Naked Economics: Undressing the Dismal Science pdfdrive com
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Naked Economics Undressing the Dismal Science ( PDFDrive )
these things before you get out of your car in a state you’ve never been in.
Compare that to the billboard advertising Chuck’s Big Burger. Chuck’s may offer one of the best burgers west of the Mississippi. Or it might be a likely spot for the nation’s next large E. coli outbreak. How would you know? If you lived in Omaha, then you might be familiar with Chuck’s reputation. But you don’t; you are driving through Nebraska at nine o’clock at night. (What time does Chuck’s close, anyway?) If you are like millions of other people, even those who find fast food relatively unappealing, you will seek out the golden arches because you know what lies beneath them. McDonald’s sells hamburgers, fries, and, most important, predictability. This idea underlies the concept of “branding,” whereby companies spend enormous sums of money to build an identity for their products. Branding solves a problem for consumers: How do you select products whose quality or safety you can determine only after you use them (and sometimes not even then)? Hamburgers are just one example. The same rule applies in everything from vacations to fashion. Will you have fun on your cruise? Yes, because it is Royal Caribbean—or Celebrity or Viking or Cunard. I have a poor sense of fashion, so I am reassured that when I buy a Tommy Hilfiger shirt I will look reasonably presentable when I leave the house. Michelin tire advertisements feature babies playing inside of Michelin tires with the tag line “Because so much is riding on your tires.” The implicit message is clear enough. Branding has come under assault as a tool by which avaricious multinational corporations persuade us to pay extortionate premiums for goods that we don’t need. Economics tells a different story: Branding helps to provide an element of trust that is necessary for a complex economy to function. Modern business requires that we conduct major transactions with people whom we’ve never met before. I regularly mail off checks to Fidelity even though I do not know a single person at the company. Harried government regulators can only protect me from the most egregious kinds of fraud. They do not protect me from shoddy business practices, many of which are perfectly legal. Businesses routinely advertise their longevity. That sign outside the butcher proclaiming “Since 1927” is a politic way of saying, “We wouldn’t still be here if we ripped off our customers.” Brands do the same thing. Like reputations, they are built over time. Indeed, sometimes the brand becomes more valuable than the product itself. In 1997, Sara Lee, a company that sells everything from underwear to breakfast sausages, declared that it would begin selling off its manufacturing facilities. No more turkey farms or textile mills. Instead, the company would focus on attaching its prestigious brand names—Champion, Hanes, Coach, Jimmy Dean—to products manufactured by outside firms. One business magazine noted, “Sara Lee believes that its soul is in its brands, and that the best use of its energies is to breathe commercial life into the inert matter supplied by others.” 6 The irony is lovely: Sara Lee’s strategy for growth and profits is to produce nothing. Branding can be a very profitable strategy. In competitive markets, prices are driven relentlessly toward the cost of production. If it costs 10 cents to make a can of soda and I sell it for $1, someone is going to come along and sell it for 50 cents. Soon enough, someone else will be peddling it for a quarter, then 15 cents. Eventually, some ruthlessly efficient corporation will be peddling soda for 11 cents a can. From the consumer’s standpoint, this is the beauty of capitalism. From the producer’s standpoint, it is “commodity hell.” Consider the sorry lot of the American farmer. A soybean is a soybean; as a result, an Iowa farmer cannot charge even one penny above the market price for his crop. Once transportation costs are taken into account, every soybean in the world sells for the same price, which, in most years, is not a whole lot more than it cost to produce. How does a firm save its profits from the death spiral of competition? By convincing the world (rightfully or not) that its mixture of corn syrup and water is different from everyone else’s mixture of corn syrup and water. Coca-Cola is not soda; it’s Coke. Producers of branded goods create a monopoly for themselves—and price their products accordingly—by persuading consumers that their products are like no other. Nike clothes are not pieces of fabric sewn together by workers in Vietnam; they are Tiger Woods’s clothes. Even farmers have taken this message to heart. At the supermarket, one finds (and pays a premium for) Sunkist oranges, Angus beef, Tyson chickens. Sometimes we gather information by paying outsiders to certify quality. Roger Ebert’s job is to see lots of bad movies so that I don’t have to. When he sees the occasional gem, he gives it a “thumbs up.” In the meantime, I am spared from seeing the likes of Tomcats, a film that Mr. Ebert awarded zero stars. I pay for this information in the form of my subscription to the Chicago Sun-Times (or by looking at ads that the Sun-Times is paid to display on its free website). * Download 1.74 Mb. Do'stlaringiz bilan baham: |
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