Advertising and Economy - Basics within the Capitalist Economic System

Advertising is an expression and part of an economic system. Each economic system has an interesting relationship with the social system, political system and cultural value.
Whatever be the charter of the economic system, there are three basic features which can are common to all:
1. Determination of goods and services and the quantities to be produced or offered.
2. Allocation of resources according to priorities of production - mainly land, labor and capital.
3. Distribution of goods and services among individuals and groups.

We are not concerned here about the relative importance of the state intervention and market determination of these three processes.
These three process condition the development of every society. Advertising is a major component of each one of these three processes. If advertising is process of meditation between the producer of goods and services and the consumer, to that extent it contributes to the development not merely of the economy but also of society. If we look at development as the overall transformation of society and not merely as the statistical growth of the economy, or the the gross domestic product, or the per capita income, then all advertising is socially relevant.

Modern advertising is a production of the capitalist economic system, in which the operation of the free market by and large determines the three basic features of the economic system, referred to above. It is in this context that advertising operates. When we say that modern advertising is product of the capital system, it means that it serves the socio-economic needs of mass industrial production for a mass market. The situation was created by the industrial revolution under capitalism. By serving such a economic system, advertising also promotes this system. We must also remember that advertising would continue to play the same role in different economic system, as long as goods and services are produced and offered for sale in the market.

To be continued...

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