All Commentary
Tuesday, April 1, 1980

Billboards, Freedom of Speech And Property Rights

The importance of advertising to a flourishing economy


“When I think of cities in the West, it makes me want to cry with longing. The beautiful advertising—those bright lights! That’s where the life is!”

Each time the Courts, various City Councils, or the legislature attempt to further abridge freedom of speech and regulate advertising, I am reminded of the words above, spoken by an East Berlin student. The essence of what he is saying—the very heart of his cry—is that billboards, and other forms of advertising, are signs of life. They are the signs of human interaction, economic vitality, and the need for information.

Envision in your mind’s eye for a moment life in East Germany the gray buildings, drab colored clothing, people walking the streets with shoulders slumped and heads hung low.

In contrast, now think of New York, Broadway, the great white way!Advertising is the hallmark of a vital economy. It becomes readily apparent that advertising is the hallmark of a vital economy. Advertising is information, and it is the constant flow of information that is so essential to a marketplace in which millions of people act—selling, buying, trading, bartering, constantly shifting information about.

It may be very difficult for some of us to sympathize with the view of the East Berlin student for we have grown up with advertising and take it for granted. Today many people even feel that advertising takes advantage of us: “It is claimed that advertising waylays people forcing them to buy things they would not otherwise buy, that it preys on the fears and psychological weaknesses of people, that it is misleading with its juxtaposition of beautiful women and the commercial product, fooling the gullible into believing that if they buy the product the woman is somehow a part of the deal; that it is silly with its contests, marching bands, and jingles and is an insult to our intelligence.”[2] Others feel that advertising with its garish messages in the form of billboards destroys the natural beauty around us.

But what is so surprising, given our exposure to advertising, is how little aware we are of the many positive values that it represents in our lives.

When we strip away the jingles, the parables, the catchy phrases, the appeals to our vanity, what is left is information. Billboards substitute cheaply provided information for expensive search costs. One should hardly have to tell jurists and legislators that information is a valuable resource: knowledge is power. And yet, outdoor advertising occupies a slum dwelling in the township of informational economics.

Information is not costless for we live in a changing world. Firms must constantly determine what to produce, in what quality and quantity. Additionally, they must inform consumers about their products and services in the least expensive manner.

It used to be that even economists did not understand the informational function of advertising and thought it useless. Economist Yale Brozen explains: “These ideas emerged among economists in the 1930′s from a two-dimensional analysis of an hypothetical static world with costless information and unchanging tastes, technology, and resources (including population). In such a world, advertising performs no useful function. Advertising expenditures in these circumstances waste capital.”[3]

But as economic models began to more resemble the “real” world, this view began to broaden. In a real-life economy “information is a valuable resource: knowledge is power.”[4]

The case becomes clearer if we try to imagine what life would be like in a world without advertising.

Picture yourself driving down a freeway late at night—hungry, sleepy, and nearly out of gas. There are no billboards anywhere, and all you can do is hope to recognize some lights off the freeway in time to exit. Or maybe you should exit anyway and wander the streets in hope of finding an open station. But, no, even though your gas indicator is sinking fast, you decide to continue. You become more and more tense mile after mile, as there are no signs of life. You wonder how much longer your gas will hold out, and is it true that a car always has another three miles after the needle hits the “empty” mark? You wonder how much longer you can keep your eyes open without a cup of coffee.

You are about to give up when suddenly you notice a glow around the next curve. You press the accelerator with great anticipation, and rounding the curve you see it, looming before you—a sight to behold! Your heart begins to quicken with relief. Suddenly you are wide awake. For around that curve is a huge brightly lit billboard that boasts, “Holiday Inn, 2 miles. Food, Gas.”

It is an easy thing to construct a scenario like the one above to make a point. There is a threat to our liberty that arises when government attempts to control the very essence of that liberty.It is more difficult, however, to explain the threat to our liberty that arises when government attempts to control the very essence of that liberty—our freedom to express our ideas regardless of the form in which we might choose to express them.

When you come right down to it, banning billboards or even regulating their use is a violation of individual rights. And there are three specific consequences arising from government interference of this kind.

First of all, let us look at freedom of speech as it relates to billboards and other kinds of advertising.

Freedom of Speech

Jefferson and Madison properly perceived that ideas must have a marketplace and that our First Amendment is the guarantor of that marketplace and the protector of dissenters who offer new or different ideas. All ideas are potentially inciting, provocative, and controversial, but to deny them a forum through a distorted interpretation of the First Amendment strikes at the very foundation that the First Amendment was designed to protect. All too often, when courts and juries have been forced to deal with ideas that are perceived as “offensive” or “threatening” or “too provocative,” they have succumbed to the hysteria of the times—or, as some courts have phrased it, “Modern Thought”—and trampled on First Amendment guarantees.

The First Amendment is not a tool of the press. It is a tool of the people. It is not nearly so much a protector of the media as it is a protector of the people’s right to know, their right to hear the ideas of others, and their right to have their ideas heard without interference from the government.

While most people might be willing to concede that freedom of speech is of great importance, many of them fail to make the connection when this principle is applied to commercial speech.

Clearly, First Amendment rights should be universally applied to all segments of the marketplace of ideas—to all media where those ideas might appear whether they be newspapers, magazines, “underground” publications, radio, television, or . . . billboards.

The First Amendment guarantees people freedom to choose the medium they prefer in which to express their ideas (be those ideas social, political, religious, or commercial).

Recently, the newspapers and television have been somewhat remiss in their defense of the First Amendment when it applies to billboards. Perhaps their owners do not really believe billboard companies should have freedom of speech. Or, perhaps it’s because the outdoor advertising industry takes in millions of dollars in advertising revenues each year in direct competition with those television and newspaper corporations. I do not know.

But whatever the case, the real test of the media’s commitment to freedom of speech, especially for newspapers, is determined by the conviction and forcefulness by which their editorials defend the outdoor advertising firm’s right to exist. And that defense should be with the same fervor (as an absolute First Amendment right) that they defend .their own freedom of the press.

Secondly, consider the economic consequences of banning or regulating billboards.

Narrowing the Choices

Economically, what forcefully eliminating billboards does is to narrow the range of choice for people who want to advertise. The market has naturally supplied many different ways in which advertisers can get their messages across. Eliminating or regulating billboards narrows the competition between various advertising sources. It does away with an extremely profitable part of the market as well as a certain number of jobs related to this part of the market. In other words, regulating billboards will have the same effect as regulating any other part of the economy. Government will only succeed in upsetting the balance of the market—giving some people competitive advantages that they may not have had in an unregulated situation.

In the third place, forbidding billboards or regulating their use is a blatant violation of property rights—the right of individuals to use their own property as they see fit. The right to property is essential if our right to our own lives and own liberty is to be exercised.The right to property is essential if our right to our own lives and the right to our own liberty is to be exercised.

Most billboards stand on private property. Not to allow the owners of this property to use it as they wish is a punishment. It is unfair to deprive owners of the income from their property or to tell them how their property should be used.

Much of the pressure to get rid of billboards is exerted on the basis of aesthetic preference. Some people believe that billboards are offensive in appearance. But, in fact, this is a very poor point from which to argue, especially if it results in limiting the freedoms of other persons. We don’t like or want every product or service available to us in the free market. And our preferences help to determine what is freely offered or introduced in the future. But in a free marketplace, we have a choice. And that choice can only exist as long as no one is making coercive judgments (even if they are aesthetic).

But there is something else that should be considered here. We should ask ourselves why that which is created by human beings—those symbols of thriving human life—should be so despised by the very people whom they serve. We should also ask ourselves why it is that people fail to recognize the fact that billboards tend to exist only in places where they are useful—namely, along with those thoroughfares where people who might need the information they provide can see them.

The complaint of the East Berlin student was that none of the life associated with advertising existed in his country. In the final analysis, it was not really the lack of advertising that he was complaining about—but the lack of things that advertising represented and that only a truly free society can provide.