The institutional analysis of conspicuous consumption demonstrates the importanc
The institutional analysis of conspicuous consumption demonstrates the importance of moving past notions of utility maximization, and beginning to look at the historical and cultural reasons behind individual consumers’ decisions. Yet, consider the following
- Americans are exposed to hundreds, perhaps thousands, of advertisements every day
- Some consumers are willing to camp outside of stores for days just to be the first to purchases a new product
- The traditional holiday of Thanksgiving has now been paired with (if not eclipsed by) the so-called ‘Black Friday’ it precedes
These and many other examples might be taken to suggest that it is not only the individual decisions of consumers concerning what to buy that needs to be explained. Rather, we should also be looking to understand consumerism–the social preoccupation with acquiring and, most importantly, identifying with consumer goods–as well.
To understand the importance of advertising and consumerism today, the best place to start is with the work of institutional economist John Kenneth Galbraith. In The Affluent Society (1958) and later in The New Industrial State (1967), Galbraith argued forcefully that the historical conditions that classical and neoclassical economists were chiefly concerned with–namely, production of necessities amidst widespread poverty and the allocation of scarce resources–had been superseded by an age of relative affluence. Mass production, as you’ll see in a later chapter of this textbook, had largely solved the problem of producing enough to adequately meet the needs of the people (though ensuring everyone has access to basic necessities remains a problem to this day). Of course, solving one problem presents new ones, and for Galbraith one of the most important problems society had come to face was how to ensure that there would be demand for what could be produced once our basic needs were met.
Enter the adman. As Galbraith argued, advertising and salesmanship became important once our basic needs were, for the most part, easily met, and our remaining desires were no long immediately evident to us. Advertising and salesmanship functioned, then, to ‘synthesize, elaborate, and nurture’ our desires for goods and services beyond those serving simply to keep us fed, clothed, sheltered, and so on. Another way to look at it: where businesses had come increasingly to serve customers in ways that went beyond providing the goods and services to meet basic needs, these businesses required a way to maintain demand–the willingness to buy–where hunger, cold, and so on would not. In this manner, advertising and salesmanship became a form of ‘demand management’, designed to keep sales up, to keep people buying even after they would have otherwise felt satisfied.
With the ascendancy of marketing, the products we buy come to take on special characteristics as their design increasingly reflects the needs of businesses to sell as much as our own personal wants and needs. More or