How Mainstream Economics Helps Businesses Manipulate our Minds


[Do we really decide what we want? One can (well, I can) agree with the analysis while disagreeing with the proposed solution. I agree wholeheartedly that we are being fed a false philosophy of living by some of the best-funded and most expert persuaders in the world. But limiting freedom of expression is not the answer. Beefing up alternative views through improved parenting, and a better-funded and better-guided education system and public broadcasting is a better way to go. A more complete package should include un-privatising education. *RON*]

By John Komlos, Evonomics, 3 March 2016

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.

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.

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