As if to spite me (or prove my last blog entry incorrect), there's an article in the NYTimes titled Habits May be Good For You, about someone who's trying to use advertising techniques to bestow sanitary habits upon people in Africa. While that sounds all noble, here's a passage that caught my attention:

"For most of our history, we’ve sold newer and better products for habits that already existed," said Dr. Berning, the P.& G. psychologist. "But about a decade ago, we realized we needed to create new products. So we began thinking about how to create habits for products that had never existed before."

The article lists products that we didn't used to have, but have now thanks to advertising. They include wonderful life-saving (and life-enhancing, of course!) products such as sprays to make your couches smell all froofy, things to make your laundry smell like unicorns, chemicals to make your teeth glow in the dark... Clearly, advertising has done wonders for these multi-billion dollar companies. Advertising allows them to create demand. It's kind of like printing money.

This is an aspect of advertising I hadn't considered in my last post. For existing demand, I still believe advertising is unnecessary. If consumers know that they want something, they have access to tools to discover exactly which brand of that item best meets their criteria. Advertising is not necessary there.

But what about this other role advertising plays? How else would companies create new markets? In other words, how would companies make you buy crap you didn't know you needed? Well, my answer is, they shouldn't. Now, this is where you ask: "But wouldn't that stifle innovation? We wouldn't have dish washers, PCs or the internet if companies hadn't created demand for those technologies!" I'm not saying innovation should stop. Companies should continue to innovate and create new products. But instead of depending on advertising to create demand, they should let the market decide. And the market will decide based on the merits of the product, and worthy products will spread virally through social channels. We're not there yet, but I think we'll get there, sooner than advertisers think.

Nonetheless, I do want to get back to the point about companies selling shit people don't need. I think that's a problem. I think that problem exists because public corporations are funded by share holders who expect exponential growth. If demand doesn't grow exponentially (or generally fast enough), the only way to achieve exponential growth is by entering new markets. One way to enter new markets is to create them.

Now, I don't know anything about economics, so I probably have that all wrong. But let's say I'm right. The problem with a system which requires exponential growth, is that infinite exponential growth is impossible, if any dependent factor is finite. That is, you can't create infinite things out of finite things. Our economy depends on things that are finite, or grow less rapidly, such as energy and certain natural resources. I recently heard that we consume more energy per time unit than the amount of solar energy that falls on this planet. That's akin to spending more money than you make, in a world where nobody's there to lend you money. (That's not entirely true, since renewable energy sources do exist... but it won't matter if we don't tap into those sources, and unless those sources can keep up with demand.)

Anyway, I'm sure I got this all wrong. I'm sure our economy will keep growing. I'm sure smart people have figured it all out. I guess I should just be a good boy and go whiten my teeth now.