http://www.advertisingantiques.co.uk/
> But the recursion bottoms out where you run out of funds to buy something that you really need. (...) By having individuals compete with companies that have meanwhile spent upwards of a century honing their skills we are creating a completely uneven battle.
Never the less, in the vast, vast, vast majority of cases the individual wins that battle. When that doesn't happen, there are usually a general inability to prioritise resources behind it. And if it happens, if someone prioritises making a payment on a huge plasma TV rather than feeding their children, I would find it morally bankrupt to blame advertising for that failure.
> The best way to describe 'to benefit someone' is to say that their lives have a maximized sense of happiness (...) if you buy the 'wrong' car because a salesman pushed it down your throat
Sure, and that's fine on the individual level. On the other hand, most people are notoriously aware of especially car salesmen for exactly this reason. And sometime someone needs to get burned, that's how this awareness is kept alive. It's a feedback mechanism, and it's working fine. One of the reasons I bought my last (used) car from the guy I did, was that he insisted that I should take it to a third party mechanic to check it out before signing. The car I got was not the one I initially though I'd get. I'll never know if I'm happier or not (oh well, I'm happier, this one is faster :) ).
> I would suggest you look everywhere but to your government, almost by definition it does not have the common best interest at heart
I agree. My point, and basic premise, is that the greater common best interest can't be defined.
Consumers would be informed about the available products in a neutral way, would know about the ins and outs of all the products they could choose from and would have an idea of the long-term benefits of the products if purchased.
Clearly, we do not live in an ideal world.
Most consumption of 'primary needs goods' is still on 'pull' basis, at least it is in most parts of the world.
But even there advertising is shaping consumers decisions more and more. Branding and marketing are gaining a bigger foothold than ever before even when it comes to buying everyday needs items such as drinking water, bread, rice, clothing and so on.
For other goods 'regular consumption goods and luxury goods' the situation is even more extreme.
> That's circular. How do you define what objectively benefits someone?
It's not circular, it is recursive ;)
But the recursion bottoms out where you run out of funds to buy something that you really need. Most income spent on useless stuff (for instance to feed addictions) goes at the expense of a real need (for instance to feed or clothe children). By having individuals compete with companies that have meanwhile spent upwards of a century honing their skills we are creating a completely uneven battle.
Nobody is able to make their decisions about what they need with any degree of impartiality.
The best way to describe 'to benefit someone' is to say that their lives have a maximized sense of happiness.
So all other things being equal, if you buy the 'wrong' car because a salesman pushed it down your throat somehow then your happiness will not be as high as it would have been had you gone through with what would have been the most rational decision.
If you look for a definition of what is in the common best interest I would suggest you look everywhere but to your government, almost by definition it does not have the common best interest at heart. In theory it does, in practice I don't think there is a single government on earth that would be able to make that claim and withstand an investigation into the veracity of that claim.
Maybe I'm old and cynical, but where ever I've lived I did not have the feeling the government had my interests in general at heart.