The Upside of Useless Stuff
There’s been plenty of talk lately –in these pages and elsewhere– about a new kind of capitalism. About creating things because they’re good for society. About understanding, as Michael Porter and Mark Kramer suggest (“Creating Shared Value,” HBR January-February 2011), that not all profits are created equal: Profits derived from making the world better are superior to those derived from the consumption of useless, or even harmful, junk.
At the risk of touching the third rail, I propose that getting people to want things they don’t really need may be far more valuable to society than we think.
Imagine that I started a business selling beautiful bottles of air for $10. I’d call them Respirer (res-pir-AY– it’s French!). My advertisements would laud Respirer’s purity, evoking bracing mountain air. (Fewer than 10 parts per trillion of particulate in every bottle!) Celebrities would endorse Respirer’s rejuvenating effects. (Kate Winslet starts every day with Respirer!) In a matter of months, department stores would be selling out, and spas would brag that their saunas piped in pure Respirer air.
Respirer would be a runaway hit. Of course, it would be just air, and in most places you could get all the reasonably high-quality air you wanted free. So how could this clearly useless product have a beneficial effect on the economy? It would motivate people. By hyping Respirer, I’d give consumers something to want, and in order to be able to afford it, they’d have to work. They’d have to be productive.
We often talk about how marketing’s job is to get us to want things and spend our money, sometimes foolishly. But that reflects only marketing’s output. Marketing also creates input: It spurs us to work to earn the money to buy the things we want.
Consider for a moment a world without marketing hype. One in which there’s nothing you really desire beyond what you need to live. There’s nothing your kids want; they don’t bug you every time you’re in the supermarket. How hard would you work in such a world? What would motivate you to work harder?
Now consider our current consumer environment: Multiply the desire for Respirer by thousands of products of varying levels of utility: iPads, leather couches, crystal martini glasses, cars, garden gnomes. It’s like having thousands of little motivational speakers hovering around us.
Suppose I’m a surgeon. Could it be that my desire for Respirer, and all this other stuff, would spur me to work harder? To innovate new procedures that would save lives and also enrich me personally? I suspect it’s very likely.
Let’s be clear. I don’t mean to say that marketing will save our economy. Or that marketing things we don’t need is the key to a prosperous planet. The line is narrow, indeed, between being motivated to work and mortgaging the future (both your own and society’s) to get stuff like bottled air.
Still, as we continue to redefine capitalism, let’s not discount the role of aspiration and the desire for incremental luxuries–things we want but don’t necessarily need. They can fuel productivity and thus have a valuable function in our economy.
Originally published in Harvard Business Review, May 2011.

The Honest Truth About Dishonesty: How We Lie to Everyone - Especially Ourselves

Love it! btw, selling air is not that far from selling bottled water.
I agree with you in every point. This is why capitalism works and communism doesn’t. Desire to have (greed!) is what makes us all go further.
i replied to you. under this comment.
This is true, of course (my opinion
).
.
But I think that the biggest motivator to work and “do stuff” is the possibility to us to make something that matters. To make an impact to what is around us. *To feel important.*
The gadget is just the short term prize. The carrot for the donkey
So, even not being a communism fan, I think I can say that in a real(?) communist society (and an utopian one?) people would struggle more to make that difference, and struggle less to buy the gadgets.
(I’m not sure about what I’m saying in this last paragraph, I confess. But I think it can sparkle a little conversation here.)
P.S. “btw, selling air is not that far from selling bottled water.” -> agree
If we twist the argument a bit more we could say that the desire to feel important is also something useless. The things accomplished to feel ourselves important can be of relevance (or not), but the mere feeling is just vanity and self affirmation.
But then we could question the utility of anything in our existence… if we stripe out religious implications, does anything we do/buy/think matter at all? no human has ever done (and almost sure won’t ever do) anything of a minimum significance from a cosmic perspective. But I’m digressing and barely being able to follow myself… I need more caffeine
But why exactly is working harder better for people? You say it’s better for “the economy,” but really? Is there any indication whatsoever that people “working harder” is what improves the economy? And what exactly does “working harder” mean? Longer hours? Or as the cliché says “working smarter?” And is “the economy” more important than the happiness I find when I realize it’s much nicer to live simply and work less than to work my butt off so that I can purchase more useless stuff? Is my whole purpose in life to be a cog in the machine called “the economy?”
Also does the equation “useless stuff=good for us” also factor in the toxic manufacturing process for the (probably) plastic bottles the stuff comes in, or the cost of dealing with the plastic waster this useless stuff generates? Or, since those costs are to be paid off at some future date, maybe after we’re dead, do they not count?
I just have a hard time with the idea that creating profits is the reason we are here on this earth. Gosh, maybe I’m reading the wrong blog …
I second Lisa B’s argument.
is working harder (needs defining first though, in this context, I mean working long and infatuatedly) necessarily better than working less?
If we put satisfaction(utility) first in our life, which is the end of mainstream economic theories, the problem only reveals itself more clearly.
The RIGHT question on this matter would be this :
Which would give me more satisfaction (although there would always be some incalculable factors.. qualitative things. )
- working harder to one’s limits or working less hard (hard enough)
I thinks the latter is a more healthy idea. Though it is fair to say that the upside Dan pointed out makes sense in a limited condition, I think it is very dangerous to generalize it, as more often than not, we are not used to setting limits for ourselves. Even if we get somehow motivated to work harder by all the marketing hypes and fancy stuffs, we would always be exposed to the blood-draining threat of desire without knowledge of when to stop.
Upside … downside …fine
a balanced look we need.
The idea is not that working hard in itself will drive the economy. The idea (at least I think) is that people in their drive to buy these useless things will work harder in the sense that they will do one of three things:
-Increase efficiency
-Work longer hours (at the same efficiency)
-Work longer hours & increase efficiency
Any one of these options will lead (most likely, given the behavior of capitalist systems) to a higher pay for this person and also a higher rate of conversion of services or raw materials (the person’s ideas or potential to create) into money. This conversion is essentially what drives economies. Therefore, this person wanting stupid things makes the economy move forward. Essential distinction: person working harder THINKS that however he is working harder will pay him more (even if it is incrementally more) money.
Thanks for sharing the value of wishful thinking !
The art of balance between ” real” need and desire may come with wise experience or ,perhaps …never!
( Just A monitor to all of us-at the end of life a lot of people desire to live on even that they are aware that is not realistic.
This is a real shared value of life!
Long live the inspiration !
I’d have to disagree with you on this one. I don’t think the creation of useless stuff is the only road to prosperity. I think consumption, and the desire to consume useless stuff can distract people from becoming the best they can be.
Without moderation, the quest for “more” becomes an addiction. You become stuck in a rut – some people call this a rat-race. An insatiable quest for more, reduces the likelihood you will ever find the time to ‘stop and smell the roses’; or ‘be thankful for what you have’.
This ability to slow-down, to be present in the moment, can create clarity and vision too. Epiphanies will spring from these eddies in time.
Game-changing, life-saving surgical procedures are as likely to be invented during these moments of clarity, as they are to be discovered during the hour-by-hour grind of back-to-back billable procedures.
I agree with much of this, but also that Lisa B has some great counterpoints.
My question is this: would we work harder, or just hard enough?
Would the surgeon really innovate new procedures, or work on marketing his “brand” to create more demand for his services, and pad his paycheck?
Most of the gains in the economy from our working harder would, I fear, be more than counterbalanced by the negative effect of a society based on wanting more “stuff.” We need to figure out how to adapt to a changing economic reality, rather than changing the world so that it continues to meet the old idiom, regardless of how destructive it has been.
It also inspire people to cheat, lie and steal, to “get the stuff.”
This is suspiciously similar to the broken window fallacy, isn’t it?
I agree with Lisa and Duncan, and would like to add that this model assumes that there is a 1:1 relationship between hours worked and money earned. However, consider your typical middle-manager in an office. This person is on salary, probably with yearly promotions, and with very little tying his productivity to his take home pay. (Of course, I recognize that being more productive provides him with more opportunities for advancement, but these rewards are not *immediately* tied to performance). My own case as a postdoctoral researcher is even more extreme: my salary is based on an NIH payscale, and is the same whether I publish 1 paper a year or 20. When I want some shiny new toy, it never occurs to me to “work harder” as this won’t get me closer to that goal.
I agree mostly with Lisa B. my father, in the 50′s often said “los ricos son locos” (rich people are fool) “they throw away the money” he worked 8 hour a day and spent the rest with us.
I am an uruguayan, our President, Pepe Mujica, moves himself in an old Volkswagen 1300, and continuously preaches against useless expenditures.
I keep the way of my father, and of president Mujica, but as things go, Daniel is a great deal right.
Is for economists, politicians, and social forces to change this way.
Please forgive my english.
Thanks for all the comments.
The question of course is not if it is perfectly desirable to want useless stuff, but if there is any value in it. And I suspect that there is some value in it.
Dan
Dan,
I do not disagree with your idea that useless stuff, and the desire to consume it can add value in an economy. However, i believe the flaw in what you have described above is neglecting to include costs of using credit to purchase these useless goods.
If we want something, work hard to receive that extra cash needed to purchase it, then yes the economy is now better off. If we want something, and simply use our credit card to purchase it, we have no increased the economy in a tangible, sustainable way.
One of the many possible costs associated with this action is regret. We realize that the good is ultimately useless, we wasted some of our credit on it, and now will either have to work harder (post purchase instead of pre purchase like you discussed). This may prevent us from now making similar purchases in the future which COULD cause our economy to contract.
if your ‘beautiful bottles’ were perfectly biodegradable, and harmless, and therefore, the full lifecycle cost of each bottle was actually being paid for by the consumer instead of by children in India and other ‘landfill children’, then sure, maybe this particular ‘useless product’ is not the worst thing to ever happen to the world. maybe.
but that’s just a theoretical, useless product, which could never exist in real life, especially under capitalism and corporations, which are all about externalizing/socializing costs.
and, add in the Jevons Paradox — increased consumption leads to increased production leads to increased consumption and energy consumption, in particular, and we have global warming and resource wars and we start wondering if the species will even survive. all in the service, we’re told, of ‘providing jobs’ for some ‘harmless products’.
so, i more disagree w/ the thrust of this post — that ‘creating (consumer) wants/needs’ is ever something that could be good.
so, do Wall Street investors ‘fuel productivity’ and therefore provide a ‘useful function’ in our economy? sure. right before they almost completely eviscerated the global economy.
on a smaller scale, it’d be useful if we all went around letting the air out of everyone’s bike tires, and then marketers and advertisers could get to work on convincing everyone to buy ‘flat tire insurance’, and it would create lots of work for everyone, and at the end of the day nobody’s quality of life would actually improve — overall, it would probably get worse. and then we’d become dependent on the social problem of people letting air out of other people’s tires. so we get a prison industrial complex or a military industrial complex — we need prisoners and wars — if we don’t have enough, we’d better go find some — maybe in the form of drug laws, or non-obedient world leaders.
i understand that people want to believe that capitalism is something that could be good, but i just don’t see how that could ever occur. the only way i could see it becoming not completely destructive is to essentially completely neuter/neutralize it with all sorts of socialist policies and massive regulations, like some Euro countries. make capitalism and markets serve people, not the other way around.
we’re just witnessing how it evolves — the latest stage is seemingly the incredible-fast self-destructiveness of capitalist institutions, like corporations, with actors willing to bring down their own companies and countries, as long as these actors make out like bandits. seems like a very dangerous situation, one that seems to grow worse with every new economic collapse — that is, every new re-failure of capitalism.
yes — I did not mean to add a cost for the environment. So for the sake of argument think of them as perfectly biodegradable.
Dan
Very interesting point of view. It’s something like there’s always value to be created out of something seemingly useless. However, wouldn’t it be better if the world could be motivated to work harder for something that is actually meaningful (for example: a useful life-changing product)
So, if I follow your impeccable logic, people who can afford decent food and shelter just lack proper incentives to work harder and be more productive.
This post is a joke.
I think that people are more complex than that. It is not just a carrot-and-stick mentality out there. As one who has not had to work for the past 10 years, I have still chosen to contribute to the society in many ways. There are many things that aren’t things that can inspire people.
Additionally, the concept of going into debt to fund this consumerism is not touched upon in your argument, but would be another downside on both the individual and the society. Well, excepting the bankers of course!
But, if your comment in the blog suggests you are only saying there is some value, then yes, but I’m not sure, at least us Americans, are good at taking only the benefit of the some without the cost of the extreme.
i think capitalism is based upon the illusion of scarcity either by denying people of their desires or by inflating desires. both keep the economy moving. you wrote about the second option, while the first one (denying) is also evident- for example, minimum wage in israel. relative scarcity, as in capitalism (relative, since most of us can still get the basic stuff for living) is not a some kind of nature force, if you think about all the technological achievements and the abundance that is not equally being shared.
Dear Dan,
So if I understand you correctly, useless stuff is useful because it makes us want to work more and be more productive, to buy more useless stuff and thus keep our (failed?) economic model ticking?
This is funny!
Etienne.
No, I think he’s saying that people’s desire for useless stuff can motivate them to create useful goods and services that can benefit humanity.
The value comes from the innovation that results. Is there a price? Sure there is, but innovation improves the lives of individuals and therefore society.
You might create a bit desire for a bottle of air. The desire might be enough to get people to buy the product. The desire however isn’t real passion.
Most marketing doesn’t create passion.
People who participate in burning man are passionate.
We shouldn’t try to get people do get empty desires. People should rather get free spaces where they can be passionate.
You sure touched the third rail on that, or rather grabbed it.
As you commented later, the point is to discuss if there is any value in wanting useless stuff, and I suppose there is, or no one would ever drink another Coke or Pepsi anywhere and millions of jobs would not depend on it.
Anyway, as there are many sides on every story, it seems more likely that the point is to discuss if desire itself could be amorally useful in developing economy, and I suppose not, because human desire does not vanish, it only changes, so it could theoretically be changed for better.
The point should be whether marketing can drive desire in the quest of “better” and, ultimately, what is best and what is not.
Consider, for instance, the growing trend of reusable shopping bags in developing countries and electric powered vehicles in developed ones. Both items seem to belong in a consumerism green zone of sorts, however, sustainable aspects of bag production and energy consumption of such green vehicles are important items of concern as well.
What I mean is even so-called better driven desires can result harmful if not considered under thorough analysis of its consequences. So, a following post concerning the same argument -the driving power of consumerism- towards production of more useful “stuff” would be a plus. Call it “green marketing” or else. But as it is, the post stands to be misunderstood as one of the most anti-zen arguments we’ve seen around.
This discussion reminds me of an IBM commercial that really bothers me. The name of the commercial is “Innovation Island.” A man in the commercial states “The point of innovation is to make actual money.”
WRONG! The point of innovation is to make life better!
So your question is basically “why did we develop complex societies”? I would say that anthropologists have been discussing this for decades.
Hunter-gatherer societies live a pretty good life. Most work only a few hours a day and spend the rest of their time entertaining themselves. There are probably several reasons that we developed more complex societies and therefore the “stuff” to support it – more control over the environment (and the capability of dealing with a harsher environment which allows migration), and more individual freedom to spend our time as we choose.
So the reason we have developed so much unnecessary consumption is primarily due to two things – a collective belief that a complex society is optimal (and hence that iPhones are desirable), and marketers who reinforce those shared values.
Primary reason was overpopulation of good hunt-gather fields. To day, “stuff” procures jobs for overpopulated countryes.
If “Respirer” would do the trick, then surely cocaine addiction would work even better.
This is one of the points raised by Tyler Cowen in TGS: Facebook is providing a great deal of entertainment for people, but employs very few people and adds very little to the economy. The fact that people pay almost nothing for Facebook is seen as being bad for the economy. It seems that this is the logical conclusion of the classical economic viewpoint — the more addicted you can get people to things that they are willing to pay a lot of money for, the better for the economy overall.
Gary Dahl proved this back in the ’70s with the pet rock.
Financial incentives are not always good, and you seem to ignore that in this piece. Perhaps desire for extra stuff will make us work harder. Perhaps it will make us cheat and steal. Perhaps, knowing that no amount of extra work on my part is going to get me a Bentley will make me angry and miserable.
Or consider the tobacco company. They’re killing people, and they know it, but they want to keep making money so they hide the evidence for thirty or forty years. Their desire for money didn’t exactly turn out to be so good for hospitals. (See also the guy who invented both tetra-ethyl lead and CFC’s, and spent a lot of time denying that they were harmful).
Like stress, or sugar, or fat, inequality and jealousy can be useful for promoting striving and purposefulness. But in excess amounts, they’re toxic. As with sugary foods, it’s hard to pinpoint exactly how much is too much, but it’s pretty clear that in the US we’ve got too much fat, too much sugar, and too much inequality.
Financial and economic incentives are the basis for much of economic analysis, but we must not ignore social capital and other incentives. The focus of innovation should be to provide us with a better life (as stated in a previous post), just like the focus of “Respirer” is to provide us with status, and hence social capital (among other benefits). What we value is culturally determined to a large extent, hence “would we work harder or just hard enough?” is determined by a complex matrices of desires (ala Bourdieu) that includes the amount that we value work and the social capital we derive from that. Focusing primarily on economic incentives provides a very limited picture of how and why we value things, and, therefore, the overall benefit (or detriment) of marketing “stuff” to society.
Feeding the “greed is good” mantra should not be inspirational. It was disgusting that that remark was actually made to business students in the first place, but it was a sign of the evil to come. I consider the Wallstreet movies a greedy man’s working manual that spurred even more people to get their piece of the action. There is never enough for the greedy so of course it spurs them into action. (and many should be in jail for those actions)
That “synthetic” derivatives were so much air … that corruption and greed are what spurs society was/is the downfall and will continue to bring America and its economy to its knees. But let’s feed the mantra shall we?
Although high frequency trades are dangerous and make the market volatile, lets feed the fantasy that speed is better. ESPECIALLY when food and necessary commodities are up for grabs.. we should have faster and more dangerous computers because there is value to it, surely.
It seems the rich Americans do not think there are enough automatons (you know those factory workers who are just trying to clothe and feed their families) doing their bidding. There should be more bottled air, made faster and in more plastic, because if there is one thing we know, the rich can never have enough and hey, it creates jobs! Whoohoo!
There is a great need for the basics in life in many countries. I think America is selfish enough without bantering how you might become even more so. There are enough sick and dying people breathing in toxins and bathing in poison as they live near or work in factories …while the smiley ads for their products spur the company’s growth and wealth.
Thinking about about the future, other people, the environment, sustainable living, who will be farming when the farmers are all gone… you know, where your next meals will ‘magically appear’ from… that is for us treehuggers to contemplate … surely not economists or the future innovators and creators of the next big fluffball!
Your fabric of life is disintegrating and the vast majority of the world is not amused or much anticipating what piece of crap the American creative mind might next turn into money, but silicone valley is going to make and market and convince the world they are wrong. Fluff is the future!
Lastly, the trickle down theory has been shot to hell many times since Reaganomics didn’t work… although it did make a richer minority, took polluting factories to third world countries and made jobs for people in other countries to feed North American consumerism.
Anyone who agrees with your post isn’t going to find the meaning of life, that’s for certain! Did this post reflect your economic, ethical and social values Dan or were you making a negative argument totally for the sake of argument? If it was made entirely to push buttons… consider mine well pushed.
Erm, there is a happy middle ground between selling people crap, and a world where nobody has any desires! You’re also discounting the negative effects of marketing – you’re ugly, you’re inadequate, other people are better than you because they breathe bottled air…
But how to you temper the consumer? We aspire to things and then borrow to acquire them because we are so frothed up that we can’t wait until we’ve earned enough. Or we can’t possibly earn enough to acquire all the things we are frothed up about. Seems like we need to restore balance, not that I have any idea how.
Nobody ever dies wishing they’d bought more stuff.
I read Upside, Dan, and you were the one who studied the importance of meaningful work. This post seems to ignore that in favour of repeating the free market canards of motivation. It seems well-studied that money can motivate mechanical repetitious tasks, but de-motivates creative tasks.
But, besides all that–there are several fields of study that are just as specialized and interesting as Behavioural Economics that would have a lot to say about “the economy”. So before engaging too far in fairy-dust fantasies about “stimulating the economy” I think it would be good to read some ecological economics, ecological footprinting, and on the industrial metabolism.
A very important point is missed here. That is that most households go in to debt they cannot afford, in order to buy things they do not need, because the television assures them that everyone else is doing it. I personally am far from poor, but, I try to limit my spending, grow my own food, and keep out of debt by not indexing my happiness and that of my family to ‘stuff’.
This is a great point. Debt grew away from a cushion for when times get hard, or to buy big ticket items now rather than later, and has become an extension of earnings for many families.
The tragedy of this is that in the last few years, many families have been put into very precarious financial positions because of things they thought they had to have.
As a society we thought that the economic success of the 1990s would extend well into the new millennium. We were all mistaken.
When a bottle of this air is used -what does one do with the empty bottle? ..
…and how do you know when it’s empty?
This is what rap and pop culture music is all about. The likes of Rick Ross and Ke$ha have been telling us this just as those before them have been. Bluntly and in abstract lyrics.
No, to say that this is what rap and pop culture is about is disingenuous and short-cuts some real issues for a cheap answer.
*Some* rap is about grabbing more, but I defy anyone to say that Jay-Z’s “Can I Get A…” is about having to have more. Eminem’s “Stan” isn’t about consumerism, and Geto Boyz’s “Six Feet Deep” talks about the senselessness of the violence found too often in the thug lifestyle.
To say that rap is about rampant greed and consumerism is akin to calling Elvis Presley and Buddy Holly purveyors of “Devil music,” which with a half-century of hindsight is just ridiculous.
Sure, there’s a lot of rappers who are bragging about their earnings, but it’s important to understand that they are playing a character and putting on a performance.
You don’t have to like the language, but that doesn’t mean that all rappers are preaching the same message.
I’m not sure about anyone else, but *my* pop culture includes Mike Luckovich, and his Liberty Weeps drawing, it includes Buffy the Vampire Slayer and All Things Considered, along with Wait Wait Don’t Tell Me and House MD and Fight Club, and Family Guy and The Simpsons and The A-Team, Batman comic books and SNL, and trashy novels from Ben Elton and Jim Butcher and Maxx Berry, along with economics lessons from Paul Krugman and a few dozen others.
My point being that pop culture isn’t defined by anyone but ourselves. I know a lot of folks have Jersey Shore and America’s Dumbest Criminals as pop culture references, but I don’t. I know they exist, but they’re not part of my pop culture. I try to influence what other people include in theirs, but there’s a limit to how much I can do that.
Rap and pop culture are not all about greed, unless we decide to make them about that.
I agree with your comments but with one caveat: in my opinion consumers want things ‘now’, not in a month, or 3 months, or a year later when the hard work they’ve put in is finally rewarded. Most people don’t think that far ahead. So instead, they turn to credit. That way, they can get what they want without working harder to get it. They reap the benefits now and pay the costs later. I suppose then you could suggest that consumers might then work harder in turn to pay off their credit card bills… while this might be true I do think the element of credit should be acknowledged in this context.
M. Ariely, please share your theory of value.
If you recognize that value is subjective, then how do you claim that a product an individual buys is useless or that he doesn’t need it? What allows you to substitute your value judgement to his?
Like you, as an individual I will often disagree with other people’s valuation. There are many things other people do that I would not want to do.
But when putting my (armchair) economist hat on, I try to separate my subjective valuation from my hopefully-more-rigorous analysis. It is an intellectual mistake to blend the two, once you recognize that value is subjective.
“[...] I’d give consumers something to want, and in order to be able to afford it, they’d have to work. They’d have to be productive.”
You don’t define what is “beneficial” to the economy. Remember that mere activity is not a sign of an improvement, wealth or prosperity.
Even if I accepted your premise that Respirer (TM) is useless, it may be that the consumers who want to afford it produce useless french-named junk too.
Instead, the correct interpretation is that Respirer is not useless. It is beneficial to those who buy it, in their eyes and at that time.
The Prague Linguistic School identified “Art” by recognizing it as formal elaboration without instrumental value, that is to say, without obvious functional utility, and thus objectively “useless.” Of course, it is the pleasing nature of experiencing this elaboration that gives art its value.
Bottled water? Not so much.
Been thinking a bit more about this post, and especially what makes people so excited/agitated about it.
For me, the biggest point of contention was idea that we could and therefore should do more work to create jobs/consumption/etc. For a world ecosystem on the verge of collapse, I think this is a reckless thought — or, at least a thought that would be quickly dismissed by all who care about the survival of the species. Specifically, I thought of the Jevons Paradox/Effect – which I mentioned – but it’s not just a crazy thought – people are still talking about it:
http://www.newyorker.com/reporting/2010/12/20/101220fa_fact_owen
Once past there, tho — I objected to the notion that “getting people to want things they don’t really need may be far more valuable to society than we think” — in my view, and I suspect, in the view of very many people — perhaps even a majority of at least the American population — we already know that our current economy is based on consumerism, created wants/needs, etc. — in short, we know it’s all a rigged game, we know that 70% of our economy is completely phoney and unnecessary and waste on top of inefficiency — so when someone comes along as say, “Hey — I actually think that doing useless work and making useless products is actually what’s keeping our economy going” — that, to us, is so commonsensical that it’s offensive to think anyone would be unique in suggesting it wasn’t a universally-agreed upon truth.
And part of that comes from the various work-related discussions I’ve been having over the past few years. I’m a computer guy, so I know lots of computer guys, but in every white collar profession — we don’t do anything. We ‘go to work’, but we don’t actually do any work. We go to meetings, we shuffle some papers, send some emails, write some blog posts and memos, go to the going away lunches, train new staff, fill out our timesheets, and we do a _whole log_ of reading, Facebooking, gaming, etc. I walk around the cubicles at my place of work and it’s a cornucopia of people filling their work day with American Idol remixes, Warcraft, online shopping, daydreaming, just about anything you can imagine — except working.
A nonprofit friend of mine busts her butt. Constantly busy. Work work work. She told me of her friend, the aerospace engineer, who claims to ‘do nothing at work’ and just reads book for her various book clubs — I wasn’t surprised in the least. The Pentagon System, to me, is just a giant make-work program — how much of the economy is based on the Pentagon alone — 35%?
So, if you are a white collar worker, most people you know don’t do any real work — not just not physical work, but we are often just rearranging piles of paper — we really add zero value to the economy, but we often pull substantial to large paychecks. How is this possible? I’m not sure — but one of the co-existing conditions of this state of affairs is that almost nothing of value is being produced, and if something of value _is_ being produced, say health care and teaching and water filtration systems, then to keep people working we have to actively combat progress by, say, poisoning the environment in every conceivable way (oil, fracking, nuclear, etc.), etc.
And I think the whole ‘incentives’ idea just sucks — we’re tired of competing with each other for a bigger house or car — we want clean air and water and food supply chain, we want to make a decent living without harming our fellow man, we want good education for our children, some vacation time, health care, etc. — the basics. The idea that people are primarily or only motivated by money is nonsensical. It’s never been true and will never be true. The only reason it could theoretically appear to be somewhat true today is most of have become wage slaves — there’s simply very few options to have a middle class standard of living without submitting to a very large corporation — rent yourself to them for at least 40 hours a week so you can have a roof over your head. People are motivated for myriad reasons that are not money — and the saying ‘money is the root of all evil’ makes a lot of sense. The world would be a much better place if all the capitalists would just ‘go Galt’ on us once and for all and leave us all alone.
OK. enough. sorry for long comment.
Been thinking a bit more about this post, and especially what makes people so excited/agitated about it.
For me, the biggest point of contention was idea that we could and therefore should do more work to create jobs/consumption/etc. For a world ecosystem on the verge of collapse, I think this is a reckless thought — or, at least a thought that would be quickly dismissed by all who care about the survival of the species. Specifically, I thought of the J Effect – which I mentioned – but it’s not just a crazy thought – people are still talking about it:
http://www.newyorker.com/reporting/2010/12/20/101220fa_fact_owen
Once past there, tho — I objected to the notion that “getting people to want things they don’t really need may be far more valuable to society than we think” — in my view, and I suspect, in the view of very many people — perhaps even a majority of at least the American population — we already know that our current economy is based on consumerism, created wants/needs, etc. — in short, we know it’s all a rigged game, we know that 70% of our economy is completely phoney and unnecessary and waste on top of inefficiency — so when someone comes along as say, “Hey — I actually think that doing useless work and making useless products is actually what’s keeping our economy going” — that, to us, is so commonsensical that it’s offensive to think anyone would think themselves unique in suggesting it wasn’t a universally-agreed upon truth. But maybe i’m giving everyone too much credit. We’ve already managed to dispose of roughly 50% of the black underclass, and women — roughly half of the entire available workforce — have been marginalized as well, tho not to that extreme extent. Older white men are finally out of work. There’s just not much left to do anymore — even if we changed our work weeks to 20 hrs/wk being full time.
A nonprofit friend of mine busts her butt. Constantly busy. Work work work. She told me of her friend, the aerospace engineer, who claims to ‘do nothing at work’ and just reads book for her various book clubs — I wasn’t surprised in the least. The Pentagon System, to me, is just a giant make-work program — how much of the economy is based on the Pentagon alone — 35%?
So, if you are a white collar worker, most people you know don’t do any real work — not just no physical work, but we are often just rearranging piles of paper — we really add zero value to the economy, but we often pull substantial to large paychecks. How is this possible? I’m not sure — but one of the co-existing conditions of this state of affairs is that almost nothing of value is being produced, and if something of value _is_ being produced, say health care and teaching, then to keep people working we have to actively combat progress by, say, poisoning the environment in every conceivable way (oil, fracking, nuclear, etc.), automating work with computers, etc.
And I think the whole ‘incentives’ idea is offensive — we’re tired of competing with each other for a bigger house or car — we want clean air and water and food supply chain, we want to make a decent living without harming our fellow man, we want good education for our children, some vacation time, health care, etc. — the basics. The idea that people are primarily or only motivated by money is nonsensical. It’s never been true and will never be true. The only reason it could theoretically appear to be somewhat true today is because most of us have become wage slaves — there’s simply very few options to have a middle class standard of living without submitting to a very large corporation — rent yourself to them for at least 40 hours a week so you can have a roof over your head and appear ‘respectable’. People are motivated for myriad reasons that are not money — and the saying ‘money is the root of all evil’ makes a lot of sense. The world would be a much better place if all the capitalists would just ‘go Galt’ on us once and for all and leave us all alone.
OK. enough. sorry for long comment.
I think there is need for some extra roles in your model for economics. For example you must have FDA acceptance for your Respirer and it’s effects on rejuvenating. If you can not prove your claim, you can not speak about it in your advertisements.
I also think, there is need for education about living in a capitalist society. You must know how to free yourself from traps, and to decide about your choices rationally.
There is a need for education that includes basic ethics. The greed is good mantra came, as I said earlier, from a business school final address to students. What a send off to the financial world…
Our children are young and impressionable. With both parents working, even in families that do not NEED the second salary, children are brought up by Daycare Centres (and TV sets) They are bombarded by TV ads and reality shows that show them how they should ‘spend’ their lives.. They are zombified on video games.
Their parents are trying to keep up with the Joneses and children learn the value of a dollar by watching their parents struggle with debt and yet continue to buy buy buy.
We can all turn off the caring about your fellow man, the earth, the air we breathe, but when we do, it becomes dog eat dog (and eventually human eat human) That is something we truly have to fear our children are learning.
Your culture has been defined by greedy consumerism for the last half century, beginning with after-war solution to make products with built in obsolescence.
It was an idea that worked for the times, but that mentality was a Capitalistic idea which took hold as the new mentality; (The new rational?) useless, defective and environmentally destructive are good because consumption is good. I do not want to look for a positive upside to that irrationality.
I laughed when I read what Peter had written at the bottom of his comment:
“The world would be a much better place if all the capitalists would just ‘go Galt’ on us once and for all and leave us all alone.”
because I was going to add something very similar.
I think the role of marketing is to “suggest things you might need” – and this turned out today to be “push things you don’t need just to make you buy more”. There is a major difference between telling me about a new product that I actually might need (in the broad sense of the word) – like a book I would like to read , a new car service , or anything of the kind – and between doing every possible thing to persuade me that all I need to be happy is drink soda drinks or eat at a certain restaurant. The same thing (new book , for example) can be described so I can make a conscious decision , and can be pumped up just to get me to buy it.
I have to disagree with the general spirit of this post – I think that Growth , for the sole purpose of growth – Is the ideology of a cancer cell.
BTW, you and Michael Schrage might enjoy a nice bottle of air the next time you get together.
New Bleach
He got right upset because his readers weren’t sufficiently convinced that a new bleach from the Mighty P&G would change our lives. Sounds like exactly what you are proposing. I will work harder to be able to afford ensuring that my family’s whites are even whiter…
And what happens when the fuel necessary to drive the production, transportation & marketing of all this “useless stuff” (i.e. cheap oil) runs out? I suspect we’re about to find out….
Grist has an excellent article by Eliot Coleman, and a paragraph seemed very relevant to this topic.
http://www.grist.org/sustainable-farming/2011-04-20-eliot-coleman-essay-organic
The third explanation goes back to the beginning of the industrial revolution when the money world began to replace barter and exchange. At that point what would have been seen as the great benefit of a biological production system, minimal need for purchased inputs, suddenly came to be seen as its defect. In an industrially dominated money economy, the processes by which biological agriculture produces food are downright subversive. Because they are self-resourced through that partnership with the natural world noted above, they are independent of industry. By self-resourced I mean that for those participating in biological agriculture, the majority of the inputs are coming from within the farm. Thus, biological farmers who take full advantage of the earth’s contributions do not need to purchase industry’s products. Back in 1912, Cyril Hopkins, director of the Illinois State Experiment Station, was fully aware of that reality when he wrote in a University of Illinois agricultural circular; “The real question is, shall the farmer pay ten times as much as he ought to pay for food to enrich his soil? Shall he buy nitrogen at 45 to 50 cents a pound when the air above every acre contains 70 million pounds of free nitrogen?”
RE:
“We often talk about how marketing’s job is to get us to want things and spend our money, sometimes foolishly. But that reflects only marketing’s output. Marketing also creates input: It spurs us to work to earn the money to buy the things we want.”
But actual money is not the only purchasing power we have . . . we could also rack up crazy credit card debt to keep ourselves enriched with Respirer. Or start knocking over convenience stores!
And it doesn’t stop there. Consider the surgeon in your example. Might she not be tempted to start performing unnecessary surgery to support her Respirer habit? And then prospective patients have to find something unnecessary to do or sell in order to afford this surgery. And then if the procedure is deemed medically necessary, health insurance plans will start to cover it, and EVERYONE will be paying for some of it.
Follow the path all the way to the end, Prof. Ariely!
Can you define necessary? Who says what is necessary? Should people live only on what’s necessary? Is this blog necessary?
Many people on this thread seem to think that value is something objective and the individuals universally share preferences.
My problem is not necessary v. unnecessary. Some things that are unnecessary can also become harmful. If Respirer makes someone commit a crime or max out a credit card, then maybe it has crossed the line from unnecessary to harmful. And, yes, some surgery is actually unnecessary and potentially harmful. I was surprised Prof. Ariely used that example.
Dan I disagree in this instance with you. I agree that it is like lots of motivational speakers but the problem I have is that who needs such speakers or to be motivated in the wrong direction…
Garden gnomes for now or wild lions for your grandchildren to see and learn about? This is the reality. We are wanting useless stuff based on want not need and its driving the society to a place which allows 25 million children to die each year through poverty related reasons. Gnomes or children?
The world is sick and nobody is looking after it or us. There is no project manager nor any global priorities such as ensuring everyone is fed and watered.
“It is no measure of health to be well adjusted to a profoundly sick society.” – Krishnamurti
Bless you, Tony.
One might take note of marketing’s positive effects on the economy, but it’s easiest to appreciate them in good conscience when it isn’t wreaking havoc on the environment. As an environmentalist, I’d hope for more marketing of services in the future, rather than things like Respirer or, as Tony says, garden gnomes. You make a good point that marketing is valuable, but why draw the line at consumptive products? I imagine the U.S. will never really get rid of its obsession with useless products, but as we shift towards a more service-oriented economy, there’s potential for people on both sides of the marketing debate to find common ground.
Firstly, I’d like to disregard the environmental issue. There’s no doubt that making useless crap is detrimental to the environment, but it wasn’t part of the argument so I won’t go into it here.
The argument was that marketing stuff we want makes us motivated to strive for better things and this is where I take issue.
Good (when I say good mean that it works not that it’s ethically good) marketing doesn’t care about what people want. Good marketing considers what people need.
What people need never changes. They want to find a mate, reproduce, be popular, find themselves, etc.
Any marketing people selling Respirer would go for these needs. I say all this as a marketing person. Yes, sorry.
So, if I was going to sell Respirer I’d pick the obvious routes, which are:
1) Respirer gives you clearer skin > you’ll be more attractive > you’ll find a mate > you’ll reproduce.
2) Respirer makes you healthier > you’ll be more fertile > you’ll reproduce better
3) Respirer is the future > be the envy of your peers > be more popular / sexually attractive
4) Respirer is what everyone is buying > don’t be a loser > don’t be unpopular / unable to find a mate / reproduce
So, useless crap gives unimaginative marketers easy ways to tap into fundamental human needs / paranoia / fear.
Consumerism / capitalism has built a society based on finding cheaply replicable ways of satisfying (or claiming to satisfy) basic human needs.
The system we find ourselves in is not the result of consumer needs and wants but actually driven by the needs and wants of industry, which is to make as much money as possible.
The thing is, you could actually satisfy those human needs more deeply and more fully through marketing almost anything to them. So why not market a better society, a fairer society, better education, stronger communities?
Oh yes, because they don’t make industry any money.
The argument that selling useless crap to people is a good way to stimulate the economy doesn’t stand up. It’s an industrial fabrication (and particularly jarring when industry does its best not to share the surplus of that approach). People can be motivated to work harder, want more and create value through a much deeper offering than canned air.
I like the idea of comparing the air bottles to motivational speakers — a kind of motivational speaker in a bottle.
Just to be clear, I buy many of the arguments you all make. I do think we work too hard that we want too much that we get to too much debt, that we are often not living the way we want to etc.
Even looking at my own life much of this is self evident to me. At the same time, I wonder if there is any role for the motivational force of “air bottles.”
Imagine for a moment that you really wanted something that cost $10,000 and you really really wanted it — what would you do differently and would your different activity be good or bad for the world around you?
Dan
Dan said, “Imagine for a moment that you really wanted something that cost $10,000 and you really really wanted it — what would you do differently and would your different activity be good or bad for the world around you?”
I read Cialdini’s “influence”, to understand the psychology driving our society, and, especially, our economy. Then I read Wynn’s “The Manipulated Mind” and Ornstein’s “The Evolution of Consciousness” and “The Roots of the Self” (partly in self-defense to Cialdini).
Two points come to mind: one, there is a learned helplessness at work in our society – partly due to the instant gratification nonsense pushed by marketing and advertising. Many people will tend to forego what they really, truly want, in favor of a lesser (in all ways) thing, because they think it will take too long to save the money, perhaps because they think the effort to work toward that thing is just too much to consider. Two, very often many people have no idea what they are capable of unless they find themselves in a situation of trauma or extreme change. Such times can be excellent learning situations. If they rely on learned habit, they will settle for less. If they are forced out of habitual behaviors, they can learn to value what is real.
I understand the thrust of your musing. I think that as individuals and as a society we will behave according to what we understand (or misunderstand) of our own comfort zones and fears and egos. Presenting someone with a new “object” will not spur change – that requires a new paradigm.
Whar would I do? Self-analysis, and patience…
After reading your post, I read Dr. Seuss’s book “The Lorax” to my boys. There are some striking similarities to many of the thoughts expressed here!
Hi Jill! Have you also read “The Sneetches”?
PS: I can’t believe no one has mentioned the parallel between this post and one of the greatest films of our times…Spaceballs!
oops! I tried to post just the link, not the video itself. Google “perri-air”.
Hi Andy! Yes, of course we have read The Sneetches, and it certainly applies here too.
Wow, I really hated that (at first read). He seems to think that working harder is working better. I disagree. This is reflective of a consumption economy mindset, which, granted, most people are geared to think in. Consumption economy meaning that “stuff” is meant to be consumed and expelled as waste. This is the basis of the continual growth of the economy. But is continual growth the best answer for civilization? If it is unsustainable for the planet, I would venture to say no. Working more or harder simply accelerates this cycle.
The answer probably lies more in the middle. In fact, what he proposes is a moderate answer, lying between “marketing junk for profit, turning it over and doing it again!” and “creating quality products that last a lifetime,” and I understand the point that he’s making. Instant urges can be productive. For example, karma on reddit/slashdot, “likes” on facebook, and achievements or badges in games, are all effectively useless, but spur people to work harder to get them.
But I still fall much closer on the spectrum to “creating quality products that last a lifetime.”
I really want a new roof. Increasing signs of leakage suggest that not only do I want one, I need one. (Actually, two, because I have a rental property with a roof of the same age as my primary residence.)
Initial estimates are +-$14,000 for both.
I would very much rather be able to buy a new roof without giving up too much of my discretionary outgo, which is thoroughly middle-of-the-road and not extreme, and without having to use HELOC money.
the roof problem is making me think differently about how I generate revenue, and actually, questioning the entire relatively fixed-income, job-based economic model. The outcome is likely to NOT be “work harder,” but rather, “work very differently.” I’m not sure that the traditional economic system will benefit. (Except I’ll need to earn an additional $20K before taxes, which is more money to the IRS and NCDOR.)
However, new roofs pretty quickly fall into “need,” not “want.” There is very little in the $10K “want” range that would inspire me to change as much as the roof problem. It’s much easier, and cheaper, to meditate on the ephemeral nature of desire and the transience of life and watch the “want” float away.
I think a central part of this discussion needs to be considering whether the occupations of those people who are induced through marketing to work harder are occupations which “create shared value”. If we take as a given that clever marketing will create the need in people to work harder to afford the latest shiny new toy, then the net benefit to society will only be the increase in output of those workers who work to increase the common good. If a new uselessly consumption-focused gizmo induces all people in an economy to work harder to be able to afford one, then only the extra work from the teachers, scientists, doctors, etc would count as a beneficial gain from this product. The increased productivity from the rest of the economy that itself produces consumption-focused gizmos would add no additional benefit.
Congratulations. In a couple of paragraphs you summarized all that is wrong in modern capitalistic society.
Agreed with premise of motivation, but what’s the problem with aspiring to wanting to have something that is useful? I don’t understand the “It has to be a useless luxury” part from the argument. That seems to come out of thin air (pun!). Why not want useful stuff? Like a fuel efficient car, energy efficient appliances, want to work hard to donate more to help people in third world, etc.
Prof. Dan Ariely, I am reading Predictably Irrational and I remembered a statement from a businessperson. His business is parking. He told that everyone who looks for a parking do not like to come into a parking building and drive from the first to last floor. To avoid this, parking companies decided to build ramps. This kind of “solution” allows his clients to drive from the top to the first floor. He completed his statement saying that “everyone who is in parking business know it”. It is something “irrational’, is not it?
Well, I think that history is anyway full of examples of products people don’t need but actually want and/or use because they make them look, feel or think differently. The truth however is probably closer to another need, our need to differentiate ourselves from our neighbour or to elevate socially rather than a response to good or bad marketing and productivity. And that, has little to do with capitalism itself. From acient Athens and Romans to Indians and the French Revolution, irrelative to productive or economic system, people want desperately what others with more power, money and/or glory have, no matter how useful to society or themselves that is! I think that saying that “we need to motivate people to work harder in order to save our existing economic system” shows a lack of understanding of the real problem. The real question to be asked has little to do with money and a lot to do with ethics: “what kind of society do we want to live in? What are the essential factor of this society: money, freedom, equality?” – we should have known by now that all of those cannot coexist for long. Do we really want to restore our system as it was some years ago? If yes, ok! That includes useless things and sustainable growth and return to this point in a few years. Do we want to place society and it’s economic rules in another perspective? Then, useless products are …just useless! The possibilities are unlimited and there are no right or wrong answers, there is only diversity: different societies with different cultures need different systems to apply to different times. The current uniformity of globalization does not permit us to be “saved” by another system (as – of course – socialism has long failed!). This diversity – if allowed – will secure our rescue now and in the years to come. (Please forgive my english – I am Greek)
I am from the Netherlands, and here and scandinavia and germany, socialism is still alive and functioning excellently. We had least impact from crisis, good social stability and recovery because of the social security (germany did it the best, they have a great system where companies don’t fire people, they make them work less, and the salary difference is made up by government social security fund untill crisis is averted).
From Dan’s books (and Barry schwartz, etc) we know choice is not the solution, it can be the problem. What you need is knowledge of what it is you need and why.
Dan, one last thing. I know that we didn’t much answer your questions, but the question as it stood originally took many of us off on a tangent. I was actually heartened by the response and hope you were as well.
It would be wise of the world to know that “do no harm” and striving to do good for the world and not just oneself or your family, is an incredible motivator in and of itself. it is the heart of communities and the heart of civilization.
Yet, what we teach is greed and selfishness and that our roots are in the almighty dollar. The earth is going to come back and bite those who think that way and they will not have the skills or moral fibre to survive it.
We can reshape our minds, our happiness, our work ethic, our relationships, our students, our children and all the world around us is we used compassion and have “do no harm” and “do unto others” be our mantra, rather then “greed is good.”
Please consider that next time you teach a class or make a hypothetical product for us to evaluate.
Terrible reasoning Dan!!
Lets extrapolate and look at the logical outcomes:
Drug consumption (cocaine, meth…), McMansions fueled by Subprime debt, Plastic surgery obsessed culture increase global prosperity???
You conflate prosperity with happiness. Your own research and that of countless others in your field (Gilbert…) proves otherwise.
Most people earn a fixed salary though, so they get their money not by ‘working harder’ but just by working enough. Those who do earn more money by working harder or working better are very likely to be those who derive pride and personal satisfaction from the work itself. The surgeon who invents new procedures is a good example, because a surgeon that good can probably already buy all the ipads s/he wants already. I doubt many surgeons invent new procedures to earn more money; they do it because it will help people or make them feel like a genius, or both.
This video that someone once showed me (it may even have been you, Dan!) ties in very nicely: http://www.youtube.com/watch?v=u6XAPnuFjJc
Dear Dan,
I am a huge fan, but I think you have made an error here. You describe a world where marketing hype about a perfectly useless product motivates us to work harder. But you ignore the costs. The money that would be spent on marketing could be far better used, creating hype about products that are actually useful. It could be invested in marketing an environmentally friendly product, or something else that has real value, not just created value. There is so much room for improvement in our world, why not devote our resources to improving it. There will always be marketing and therefore always hype, but what if it was used to market ‘useful’ products? How would this motivate us less? I fail to see any convincing upsides of ‘useless products’.
Daniel
I would buy a can of air…because I already buy bottled water.
I am able to see the point made that the desire to acquire a product or service (whether or not one NEEDS such a product or service) inspires and motivates one to work hard in order to earn requisite remuneration that will enable them to procure the aforementioned products or services – the desire inspires and motivates hard work or productivity. However, it is useful to also consider a couple of issues regarding the achievement of a high productivity level; these issues are: On the one hand, the resources that are utilized and the impact that is effected in the process of attaining the productivity level and, on the other hand, the satisfaction that is derived from consuming the products and services generated by the productivity level.
Consider the following couple of types or kinds of productivity that may be motivated:
1. Productivity is attended by and results in wasteful and non-renewable utilization of resources and degradation of the environment.
2. Productivity made possible without non-renewable, wasteful resource utilization or environmental degradation.
The value of the former productivity type (type 1 above) is lower than that of the latter type – the productivity caused and enhanced, of type 1, is inferior to that of type 2.
Another way, by which the productivity that is motivated (by desire for products or services) may be evaluated (in addition to the aforementioned way), is introduced by us defining a quantity termed “useful gratification,” which we may define as the satisfaction, of a high value, that a consumer of a product or service derives from their consumption of such a product or service.
Now that that the term “useful gratification” has been defined, we then proceed to thus evaluate the productivity that is motivated (in another way): If the consumer of a product or service derives useful gratification from doing so, then the productivity that generated and provided the product or service is of a high value; the productivity is of a low value otherwise.
By the way, examples of a satisfaction of flimsy, inferior, low value would be when the procurement or consumption (of the product or service) results in virtually no real or useful advantage, despite any apparent satisfaction derived, such as:
1. The product or service is procured at a cost when it may be procured for free, e.g. bottled air.
2. The consumer of the product or service derives a vain, empty satisfaction – satisfaction of zero value – e.g. vain glory gained due to the acquisition of a status symbol, excessive/greedy, wasteful consumption (consumption of more than enough), etc.
3. The consumption of the product or service involves or results in substance abuse, unhealthy/harmful eating, unhealthy/harmful leisure, unhealthy/harmful gratification, etc. – gratification that, though appearing innocuous, is actually harmful/hurtful – which may, in fact, only lead to a deterioration of the consumer’s mind or body or, generally, results in some loss or disadvantage.
On the contrary, an example of a satisfaction of high value would be when the consumption results in a gain that is clearly, incontrovertibly of great use – e.g. saving a human life, nourishing one’s body or mind, securing humankind, etc.
“The line is narrow”
and is defined by what is useful to our descendants and what is not. Which, by extension, is defined by what is useful to *their* descendants, and so on.
You might say that there’s no way to know such things, so why try? Anything that sells is a good thing, and we have no responsibility to question ourselves further.
But bottled air stil requires bottles, which aren’t nothing. It takes material and energy to make something. When you’re doing enjoying your air, where does the bottle go?
I know that argument is an old one, but it’s still true. Efforts that lead to a sustainable future are more valuable than ones that don’t. Commerce for the sake of commerce may create something of value, but is not designed to do so.
Dan,
As a previous commenter mentioned, you need to look up “broken window fallacy” in Google. You’ve just fallen into the same trap. The idea is that if you only look at the benefits of breaking a shop window (i.e. increased GDP due to the glazier’s work) you’ll conclude that you should break all the windows in town–it’s good for the economy! But a more accurate assessment would take into account what the shopkeeper would have done with his money otherwise. It’s rarely the case that you can improve the economy by doing useless things, though you might convince yourself otherwise if you aren’t accounting for everything properly.
(Keynes claims that during high unemployment, there CAN be times when useless activities can be better for the economy, but even if true, it’s only in rare circumstances.)
In your case, if you consume $10 of Respirer a day, then you work $10 harder, but you’re also reallocating labor from doing something useful to working in a Respirer factory. In the simplest case, you could simply finish your day job and then go work in a Respirer factory for an hour. You’ve traded your valuable time (which you would have spent with your children) with working in a factory doing something useless.
See Futurama’s public service announcement “Don’t Date Robots!” for an animated illustration of Dan Ariely’s point.
/futurama-anti-robot-propaganda
Money doesn’t motivate people in any positive way. It holds back any kind of innovation, discovery or progress. It’s no surprise to read so many people disagree with Dan on this one.
What would people do if they really really wanted $10,000? There must be at least two kinds of people, the ones without an occupation and the ones who actually have a job. If money is their only motivation, and I have to emphasize this, if it is their only motivation, the following will happen:
People who don’t have an occpuation look for one. Either they conform themselves with any job or they look for the job that looks more profitable. Someone mediocre enough to conform with any job will do a mediocre job, like a bad waiter. Someone who looks for a profitable occupation will find one where either he lacks talent, like a lousy lawyer, or he where he is skillful, but even being skillful money would drive him to work unethically, like a surgeon who makes unnecesary procedures. Even farther, a person looking for a profitable occupation may find an illicit one, like drug dealers. Steven Levitt has talked about how gang leaders show a lot of money to make the drug dealing business attractive for young people, who don’t realize that if they work in a gang they’ll earn less than at Mcdonald’s and they’re more likely to die in a shooting than fighting in Iraq.
But for those who have a nice job, will money make them work harder or be more innovative? Of course not. Someone already mentioned Daniel H. Pink, he has written about experiments that show that monetary incentives lead to poorer performance in every task that calls for any rudimentary cognitive skill. I believe monetary incentives can be even harmful. In my country we have a huge problem with the penitentiary system. Our policemen get extra paid for every arrest they make that ends in conviction. The result is they arrest innocent poor people and make up charges against them in order to get more paid. There’s a docummentary in youtube about this called presumed guilty.
Moreover, money holds back innovation. It is sufficient to mention money, as Dan writes in Predictably Irrational, for market norms to emerge. Thinking about money makes people want to spend more time alone and more likely to select tasks that require individual input rather than teamwork, and nowadays, according to Jonah Lehrer, the most complex problems can no longer be solved by people with expertise in a single field. Teamwork is necessary for innovation. Benjamin Jones has made a terrific study about how the difficulty of making new discoveries has made scientific teams become a far more important part of intellectual production, and if you want to read examples of how this teamwork has been essencial in the past and still is, Steven Johnson has written a really good book about this.
That’s why I say, plainly, there’s no upside of useless stuff.
Thank you for reading.
Rodrigo Pérez
For those who want to see how monetary incentives drive policemen in my country to arrest innocent people (and some other problems in our penitentiary system) here’s the link to the docummentary:
It’s subbed.
The problem with police corruption and abuse is not money, it is the monopoly status that protection services enjoy.
If you have competing protection and insurance services, money actually helps keep their behaviors in check.
I’m sorry I wasn’t clear with this comment. I assumed you had read the one I wrote right before this one. We are discussing if people who want extra money would innovate or make a better job. This is just one example that I mention about how monetary incentives lead to unethical behaviour. There’s this particularly terrible policy in my country: policemen and other authorities in our justice system are rewarded economically for the number of arrests they make that end in conviction. The result is they make up or exaggerate charges against poor, innocent people. Detectives make up evidence, ignore it or even destroy evidence and they get rewarded for it; and I’m talking about more than 90% of arrests in my country, where these innocent individuals never see an arrest order, never meet the judge, and spend a lot of years in jail.
Sorry for replying again here (system won’t let me reply to your latest comment).
I did understand your point correctly, I believe.
Although it is true that monetary incentives don’t always help (and cultural incentives can work better), they can only turn things really sour as you describe in a monopoly system where competitive forces are forcefully shut out. Private services that aren’t granted special privileges by government can’t afford to abuse customers.
When you let insurance companies and private security take over the role of protection from the tax-funded police services, you gain accountability and proper aligned incentives. Mall security can only very temporarily gain from abusing the mall customers. Security insurance companies tend to be defensive rather than waste resources in costly aggression.
Here’s an illustration of how self-interest leads insurance companies to do the right thing: http://robertfellner.blogspot.com/2011/05/chaos-theory.html
The “Chaos Theory” (by Robert Murphy) essay which is referenced is a fascinating read on the topic too.
Checks and balances keep people doing the right thing. Money and competitive force can be a very powerful way to encourage people to serve one another. That’s the foundation of a free and voluntary society.
I could be wrong, but I often see money get its corruptive power when entering by the political realm of non-voluntary transactions, which leads me to think that political power, not money, is the problem.
In your country, it may be time to kick the state-run police out.
Thank you for your comment, I just got a copy of the book you’re recommending and I can’t wait to start reading it.
I wrote about that sour example because I thought it was appropiate for this discussion. Since the level of impunity in my country is so high, the policemen, detectives and judges are free to behave the way they want. The only consequence of their actions is that either they get the monetary reward or they don’t, almost like an experiment, there’s no other variable that conditions their behavior; but since I appretiate the article and book recommendations I will discuss the point you’re making.
First of all, state-run police lacks very important characteristics of a monopoly. A monopoly has the power to set the price of a service and to determine the terms on wich other individuals have access to the service. State-run police doesn’t have any control on its incomes. It’s the work of legislators to modify and approve budgets, and in this case, the monetary rewards policy. Besides, police force can’t refuse to serve any citizen, even if the citizen doesn’t pay for the service. Not everybody pays taxes. Third, there are private security and insurance services for anyone who can afford them. It’s not like there is no competition.
Second of all, I believe monetary incentives in our justice system should be abolished, but we should keep our institutions working. Something as bold as kicking state-run police out may bring catastrophic consequences. There is a huge difference between an inefficient security system and a nonexistent security system. You may argue that it won’t disappear, that private services will raise, but in my nation, where more than 20% of the population live in extreme poverty, moving to a private security system would leave more than 20 million people without the service. It is a crappy service, it may be even just the illusion of a service, but having a police car patrolling and turning on the sirens every once in a while, makes people behave, at least some people.
Last but not least I want to comment something on the article you shared. I have to say it really caught my eye, specially this line: “…quite possibly the increased demand for high level security personnel could result in greater pay for said security personnel. Which then leads to more people becoming interested in this profession to fill this alleged void those whom have not fully grasped the workings of the market appear to be concerned with.” I agree, that’s how it works in my country, at least for the wealthiest, the drug cartels.
If you’re serious about analysing free markets you should study these groups. I’m not trying to provoke you, but they’re a perfect example to this point. They respond to nothing but to the market. Not to authority, not to any written law, not to any policy, they respond only to the laws of offer and demand. Drug cartels share with everyone the necessity of a high level security service, but unlike the rest of us, they have enough money to pay for the best. They hire a lot of people from the poorest places who have nothing to lose and who become interested in the profession of security and killing when ordered. It results for them in a greater pay than having no job and starving to death, that’s for sure. They become extremely efficient, otherwise they would be easily killed. It has been docummented that they get armed with the really big weapons, bigger than those of our police force, and the consequences of this arms race between cartels and authorities are huge. Just during the current federal administration, more than 40,000 people have died in the war against narcotraffic, that’s more than 40,000 families living a tragedy in their own homes. I wonder if economic theory ever considers the cost of death, but I think it doesn’t, and as far as my experience with public policies has taught me, you can’t ignore outcomes like these. Public policies that protect a theoretical frame and disregard real life consequences are a big mistake.
Still, I’ll say that there may be something positive and true about the article you recommended. Maybe protecting ships’ ownership can be controlled owning and showing a big weapon. Maybe insurance companies can play a part to reduce crime rates at some level, but I believe that level is trivial. If you believe that the brilliance of the free market is the answer to security problems I’ll tell you, there’s no guarantee that free market rules will be more benefficial to honest people than to criminals. I hardly believe security staff or people at home will be armed with anti-tank bullets like narcotrafficants are; and if they were, I wouldn’t like to live in such a country. That’s just my opinnion.
Just to end, I seriously don’t want to continue discussing any further from the original topic, I thank you for the recommendations, I’ll read the book, and maybe some other time we’ll have the chance to discuss some other topic.
More pathetic kowtowing to a bankrupt system
At least you got Sully’s ear!
“Consider for a moment a world without marketing hype. One in which there’s nothing you really desire beyond what you need to live. ”
Logical fallacy: it’s entirely possible (and practically inevitable) to desire ‘beyond what you need to live’ without marketing hype. I’d just have to think up these objects of desire on my own, without having them suggested to me. There’s stuff I want that doesn’t even exist yet.
We don’t need useless stuff to motivate us. We are already motivated by our needs for useful stuff and non-material things. If we have enough income to buy everything we need, we can share with others. We can entertain, or seek entertainment. We can seek more education. We can save for our futures. We can give to causes we believe in. We can travel. These are all more meaningful and satisfying than owning useless stuff. The marketing that convinces us to want useless stuff just gets us to spend on things we actually enjoy less. I laugh when I see the commercial that says “Change your TV, change your life.” We sat and watched the set the same way when everything was shown in black and white.
Marketing also does a great job of convincing is that we are unhappy unless we have (insert product name here). And any benefit gained from this supposed incentive to work harder is offset by the increased unhappiness from supposedly lacking things we don’t need
I completely disagree. I believe money is not the best incentive for work. I believe if we would stop working so much we would have more time to think about issues that are important to us, we would have more time to help the needy. If we wanted just what we needed we could give the rest to people who can’t get what they need. And we would also polute a lot less. Consumerism is destroying our minds, each other, and the planet.
Dan,
I am having trouble relating this post to your lego study. I love the Search For Meaning as an example of people working for a higher purpose. I am a believer in Mission as the number one motivator. That isn’t exactly what you are discussing here. But, the ideas do seem to be in opposition. At least one is sustainable and the other isn’t.
I like Ariely a lot, but the argument here is very flawed. First of all, it assumes that being productive is good. That working is good. Being productive often comes at a great expense to the environment, and to our and others’ health.
Also, even the example used shows that working and making money in an economy doesn’t equate to being productive. Making bottles of air is not productive. It has no use. So if someone works at an equally useless job to make the money to buy bottles of air, they aren’t being productive.
Most of our jobs are similarly unproductive to a certain degree.
Imagine a world of selflessness and altruism where people are motivated by what they can do for others. They work hard and only buy their basic needs and spend the rest of their money improving the world and the lives of those around them. That world would be a hundred times more productive than a world based on enticing marketing.
I don’t know how, but I would like to find a way to change people’s motivation to selfless altruism. I think this would do more for making the world a better place than anything else.
It’s time to unsubscribe from this blog. This is useless…
Dear Dan,
to me this theory sounds more like the broken window fallacy (do not mistake as the broken window theory used by Rudy Giuliani to fight crime in the ’80s).
Best regards, Rodolfo.
cool site