Will market regulation of advertising be more effective than state regulation? For example, advertising for psychoactive substances, child pornography, or gambling.
Anonymous question
The question of how libertarian institutions regulate something is, in essence, a question of how market institutions regulate something.
The person placing the advertisement does so to increase the return on their activity. In the limit, they would like to force everyone and anyone to buy their product for any amount of money by a simple act of will. In other words, they would like to take the position of a regulator of consumption.
The person consuming the advertisement wants to receive information as a result about which goods are available on the market, how they satisfy their particular current or potential needs, and where these goods can be found. In the limit, they would like to force the producer by a simple act of will to do exactly what the consumer needs, right at the moment of the order, and deliver it right to where the consumer indicates. In other words, they would like to take the position of a regulator of production.
Finally, there are those who produce the advertising and show it to the consumer. In the limit, they would like to force product manufacturers by a simple act of will to pay them the lion’s share of the product’s value for the right to sell this product to the consumer. In other words, they would like to take the position of a regulator of sales.
How do market institutions regulate the relations between these listed groups? Through a multitude of spontaneously emerging feedback loops. Advertising is too expensive — producers try to minimize their purchases, and the consumer is forced to spend a huge amount of effort to find anything outside of their daily basket. There is too much advertising — the consumer develops banner blindness, and it becomes ineffective. As a result, the advertiser stops paying for impressions, preferring to pay for results — and the advertising market is forced to restructure in favor of more targeted advertising tools. This leaves both the advertisers satisfied — their ads give the maximum return per unit of funds invested — and the consumers — they receive information exactly about what they want, and unnecessary things do not clutter their eyes. For each of the stakeholder groups, the situation ultimately turns out to be imperfect, but it is a kind of dynamic compromise that more or less satisfies everyone. And as soon as it stops being satisfactory, a fairly rapid restructuring of the market occurs.
And what about state regulation? The state is a regulator of production, consumption, and sales. In the limit, it would like to determine every aspect of the life of each of its subjects by a simple act of will (by “desires of the state” I here mean a somewhat simplified reflection on the activities of its individual functionaries, as well as the persons who make up its support group — “statists”). The extent to which the state is successful in this pursuit is also determined by spontaneously emerging feedback loops. If it succeeded in selling the consumer the necessity of fighting child pornography, the consumer will tolerate difficulties in receiving the corresponding advertising, and the increasing cost of the corresponding services. If it failed to sell the necessity of fighting alcohol consumption, the consumer enjoys the fact that they are at least not imprisoned for consumption, even though advertising, for example, is restricted.
Now, your question essentially concerned whether market institutions can allow third parties to restrict the advertising of certain products in which both the producers of the product and its consumers are interested. How effectively these third parties can perform the role of the state in this case, without being the state and without resorting to direct violence.
Answer: they can, but not as effectively as state institutions. The task of an influence group is to make a certain consumer behavior reprehensible, to make the person feel ashamed of it and, conversely, proud of avoiding it. If your advertising campaign proves successful — congratulations, your opponent is marginalized. If it proves unsuccessful — well, then you yourself end up as the marginals. Everything is fair.
