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Thursday, April 26, 2012

Super Bowl versus Education?

Around the time of last February’s Super Bowl, a Facebook friend posted a status update that needed deconstructing. It said: “If we took all the money from Super Bowl ads and spent it on educating our kids, we wouldn’t be America.” While the statement is rather oblique, I think it’s safe to say that she was implying that the values of “America” are so perverse that “we” value a football game over “educating our kids.” Consumerism trumps literacy, or something like that. It’s evidently a popular sentiment, since the last time I looked it had 1,748 “likes” and 551 “shares.”

It’s possible to read that statement as being politically neutral. I’ve known ardent libertarians to decry the materialism that dominates so many lives in prosperous countries such as ours. But the references to “we,” “America,” and “our kids” reflect an attitude I think libertarians would not be comfortable with. Such sentiments, expressed in that way, tend more to come from the political left. It’s similar to things people used to say when I was growing up, such as, “If we can put a man on the moon we can end poverty!” This boils down to an ideological dispute over how best to spend “our” money, with the “we” who would be doing the taking and those from whom it would be taken left unidentified.

It seems that in addition to interpreting the ideological content, it’s also possible and probably more constructive to examine the status update in two other ways.

When I saw the update I first wondered if the underlying factual assumption is true: that corporate advertisers spend so much on Super Bowl advertising that redistributing it toward education would make a material difference in the academic achievement of our children. Now, in the same way that spending on the military-industrial complex isn’t the same as spending on “defense,” because there’s so much pork involved, spending on the education-industrial complex isn’t the same as spending effectively on educating children. But let’s put that all to one side. I ran a quick Google search and came up with the following “facts.” (I use the scare quotes because I’m not willing to bet my reputation on the results, but I do think they give a sense of the magnitudes involved.)

According to a website called Marketing Vox, in the 20 years between 1988 and 2007 “Super Bowl ads translated into $1.84 billion of network sales from over 200 different advertisers.” (That figure, if reliable, is five years old, so we can safely assume that the total is now over $2 billion.) Next I quickly found a website for the National Center for Education Statistics, a federal entity located in the U.S. Department of Education, which says spending on the government’s elementary and secondary schools amounted to “approximately $596.6 billion in 2007–08,” which as luck would have it happens to be the last year of the Super Bowl data mentioned above. So it appears that spending on government education in one year was 324 times the amount companies spent on Super Bowl advertising over 20 years. That pretty much takes the wind out of that particular status update.

But what about the moral sentiment that underlies it? While I don’t really care to argue over whether Super Bowl advertising is morally superior to educating children (aside from the tax funding involved), there are three ways I believe that economics can clarify the issue.

First, in a world of perfect knowledge we clearly wouldn’t need advertising because we’d already know what the best brands were, where to get them, and at what price. The great economist Israel Kirzner tells us that not only does advertising convey information about products we already know about, but—more fundamentally in a world of imperfect knowledge—advertising draws our attention to the very existence of products, or characteristics of those products, that we may not have been aware of—which helps to explain why commercials try to be so attention-grabbing, especially during the Super Bowl. So advertising confers benefits.

Second, most advertisers probably wouldn’t be willing to change their spending from ads on the Super Bowl, which they typically see as an expensive long-term investment, to funding education, because their comparative advantage is not likely in education but in selling beer, electronic trading, pizza, and cars. At the same time, viewers are willing to tolerate those commercials, quite apart from their entertainment value (such as it is), because they make it possible for them to enjoy watching a championship football game for free. My friend may think that’s not important, and it’s fine if she turns off the television and reads to her kids instead. It does become a problem, however, if she forces her personal preferences on others by political means.

Finally, and most important, the kind of thinking that underlies all these so-called tradeoffs—football versus education or moon landings versus poverty—commits a fallacy that economics refuted over 140 years ago.

One puzzle economists had to solve before they could come up with a satisfactory theory of value was the “diamonds-water paradox”: Why does water, which is more useful in sustaining human life, fetch such a low price on the market when diamonds, which are less useful in that sense, fetch such a high price? The answer lies in recognizing that the dichotomy is a false one. No one, at least in a free society, is in a position to decide between all the water in the world and all the diamonds in the world. It’s not water versus diamonds in general. Instead, each of us chooses how much water she would be able and willing to trade for a specific diamond at a particular place and time. How does that apply to football versus education?

From an advertiser’s perspective the choice is not between devoting his entire budget to advertising or to something else. It’s whether he spends more or less on advertising rather than perhaps plant and equipment, or possibly even on education of some kind. From the TV viewer’s perspective, the choice is not between spending all her time watching football or all of it teaching her kids. Rather given her preferences and budget, it’s how she can best spend four hours on a particular Sunday afternoon.

In a free society we can dispose of our time and wealth as we see fit as long as we don’t violate the property rights of others. Collectivists, however, might like to use political means to impose their preferences on how all wealth should be spent, in which case the decision may very well turn out to be lots more education and much less football. I’m not saying my friend would openly seek coercion to impose her values. In fact I’m pretty sure she wouldn’t. But what is behind her sentiments and language is a collectivist mentality that taken to its logical conclusion would lead to bigger government and less individual freedom.

  • Sanford Ikeda is a Professor and the Coordinator of the Economics Program at Purchase College of the State University of New York and a Visiting Scholar and Research Associate at New York University. He is a member of the FEE Faculty Network.