In the meanwhile, I suggest you read about the subjective theory of value and why it is has replaced the labor theory of value in economics. The idea of marginalism is also related.

Producers exist only so long as they can make profits.
Let us keep govt regulations out for a moment, assuming it to have some constant value I agree with all the points you have made here. I don’t see how the pull models affect producer profitability.

I said it is necessary for many businesses
necessary meaning something which can’t be done away with…. has to exist, hence no alternative. Right?

I just don’t think they can fill the shoes of commercial large-scale advertising
In web sphere, they are all new strategies and I have already given sufficient examples of success with it. In off-line world I have given the example of the publishing industry. I don’t see why these cannot work for other products. Advertising strategy is producer centric and producers won’t be happy doing away with it.

Glad to see you acknowledging my point for once.
Oh I forgot the publishing industry example while writing this. So I take back my statements Anyway, I have been saying it all along. That I am interested in seeing an alternative sustainable model to advertising. In fact in the main blog post I couldn’t think of any alternatives at all. But during this discussion I’ve learned of many promising alternatives.

Please consider the following scenario:

I have a hand made chocolate with me, which you want to buy. While selling I explain why I’m selling it to you at that price. I’ll give u a split up. something like say, Rs.A for raw materials + Rs.B for transportation + Rs.C for my labor + Now I want to put some posters at my house and some posters at the main crossing so Rs.D for that.

Will you agree to pay me Rs.D? I wouldn’t.

As long as my arithmetic is concerned, that Rs.D should not be taken from you, but from the savings I make from my Rs.C. An employee’s investments are from his savings from the income. Income doesn’t become as much as the employee wants to invest.

You still didn’t answer my Tax question.

Um, I didn’t understand this. What aspirations?

There will be producers as long as there are people to buy it. (and not vise-versa).
(Sorry for not dealing with this point earlier.) You can’t take the existence of producers for granted. Unfavourable government regulation does drive producers out of existence or atleast makes the goods (unnecessarily) expensive. (You are not talking about govt. regulation, I know.) Producers exist only so long as they can make profits. Producers can make profits for only so long as they can make products for a price that consumers think is justified for that product.

You have been saying it is the only thing and the best thing for many businesses.
Whoa. I never said it is “the only thing and the best thing”. I said it is necessary for many businesses. I have nothing against any of the push models you venerate. I just don’t think they can fill the shoes of commercial large-scale advertising.

Of course I don’t have any alternative here. But I would like to see one. Yellow pages is there, but hasn’t been effective.
Glad to see you acknowledging my point for once.

And this “passing burden onto customer” argument is bizarre
Ufff. All my arguments so far were directed towards only this.

What in fact is the difference between hiring more employees and commercial large-scale advertising
I knew you would make this point.
There is cost associated with _human-resource_ which goes into making the product available to the customer, not for the aspirations of those humans.

That means you don’t care about the consumer’s happiness too, because that was the explicit point I was making (read my comment again.)
Of course I read every point you make You are seeing it from the producers point of view and u don’t seem to give a damn about customers. To point this out I said,

There will be producers as long as there are people to buy it. (and not vise-versa).

consumers don’t exist to consume what all is being produced. It is the other way round, producers identify the demand for a certain thing and cater to it. Producer’s main source of income is by making consumers happy.

I have tried to convince you that large-scale advertising is indeed necessary for many businesses
Correct me if I’m wrong. You have been saying it is the only thing and the best thing for many businesses. Right? How do you know there can’t be a better alternative? Don’t you think, (after all these arguments) that it is like govt taxes? Please tell me a difference I you think otherwise.

I have exhausted all my arguments at this point, and I don’t think I have anything to say I haven’t already said I would rather like it to continue till we arrive at a common base. [I hear you rubbishing it.]

And this “passing burden onto customer” argument is bizarre, to say the least. Because Bill Gates is donating loads of money to a charity, does that mean he is passing the burden onto the customer? Because he buys a private jet does that mean he is passing the burden onto the customer? Because he hires more employees does that mean he is passing the burden onto the employees? What in fact is the difference between hiring more employees and commercial large-scale advertising, if both are indeed essential to his business? (But ofcourse you don’t think it’s essential to his business.)

You said you don’t care about the producer’s happiness. That means you don’t care about the consumer’s happiness too, because that was the explicit point I was making (read my comment again.)

I have tried to convince you that large-scale advertising is indeed necessary for many businesses, but you just seem to believe that a few models that have worked with a few things can work for all products. I have exhausted all my arguments at this point, and I don’t think I have anything to say I haven’t already said in all these comments put together.

All I know is if it’s happening, (and it’s happening with a broad range of companies) it must be happening for good reasons.
Yes, good reason for the companies. It is customer who is paying to fulfill their aspirations. Isn’t it the most easy way out for them?

The customer’s happiness is indirectly related to producer’s happiness.
Frankly, I don’t care. I’m not here for producer’s happiness nor do I expect producer to exist for customer’s happiness. He is there to do business and in return offer services/products. That is it. Nothing more. Nothing less.

If producers aren’t allowed to do what they need to do to sell their products, they will simply close shop
Now I can’t remember where I have spoken of a legislation to _not-allow_ them to do what they want. Producers want to advertise, consumers are happy to buy that product. I see no issue as to why they should be _forced_ to stop it (I oppose regulation against dowry cases too.:D as long as both parties agree, who are you to stop them?). All I’m speaking of is to shift the market forces from being producer centric to a neutral point (not even consumer centric.), by finding out a sustainable alternative model following which a competitors product would cost less than what it would cost with advertising. For example, I don’t see how collaborative filtering technique is anti-producer as long as the product is worthy of consideration.

And if there are no producers, the customer doesn’t even have a product to buy
There will be producers as long as there are people to buy it. (and not vise-versa). The problem being discussed is on how to make people more aware of _their_ product. I am speaking of alternatives to do this, without passing on the burden of it to the consumer.

The examples you give are those of products that don’t have significant economies of scale.
I thought I gave the publishing industry example also.

The marginal cost of making an extra piece of software is (more or less) zero.
How is it related to the problem of making a product popular among consumers? There are N number of channels/blogs all having very little cost to scale, how does one become more popular and more used than the others? By product differentiation, by unique value addition, by quality improvement, by cost differentiation, by serving a niche market, etc., etc.,

It happens that the only way some companies can survive is by pro-actively building a brand name – part of which they do by providing public goods (such as sponsoring sports matches). They do it because they need to – may be because otherwise their company can’t maintain its image and its standing, and without a brand name customers won’t buy their products as much as they will their competitors. All I know is if it’s happening, (and it’s happening with a broad range of companies) it must be happening for good reasons.

The customer’s happiness is indirectly related to producer’s happiness. (The failure to recognize this is one of the major failing of leftist thought.) If producers aren’t allowed to do what they need to do to sell their products, they will simply close shop and shift to some other business where they have more freedom (and therefore more profits). (And this is indeed the effect of many government regulations.) And if there are no producers, the customer doesn’t even have a product to buy, so essentially the product’s cost is infinite and the customer isn’t happy.

How scaling is related to quality and efficiency of a product, is beyond me.
The examples you give are those of products that don’t have significant economies of scale. The marginal cost of making an extra piece of software is (more or less) zero. The marginal cost of broadcasting a channel to one more user is (more or less) zero.

But this is not true for all products. Consider shoes or toothpastes or cooldrinks or banks or cars – What is cheaper (per car)? Producing 10 cars or 10,000 cars? To see how quality in turn is related to efficiency – When will a producer of cheap goods care for quality? When the goods become cheap enough that consumers will care to pay that extra dollar for quality. How do the goods become so cheap? Again through economies of scale. Scale is not the only factor in achieving efficieny, but it’s a significant factor.