Thursday, September 23, 2010

The Vince Cable marketing strategy

Vince Cable's conference speech has attracted a fair amount of comment. Dave Osler dismisses his anti-banker rhetoric as populism, while Chris Dillow finds it incoherent. The Daily Telegraph responded pretty much as you might expect - and practically everyone agrees that in the absence of any concrete proposals for banking reform, Cable's speech was fairly meaningless.

I would agree with this but argue that the significance of the speech lies in the politics. Cable's rhetoric about the anti-competitive behaviour of capitalists provides a neat illustration of what he was doing. Firms can try and defeat their competition by under-cutting their rivals, providing a better product and/or lobbying government for some kind of protection, as Chris reminds us. But something else they do is to try and differentiate a product that might in reality be not much different from that of their rivals. This can become anti-competitive when big firms spend so much on advertising that it effectively acts as a barrier to entry for smaller producers.

Whether the media coverage that Vince gets is analogous to this latter feature of product differentiation, I couldn't say - but the first bit is, I think. What Cable was on about is secondary to why he was doing it. It was merely an attempt to pretend that two neo-liberal products with little to distinguish them, are in reality very different. Predictably the Lib Dem party faithful went for it; what is quite impressive is the extent to which the rightwing press have fallen for it too.

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