The Market for Indoctrination
Thoughts on persuasion and indoctrination from the late, great Gary Becker
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Here at Economic Forces, we think that price theory is a pretty effective tool. In fact, we tend to think that price theory can answer a lot of questions, even those that aren’t so obvious. After all, a central tenet of price theory is that a true assessment of the costs of any action is really an assessment of opportunity costs and all actions have opportunity costs. Thus, as the cost of an action increases, we would expect people to be less likely to take that action. That is just basic analysis of demand.
Nonetheless, some activities on the surface seem more difficult than others to understand. Recently, The University of Chicago Press published a series of previously unpublished papers by Gary Becker entitled, The Economic Approach. In the book, he addresses a number of topics for which a casual observer might not think price theory would be a useful tool. Nonetheless, in typical Becker fashion, he shows price theory to be quite useful.
One interesting example that Becker examines is about persuasion and indoctrination. In doing so, he demonstrates how price theory can be a useful tool for understand the supply and demand of indoctrination. In today’s post, I would like to highlight some of the key points of his argument.
On a basic level, it seems obvious why people might supply persuasion or indoctrination. A company will advertise its product in an attempt to persuade you to buy it. A parent might lecture their children to promote good behavior. A state or a political movement might use propaganda to solidify its power. Cults essentially specialize in indoctrination.
It is easy to think about the supply of persuasion and indoctrination in the same way that we think about any type of production. Those supplying persuasion and indoctrination must get some marginal benefit from doing so. Of course, to persuade or indoctrinate, the supplier will also have to expend real resources. This could come in the form of advertising or it could come in the form of massive parades to celebrate a dictator. Regardless, those wishing to persuade or indoctrinate will do so as long as the marginal benefit is greater than or equal to the marginal cost.
But what is the source of the demand for persuasion or indoctrination?
One might be tempted to argue that people want to be persuaded or indoctrinated. Like any other form of consumption, one might argue that it must make the consumer better off or the consumer would avoid processes by which people are trying to manipulate them. There is certainly some truth to this perspective. Advertising is about persuasion, but it might persuade through the use of information. Someone might find certain advertisements entertaining. It is also possible to learn important information about a product from advertising. In these types of situations, the consumer is clearly better off. They enjoy the advertisement and find a new product that they want to buy. Both things make them better off.
Nonetheless, this perspective seems far too Pollyannaish. After all, we often talk about persuasion and indoctrination in negative terms. When someone disagrees with us on political issues, we often refer to them has having been indoctrinated by the other side. Even more mundane examples suggest that people don’t always like being persuaded or indoctrinated. Children often hate being lectured by their parents. A Catholic who sits through Mass while listening to the priest tell him that he is a sinner might be filled with a sense of guilt.
One possibility here is that although persuasion and indoctrination might have a negative direct effect, this negative effect might be partially or completely offset by other behaviors brought about as a result of persuasion or indoctrination. For example, the Catholic in the example above might find his induced guilt to be unpleasant, but might change his behavior as a result of that guilt in ways that make him happier. A child who follows the advice of their parent might make better choices.
In price theory, we would say that this means that the marginal utility of persuasion and indoctrination itself is negative. However, persuasion and indoctrination might increase the marginal utility of other choices.
If the positive indirect effects of persuasion and indoctrination are large enough to offset the direct negative effects, then we are just back where we started. There is a demand for persuasion and indoctrination because it makes people better off. However, this cannot always be true, can it? More importantly, if this is not true, how do we explain why people submit themselves to it knowing that it is bad for them? This takes us back to supply.
Indoctrination and persuasion might occur through force. The natural example is an authoritarian government and its propaganda. Even democratic governments are subject to criticism that public schools indoctrinate children with particular beliefs. Those who can’t afford private alternatives are stuck with the alleged indoctrination. A more innocuous example would be that of parents and their children. Children don’t have much choice over whether their parents give them a lecture. Force creates a captive audience.
Price theory nonetheless offers important lessons about the role of force. Even when persuasion and indoctrination can be forced on people, this doesn’t mean that the supply of persuasion or indoctrination is unlimited. The supplier will persuade and indoctrinate only up to the point at which the marginal benefits are greater than or equal to the costs. Thus, the marginal cost of persuasion and indoctrination creates an inherent limit on the supply. More interestingly, the supply of persuasion and indoctrination will be limited by the extent to which it actually produces the desired change in behavior. Both parents and authoritarian governments are likely to find significant limits here.
If persuasion and indoctrination is avoidable, we might be able to draw a closer analogy to markets. Persuasion or indoctrination might be competitively supplied or supplied by a monopolist.
An example of a monopolist might be a state-sponsored religion. For the sake of argument, let’s assume that the state sponsorship does not imply force, but rather just the exclusion of competition. The primary difference between a monopoly supplier and a captive audience is in the incentive structure and limits to the supply of persuasion and indoctrination. Whereas under force, the limits are the direct costs of persuasion and indoctrination and the ability to affect behavior as desired, the monopolist faces an incentive compatibility constraint.
A supplier does not want to persuade or indoctrinate as an end in itself, but rather wants to change the behavior of those they persuade or indoctrinate. A monopolist must therefore try to maximize the benefits it gets from persuasion and indoctrination subject to both the resources it needs to expend to persuade and the constraint that its consumers have the option to ignore them. This implies two important implications. First, this additional constraint means that a monopolist will supply less persuasion and indoctrination than would be true with force. Second, a monopolist, cognizant that some will try to avoid the negative direct effects of persuasion and indoctrination, will likely try to offset any such losses with transfers to the consumer. (This might explain why advertisements are often bundled with popular entertainment, for example.)
This latter point is important when thinking about persuasion and indoctrination in competitive markets. A competitive market will provide less persuasion and indoctrination than in the monopoly case because the forces of competition create additional costs on suppliers. Higher marginal costs require larger marginal benefits and thus less persuasion and indoctrination. In addition, standard comparisons between monopoly and competition suggests that the total surplus generated by persuasion and indoctrination should be larger under competition and that more of that surplus should go the consumers.
The basic lesson here is that competition and market forces will tend to reduce the amount of resources expended on persuasion and indoctrination. Further, the benefits created via persuasion and indoctrination will be shared by the recipients of these techniques when they are competitively supplied whereas the benefits accrue solely to the supplier under force. Furthermore, even a monopolist is preferable to the outcome imposed by force because it is somewhat disciplined by the desire of recipients to avoid the persuasion. Finally, conventional wisdom might be correct that, on net, people don’t like persuasion and indoctrination. However, if so, both monopolists and competitive suppliers have an incentive offer some level of compensation to offset that dislike.
All of these implications are fairly straightforward applications of price theory. Overall, Becker offers a lot of insight. Of course, this is not to say that this the final word on the matter. Nonetheless, his approach to the problem reveals the value that price theory can offer even to a topic like indoctrination and raises interesting questions and points worth pursuing further.