How is wealth formed? This simple question, the answer to it is not in any way easy, especially if we introduce a set of economic theories and their social intersections to explain it, at the local and global levels. Well, let us start from the first popular, self-evident answers to the previous question; this answer is usually related to work, that is, direct action that involves physical and mental effort. However, with a closer look at the reality surrounding us, this answer will appear as an ideal and perhaps a dreamer, and not express what we live in. It suffices to look at the celebrities of the communication sites, or the wages of the artists, until you see the levels of inequality increasing gradually, and away from light years, from the returns that constitute the majority of societal classes, whether in Egypt, or in the rest of the world.
At the level of "artists", for example, the singer Amr Diab received 40 million pounds in exchange for his participation in a Vodafone advertisement in Ramadan 2019, while the singer Tamer Hosni received 30 million pounds, the same amount that the singer Nancy Ajram received in return for their participation in Orange 2019 Ramadan Advertisement.
In a similar vein, and if numbers diminish, [1] “dummies” has published a map of the profits made by influencers, who have many followers on social media, as he affirmed that the YouTube influencers, who have 50,000 to 100,000 subscribers They earn $ 500 to $ 1,000 per video, while channels with 100,000 to 500,000 subscribers earn $ 1,000 to $ 3,000 per video. These numbers may remind us of the famous saying of artist Yassin in his famous monologue, "Do you wonder, do you wonder? In people you gain and do not fret ... people get tired and do not earn me ..."
Well, some may attribute this to "dividing the livelihood", but this does not negate the existence of underlying laws and mechanisms that reveal what appears to be random and irrational on the surface, and this is the task of economics, which explains to you how entertainment stars win millions without providing real value while You toil for less than a quarter of what they charge.
The illusion of productivity: an economy has lost its territory!
Why do entertainment stars win all these millions? Economics attempts to explain this phenomenon by explaining the distribution of incomes in capitalist economics, in particular the distribution of those enormous incomes that are not justified by the efforts or values provided by these stars, so that economists provide their interpretations through three basic answers:
The first answer is the typical answer to the formal traditional economy, centered around what is known as productivity, meaning that the return depends on production, so every contributor to social production gets in return for what is equal to his productive contribution, which is the answer that applies "theoretically" to all traditional works, especially In agriculture, trade and industry in their traditional form, but even the most traditional and conservative economists do not believe in this view of its launch, especially in the case of artistic and exceptional products, which have flooded the markets of the world and altered people's tastes and desires.
As for the second answer: it is the dominant answer to the opposition critical economy (A), and it revolves around social conflict and division of roles in society. Each social group gets its share of the income according to the interaction between the community’s need for it and its social ability to impose its position in society and collect what is equivalent to that need and that The center of the share of the total output.
While the third answer relates to exceptions, and is related to what is known as rent, which is considered an alteration of the second answer, but without social conflict, whereby rent arises simply from the limited supply of the product or work required, i.e. the inability to increase the supply of it to meet the demand for it, as is the case of agricultural lands And urbanization, which is difficult to increase significantly in the short and medium term, and the more important that property is for society and the market, the greater the proceeds. Here, the social function of the product or work is guaranteed and its supply limited by imposing its share in the product.
The formal economy relates that social reward in its broad sense to the benefit provided to society to satisfy its relevant need, that is, whenever the society and market need is greater to the product or service provided, its physical and symbolic price rises, but that relationship is irrational in the case of astronomical rewards that these stars receive, Whether as an evaluation of the work and what is reflected in terms of the numbers in general, or in relation to the benefits offered against it in particular, in the case of entertainment stars, the person himself turns into a rare commodity with high returns, the competition for which ignites, and thus the prices rise insanely. And the evidence for the irrationality of that relationship between the reward and the value provided is that these astronomical rewards are nothing but a "modern fashion", since the greatest artists of Egypt, for example, half a century ago, were not getting nearly the numbers that even the most like artists today, even taking differences Currency value and purchasing value changes are taken into consideration.
This destroys the social benefit hypothesis as an explanation of these rewards. Even by assuming equal artistic values for the works of time artists, and ignoring the general feeling of exaggeration in these rewards, there is nothing to support the assumption of the importance of art and sport in society in general, in a manner that increases the benefits of their services to him, and thus increases his spending on them, even by imposing high levels of his living and increasing his free space And its consumption from it, where income and spending surveys indicate, for example, that the average spending of the Egyptian people on the field of culture and entertainment did not exceed 2.1% of their income in 2017-2018 [2]. Therefore, it does not seem that the first or second answer provides a logical explanation, if these stars do not provide any material or symbolic value added or service that meets a great benefit to society, on what basis do they win all of these profits ?!
Employment rents: a return to classical economics
The third answer gives us a key to understanding, but it remains incomplete. From this perspective, the products of these stars perform a social function that imposes a share of the product, or a credit allocated to them in exchange for the performance of this function. The matter here is similar to the “balance of wages” (B) according to the famous theory with the same name, It is a balance that, no matter how small, its average average is large due to the relative limited number of their number, and where it is assumed that they provide rare or distinct goods individually that carry the character of the star alone, this rare few possess, in particular, a larger share of that balance, which economists consider a type of rent, and they call it "Talent proceeds."
However, this answer is missing, as it did not specify the source of this balance and how it is determined, unlike the balance of wages that comes from material production, and is determined by the size of the supply of the workforce, the ratios of the use of capital and labor in production, and the balances of political and social power between them, there is no real social conflict here nor Technical production systems that determine the demand for the strength of their work or product, but only a consumer request governed by the size of the output, the standard of living, and free time, and it is clear that this consumer demand is not sufficient to explain this entry, or that its relative importance as a source of it is limited, so what is its source then ?!
The source of rent: marriage of interest between the advertising and entertainment industries
Internet stars, or what is known as "flu", are a typical case for star gains, they represent a more abstract state than traditional stardom for singers and actors, where consumers do not pay a direct or cash consideration for the products of the flu, except for the rare cases of paid exclusive content, most famous influencers On social networks and content sites such as YouTube and others on most of their income from "advertisements" in one way or another.
In general, these ads represent the largest source of revenue for most cultural, artistic and sports activities. Robert Crawford of Kings College London states in his paper about the relationship between the advertising and cinema industries in Australia [2] that since the early twentieth century, the advertising industry has been the incubator and major business partner for the industry Cinema, before the advent of television, the existence of which is also dependent on the advertising industry, a situation that has not changed, but has been strengthened with globalization and the spread of media, television, satellite broadcasting and the Internet.
Dr. Ibrahim Al-Muslimi also confirms in his book "Managing Press Institutions" that "advertising has become a measure of the success of newspapers, after the distribution was the only measure, and the newspaper that lacks advertisements cannot live long, no matter how distributed copies, the advertisement brings the necessary money, but it does not It is only given to the rich and powerful newspapers which are widespread "[3], and some record advertisements reaching about 75% of the average American newspaper resources [4].
In a "paid episode" of the "Al-Duhayh" program, Ahmed Al-Ghandour mentioned the ad revenue reaching ratios ranging between 80-98% of the total profits of companies such as Google, YouTube and Facebook, which makes them the main source of profits in a way that has been discussed in this episode, among the benefits Advertisements are their support for culture and the arts, as they are the primary source of their revenues and the incomes of their employees, but what he did not mention is the source of most of these advertisements themselves, their justifications and those behind them, or in other form, who is the sponsor of this marriage between the advertising and entertainment industries?
Puppet player: The villain behind invalid marriage
Economists disagreed over the question of ads, whether they are beneficial or harmful, but what they almost agreed upon was the high advertising spending being linked to market concentration, i.e. the control of a few large companies over most of the market sales, or in other words, Monopoly (c). This is confirmed by the increase in advertising spending globally in parallel with the deepening of monopolistic trends in general, where we find a continuous increase in the proportion of advertising spending of GDP for many years, for example, during the 1980s, for example, it rose from 0.61 to 0.95% in Austria, and from 0.49 to 0.78% in France, 0.42 to 0.62% in Italy, and 0.76 to 1.56% in Spain [5]. But what is the problem with that? Is not the product entitled to promote its good and maintain its market share? Isn't this really legitimate and part of fair competition ?!
The truth is that it is not so simple, and to understand it, we must understand the conditions for achieving a competitive market as defined by economists, which are four conditions in the first place:
(1) the homogeneity of products, that is, there are no significant differences between them.
(2) Availability of complete consumer information about commodities and prices on the market.
(3) The freedom of producers to enter and exit the market.
(4) The number of producers and consumers is so large that no single producer or consumer has a significant impact on the total supply and demand quantities in the market.
Given these conditions, we find advertisements that affect them in the following forms:
First: homogenization of products:
The mission of advertising is inherently to convince the consumer of the distinction of the declared product and its difference from the rest of the products in the market, as it rarely suffices with the task of "providing information" as the theory of "introducing the product" claims, but rather aims to achieve the task of "convincing the consumer" of it, as the theory that holds The same name (D), even if the condition of "homogeneity of products" is actually fulfilled, such as homogeneity of biscuits or washing powder, the main task of the declaration is to eliminate that homogeneity in consumer awareness. What reminds us here of criticism of the pioneers of the Frankfurt School for this counterfeiting of consumer awareness of the claim of imaginary diversity in the products, describing it as the only true freedom provided by capitalism, the freedom to choose a washing powder from among ten types of it there is no real difference between them except in the packaging of the packaging.
The advertisements lead to the consolidation and continuation of monopolies, which comes within a general context of historical transformations in the capitalist system, including the increase in his media needs to deceive the masses
Second: Availability of complete information for the consumer:
This is the virtue that the product definition theory attributes to advertisements (e), in that it saves part of the costs of research and shopping to the consumer, but it is a deficient virtue, whether for its mixing with the purpose of persuasion, or for the high cost of the advertising service itself, thus limiting it to the major producers that already exist, and not The ability of small producers in the market to benefit from them and announce their presence, which leads to the absence of the requirement of "perfection" of information for the consumer due to the exclusivity of advertisements themselves as an expensive service that works for the benefit of the largest at the expense of the smaller
Third: Freedom to enter and leave the market:
Here we meet the most important channels for monopoly to benefit from advertisements. In front of monopolies, to hinder the entry of new competitors into the markets in which two main methods operate:
First , increasing the number of brands produced, especially when the product is the type whose consumers constantly change its brands, it is a tactic "Eat yourself before what you eat" suggested by Ahmed Helmy in the movie "You made me a criminal", a tactic that creates a strange contradiction, which is competition The companies themselves have multiple brands of the same product, which brings society unnecessary social cost, which is the expenses of conflicting and unnecessary advertising campaigns for these different fake brands of the same products.
Secondly , raising the unit cost of the product by increasing its share of advertising and advertising expenses, what these existing monopolies with large market shares can afford without a significant increase in their price, by virtue of the large number of units that sell them from that product, and thus decrease the share of one unit of those expenses, other than the situation With new companies smaller in the market, of course, with small market shares, which make them unable to compete by making them in front of two options that are bitter, they either will not be able to bear advertising expenses of the same size from the beginning, or they will bear them and have to raise the price of their product in a way that weakens the demand for it in the market, This puts it in a weaker market position in both cases, it may reach the point of having to completely exit the market, and hence the continuation of the market concentration and the beneficial monopolistic position of the previous monopolies.
Fourth: The large number of producers and consumers in the market:
All of these monopolistic situations, which are strengthened by the advertising industry, lead to a decrease in the number of producers versus an increase in the number of consumers, while the number of consumers cannot be reduced, the number of producers in a monopolistic position supported by advertising is slowly decreasing with the continued and increased market concentration, as demonstrated by the Douglas Greer classic paper The influence of advertisements on market structures and their degree of concentration, describing them as a "very important determinant" [6].
Thus advertisements in general lead to the consolidation and continuation of monopolies, which comes within a general context of historical transformations in the capitalist system, which included the increase in his media / ideological needs to deceive the masses, control of peoples, falsifying facts, and anesthetizing the accumulated feelings of anger in the context of the worsening of its economic crises, such as growth, growth, unemployment, and chronic inflation And financial instability, and his social and political tensions increased the inequality of income and wealth locally and globally, which led to the rise of populism and others.
In addition to the tremendous growth of capital surpluses that no longer find a place for investment in the productive sectors that have already satiated, what has led to the growth of what is known as the third sector (f), represented by the services sector of all kinds, parasitic and non-parasitic, which increased advertising spending First, directly, by increasing its costs with the development of its applications and the diversity of its services with the development of technology and improving the forms of advertising and its technologies in line with modern media such as television, the Internet and mobile phones, and secondly indirectly, by increasing the demand for advertising services while increasing the need of sectors and other activities to it, and competing with it On his services, what contributed to the generalization and spreading of the monopoly situation across all sectors through the tributary of advertisements, which have become the necessity of continuing and imposing an eye on all institutions, even within the sectors that are not used to excessive advertising expenditures, such as education, training and universities sectors. But what are the losses incurred by society due to this marriage, which was arranged by monopolies between the advertising and entertainment industries ?!
Entry is not separated from one another, and what goes into a person's pocket definitely came from another person's pocket
Costly marriage: the social cost of advertising and entertainment marriage and millions of stars
The real problem does not lie in the millions that these stars possess, despite the importance of understanding them as a paradox in itself, a paradox that makes those who do not offer anything real to society are the richest of them, but the problem lies in the overall system that allows their existence and achieve their gains because of them, and most importantly because their millions are not separated from Real losses that we all bear, in this case or in others, and even in the economics of monetary exchange in general (g), income is not separated from each other, and what goes into someone’s pocket inevitably came from another’s pocket, and whenever you see someone who wins millions “easy” , Know that it takes it from the share of the rest of the workers in the same community .
If we look at the social costs of marriage to the interest arranged by monopolies between advertising and entertainment, we will find before us a number of losses that we bear from our living and our pockets in favor of billions of monopolies and millions of stars, the most important of which are:
(1) Unlike the product in the natural competitive market, the monopolistic product can sell less of the commodity for higher prices, which means that the society gets less of this commodity and pays higher prices for it, which becomes net gains that are not due to this monopolistic product, which is what The standard of living of consumers, and society in general, is reduced due to the amount of goods lost by monopoly, and because of the higher price difference that he unnecessarily paid, while he would have obtained more goods and paid less in competition conditions.
(2) The monopolist reduction in production reduces employment, i.e. society's loss of real job opportunities that could expand the labor market, supply human capital with new productive skills, as well as reduce unemployment and pump new incomes that would have been obtained by employed labor, thereby raising their living standards from On the one hand, consumer demand increases on the other hand, and its effects increase the growth in other sectors and the overall growth in general, while all that money goes into the pockets of monopolistic businessmen, advertisements and their stars.
The large, easy incomes of these stars affect the system of productive and social incentives in society, fostering a culture that accelerates returns and easy earning.
(3) Expenditures for the unnecessary part of advertising campaigns represent a waste of economic resources in non-productive parasitic activities that do not add wealth or net benefits to society, even if some job opportunities are provided at much lower rates than they would have been if they were directed to more productive sectors and activities, which they do not bear. Poor, underdeveloped economies have limited surpluses in need of these resources, compared to the wealthy developed economies that have that luxury.
(4) The large, easy entry of these stars affects the system of productive and social incentives in society, fostering a culture that accelerates returns and easy earning, either positively by pushing more young people to shift their ambition towards lucrative stardom fields, which the "honest" paradox the 1990s movies used to present as the only rapid success models. Possible, or negatively, by making even those who remain in their traditional works lose their conviction of their meager incomes, and reduce their actual productivity to what is equal to it, pursuant to the philosophy of “on the AD of their money,” which is proven by studies on social comparisons and the “fair pay” hypothesis [7]. Money balanced their productivity by entering them, and their awareness of the two is undoubtedly completely relative, that is, influenced by the balance between efforts and returns at the level of the whole society, and there is no doubt to a greater degree that entertainment stars and their millions do not convince anyone of justice in this regard.
In other words, millions of these stars come directly as functional revenues from mostly unnecessary advertising expenditures to perpetuate monopoly situations that are economically, socially and politically harmful, and more generally, within the historical trends of irrational inflation in parasitic activities and monopolistic inclinations in the capitalist system, and thus help these stars, Unconsciously or unconsciously, in support of the continuation of these monopolies, reaping their easy millions as part of the billions that we lose from our pockets in favor of these monopolies, for which we lose more and more benefits, incomes and job opportunities, and even at a greater and broader level, we lose by just By the levels of market efficiency and social justice, the situation remains as it is, and drown society in his poverty.
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Margins:
A / includes all attitudes and intellectual jurisprudence that do not adopt the formal approach prevailing in the economic academy, which is the liberal approach based on the synthesis between the neoclassical and Keynesian ideas, where these trends mostly oppose the basic assumptions of the formal economy, such as the automatic balance of the capitalist system and its absolute efficiency in the distribution and use of The resources and the necessity for the state not to interfere, etc. from basic assumptions in the liberal economic model. This critical economy includes Marxist, NewCardi, institutional and post-Keynesian economic thought in addition to some smaller marginal schools.
B / A theory dating back to the classic economy that prevailed in the nineteenth century, and its pioneers Adam Smith, David Ricardo and John Stuart Mill, and the theory says that in every society at a certain historical stage there is a specific balance or share of the output devoted to wages, and its size depends on the ratio between the population And the size of the capital in society, and thus the more capital in society relative to its population, the greater the balance of wages in relation to its workforce as a whole.
C / The market has two extreme cases, which are complete competition and complete monopoly, while most markets are in fact between the two cases. As for competition, it is the situation in which one or a few producers does not affect the prices or quantities in the market, because of the large number and the small percentage of sales of each product in The market, and thus the only choice for the product is to sell its quantity of the commodity at the prevailing price in the market, and its interest here is to sell the largest possible amount in order to get the largest possible profits, so he and the community benefit together, in contrast the situation differs in monopoly, where one or several producers dominate A large share of the market, that is, they influence In a large percentage of the offer for sale in it, as they do not fear their competitors because of their weak influence in the market, and therefore they can reduce the amount that they offer to raise the price of the commodity, here it is not in the interest of the monopolist to sell the largest amount, but rather to sell a smaller amount at higher prices, as it achieves greater net profit in This case, but at a cost to the consumer.
D / The theory of persuasion is a theory that sees the task of advertising lies in persuading the consumer to buy the advertised product and creating a kind of consumer loyalty towards it at the expense of other competing products, without adding or special feature in the product, so that the product guarantees the stability of its market share and its ability to raise its price without fear of The departure of consumers from it, that is, it is harmful to competition in general, and economic evaluations of ads differ from the perspective of this theory between the direct and indirect effects and the size of their burden on the consumer, but it favors the predominance of the negative impact on the positive.
E / Definition theory is a theory that considers the task of advertising to transfer the necessary information to the consumer, which saves it at the time of research, shopping and effort, which increases its information about the products available in the market, and therefore it is useful for competition, although it may arrange some monopolistic advantages for some companies that have some monopoly power Indeed, it favors overcoming the positive effects of advertising on both consumer welfare and corporate earnings.
And / agriculture is the first sector and industry is the second.
G / Some define capitalism as an inclusive or generalized exchange economy, where money mediates almost all economic transactions, in order to distinguish it from previous systems such as slavery and feudalism, which defined forms of monetary exchange, but it was not the basis in the overall exchanges on the one hand, and the guide was not Its as in capitalism on the other hand.