Hotelling on the Price Rationing of Advertising

Understood in 1938:

Another thing of limited quantity for which the demand exceeds the supply is the attention of people. Attention is desired for a variety of commercial, political, and other purposes, and is obtained with the help of billboards, newspaper, radio, and other advertising. Expropriation of the attention of the general public and its commercial sale and exploitation constitute a lucrative business. From some aspects this business appears to be of a similar character to that of the medieval robber barons, and therefore to be an appropriate subject for prohibition by a state democratically controlled by those from whom their attention is stolen. But attention attracting of some kinds and in some degree is bound to persist; and where it does, it may appropriately be taxed as a utilization of a limited resource. Taxation of advertising on this basis would be in addition to any taxation imposed for the purpose of diminishing its quantity with a view to restoring the property of attention to its rightful owners.

Harold Hotelling, The General Welfare in Relation to Problems of Taxation and of Railway and Utility Rates, 6 Econometrica 257 (1938).