L. Neil Smith's

Number 10, July 1996

The Economics of Getting Screwed

By Andrew F. Boardman

Exclusive to The Libertarian Enterprise

         Watch late night television any night and you'll see hundreds of thousands of dollars worth of infomercials. What causes groups of (presumably) otherwise intelligent, rational human beings in certain circumstances to bend over, pull their pants down, and let con artists have their wicked way with their wallets? Or their votes? Or their rights?
         Here's an exercise: take a guess at how much it costs to buy a full half hour advertisement on any given channel. Even the late night cheap spots. Multiply that by the number of times some of the worst of these infomercials run, and don't forget that many will run on multiple channels at the same time, some more than once per night on a given channel.
         Now add to that the amount it might cost to produce one of these infomercials. Keep in mind that, yes, the entire "audience" are paid extras, and most of these shows are filmed and produced by union employees.
         Infomercials are pretty expensive pieces of work to create and run constantly, but consider the revenue that the psychic hotlines, get rich scheme artists, and other "no value high pitch" salesdroids must be generating in order to afford, and increase, the numbers of infomercials.
         Depressing, isn't it?
         Not as depressing as going to a political convention and having some slick bastard bleeding the audience emotionally, and more to the point financially, by telling them things you can just tell he knows better than to believe himself.
         After getting quite frustrated by this and other almost identical situations, I decided to analyze it with the old standby tool: economics. We know where the dollars are going, but why are the they there for the con men, and where are they coming from?
         Everyone has dreams, prejudices, hobbies, favored forms of entertainment, etc. Someone who likes to read science fiction is willing to pay for sci-fi books, watch sci-fi television shows, and go see sci-fi movies. Someone who likes billiards is willing to buy books on billiards, buy a billiards table, a nice cue (maybe more than one, and some crappy ones for his friends to play with), a set of billiards balls, and a rack. This willingness to spend money in economics is called "demand". We create demand for the goods and services we're willing to pay for.
         We have demand for things that do not even exist, because if they were here we would pay for them. A great part of capitalism is determining what has demand, and creating the good or service, called "supply". Those goods or services with greater demand will command a higher price, created higher profits, thus removing resources from less profitable goods or services, and freeing them up for those with more demand.
         This is the oft-referred to "invisible hand of the marketplace", as coined by Adam Smith. The market is a self-correcting mechanism, where resources are moved from goods and services with lower demand to those with higher demand.
         The problem does not have to do with those who create psychic hotlines, get rich quick schemes, nor political con men. They are only reacting to demand! The problem is with those who provide the demand. These people have little demands within them, often things they are willing to pay to hear. Some examples:

"Life is harder now that it ever was for anybody before."

"You can lose weight and look better without any effort!"

"Your failure isn't your fault!"

"Health care is a right, you should get it for free!"

"Jobs are rights, too! You should get one no matter what your qualifications, intelligence, skills, or education."

"All your problems can be solved by the supernatural!"

"Most Americans are already Libertarians, they just don't know it!"

         When enough demand is generated for these statements, it is only a matter of time before a capitalist, ever on the prowl for needs to be met, will supply the statements. Sometimes even semi-credibly. Not that it often matters, because anyone with that kind of a demand is more than willing to meet the supplier half way (especially if supply is low).
         The demand is caused by people who don't have the ethical and intellectual backbone required to face these demands within themselves and say, "Wait, this is utterly stupid."
         Blaming the supply side might be helpful as a stress outlet, but it is useless in fixing the problem. The market will always bring us suppliers if the demand is great enough. Fighting fundamental economic truths is the job of the government, not you. And it's pointless for them, too.
         The solution is, and can only be, getting rid of enough demand so that the market shifts resources away from the con artists and towards more productive uses.
         How do you do this? First and foremost, while we all tend to have a sense of what a person or a group wants us to say, we must avoid this at all costs! If you do not, you are reacting to the demand, rather than trying to affect it. You will have no effect on a person if you tell them what they already want to hear.
         You must tell them what they do not want to hear. Loudly, and confidently. If you have something you want to tell them is that they want to hear, put it off until you've finished telling them all the things that they don't want to hear. Once you've shown them that you are not a supplier, not out to stroke their ego for reward, only then is it okay to tell them they were right in a few cases.
         People will not be changed, demand will not be altered, when that person perceives that you are a supplier. "Why think? He said I was right!"
         The correct response is:

"You're wrong, you're wrong, you're wrong wrong wrong!"

Andrew F. Boardman is a Software Development Engineer for a privately held company in Denver, CO. He has been a libertarian (the "non-aggression principle" kind) for 10 years, and is a founding member of the Libertarian Second Amendment Caucus. He recently lost the election for the L.P. State Chair position in Colorado, and has been more relaxed ever since.

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