Textbook Capitalism

trickle down cartoon If you want to understand how the world really works, corporate marketers are a far better source than mainstream economists. The latter, of course, have long insisted that capitalism is the ultimate expression and accommodation of human reason. At the level of theorizing individual behavior, that still-regnant claim rests on the homo economicus axiom, which insists (invariably without serious examination of relevant evidence) that ordinary people are, first and foremost, walking calculators.

Here, meanwhile, is what those who are in charge of actually selling actual capitalist products have to say on this topic:

Experiences shape how consumers feel about brands, including factors such as service, quality of products and amenities.

Advertising has always needed to appeal to consumers’ emotions as the most rudimentary form of engagement, and that has not changed.

Emotions actually play a more significant role in purchase behavior than price and convenience…

There’s a point at which a customer’s positive or negative experience is so strong that it can transcend the rational aspects of a brand (e.g., quality, price, service). That’s why creating and guiding the customer experience is so important. Experience creates emotion, emotion fuels engagement and both together impact brand and business outcomes. [Source: adage.com, March 4, 2015]

Not exactly textbook material, is it?

Luxury Capitalism

As investment outlets outside the financial casinos get harder and harder to find, and as almost all new wealth continues to pile up in the coffers of the hilariously/Orwellianly self-proclaimed “job creators,” the reality is that corporate capitalism is getting increasingly dependent on selling increasingly ornate luxury goods to the elite and the merely comfortable.

Consider the latest news that the size of new houses being built has returned to its pre-crash trend of steady, record-breaking increases. Why is that? Is it some feature, as many “consumer culture” analysts would surely have it, of national character, of collective greed and psychosis? “Americans love bigness!”

Not so much. “To get an answer, just take a look at WHO is buying new homes,” says the NAHB itself. Here’s the click-to-expand graph:

ficohousing

Hence, another always stratified and divisive core capitalist product has generally gotten much more stratified and divisive.

Capital Never Rests

Decent piece in today’s NYT about the march of automation. Among the facts disclosed:

The [cotton thread] mill [in Virginia] produces 2.5 million pounds of yarn a week with about 140 workers. In 1980, that production level would have required more than 2,000 people.

140 is one fourteenth of 2,000, for you math jockeys. So, 100% of the output with 7% of the workforce.

Made in America - Bayard Winthrop of American Giant

Ideology and Intuition

The Associated Press ran a story yesterday on still more record-setting income flow for the overclass.  Penned by Bernard Condon and Paul Wiseman, it is a true monument to our market-totalitarian times.  The authors express perplexity in the face of the basic facts:

Profits have a curious, sometimes counterintuitive, impact on the economy.  Unexpectedly strong earnings don’t necessarily translate into surprising economic strength.  Consider that profits have surged since the Great Recession ended in 2009, even as the economy has struggled to recover.  That’s because companies made profits mostly by slashing jobs and cutting costs.

What?  You mean not all capital that gets amassed returns to “job creation”?  Giving the rich more money might not be the best answer to all problems?  Who’d have thunk it?  Could there be something wrong with mainstream intuition, not to mention the central political tenet of the last 32 years?  What could it be?