An Economist’s view of Chomsky on Advertising & Management

Noam Chomsky writes, ‘the existence of the advertising industry is a sign of the unwillingness to let markets function. If you had markets, you wouldn’t have advertising. If somebody had something to sell, they would say what it is and you would buy it if you want it. But oligopolies want to stop price wars. They want product differentiation to give them market power’.

In other words, Chomsky argues that advertising – which increases the power of the brand – leads markets away from perfect competition to imperfect competition. It is true that the way the economy works differs substantially from the way that the economy is modelled, however product differentiation also comes about from genuinely changing the product from what the market offers. For instance chocolate-flavoured Weetabix costs a little bit more than regular Weetabix.

He writes that industrialists favour a disciplined work force over a creative work force. Letting managers run things instead of skilled machinists is the favoured strategy, even if this method was less profitable. This strategy was employed because it ensured that the workers were controlled. And worker control was needed to avoid a situation where the role of the boss is itself questioned, possibly leading to worker action, for instance strikes.

 So, to put it simply the managerial strata of big firms have an incentive to suppress trade unions and the like because it allows managers to profit from improvements in productivity, even if these improvements come from the workers and not from the managers.

Chomsky writes that the English working class of the 19th century may well have been more educated than the aristocrats, because high culture (including literature and classics) was such an important part of every day life of the common people.

 For an explanation of the economic terms used in the article, see the Concepts section.


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