Price Matters

June 28, 2011

Turn on the radio to catch a weather report, and it’s there.  Switch to a ball game; it’s there too.  Put on your favorite TV show, and it’ll soon be in your face.  Go to the supermarket where background noise tends to be musical, and just wait. Sure enough, an interruption to bring you the omniscient one is bound to occur.  Research for something on the web, and it’s liable to pop up.  By it, I mean those hypnotically repetitive, heavy density ads with no content about the product, other than the low price that can’t be beat.  The worst offenders occupy an Orwellian world that one simply cannot escape.

Advertising is essential for doing business, needed to create name recognition and to establish customer interest in one’s product.  Messages that talk about discount prices over and over again in clever ways but never the product itself is symptomatic of a bigger cultural trend.  Unbeatably low prices are to private goods and services what endless tax cuts connote for the public arena.  Ultimate utility is achieved not in the consumption of something you badly crave but in foregoing as little as possible to get it.  The design of the good or quality of the service are secondary, so much so that an ad campaign can be highly successful without even mentioning the item’s own intrinsic usefulness.

This state of affairs has been very prevalent in government for a long time.  For many folks, cutting taxes is never an ill-timed idea, and an opportune time for raising taxes is, well, the ultimate oxymoron.  A recommendation of lower taxation with or without representation is always considered a winning suggestion.  The other side of the equation, which involves what tax money provides and how public services enable or hinder the availability of private goods and services, is a matter of secondary or even tertiary importance. 

Prices and taxes provide a means for organizing society, empowering people with signals to decide what to make, the means for doing so, and a circuitry for distributing what is produced.  The “rational” consumer of economist models attempts to spend every last unit of money in ways that return the highest possible customer satisfaction.  So yes, price matters critically and greatly in economic decisions.  But a strategy that considers price only is not a healthy or balanced approach for individuals or communities.  

Copyright Larry Greenberg 2011.  All rights reserved.  No secondary distribution without express permission.


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