Ridiculous, of course. Yet for two centuries, that's exactly how economists envisioned consumers when they thought about them at all. The problem? They did not know how to account for consumer taste, which was deemed too irrational to quantify. Then along came Gary S. Becker and his University of Chicago colleagues.
No, Becker said, consumers aren't amnesiacs. They have pasts that form their expectations of pleasure in the future. They live in a society that shapes their tastes. Far from being unaccountable, these influences can be analyzed and their effects predicted.
Becker even claims that addiction, consumer preference in extremis, has a rational basis that Adam Smith could understand. For making elegant mathematical sense of these ideas whose time had come, Becker won the Nobel Prize in economics in 1992.
Accounting for Tastes, his collection of a decade's worth of prize-winning work, isn't beach reading-unless you happen to be an academic economist on vacation. Yet even one who, like Barbie, thinks math is hard can figure out that Becker's work marks a sea change in understanding the economic role of the consumer and advertising.
Traditionally, economists have not been fans of advertising. In the Hidden Persuaders era, the reigning theory claimed that advertising increased the cost of goods. There was more advertising than could be justified by the real economic benefits it generated. The bottom line was that advertisers were manipulators who spent millions to shift taste and create artificial needs. Like most eggheads, economists just didn't like the stuff.
This "hostility to advertising," Becker says, led economists to assume that unless ads provided hard information, consumers did not derive any benefits from them. But this was prejudice, not science, Becker argues. In econospeak, advertising increases consumers' "marginal utility." In other words, we have a taste for ads that we seek to satisfy.
Once consumer preference worms its way into the arithmetic, it is amazing how many basic assumptions about advertising crumble. In Becker's radical scenario, ads are not "taste shifters," as commonly believed. They are not manipulative tools or a means to an end. Rather, ads are ends in themselves, "complementary goods" that consumers buy along with the product that's advertised.
Each time we read an ad in a publication, lend an ear to a radio ad or refuse to zap a TV spot, we've made a "purchase." It's like the relationship between hardware and software; consumption of one encourages consumption of the other. Only this theory, he says, can explain the results of a famous study by psychologists which shows that consumers paid more attention to ads for the car of their choice after they bought it.
You don't have to do the math to see the "ad as an end" at work in the real world. All you need do is look at a bunch of Nike ads to experience advertising as a consumer preference unto itself.
Or consider Nissan's Mr. K. Metaphorically speaking, the wildly popular campaign is a product that has flown off the shelves. It did not, however, put fannies in showroom driver's seats. In this case, consumers bought the ads instead of the product.
If you want to understand how this affects the economic worth of advertising, give Accounting for Tastes a try.
Becker, it seems, has done something even more rare than winning the Nobel Prize. He has come up with a theory of advertising that actually reflects the real-life practice of ad professionals. Indeed, advertising finally has an economist of its own.