That is to say, if citizens in a communist or socialist society can’t purchase items with the same flexibility [or even at all] as citizen in a federal presidential constitutional republic*, how does advertising exist?
*Yeah, I had to look this one up. I should feel bad that I didn’t know this, but I don’t.
If you’re talking about a planned central economy like the Soviet Union, there was no reason for advertising. There was no competition and the central planners determined how many units of product would be manufactured, priced and distributed. There wouldn’t be any need to “promote” individual products. It was more efficient simply to control production.
Of course not all advertising is product-oriented. All those giant posters of Lenin and exhortations to the glorious workers to build more tractors – that’s a particular form of advertising called propaganda.
How about a hypothetical situation in which the Supreme Leader decides everyone needs a banner with his picture on it, to carry with them wherever they walk. So he orders that millions of these banners be produced.
But the people see no advantage in carrying these banners, so they mostly sit in boxes in warehouses. One can easily imagine that SL will call for an advertising campaign that promotes the advantages of carrying a banner. (Which to be effective is, of course, likely to focus on the disadvantages of being caught without one.)
Nope, there’s literally no such thing as advertising in Scandinavia because it just doesn’t work in socialist countries. Everyone just gets in the toilet paper line and silently wishes they lived in a capitalist paradise.
Another advantage of a planned central economy. If the supreme leader decides everyone needs to carry a banner with his picture on it, he can simply decree it, or decree that only people who carry banners get their ration of potatoes.
Of course, the state can have a promotional campaign to encourage people to carry banners, but when the “prize” is the choice of carrying a banner or not getting potatoes, that’s stretching the definition of advertising.
Before the Wall fell, East and West Germany still had a fair amount of communication between them, and various day passes could be obtained for families to visit each other and perhaps for certain businesses (I really don’t know the details, but visited Berlin this summer and this is more-or-less recalled from the various museums I went to).
Anyways, since West Germany was open to the rest of the world, East Germany was exposed through these visits to western products, however they weren’t really available. I recall seeing an ad in the DDR Museum for soviet-made blue jeans, which heavily focused on how much better they were than anything else. There was a pair of these jeans placed next to a pair of Levis 501s (IIRC). The “jeans” being sold to the DDR were made of polyester; they had dyed blue and white “stripes” that looked like the weave on jeans but they were very much not the same.
The 1980 price of the Levis was something like 400 DM, while the polyester jeans were about 5 DM or equivalent (I don’t recall the numbers exactly).
I don’t know how well the advertising worked…the museum didn’t go into details although it was pretty clear that the Levis jeans were extremely desired by those who could afford them. Despite being a communist state, there were “high end” stores and it was possible for some families to eventually acquire these sorts of luxury items.
Theory != practice, evidently 
On a related vein, there isn’t much advertising for products in Cuba, but the residents are aware of various products through television, (some) internet and lots of tourists, and they are desired products. They don’t need advertising to see how much better our clothes hold together, how fancy our sneakers are, what kinds of beauty products we use, etc. Advertising works on us, and that influence gets spread to those who see it but can’t access it (also true of poor people, when you think about it).
They were called Intershops. Originally they were intended for visiting tourists & diplomats from capitalist countries to spend their hard currency in. Eventually the government decided to allow East Germans who had access to hard currency (from various sources) to convert their Deutschemarks into Forum checks and shop in them. They sold both Western goods as well as domestic goods intended for export to the West. Every communist country had something similiar.
Here’s an example of the kind of advertising you do see in Cuba, in this case outside a community rec center. Next to the signs announcing juice for sale (no brand) and public information available inside, one says, “Always loyal,” and another, “Socialism or Death.”
Yes, that sounds familiar. Thank you for filling in the details! I wish we had more time to visit that museum…we had to go through it rather fast and were kicked out at closing time with a good 10% of it left to go! It was truly fascinating and worth it for anyone visiting Berlin (which I also recommend, it’s a beautiful city).
Yeah, the advertising they do have is interesting. I think it’s the Holguin airport (or Varadero? I forget…need to go back!) that has a giant “Socialism or Death” sign right next to the runway.
They don’t advertise it, but Cuban-made Tu-Kola is a fantastic soft drink, IMHO. It’s rather impressive, the things they have created/duplicated/replaced. A beautiful and resourceful country, despite the politics.
You are having the little joke, no? Yes, of course you are!
Yet I think a lot of people do seriously think that a socialist society is along the lines of the Soviet Union. The Soviet Union was a communist dictatorship.
Socialist is not the same as communist. In a social democracy the government provides basic services to the community such as health care, education and welfare etc, but private enterprise also exists in such a system. People can and do own property and businesses. And the people vote for their government every few years just like in the US.
The main difference is that if you ever fall on hard times or ill health you aren’t as likely to end up on the streets living out of your car and eating out of a dumpster.
There is a cost for that in the form of higher taxes. Nothing is really free. I’m not trying to advocate this system over the US model, but I think there really is a misunderstanding about what socialism is in many people’s minds.
I confess, yes, I am having the joke :p, at the fact that apparently there are a number of Americans who’ve never even visited Europe and have some confused idea about what exactly socialist countries are like. It’s so clearly ridiculous to imagine that there’s no such thing as advertising in socialist countries that I can’t help but laugh a little bit about people whose understanding of economics is so childish and confused.
It appears that most people here buy into American right-wing economic theories, so they don’t quite understand what “socialism” actually is.
It seems to be deliberate - it’s not that Americans can’t grasp that there’s a whole world of difference between a social democracy and a communist totalitarian state, it’s that some Americans like to pretend it’s all the same thing.
And then they will go on to misinform others. I know those of who you speak and we have similar people here in Australia. I have been watching the current Republican circus and found it to be very illustrative after having recently read Snakes in Suits - When Psychopaths Go To Work.
On the one hand I really hope Rick Perry or Michelle Bachman wins the nomination - watching either of them try to debate Obama will be comedy gold.
But on the other hand I feel sorry for moderate Republicans who have had their party hijacked by extremists and theocrats. And it’s tragic that such a serious political process is being used by such people.
It was the splendid joke. I chuckled long and hard after the Coca Cola had come out of my nostrils most fiercely.
I too have never been to Europe, at least not outside of the UK. So it’s not really much of an excuse for them. I guess some people don’t take to book learnin’ so much.
Eh. Don’t feel too sorry. Looking at the political landscape, it’s pretty clear those people have either left politics or started voting Dem. There aren’t many serious rational Republicans left at this point.
But in the Soviet Union (and indeed in modern-day planned central economies) there was advertising for products and services. Clearly there must have been some “reason” for it or they wouldn’t have done it.
IANAMacroEconomist, but here’s my take:
As long as currency exists in an economy there will be incentives to promote consumption. Even though the state controls production, products still have to be moved from shelves and taxes need to be collected on sales. If consumers begin hoarding currency without reinvesting it, a fluidity trap develops.
Even removing currency from the system (making stores free and allowing consumers to simply pluck what they need from shelves) other incentives arise. Factory managers and planners may wish to increase their production for whatever reasons, be them selfish (gaining a larger market share, meaning more political clout) or altruistic (Soy is the ultimate crop to promote health! The populace should eat more soy!)
Additionally, the state wishes to promote general happiness. If the state planners are of the opinion are the happiest children are those who are given cake on sundays, consumers will be through advertisement encouraged to pick more cakes off the shelves towards the weekend.
Incidentally, anybody conflating a social democratic economy with a socialist one needs their heads examined. Sweden (my country of residence) is as much a free market economy as the United States. The only difference is that the free market isn’t allowed to negatively affect healthcare or schooling. While private healthcare and schooling are both allowed and exist, the bare minimum provided is sufficient for any social class to get a quality university education and not have their lives unduly shortened due to lack of money. In the social democratic mindset, this is a far more egalitarian and and free model than the one implemented in the US.
Mind, this is not my personal opinion, I’m merely trying to voice the rational behind social democracy.
But Russians were hoarding money. They typically were sitting on mountains of roubles that they had rarely an opportunity to spend.
And hence the economy came crashing down. Now, much as in other non-market economies (such as the DDR) high prices on goods and services are merely replaced by lines when the market can’t control price.
As was stated in another thread, a part of the problem with the Soviet economy was that production could never meet demand (neither essential or luxury), and that the result of scarcity coupled with arbitrarily low prices led to hoarding of goods and black market sales. If there was butter one day, everybody would buy up as much as possible in case there wasn’t the next. Advertisement was prevalent in Eastern Bloc states though, the blog EnglishRussia often posts examples of this.