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How Ernest Dichter, an acolyte of Sigmund Freud, revolutionised marketing
THESE are thrilling days for behavioural research. Every week seems to yield a new discovery about how bad people are at making decisions. Humans, it turns out, are impressionable, emotional and irrational. We buy things we don’t need, often at arbitrary prices and for silly reasons. Studies show that when a store plays soothing music, shoppers will linger for longer and often spend more. If customers are in a good mood, they are more susceptible to persuasion. We believe price tends to indicate the value of things, not the other way around. And many people will squander valuable time to get something free.
The sudden ubiquity of this research has rendered Homo economicus a straw man. Yet such observations are not new. Analysts have been studying modern man’s dumb instincts for ages. Sigmund Freud argued that people are governed by irrational, unconscious urges over a century ago. And in America in the 1930s another Viennese psychologist named Ernest Dichter spun this insight into a million-dollar business. His genius was in seeing the opportunity that irrational buying offered for smart selling.
… He held that marketplace decisions are driven by emotions and subconscious whims and fears, and often have little to do with the product itself. Trained as a psychoanalyst, Dichter saw human motivation as an “iceberg”, with two-thirds hidden from view, even to the decision-maker. “What people actually spend their money on in most instances are psychological differences, illusory brand images,” he explained.
… Asking shoppers why they bought particular products was like “asking people why they thought they were neurotic,” quipped Dichter.
In fact, he believed, most people have no idea why they buy things.
… For advertisers, argues Mr Samuel, Freud was a “godsend”. When goods were scarce and people bought what they could get, it was hardly necessary to understand consumer psychology. But in an age of prosperity, when supply outstripped demand and countless indistinguishable goods were competing for buyers, companies had to rely more heavily on branding and advertising.
(17 December 2011)
Well done, Economist. A long article that lifts the veil of consumerism.
Corporate monopolies ‘may dominate green economy’
T.V. Padma, SciDev.net
NEW DEHLI – The global push towards a ‘green economy’ risks being hijacked by large corporate monopolies trying to gain control over natural resources, a report has warned.
A report released earlier this month has warned that global companies, positioning themselves for a post-petrochemical future, may use the idea as a pretext for gaining control over biomass resources, which would eventually replace petroleum as the feedstock for energy and for industrial products. There is a growing emphasis on the concept of a green economy in the run-up to the UN Conference on Sustainable Development (Rio+20), in June 2012, in Brazil. A green economy is widely seen as a way of tackling environmental challenges including climate change, failing fisheries and water security.
But a report released earlier this month (14 December) has warned that global companies, positioning themselves for a post-petrochemical future, may use the idea as a pretext for gaining control over biomass resources, which would eventually replace petroleum as the feedstock for energy and for industrial products.
The report, published by an international nongovernmental organisation Action Group on Erosion, Technology and Conservation (ETC Group), in Canada, says that most of this biomass is in developing countries, where it is managed by poor peasants, forest dwellers, fishing communities and livestock-owners whose livelihoods depend on them.
The report urges developing countries to craft policies that will protect them from such encroachments.
If they do not, they risk being “seduced” by the promise of quick green techno-fixes, which appear as “a politically expedient” alternative plan to save the climate, the report says, because “techno fixes are not capable of addressing systemic problems of poverty, hunger and environmental crises”.
… Link to full report.
(29 December 2011)
The invisible toothpaste: overselling science
Ugo Bardi, Cassandra’s legacy
The science of advertising is based on a number of fundamental laws; the most important one can be stated as, “don’t just sell them a toothpaste, sell them a whole new way of life”. You can see this law applied every day in TV. If you brush your teeth with a specific brand of toothpaste, you don’t just get beautiful white teeth, but you’ll become sexy and athletic. And you’ll have a happy and smiling family, too!
Almost every one who works in advertising knows and applies the law, but if you want to see real mastery, do give a look to the video above. This guy is not just selling a toothpaste; he is selling a promise of a toothpaste to come; an invisible toothpaste. He is a true adept of the Art, a master. Look at the posture, the tone, the sense of the talk, the mix of scientific wonder and moral duty. Look at the faces of the people listening to the talk – totally enthralled. Look at the final stroke of genius, when he sorts out of his pocket the photo of a little girl from Sudan, dying of thirst. That borders on the sublime.
But what is exactly that this guy is selling? Well, my impression while watching the show was to be exposed to the output of a giant hair dryer. Of course, nanotubes are real and they have interesting properties. They do have promising future applications. But, in this talk we have no quantitative information anywhere, except for one point and, there, the given datum is wrong!
… what is hugely interesting in this talk, it is the way scientists are described. Notice when he says (8:15), “.. these incredibly brilliant and kind scientists .. they have a magic look of the world .. their discoveries are coming out of the lab, and into the world…. “
A truly brilliant choice of words: I think we have here a nice summary of the problem with the public perception of scientists. They are “brilliant and kind” as long as “their discoveries are coming out of the lab and into the world” in the form of assorted gadgetry. When it works, it is “magic.” But, when scientists are not bringing gadgetry for free; when they warn us of inconvenient truths such as climate change or resource depletion, well, the magic is gone. They are not any more brilliant and kind; they are enemies of the people to be insulted and threatened.
With this attitude of the public, it is impossible to think that solutions based on voluntary restraints could ever work. But can we really solve our problems with nifty little gadgets? Surely not with windows that change color or glasses that let you find your car keys in the dark. Maybe nanotubes could give us a breakthrough in solar cells, just maybe; but don’t forget that even if we could have cells at zero cost, a solar plant would still cost money because of all the rest that is needed, from supports to the electronics. So, there are no miracles in science and we are going to be badly disappointed if we expect science to solve all our problems by “magic.” It is like expecting to whiten our teeth with an invisible toothpaste.
(16 December 2011)
The Arctic Will Burn
Zoe Cormier, New Internationalist
When it comes to climate change, there are many things of which we can be certain. Though until recently the popular emphasis – both in mainstream media and in politics – stressed what we don’t know, we now know enough to be very, very certain of a number of things.
Climate change is real, and it is happening right now: temperatures are rising, glaciers shrinking, and this year summer Arctic sea ice reached a new low. The examples are endless.
… just how worried should we be? Predicting the future is never an exact science, and there will always be a certain degree of uncertainty. Some places may change little, such as desert interiors. Others will become unrecognizable – or vanish entirely, such as Alpine glaciers and small islands in the Pacific.
One region we may regard as a barometer for change is the Arctic, because it will warm more than regions at lower latitudes – the planet as a whole may warm up by 4°C, but the Poles could warm up by 12°C. The changes will obviously be more extreme.
What will this look like?
While most of us probably picture moist, foggy, tepid bogs, research indicates that large portions of the region may dry – and burn. As counterintuitive as it may seem, fires may become an important feature of the Arctic landscape.
Already there are signs that this is happening. From what we can glean from the geologic record, the Arctic tundra rarely experienced fires 100,000 years ago. But for the past century fires have sparked with increasing regularity and severity. The Anaktuvuk River fire in 2007 burned more than 1,000 square kilometres of tundra, in one flush doubling the amount of Alaskan tundra that has burned since 1950.
This could be just a prelude to things to come, says Dr Philip Higuera, Assistant Professor in the College of Natural Resources at the University of Idaho, who published new research this month in the journal Ecological Applications.‘Our work illustrates that some tundra regions can burn frequently, implying that future warming could certainly result in more frequent tundra burning,’ he explains.
Of crucial importance: fires could lead to more fires, and the Arctic itself may become a driver of climate change. In other words, an actual contributor to global warming, rather than a cooling refrigerant sitting atop the planet.
(27 December 2011)
Return of the food and energy crisis: structural problems and/or financial speculation?
Sean Thompson, Socialist Resistance
Sean Thompson gave this presentation to a seminar of economists organised by The International Institute for Research and Education in Amsterdam in November. An edited version will appear in the next issue of Socialist Resistance.
Of course, its glaringly obvious that the fluctuations in world oil and fuel prices, particularly the wild fluctuations of the last three or four years, have been in large measure the result of speculation. Indeed, all commodity trading, seeking as it does identify supply shortages to buy low and sell high, can be characterised as speculation. However, in my view speculation driven fluctuations in oil and food prices are the symptoms rather than the causes of the long term problems of production and supply that we face – although of course it is usually the symptoms of a disease that kill, rather than its underlying cause.
I believe that both the energy and food crises are structural problems that call into question the future of both capitalism and humanity. The oil crisis challenges the stability of capitalism because it is moving beyond the planet’s physical capacity to supply the demand for fossil fuels in the quantity and at a cost which permits capitalism to continue a relatively uninterrupted expansion – without which it can’t survive. However, the food crisis is not the result of any physical limits in the capacity of the earth to feed us. Generated as it is by capitalism’s increasingly desperate need to penetrate new markets and new sources for investment, it presents both a challenge to humanity, particularly the peoples of the global South, and, as a result of their reaction to the on-going crisis, as in Egypt, Algeria, Tunisia etc., a potential challenge to capitalist hegemony almost anywhere in the global South.
Peak oil …
… So an increasing reliance on unconventional oil will inevitably lead to both increasing environmental degradation and also to ever increasing oil price.
… The future price of oil
Predicting oil prices is as problematic as predicting rates of global warming for much the same reason – the difficulty in separating the weather from the climate. Over the past three years, oil prices have yo-yo’ed madly. In July 2008, oil reached $147 a barrel – and pushed an already faltering world economy into recession – but had fallen to $35 by December Since then it has zig-zagged back to above $100, averaging $102 for the year to date.
Notwithstanding the often violent fluctuations we have seen over the past period, the trend for oil prices since the 1973 oil crisis has upwards, albeit unsteadily.
… Unlike the oil crisis, which is fundamentally to do with the physical limitations on the planet’s capacity to supply the demand for fossil fuels, the roots of the food crisis lie in the expansion of multinational agribusiness and the imposition of ‘free trade’ and the disciplines of the World Bank and the IMF on the countries of the South.
(22 December 2011)
Logo of the site reads: “Ecosocialist – Feminist – Revolutionary – The Fourth International in Britain.” The Fourth International.” The Fourth International is that branch of socialist, associated with Leon Trotsky; and is in contrast to social democrats (e.g. Labor Parties) and the Communist Parties associated with the Soviet Union, China, etc.
The article is significant in that it shows a higher degree of awareness about peak oil, food issues, etc. that most writings by socialists. The disparate variety of socialists are about as aware of these issues as business people. -BA