Psychology and Economy
Psychological conflicts - Rationality, emotions, and motivations
Marketing and Advertising
What activates economic transactions: Production process or Consumer Demand ?
The same process that produces products also produces the demand for those products. This is called the dependence effect. Advertisement encourages a preoccupation with material goods and encourages private consumption.
Each of us sees approx. 1600 advertisements every day. Google is an advertising company. Apple is a design company.
Defenders of advertising claim that advertising is necessary for economic growth, which benefits us all. They see it as a necessary and desirable aspect of competition in the free market system. It also sponsors the media, in particular television.
Critics claim, that advertising is a waste of resources, and serves only to raise the price of advertised goods. It reinforces mindless consumerism. It leads to very mediocre and shadow television, because the stations try to reach a large audience, and therefore they seek to reach the lowest common denominator.
How do we distinguish between genuine and artificially stimulated needs? Who will make these decisions?The goal of advertisement is to persuade consumers to buy, it has no interest in the well-being of consumers.
Questions to think about:
Is advertising a form of free speech? (Examples: tobacco advertisement, advertisement for alcohol.)
Should the government create better standards for products and services? What do you see as the pros and cons of government safety regulations? Give some examples
Are businesses meeting their responsibilities to consumers in regards to the safety, quality, pricing and labeling, packaging of its products? If not, how might it do better?
How does advertising produce its psychological appeal? What tools does it use to reach the consumer? Give some examples.
Is advertising a positive or socially desirable aspect of our economic system?
How does the process of commodification expand to or include people? Give some examples.
Objects of Economic Exchange
The Shoemaker's goal is to produce good shoes.
The shoe in a capitalistic system is a means to make profit - quality is relative to price.
What are the objects in the economic exchange cycle?
commodities (standardized, mass-produced, exchangeable. No intrinsic identity that distinguishes one thing from another, as in nature. See food, like apples, tomatoes, etc.)
delivery platforms for services. They enable other forms of sales. (The computer - software, external devices, service contracts.) Phones, TV's, Cars, houses, etc.
objects of desire. Design overrides functionality, Owning the object "defines" you. The object creates an identity, it is a status symbol.
The product becomes an element in a series of productions and improvements - the outcomes are extremely refined products that have a shorter and shorter life-span, because they will be superseded by the next model. Planned Obsolescence.
Products in a capitalistic system are the endpoints of resource organisation: factories, source materials, manufacturing, storage, transportation, packaging, marketing, pricing, branding, delivery. Goal is the end-user: Sense of delight when opening the box.
The opposite of it is junk. Used items, recycled stuff, second-grade, sold for discount. Products are there to be used, therefore the system produces garbage.
If services turn into products, then the people who provide these services - "service providers, health care providers" - also become like products in the system. "Professionalism" becomes a form of objectification of human beings.
Crime and Corruption
Corruption can be defined in many ways. We can distinguish between individual corruption (improperly taking advantage of one's position) and systemic corruption.
You can find a more philosophical approach to the concept of corruption here:
Miller, Seumas, "Corruption", The Stanford Encyclopedia of Philosophy (Spring 2011 Edition), Edward N. Zalta (ed.), URL = <https://plato.stanford.edu/archives/spr2011/entries/corruption/>.
More about measuring corruption can be found at http://www.transparency.org/
Ideas to consider:
Corruption itself is a wicked problem: It cannot be solved easily.
Markets are betting on outcomes. Advance information (or manipulating the events in one's favor) translates into profits. Information is money.
Cultural systems sometimes contain practices that can be seen as corrupt, for instance, the expectation of gift giving, or preferencing once friends and families.
Sport events, and the whole business of sports, are huge opportunities to make money. Betting, fixing the outcomes, secondary businesses: Setting up whole markets enables huge earnings in ways that are not transparent to the customers.
Crime and business. There is a systematic overlap, not just incidental aberrations.
Politics and corruption: Politicians need money to run, and businesses are willing to pay for a chance to participate in politics. This enables corrupt schemes that go to the foundations of political systems and dilutes their focus on advancing the common good for all.
Commodities and Gifts
What is the anthropology of the economic exchange? Economic systems can be seen through the lens of anthropology; and different cultures use different modes of exchange with meaning systems that can be vastly different from our current capitalistic system of exchange. An example for this is the difference between goods, gifts, and commodities.
Marcel Maus (1872 - 1950) was a French anthropologist., and the nephew of Émile Durkheim. He analysed practices such as magic, sacrifice, and gift exchange in different cultures around the world. His most famous book is The Gift (1925). He argues that although gifts appear to be voluntary and spontaneous, they are obligatory for many types of social relations. He also distinguishes between ‘societies of the gift’ (clan-based societies) and ‘capitalist societies’ (class-based societies). This poses some problems. Studying the transactions in ‘societies of the gift’ illuminates many aspects of the symbolic and political importance of gifts. It also raises questions about contemporary industrial societies: How does the culture of gift-giving influence modern societies? This question leads to the so-called ‘gift and commodities’ debate.
Maus argued that gifts identify two types of social relations: commodity relations and gift relations. Commodity relations, as found in capitalist-state societies, describe the alienation and autonomy of individuals in their market transactions, and the ‘strict distinction’ between ‘things and persons’ during exchange (Mauss 1925: 46, 47). Gift relations, in pre-capitalist societies, describe the boundedness of people with others and things, created by the transfer of a possession.
Motivations for Human Behavior
Money as a motivation for people to work? What about intrinsic purpose, and the desire to create something innovative, useful, beautiful, or disruptive?