Economies of Scale

Libertarians love Adam Smith because he talked about the power of markets and competition.

But Smith also talked about the power of centralization, specialization, and economies of scale.

Even though the LP’s overall market plan has historically been very centralized, the members have resisted centralization where it could really be beneficial.

Printing entails significant setup charges. Slick brochures, bumper stickers, yard signs and the like are much cheaper per item when printed in large runs. Centralized purchasing of such materials would make a great deal of sense.

Demographically targeted advertising through magazine advertising needs to be done through the national office, if at all. It would be interesting to couple such advertising with mailing list rentals from the respective magazines. (Of course, a party should target a variety of demographics. But different demographics can see different ads.)

Quality radio and television ads take money to produce. If the central office pays for such production, affiliates can run the ads paying only the cost of airing the ads.

I got on the LNC as part of an effort to get headquarters to take advantage of these opportunities. My efforts had some rather limited successes.

And yes, there are problems with some of my ideas along these lines. Distribution costs money. So do warehousing and taking orders. My economy of scale idea for yard signs (see quiz2d.com/essays/scale) worked well enough in Northern Virginia, but would not work well in areas that crack down on signs on the pubic right-of-ways.

This admitted, I still contend that such efforts should have been tried. They were cheap experiments compared to many of the LP’s efforts during the past few years. The successful experiments could have been repeated; the failures written off without threatening the party with bankruptcy.

It is true that having a propaganda store at the national office in DC was an expensive pain in the butt. My solution: give the stuff away! Give out bumper stickers as premiums to donors. Give the state parties boxes of brochures, bumper stickers and other doodads to distribute to county affiliates. Create outreach kits for student groups, county affiliates, and individuals wanting to do something.

Yes, such a generous policy would result in wastage. Maybe only one in twenty bumper stickers would actually end up on a car. So what! The economies of scale would justify the other inefficiencies. If only one bumper sticker in 20 gets used, you still get a bargain in advertising. (Last time I bought bumper stickers, it was about 12.5 cents each for one color in lots of 5000.) A run of Legalize Hemp posters to give out at rock festivals would bring in a tremendous return on investment. (I had a few Legalize Hemp/Vote Libertarian signs left over from a campaign when I worked an alternative rock festival in DC. Pierced and tattooed young adults were begging me for signs to wave in the audience. The previous year, we had deployed many of these signs, only to have them stolen by teenagers, for later posting in college dorms.)

To win, you must do better than the competition somewhere. It is impossible for a third party to match the D’s and R’s in national media and press coverage. It is possible to deploy a better outreach booth at local events. I have done so (along with fellow volunteers). Large centrally produced print runs would make such outreach tables more economical. A generous policy would inspire more volunteers to work such outreach tables.

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Copyright 2007, Carl S. Milsted, Jr. All rights reserved.