Most consumer goods marketing is bullshit
The danger is when companies are good at doing it, because they have a way of making it look like...something real
In ECON001 class at Penn during my freshman year, we were given a very simple mental model of how free markets create value over communism. Surplus value is generated when supply can be created at a lower marginal cost than the marginal utility that the product would give to a consumer. Marginal cost depends on skill; marginal utility depends on preferences.1
Long story short: free markets allow you to buy the thing you want from someone who is good at making it. Communism fucks this up.
Yet every single one of us has decried consumerism at some point, stared at all of the fucking stuff around us, and realized that we were still…unhappy. So what gives?
Happy people don’t need stuff
Aside from some basic stuff like food and jackets, all consumer goods and experiences are sold on the premise that they will make your life better. That you’ll be sexier, smarter, more productive, more liked, more satisfied, etc. Or at the very least, you’ll be temporarily distracted from the painful, existential nonsense that is (gestures at the world) all this.
In other words, the company producing the product is no longer fulfilling a preference that is innate to you. Instead, they actively work to create that preference in you. They create a need where there previously was none. And unhappy people are the easiest people to do this to.2
A healthy, well-adjusted, emotionally well put together person is a person who doesn’t need to buy shit - and such a person is not good for GDP.
Sometimes the line is blurry
The bullshit is not always so clear cut. A Macbook is a good example. You could use it to write a novel which generates profound feeling and seismic philosophical shifts in readers. Or you could use it to watch porn and reality TV.
I think a good litmus test is this: if you didn’t actively go out and look for the thing because you need it for a specific purpose, it’s probably bullshit. If you had no idea it even existed before, but now you feel like buying it because it’s been put in front of you, it’s probably bullshit.
I spent the first four years of my life in a crappy state-assigned apartment in Wuhan, and don’t recall having a single care in the world. After moving to Toronto, I spent the next decade or so being extremely resentful of all the families who had things that we could not afford - despite living in an objectively nicer home. Where did that resentment come from? Why did I want all that stuff?
Even today, I get a strong but short-lived burst of satisfaction from going around with my parents and paying for things that we couldn’t afford when I was younger. Decent restaurants, and things like the Distillery Christmas market in Toronto were pretty typical examples. I can now recognize them as silly consumerist middle class trappings, as empty as everything else. But when I was young, that dissatisfaction cut deep.
I have no idea how much Dior paid to have their name emblazoned on the Christmas tree in twinkling lights, but to my great surprise I found myself doing something the next day that I never thought I would ever do: I went on the Dior website. And then I went to Sephora. And I bought one of their fucking lipsticks - as if it would somehow reassure me that those wanting days of my childhood were gone for good.
I’m reminded of the story of a North Korean defector who spent a quarter of her monthly budget on a lipstick that she didn’t even end up using:
Buying make-up was even harder. She had no concept of what looked good on her. All she knew was that she wanted to copy South Korean Olympic figure skater Kim Yuna, even if it cost her about US$20 to buy her signature fuchsia lipstick. After leaving the shop, So Won excitedly applied it, only to find it made her look sallow and garish. She never wore it again but was too ashamed to throw it away because it had cost a quarter of her monthly spending budget.
-”When the dream dies: female North Korean defectors suffer prejudice in the competitive, self-absorbed South”, by Ann Babe (South China Morning Post)
And here’s the kicker. The famous lipstick that Kim Yuna was wearing during the 2013 World Championships? That’s right. Dior. They didn’t even pay her for product placement!3 She literally just had it on her. Lucky bastards.
Thankfully for us, most marketing campaigns are bad.4 They are so obviously selling a false narrative that nobody would ever confuse the product for genuine happiness.
The real danger is the folks who do it well. Some of these people are better shrinks than any psychologist I’ve ever worked with. Here’s a quote from the marketing company5 that put the whole Christmas campaign together, emphasis mine:
The … [Village] in the historic Distillery District is an annual, intimate picture-perfect holiday experience where friends and family gather to take in the timeless romance of the holidays…
I wish I could say that they were wrong, but they’re not. Our family went to the market together this year, saw a play, got some dinner, and genuinely had a good time. The market was very pretty. It was exactly the type of memory that I had wanted as a kid, but was always frustratingly out of reach.
Is that real value generated, from free-market producer to free-market consumer? Or is it all hogwash? If a North Korean defector decides to escape to the South because they saw some women wearing pretty dresses in a movie, and thought they might be like that one day - are they bold and daring vanguards? Or are they suckers?
It’s hard to know. All I know is that a lipstick wasn’t the best way to spend $61. But it wasn’t the worst either. Just like everything else in this world.
#104
Ok, the more complete explanation is this. Marginal utility depends on preferences, and preferences differ from person to person! One person likes chocolate, and one person likes vanilla. In fact, they both like their own flavour so much that they would be willing to pay $5 for their preferred flavour, and only $1 for the other one.
Marginal cost also depends on skill and ability. Some people might be better at making chocolate ice cream; some people might be better at making vanilla. There are two ice cream makers: one who can make chocolate ice cream for $1, but vanilla ice cream for $2. (Maybe he’s good at growing cocoa beans but not vanilla beans, or something like that.) And the other one is the exact opposite: he can make vanilla ice cream for $1, but making chocolate ice cream costs him $2.
In a free market, then, a chocolate ice cream that cost $1 to make could be sold to the chocolate ice cream lover for, say, $2. The chocolate ice cream lover gains $3 of utility (because they paid $2 for a thing that they value at $5), and the ice cream maker gets $1 of profit. This is a total of $4 of value, “generated out of thin air”. The same applies for the vanilla transaction. So a total of $8 of value is generated, and everyone is happy:
Chocolate lover: Paid $2 for $5 of value. +3
Vanilla lover: Paid $2 for $5 of value. +3
Chocolate maker: Cost was $1, sold for $2. +1
Vanilla maker: Cost was $1, sold for $2. +1
Contrast this with state-controlled production, where all producers must produce vanilla (because chocolate is treason and unpatriotic, or whatever bullshit ideological reason), and they must sell it for $2, because the state has determined that this is “fair”. Now we have the following:
Chocolate lover: Paid $2 for $1 of value. -1
Vanilla lover: Paid $2 for $5 of value. +3
Chocolate maker: Cost was $2, sold for $2. +0
Vanilla maker: Cost was $1, sold for $2. +1
In this case, only $3 of value is generated. What’s more, the chocolate maker will probably say fuck it to the whole operation, because he’s not making any money, and will stage a violent coup, which disrupts the entire ice cream trade. The chocolate lover might decline to participate in polite society (because there is no happiness to be found) and bomb a public location, or flee the country, or die trying to. You get the picture.
The stuff that unhappy rich people try just happens to be more expensive than the stuff that unhappy poor people try. But the dynamic is the same.
Though of course they started doing so later. They know how to capitalize on a good thing.
My absolutely favourite is Chinese sellers on Etsy or Aliexpress who Photoshop the limbs on female models to make them skinnier, to the point where the background is literally distorted. Here is a VERY NSFW (!!) example.
They literally branded themselves “eat it up”!! As in, haha these suckers are gonna eat this up