The difficulty with this “algorithm” or set of rules is that the optimising function does not include the side effects of a trade between two parties being considered as a part of the trade. That is, in optimisation language the objective function of maximising benefit only includes the benefits to the parties involved. It does not include other factors such as maximising the total wealth of the whole society or reducing greenhouse gases. To overcome this problem we build other structures around our trading activities to address externalities (such as taxes for redistribution of wealth). A different approach is to include other measures to be optimised into individual trades that address externalities rather than trying to address externalities by restrictions imposed outside individual trades. Restrictions will sometimes work but changing trading rules to achieve our desired outcomes is guaranteed to work.

That said, since the only TV ads I see are during Rugby broadcasts and I don’t really about them, perhaps I am missing the point?

Maybe I am missing the point more broadly, as well, or am just wilfully blind. But whilst I agree with the importance of self-control to society, and the comments about the importance of commitment devices, and I even think I agree about the significance of ‘psychological’ input to economics, I simply cannot find much of what Gittins thinks we need in terms of government-compelled commitment enhancers compelling.

I think that one could excise the status goods happiness-tinged bit, inclulding the apparent conclusion that the waste involved requires government action. I think it is tangential to the main point about commitment insofar as relevant to the practice of economics. I think that, from a policy perspective, the status goods stuff is largely irrelevant to policy dealing with commitment and self-discipline, and wrongheaded, in relation to policy dealing with self-control and/or ‘zero-sum wastage’.

In fact, I think the discussion about status goods is simply too broad. Given such a broad presentation, the argument is indeed compelling – quel horreur, tout ce gaspillage! However, this is artificial when other considerations are accepted as legitimate, and not merely dismissed (implicitly) as auto-justifications for a desire for status. In particular, the desire for internal personal gratification seems quite separate to me, and does not entail the waste that Gittins identifies since it is theoretically never zero-sum (at least gratifying me is not!).

One easy example is that I have searched my soul and quite simply I cannot remember having been to a restaurant for anything to do with my own status. In fact I nearly did once but I didn’t because it wasn’t a good enough reason to pay that much.

Some of his ‘uncontroversial’ examples are controversial in this context. What does drug use (of all things) tell us about a) status as a motive and b) government enhancement of our commitment devices? Usury is surely an even worse example! And there drinking is pretty ambiguous since we seem to generally agree that it is ok to drink oneself to death, notwithstanding the complete inconsistency between this and the position in relation to smoking etc.

It all boils down to trying to find a palatable way of telling us what we do and do not need. It ties in well with the contemporary fuss about the environment, and obesity, but it has a terrible track record. His fancy new car is a good case in point – it is probably safer than the ten year old Toyota!\

Finally, I would add to his penultimate paragraph that self-control begins and ends with selves. Laws, such as drink-driving rules, have a role to play in changing social norms. But I think that on hearing this speech one might have an inflated idea of how big a role. Restricting advertising seems like hardly a useful answer to me when it is really weakening people’s self-control by reducing their exposure to temptation. Whilst obviously we shouldn’t all be demi-gods able to resist all temptation nor is there obvious merit in sheltering people from temptation.

Then again, as I said at the outset, since I simply don’t see the vast majority of television advertising, and since my food consumption choices would be utterly unaffected by any amount of advertising for fast food, maybe I am just missing the point.

In short, were always facing choices where the benefits are clear and immediate, whereas the costs are uncertain and distant. The greatest problem is our willpower to defer gratification, but its compounded by uncertainty about our own preferences and about what the future holds.

But who is telling us about the clear and present benefits, and touching our positional-goods-now g-spot? Advertisers. The merchants of discontent.

No analysis of modern life is even 50% complete without addressing the pernicious effect of multi-media advertising. My kids will not read Ross’s essay but they will see perhaps 100 adverts today. The market in information is very one-sided. I am afraid Ross’s call to arms, that we should “research the use of personal commitment devices and educate the public” is so much not air. All the best pychologists of consumption are working for Saatchi and Saatchi.

There is almost no net public benefit in advertising. It is a cost, aimed at stimulating both the demand for the particular product and demand in general. It is not aimed at solving the economic problem of scarcity. Indeed, it actively campaigns in the opposite direction.

The information that consumers actually need could be provided by a dedicated advertising channel with 12pt Roman format and strict fields that specifically exclude calls to status. If advertising has value then people would watch it. I am tipping they hardly ever would. The least expensive method of informing consumers would be that the government buys out Choice Magazine and delivers it to every household for free.

(Insert libertarian rant here – see no doubt below).

When there is a coup the first thing the troops grab is the TV station. It is all about control of information. I fear the battle was lost long ago. Sorry to be so pessimistic. I have a raging flu and fever and the world looks pretty bleak.

I hope that not only economists but scholars in other disciplines turn their attention to the problems of abundance and examine the assumptions and models that they rely on. A world in which the state looks to psychology to inform public policy in order to manipulate an increasing amount of what is now regarded as the private behaviour of individual citizens would be a rather unpleasant one.