Advertising is a powerful tool for consumers. It should be welcomed, not feared, says John E. Calfee in a new book published by the AGORA Association in collaboration with AEI.

In Fear of Persuasion: A New Perspective on Advertising and Regulation (AEI Press; September 1997), Calfee examines three decades of research and draws three compelling conclusions:

• Advertising improves consumer welfare. Calfee shows how advertising brings consumers information they would otherwise not get. Consumers find out about better prices, higher quality, and ways to improve their lives. For example, advertising from drug companies about allergies, cholesterol, and high blood pressure leads consumers to get needed health care.
• Advertising corrects flaws in the marketplace. Advertisers often tell consumers what's wrong with competitors' products and services, creating demand for better ones. Calfee provides numerous examples, including cigarette advertising in the 1950s in which companies portrayed their brands as less dangerous. Instead of switching brands, many smokers apparently thought it would be less dangerous to just quit; thus, smoking declined.
• Advertising regulation does more harm than good. Consumers suffer when they don't get the information that advertising provides, Calfee says. Bans on toy advertising have reduced price competition and product selection--parents pay more and children get less.

Calfee acknowledges that advertising attempts to persuade. But consumers don't trust it. Therein lies its value, he says. The dynamics among competing advertisers and between advertisers and consumers tend to keep false advertising in check. Regulation tends to reduce competition and consumer choice.

"Consumers have a stake in the freedom to advertise," Calfee says, and commercial freedom of speech should have the same constitutional protection as political freedom of speech. It is "nearly impossible for vigorous advertising to avoid offending political authorities."