How Individualism Changed the Economy

The Century of the Self and Life After Lifestyle

This is an edited transcript of my YouTube video How Individualism Changed the Economy

The consumer is a centerpoint to the economy. Personal consumption expenditures contribute heavily to GDP, driving a significant portion of economic growth. PCE itself is nuanced, but spending patterns matter. People are important, and how they drive the economy forward is important.

But how did people even began to get defined as consumers?

Consumption is not inherently a bad thing, but it does have two big problems.  

1. It's really bad for the environment. The fact that we have planned obsolescence where tech just doesn’t work after a few years is horrible. We have so many different iterations of the exact same products. Like, do we need 47 types of spoons? Probably not. 

2. It also feels weird. If people begin to define themselves through the things that they're consuming that create a weird separation of self where you're like, who am I actually? Do I know who I am outside of the things that I purchase? 

The Century of the Self, a 2002 documentary by Adam Curtis, explores the history of the relation between the consumer and the corporation over the past century. The whole thing is about four hours long, and it’s terrific. In a feeble attempt to sum up in one sentence - American corporations sell products by connecting them to people's unconscious feelings. 

The Century of the Self

The documentary begins in the early 1900s by examining Sigmund Freud’s¹ impact on the world. When Freud first emerged, he freaked everyone out. The ideas that he was proposing were kind of embarrassing! Like “everyone has dangerous instinctual drives?” Okay, sure, buddy. 

Nobility, in particular, didn’t like the idea of people examining their inner feelings because that would  be a threat to their control. They didn’t want people staring into the metaphorical sun. But Eddie Bernays, Sigmund Freud’s nephew, had a much different approach. He liked these dangerous, instinctual drives, and what they meant for his idea of ‘mass persuasion’. 

Bernays had done some work with President Woodrow Wilson in World War I, and watched Wilson become a ‘man that ensured the individual would be free, a liberator of the people, a hero of the masses’ - and Eddie Bernays wanted to capture that power during peacetime. 

Bernays was like “Hey everyone has these big emotions, I wonder what would happen if we manipulated them. Don’t give them facts (people are too stupid for that) but play to their irrationality. And then sell them things.”

Cigarette manufacturers wanted to sell more cigarettes. Cigarettes were masculine, and women wanted very little to do with them. 

This was a great opportunity for Bernays. He said “Listen, I am the king of manipulation” and staged a campaign during the annual Easter Day parade. He told a group of women to whip out cigarettes at his signal, and rebranded cigarettes as ‘torches of freedom’.

This was during the women’s suffrage movement too - so if you pushed back against cigs, these torches of liberty and the pursuit of happiness, well, you also hated women.

The cigarettes became these emotional tools, an irrelevant object that became intertwined with equality. They were used by women to express their freedom - something that was completely irrational, but the object was now a symbol. 

Advertising was about to massively change. People were still buying mostly for need rather than for want. Everything was advertised in the form of practicality. There was no marketing like “this is going to describe you, this is going to complete you as a person” it was much more like “this is a durable shoe that will get you through your work day.”

Paul Mazer of Lehman Brothers was all about changing that. He wrote - 

We must shift America, he wrote, from a needs to a desires culture. People must be trained to desire, to want new things even before the old had been entirely consumed. We must shape a new mentality in America. Man's desires must overshadow his needs.

And the American consumer was reborn.  

In 1927, a journalist wrote 

A change has come over our democracy, it is called consumptionism. The American citizen's first importance to his country is now no longer that of citizen, but that of consumer.

Bernays was all about that. The whole idea was that of ‘engineering consent’ - controlling people's inner desires and giving them consumer products, to manage the irrational force of the masses. A turbo-charged consumer.

In 1928, soon-to-be-Presdient Herbert Hoover was really excited by consumerism as a driving force of the economy. He said ‘Yeah, man, this freaking rocks. You've taken over the job of creating desire and have transformed people into constantly moving happiness machines.’

Happiness machines which have become the key to economic progress. Which was weird. Stewart Ewen, historian of public relations, said -

Both Bernays and Lippmann's concept of managing the masses takes the idea of democracy and turns it a palliative, turns it into giving people some kind of feel good medication that will respond to an immediate pain or immediate yearning but will not alter the objective circumstances one iota. The idea of democracy at it's heart was about changing the relations of power that had governed the world for so long; and Bernays' concept of democracy was one of maintaining the relations of power, even if it meant one needed to stimulate the psychological lives of the public. And in fact in his mind that is what was necessary. That if you can keep stimulating the irrational self then leadership can go on doing what it wants to do.

Feel good medication doesn’t really change anything. It was all about satiation and suppression.

Of course, the world then imploded right after 1928. 

FDR came into office and he said “Listen, we just had a freaking Great Depression. It seems like business is not the key driver to everything being beautiful and good, and we need Government. We need Government to come in. We're going to ask people these really factual questions about what they really think, and we're not going to manipulate their emotions.”

Eddie Bernays probably gave a small chuckle at this, because that was clearly not going to be happening. In 1939, New York hosted the World's Fair. Eddie insisted that the theme be the link between democracy and American business - no government needed. At the heart of this fair was this giant white dome called ‘Democracity’  - General Motors corporation's idea of what the future could be. 

It was a form of democracy that depended on treating people not as active citizens, like FDR wanted to, but as passive consumers. Eddie Bernays believed that was the key to control. Don't give people the choice to choose, give them consumption to choose from. This stemmed from his Uncle Freud saying “Human beings could never be allowed to truly express themselves because it was too dangerous. They must always be controlled and thus always be discontent.”

Martin Bergmann, a psychoanalyst of the US Army during World War II saw through all of this - 

World War II was a major shattering experience because I discovered the enormous role of the irrational in the life of most people. Now that I can say that I learned that the ratio between the irrational and the rational in America is very much in favor of the irrational. That there's much greater unhappiness, much more suffering, it's much more a sad country than one would imagine from the advertisements that you made, a much more problematic country.

And yeah, after World War II, people understandably began to have a mental health crisis.The whole era became the implementation of psychoanalysis around controlling emotions, controlling oneself to conform to the hidden rules of society. 

And this of course, applied to marketing too. Connecting to the unconscious and whatnot. Ernest Ditcher was a psychoanalyst who did work with all sorts of corporations.

• Betty Crocker had done a lot of manufacturing around instant convenience foods. One of the things that they produced was a cake mix, but housewives during the 1950s were very hesitant to use this cake mix.

• Ditcher did a number of focus groups where housewives talked about what they felt about the cakes mix and it surfaced that they apparently felt this unconscious guilt about this easy cake mix.

• All they had to do is pour the cake mix out of the box, which was too easy, too simple, too not pleasing for Husband. 

• So Dichter told Betty Crocker to add the instruction for them to add an egg.  The housewives adding an egg would remove that barrier of guilt and give them a sense of participation.

• Sales soared.

Bill Schlackman, an employee of Dichter, asked ‘Is it wrong to give people what they want by taking away their defenses, helping remove their defenses?”

Sure. But then the pushback began around the 1960s. 

In 1963, Arthur Miller, an incredible writer, said 

My argument with so much psychoanalysis these days is the preconception that suffering is a mistake, or a sign of weakness, or a sign even of illness. When in fact, possibly the greatest truths we know will have come out of people's suffering. That the problem is not to undo suffering or to wipe it off the face of the earth but to make it inform our lives, instead of trying to cure ourselves of it constantly and avoid it. And avoid anything but that lobotomized sense of what they call happiness. 

People quickly shifted their views on advertising and mass production and the Corporation. The Weathermen Revolutionary Group came up during this time, the Black Panthers, and where we began to see people lean into the personal. The personal had to become political. 

And this of course, changed manufacturing. People wanted to be individuals. They didn’t want the mass produced goods that corporations were putting out. The individual was the most important, above all else. 

Stew Albert, the founder of the Yippie Party, said - 

Basically the politics were lost and totally replaced by this lifestyle and then the desire to become deeper and deeper into the self. By now a grandiose sense of the self. And my good friend and one of the original Yippie founders Jerry Rubin definitely moved in that direction and I think he was beginning to buy into the notion that he could be happy and fully self-developed on his own. Socialism in one person. Although that of course is capitalism.

Naturally, marketers had to respond to this individuality, so they created values and lifestyle marketing. They said “okay, if you wanna be yourself, we'll give you products that represent you.” And the market became a “market of unlimited, ever changing needs” because of self expressiveness giving “economies unlimited horizons.”

As Daniel Yankelovich said -

The world in which people felt they were rebelling against conformity was not a threat to business but it's greatest opportunity.

It was all about personal satisfaction. There wasn’t really a society, only a bunch of individual people making individual choices about their own individual well being.

It wasn't so much about products serving a certain need or even a certain desire, but what does it mean emotionally? Like, will this handbag make me beautiful? Will this bag of flour make me happier? 

This was now in the 1980s, during the Reagan and Thatcher era, they are both probably the most emblematic of this system, and the idea of individualism. Ronald Reagan was played to that and was like, “Yeah, you are the only person on the face of the planet that matters. You don't have to support anybody else.” As Mario Cuomo said, he made the denial of compassion respectable. 

And of course, that's not how a society works. That's not how collective awareness works. But people were like, well, if I just go and buy things, like that's how it works in the business world. So why shouldn't it work like that in the politics world?

Bill Clinton took this to a whole new level. Suburban swing voters were essentially running foreign and domestic policy during the 1990s.

Ewen again - 

So democracy is reduced from something which assumes an active citizenry to something which now increasingly is predicated on the idea of the public as passive consumers, the public as people who essentially what you are delivering them is doggy treats.

The documentary ends with a discussion of how we have become entrenched in our own desires. We've forgotten that we can be more than that and that there are the other sides to human nature.

Thoughts

I feel like the piece Life After Lifestyle is the best reaction to this without directly being a reaction. Within the piece, Shorin talks about how consumption drives subcultures. He writes -

To be even more literal, cultural production has become a service industry for the supply chain. All culture is made in service of for profit brands at every scale and size. 

Consumerism (materialism, perhaps) is not inherently a bad thing. It's what keeps the economy going. It's what keeps businesses going. It's what gives people jobs. But we're served over 10,000 ads a day. It’s hard to separate yourself from that.

And a lot of times we end up defining ourselves by the things that we're purchasing and that we are consuming.

The thing is, we all know we're being influenced and being marketed to. That's just part of being in this economy. But I feel like this idea where there's a disconnect, as Herbert Marcuse said 

[This] does not take at all into consideration the very real political systematic waste of resources of technology and of the productive process. For example this planned obsolescence; for example the production of innumerable brands and gadgets who are in the last analysis always the same; the production of innumerable different models of automobiles; and this prosperity at the same time, consciously or unconsciously leads to a kind of schizophrenic existence. I believe that in this society an incredible quantity of aggressiveness and destructiveness is accumulated precisely because of the empty prosperity which then simply erupts.

You have so many options, you have so many different things that you can choose from at any given moment, but there's still this gap. There's still this missing link. It seems like we're trying to fill a gap of community, of love, (not get all woo woo) but of people, with products.

King Disani posted a video on TikTok that several people sent me (thank you) about the ‘Huberman Lifestyle’ - how human health is broken and sold back to us. Within the video, he says

98 of 100 problems that we have come from attempting to take the responsibility of a community and place it on ourselves and then not being able to meet those expectations.

This is something I’ve harped on for a minute, individualism and lack of community and the power of caring for others. But it’s hard. The world isn’t really designed that way. And so you can buy all the things in the world, but if you end up defining yourself by a brand, rather than the people who are around you, that can feel weird. Lonely.

The reason I wanted to do this long video (and this long newsletter) about this documentary and tie it into Life After Lifestyle was because I feel like it's really important to discuss the direction of culture relative to the economy. 

So with Toby's piece, which is a little bit more updated, he talks a lot about how ‘all culture is made in service of for profit brands at every scale and size’. So when that happens, you end up losing an element of creativity. We are constantly responding to algorithms (and that's just the way it is) but you lose out on some beauty within that.

Because it becomes, ‘I have to do things a certain way in order to appeal to this consumer system or this computer system’. And that's not necessarily a bad thing, but when culture is made in service of brands and for money constantly, we lose out, I think, on a lot of serendipity, on a lot of beauty, on a lot of creativity.

That is a long term issue, as I've talked about it before, because that force feeds into Nostalgia and the standardization of culture across the board. You lose out on like so much future economic growth because everything is the same. When everything is the same your foundation is flat and it's a little bit harder to build upwards.

I think it's super important to talk about this kind of stuff people matter, right? Consumers saved the economy this time around. We had fiscal policy, the CHIPS Act, the IRA, the IIGA, but also we also had people spending money. 

But within all of that, we have to make sure that there is still room to be creative within a world that pushes back on things that are not standardized, even more so than it did in the big manufacturing era. It all ties into the passion crisis, the “what am I doing here?” that we are seeing in younger generations (and has been around for so long).

It’s all kind of scary, but fear can also mean opportunity.

Other Things

Is the US Economy Seeing an Upsurge of New Firms? | Falling College Wage Premiums by Race and Ethnicity | Air pollution greatest global threat to human health, says benchmark study | Tourism to Yellowstone National Park contributes $600 million to local economy | Sure, Consumers' Savings Are Down, But So Is Their Debt | Why Unemployment Can Stay Low While We Fight Inflation | The Cynical Genius Illusion: Exploring and Debunking Lay Beliefs About Cynicism and Competence | The Evolution of Retirement | Policymaking in an age of shifts and breaks | Barry Eichengreen on the New Era of High Government Debt | Pope says some ‘backward’ conservatives in US Catholic Church have replaced faith with ideology

Disclaimer: This is not financial advice or recommendation for any investment. The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, or financial advice.

1. I am not a big Freud fan, but the purpose of this piece is to explain his contributions to The Century of the Self