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Sunday, July 23, 2006
Paul Jacob :: Townhall.com Columnist
Google eyed
by Paul Jacob
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I don't mind puzzlement. I don't have to have the answer for everything.

Here's one: Google. Not only do I not know how Google's technology works, I have only the faintest glimmering of how the company makes money. (I think it has something to do with ads.) What I use by Google costs me nothing. (My eyes quickly move away from the ads.)

But I can read the newspaper, and it reports that Google's sales just came in at $2.46 billion, up 77 percent from the previous year. After discounting "traffic acquisition costs" (whatever they are), revenue for last year was $1.68 billion.

And here I am, using Google for free. I've contributed nothing to its effort (unless curious well- and ill-wishers looking my name up on Google counts).

I couldn't be happier. I get a great service. And they make money . . . off of other people.

So, when I hear someone complaining about big, greedy companies, I shake my head. There are a number of companies I get free goods off of all the time. And, unlike the government, they don't come knocking on my door demanding payment just because I get some benefit. (They ask nicely, if they do come a-knockin'.)

There's an economic concept here. It's called "free ridership." If Google were a government service, I'd be called a "free rider." My very existence would be something of a scandal to political philosophers and economists.

But since Google is a company making money, I'm categorized in some other way. Or maybe I'm still called a "free rider," but my status isn't quite so dangerous.

Not everyone agrees, of course. For some, everything must be paid for. "There ain't no such thing as a free lunch" means, for them, not that every lunch is paid for somehow, but that everyone should pay, dagnabbit, and if they don't pay for their lunch, something's horribly wrong.

I've heard tell of economists who somehow think that if there exists a free rider anywhere, that person really ought to be paying. I've read political theorists argue that because people get some benefit or other from some other person, that puts them into debt with that person or organization . . . even without a contract.

Nonsense. We don't expect our kids to pay for everything. We don't expect the desperately injured to pay for everything, either. Many of us freely give huge chunks of money to all sorts of people who are down and out. Continued...

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About The Author
Paul Jacob is a Senior Advisor at The Sam Adams Alliance, a Townhall.com member group. His daily Common Sense commentary appears on the Web, via e-mail, and on radio stations across America.
 
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Subject: Um...
NerdusMaximus wrote:
"You pay for the costs of the ads for any advertised product you buy, even if you never saw the ad so it had zero affect on your purchasing decision."

By that same fuzzy logic, you pay for the costs of the labor to manufacture a product even though you've never met the laborers and their personalities, competency, work-ethic, etc. had zero affect on your purchasing decision.

Thus, ALL prices on goods are a coercive since they incorporate the costs of doing business in a huge number of realms that are not directly viewed or experienced by the consumer and never factor into the consumers' purchasing decisions.


FALSE. Please use your dictionary and look up the word coercion. There no element of force involved, regardless of the various expenses that are paid for by consumers through their purchases.

There is coersion of a sort in ads
Phoenix Lady takes a tack that points our where I was not as clear as I could have been. There is an element of coersion in our advertising driven marketing system: You pay for the costs of the ads for any advertised product you buy, even if you never saw the ad so it had zero affect on your purchasing decision. This is not necessarily a bad thing, but it is a reality. Not buying is a choice a you can make. The choice you do not have is to not pay for the advertising of any products you do buy.

The key point is that nothing that is advertising supported is free any more than a tax supported government service is free. Fortunately, the free market is much better at cutting off wasteful spenders than our representative government has proven to be of late. This is what Phoenix Lady picked up on. If you drive up the costs of your product by making poor advertising choices people will not buy it and you will go out of business.

There is still no free lunch. Google and all other advertising supported services are not free, but are paid for by the people who buy the advertised products. Fortunately, the free marketplace is delightfully self-regulating, so the costs of such "free" services are kept in check.
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