Business

How Mainstream Economics Helps Businesses Manipulate our Minds

Do we really decide what we want?

Share with your friends










Submit
More share buttons
Share on Pinterest

By John Komlos

A major oversight of standard economics is that it begins the analysis with adults. This is convenient, because this strategy enables the discipline to ignore the crucial and pernicious influence of powerful mega-corporations on the formation of the mindset of children and youth during their formative years. By disregarding the crucial first 18 or so years of life, mainstream economics can simply assume that tastes are already formed when a person enters the market place and by then they know perfectly well what they like and dislike. In other words, they enter the economy as adults with tastes fully formed, so businesses do not influence them in their childhood. The technical term for this is that tastes are exogenous. So economists do not have to worry about tastes because that is determined exogenously, i.e., outside of the economic process.

This dovetails well with the idea of consumer sovereignty,—the doctrine that consumers dictate what businesses produce insofar as they “vote” with their dollars to channel production in such a way as to satisfy their desires. Insofar as tastes are predetermined, consumers express them through their wants, supposedly inducing corporations to produce the right amount and quality of goods in order to satisfy those wants. In the end, the consumer is king as he/she determines what is being produced. If we would not demand stuff, firms would not produce stuff. So our wants are satisfied and everyone is happy, or at least it is claimed by conventional economists.

Get Evonomics in your inbox

However, this model is completely off the mark, because of the unfounded assumption that tastes are exogenous. It is all too obvious that the corporate world influences our culture and desires in profound ways. Hence, the theory of consumer sovereignty is pernicious, because it enables economists to claim that all is well. Producers are just doing what consumers want them to do. And consumers do not need protection because they are in charge, after all. So economists disregard that desires beyond the basic needs are learned gradually and do not come into being spontaneously from within ourselves. Through the process of socialization we learn the terms under which we become respected members of the society. The foundation of our value system is learned during those formative years.

In fact, the manipulation of children’s unconscious by the media lays the foundation for a culture of consumerism that cannot be undone by rational processes once the child reaches adulthood. Hence, it would be important to create an environment in which the development of children’s unconscious mind is largely protected from business influence.

The other important psychological principle prominent in influencing children is Pavlovian conditioning by, for instance, reinforcing behavior by rewarding it. The conditioning starts at an early age: fast-food chains give away toys to toddlers as a way of conditioning them to want to frequent those eateries even when they no longer receive the toys and the firearms industry has poured millions of dollars into a broad campaign to ensure its future by getting guns into the hands of more, and younger, children. Cigarette manufacturers give out free samples. And we have many programs such as frequent-flyer miles, bonus points with credit cards, free gifts, and premiums. Parents have not been successful in shielding their children from this multibillion-dollar effort at conditioning.

Hence, by the time we reach adulthood we have gone through a rigorous process of inculcation inasmuch as Madison Avenue inundates us with symbols of sex, power, and cultural icons in order to sell its clients’ products. Through this socialization we assimilate a culture in which we learn to mimic the tastes, values, and consumption habits of superstars and assorted other idols projected across the media. Under such intense pressure, children are groomed to grow up to become reliable consumers and choice becomes a pretense of individualism.

Neoclassical economics ignores the role of the unconscious mind and the role of conditioning in the formation of our personality because otherwise the rationality of Homo economicus, who is objective about her wants, is super rational, and is in perfect control of her taste, emotions, and desires would not make sense.

However, it is deceptive to think that we are in control of our tastes and values. Nearly three hours of TV watching daily would affect anyone’s thinking patterns. Corporations invest extravagantly in order to promote those aspects of the culture on which they can profit, sway our wants, and make us feel like we need their product. They hire trendsetters to admonish us hundreds of thousands of times to forget about the future and buy today before the bargains expire, to indulge in instant gratification, and tempt us with the newest glittering products, to carelessly disregard the future, putting caveats into the fine print.

We’ve been so preoccupied with the threat of big government controlling our lives that we were blind to the threat posed by other institutions, namely Madison Avenue, Wall Street, Hollywood, Silicon Valley, and the mega-corporations that slowly but incrementally, year in and year out, did exactly that which we feared the most: limit much of our freedoms and manipulate much of our individuality.

So in order to regain our freedoms we would need to start by protecting the individuality of our children from the conditioning of the corporate world. That can only be accomplished if we can limit the power of Madison Avenue from depicting an unrealistic but tempting view of the American Dream.

2016 March 3


Donating = Changing Economics. And Changing the World.

Evonomics is free, it’s a labor of love, and it's an expense. We spend hundreds of hours and lots of dollars each month creating, curating, and promoting content that drives the next evolution of economics. If you're like us — if you think there’s a key leverage point here for making the world a better place — please consider donating. We’ll use your donation to deliver even more game-changing content, and to spread the word about that content to influential thinkers far and wide.

MONTHLY DONATION
 $3 / month
 $7 / month
 $10 / month
 $25 / month

ONE-TIME DONATION
You can also become a one-time patron with a single donation in any amount.

If you liked this article, you'll also like these other Evonomics articles...




BE INVOLVED

We welcome you to take part in the next evolution of economics. Sign up now to be kept in the loop!

  • rorysutherland

    This is a surprisingly “Blank Slate-ish” view for a blog which calls itself “Evonomics”. And seems to follow that old economic assumption that humans are not to some degree instinctively competitive, caring only about absolute not relative wealth; that we would somehow be content with a minimalist and egalitarian existence had we not been otherwise indoctrinated to want things.

    As E O Wilson supposedly said of Marxism: “Wonderful theory – wrong species.”

  • Pretty accurate. You might toss in the idea of telepathy and possession technology that reinforces the conditioning.

  • Was there any evidence in this piece? You would expect some to justify limits on free expression advocated in the conclusion.

    • Unlearning Economics

      While I agree the article was quite weak, ‘limits on free expression’ is a bit much. Only people have a right to free expression; corporations do not.

      • Alex Nongard

        Corporations are people, my friend.

  • Joe Manning

    I agree. And Sheilding our children from this can a daunting task.

  • David

    There is no way to “evidence this as Anderson suggests. We (the US) are the world leaders of consumption and there is no doubt much of it is early conditioning.

  • X-7

    If we wanna survive, and it’s likely already too late given that arctic methane is exponentiating we have to go deeper, down to our cultural genome.
    “The story of human intelligence starts with a universe that is capable of encoding information.” Ray Kurzweil – “How to Create a Mind”
    Code is relationship infrastructure in bio, cultural & tech networks: genetic, legal, math, language, monetary, moral, religious, software.
    It’s Triage Time, so like an immune system, I’m generating variation, in this case, culture code variation:
    http://ow.ly/Z4lj0

  • Derryl Hermanutz

    That governments, politicians, corporations and other social institutions engage in systematic and highly psychologically sophisticated propaganda to influence their target market’s desires and thinking and behavior, is not a controversial thesis. The ancients practiced the art of rhetoric: appealing to emotion, reason, psychological manipulation — whatever works — to bring the audience around to “seeing things my way”.

    Gustave le Bon laid the groundwork for the modern understanding of mass psychology in his 1895 book, The Crowd. In the 1920s Walter Lippman and Edward Bernays married le Bon’s group psychology insights to the homogenizing power of mass media.

    In his 1922 book, Public Opinion, Walter Lippman argued that mass society requires homogenous mass mind to be governable. Lippman drew on the spectacularly successful techniques of the propaganda campaign that transformed Americans’ public opinion from, “Spend no US blood or treasure on foreigners’ wars” to “Kill the evil Hun!”, that was needed to get the US into WWI (read Smedley Butler’s little 1935 book, War is a Racket — documenting how the many pay to produce war profits for the few — to discover whose interests were served by US entry into that war and other wars). In 1923 Bernays published, Crystallizing Public Opinion, advertising his ability to mould public opinion on contract to whoever could afford his fees. Bernays’ 1928 book titled simply, Propaganda, enumerates his successes at altering public opinon in favor of his clients: the governments, corporations, and rich individuals who could afford to pay for his “public relations” services.

    Mass mind moulding has been a “profession” for a century already. Marketing is necessary to the success of any business (no customers, no sales, no business) and is a major department of every large corporate enterprise. Marketers have been explicitly targeting future consumers of their products — children — for decades: maybe beginning with breakfast cereals in the 1950s. Consumers are groomed, nurtured, culturally constructed.

    As Karl Polanyi explained in his 1938 book, The Great Transformation, 19th century capitalist propagandists successfully transformed the Western public mind from believing people are democratic citizens of Christian nations to believing people are sovereign consumers in a capitalist market economy. “Christians” exhibited mixed success at serving God (spiritual values like empathy and charity that seeks the good of others) over Mammon (material values that seek to enrich oneself and devil take the hindmost). But capitalism recongnizes no “really existing” god other than Mammon. That’s a major cultural transformation, that has opulently served the acquisitive inclinations of capitalists by eliminating competition from “the other God”. Now we have the invisible hand of the market — and Lloyd Blankfein — doing God’s work of optimizing social outcomes and delivering everyone their just desserts.

    Propaganda “works”. Ubiquitious exposure to the psychologically and ideologically sophisticated tools of mass mind moulding is a reality of modern life.

    What is interesting is that the first four commenters on this article are hostile to the author for saying it out loud.

  • Yes, certainly, what is written here is a small part of the issue.

    Certainly we are influenced by the context of our existence at many levels, from deep cultural to sound bite advertising, to such approximations as we manage of rational consideration.

    Certainly humans can be both highly cooperative and highly competitive, depending on context, and the evolutionary justification for that is clear and complex. Reality has many dangers. As one example, super-volcanoes are real. 1815 was the last time a little one went off, and gave a winter to the planet that lasted 18 months. Bigger ones can create much longer winters. All of our ancestors were sufficiently competitive to survive all such things.

    And it seems that for most of human history (between such external destructive events), there was sufficient abundance for humans to live in highly cooperative societies. And cooperation by itself is unstable, and requires attendant strategies to prevent invasion by cheating strategies – we see them at many different levels – within our cells, to prevent viruses, our immune system, and many levels of cultural systems.

    So if there is genuine scarcity, we can all compete, and compete hard.
    And if there is enough for all, we can all cooperate, at potentially infinite levels (whatever level we have managed to achieve awareness of).

    Our ability to automate processes is on a double exponential growth pattern, and has been at least since the 1890s and possible well before that. The doubling time on that process is now about 10 months (far faster than human population growth rates of around 2%).

    We can automate any process of production we choose (I write as someone who has run a software company for 30 years) – be it goods or services.

    That anyone on the planet experiences want of any necessity is not about our ability to produce those things, it is about the social constraints on the systems we use (not the technology itself).

    It is a relatively simple issue, technically, to meet the material needs of everyone, through automation.
    What is far less trivial is changing the ways we think, the things we accept without question.

    There seem to be many variations (perhaps potentially infinite) that can be usefully and broadly categorised into three basic ways of thinking.

    Some groups accept a certain set of ideas as “True”, and one may not challenge such truth.
    Many cultures have notions like “heresy” and “blasphemy” that make it a crime to challenge such beliefs. Other versions of the same general class of thinking come in notions like patriotism, nationalism and “truth”.

    Some groups simply accept certain cultural norms, without necessarily ascribing the idea of truth to them. Things that must be done, even if no one really know why, and even if everyone acknowledges that the stories are just stories.

    Some few people question assumptions, learn about learning, learn about as many aspects of the complexity within which we seem to find ourselves as possible, and create new modes of interpretation and understanding, and end up in modes of understanding that are fundamentally based in probability (without “Truth”).

    Science, at its best, falls into the latter category, and it is not difficult to find examples of individuals using science in both of the other major modes.

    So what has this to do with economics?

    Everything!

    Economics is a set of ways of thinking about social organisation that are founded in exchange.

    Exchange, and specialisation was certainly of great benefit to our ancestors, and through them to us.

    And now automation is overtaking exchange as the prime delivery mechanism of practical benefit.

    Marx tried to create a Labour Theory of Value. There are some clear logical flaws with a labour theory of value, and there is the essence of something in it.

    It seems that we each use a measure of time in making value judgements.
    How much time would it take us to get x by path a to b to c, versus by path f to g to h.
    Many people collapse time into the concept of labour. Marx certainly did, many others have too, in various different ways.

    By specialising, we can produce more, and thus society as a whole becomes richer.

    But what happens when automation comes along?

    Now we can automate any process.

    Automation completely breaks exchange based systems.

    If you really think money is an accurate measure of value, just consider how you would feel if you didn’t have any air for an hour.

    Air has no monetary value.
    It is a free good.
    It is universally abundant.
    No one will exchange anything for it because all they need to do to get what they want is to breath.

    But imagine a plastic bag over your head, so you cannot breath – for just one hour.

    At normal temperatures you are irrevocably dead at the end of that hour – no chance of even the most advanced medical systems being able to restart your consciousness, the levels of cascading systems failure within the many levels of organisation within your body would have caused just too much damage at too many levels to start again. Dead Jim!

    Oxygen in the air is arguably the most valuable thing to any of us.
    Yet it has no monetary value.

    Automation has the ability to make most goods and services (certainly all those required for survival) as common as oxygen in the air, and just as valueless in economic terms.

    The response of the system to date has been to create artificial barriers to such abundance, with ideas like copyright, and intellectual property; the sole aim of which is to prevent universal abundance and thus maintain marketable scarcity.

    Gaining awareness of the levels of freedom that are possible takes a lot of work.

    People who spend all their time working to make just enough to survive have no reasonable chance of ever gaining sufficient freedom to be able to make the time to investigate the deeper levels of what freedom actually is and what it can become.

    There is no shadow of reasonable doubt left in my mind, that having a reasonable chance of real long term security for any of us, requires that we develop systems that deliver such freedom to all of us. Many people will still be in one of the first two modes of existence above, and I have spent over 50 years in the third mode. So I don’t expect to generate universal agreement any time soon.

    And we need many more people to start seriously looking at the invalid assumptions present in many of our currently dominant institutions, if any of us are to have a reasonable chance of survival (and I am cautiously optimistic that most (and perhaps even a reasonable approximation to all) of us can survive indefinitely.

  • The classical view of economics is not an oversight, but rather fits within the frame of Cartesian idea of what it means to be human, which is to be an autonomous rational soul. The more we find out about how humans really operate, the more we find this view deficient.

    Many writers accept the idea contextual influence on human behaviour don’t want to think about its ultimate corollary: if our choices are conditioned, how conditioned is our choice in the kinds of articles we write and read, and the kinds of theoretical thoughts we think.

    What if nothing is outside the system?

  • James Dickens

    This isn’t Pavlovian conditioning. It is Operant (Skinnerian) conditioning. And the already weak article that wants to prove a good point gets decimated by this inaccuracy.

  • Richard Wilk

    A cursory search through the literature on consumer behavior would make it clear that theories of psychological conditioning have been rejected for almost 40 years now, and the same is true in media studies and allied fields. Influence, yes, but conditioning no, The Frankfurt school (Horkheimer et al), and various ideas of consumer brainwashing were popular in the 1950s and 60’s when people were in a panic about the vulnerability of children and the uneducated (remember the comic book code?), and in the hands of early consumer advocates like Vance Packard. Of course advertising has pernicious effects on society – andI wish it was as simple as conditioning, but really, read the literature or at least consult some people with expertise.

  • Oswaldo Lairet

    Thanks for contributing an insightful, alternative notion on how economics really work. From my perspective, this one sentence reveals the power of your insight: “…In fact, the manipulation of children’s unconscious by the media lays the foundation for a culture of consumerism that cannot be undone by rational processes once the child reaches adulthood.”

    I ​begun a ​largely ​vegan regimen (​17​ of ​21 weekly meals​)​, ​seven years ago. Yet, the industries you mention have so brainwashed our society, that without my 4 unrestricted weekly meals, I wouldn’t have a smooth social, professional or family life. In fact, our own “animal brains” initially rebel against us taking away​,​ the menu of oxidant, toxic and generally degenerative foods introduced to our sensory perceptors since ​childhood.

    Additionally, the ​industrial ​complex’s army of scientists keep developing ever more precise chemical combinations, designed to hijack our senses and exploit them to the point that convincing my own kids to stay away from addictive foods it’​s impossible. ​Yet, ​earlier this year I summarized​ for them​​, the key ideas ​(and internet links) ​I’ve developed over​ the years​ and while slowly, this approach is starting to work. I’d gladly share ​it this way or privately​, upon request.