What’s Mine Is Yours

After the war, Bernays, like many PR political gurus of that time, went to Madison Avenue, where he applied his talent for influencing the masses to the nascent advertising industry. He received a letter from his uncle Sigmund Freud asking for money. ‘I disdain to ask you for this favour, but times are hard in Austria and my research thus far has not been well received. Is there a way I might borrow from you a sum to help cover some recent expenses?’ Freud wrote.

Bernays, knowing his uncle was fond of cigars, enclosed a box of Cubans along with the cheque. Grateful for the loan and the gift, Freud sent Bernays a copy of his unpublished book, A General Introduction to Psychoanalysis. Within his uncle’s writing, Bernays found the scientific backing for his ideas about the power of emotions to persuade. The book reinforced his profound belief that you could manipulate consumers’ behaviour by connecting with them on a deep subconscious level, particularly their drives towards aggressiveness and sexuality. To get people to want stuff, desire should be linked to rudimentary human patterns – what we admire, what we despise, what we love, and what we hate and fear.[68 - Margaret Atwood, Payback: Debt and the Shadow Side of Wealth (Bloomsbury, 2008), 11.] He was so impressed, in fact, that he arranged for his uncle’s book to be published in America. Freud became famous, and to a lesser degree, so did Bernays as the father of spin.

Bernays understood the power of psychology to design effective public marketing campaigns. ‘If we understand the mechanism and motives of the group mind, is it not possible to control and regiment the masses according to our will without their knowing about it?’ Bernays wrote.[69 - Edward Bernays, Propaganda (Ig, first published 1928, quote taken from 2005 ed.), 71.] He reasoned that if he could tap into people’s desire to feel good, powerful and sexy, he could sell just about anything, and he proudly referred to this concept as the ‘engineering of consent’. We call it the power of persuasion. From soap to silk to bacon to even Wall Street stocks, Bernays got consumers to buy not what they needed but what they desired, connecting not just to who the consumer is but who he or she wanted to be. He realized that the power in this principle was that unmet desires have no fixed point. One of his favourite techniques for influencing consumer wants was to use indirect third-party endorsements. ‘If you can influence the leaders,’ he posited, ‘either with or without their conscious cooperation, you automatically influence the group which they sway.’ Through techniques such as these, he didn’t just change what people bought; he transformed time-honoured social habits.

In the mid-1920s, despite the widespread popularity of cigarettes, it was not considered acceptable for ladies to smoke in public. The American Tobacco Company hired Bernays to change this social norm. He realized that the real desire for women was not the cigarettes themselves but the liberty to pursue the same things as men. During the 1929 New York Easter Parade, he arranged for a group of attractive young debutantes, including his own secretary, Bertha Hunt, to march in their Sunday best. On Bernays’s signal, the women all lit up a Lucky Strike cigarette. Hunt’s press release described the march as ‘Lighting the Torches of Freedom’ in the interests of gender equality. And being the master of PR, Bernays saw to it that the media throughout the world covered the event. The idea was that anyone against the idea of women smoking would appear to be against their liberty and freedom. Although this did not completely do away with the taboo against women’s smoking, the number of women taking up smoking skyrocketed (American Tobacco’s revenues jumped by $32 million in 1928 alone).[70 - The story of Bernays and the ‘Freedom of the Torches’ is a featured article on ‘Culture Wars’, www.culturewars.com/CultureWars/1999/torches.html.] In his memoirs, Bernays wrote, ‘It was on this day I learned that age-old customs could be broken down by a dramatic appeal, disseminated by the network of media.’[71 - Allan M Brandt, ‘Recruiting Women Smokers: The Engineering of Consent’, Journal of the American Medical Women’s Association 51, no. 1–2 (1996): 63–66, http://dash.harvard.edu/bitstream/handle/1/3372908/Brandt_Recruiting.pdf?sequence=1.]

When you consider that the average person sees more than three thousand advertising messages per day, it is not surprising that we have become so seduced by the pull of the new and the desire for more.[72 - Douglas Rushkoff, Life Inc.: How the World Became a Corporation and How to Take It Back (Random House, 2009), 113.] Influencers such as Bernays were part of a wider force, which engineered and reinforced a system that converted consumers’ wants into needs into everyday habits.

The Diderot Effect

In 1919, an advertisement from the department store Sears exhorted, ‘Use your electricity for more than light.’ Before World War I, the average household did not have an electric toaster, blender or dishwasher, or electronic waste disposal. Families used other means, even if it took a bit longer to toast a piece of bread or wash the dishes. The consumer revolution had barely begun, yet we learned to need and depend on these gadgets. Few people today will deny that these products make our lives easier, and most of us use them every day. But around the same time, superfluous gadgets also entered the kitchen, such as the spiral slicer and other garnishing tools as specific as melon ball scoopers. If you have ever created dramatic spiral strands, ribbons or thin slices from vegetables such as a cucumber, you have probably used a spiral slicer. Advertisers not only touted the slicer as the ‘clever, easy and sophisticated way’ to add colour to meat platters and to make bland one-colour vegetables such as carrots ‘more attractive’, but also pulled out the health card, attempting to convince mothers that fancy slicing was the way to get their children to eat more vegetables. Products such as these, which could never be considered a necessity, mark the crossing of a critical line, the line of needing a new invention for rational reasons including hygiene and safety to you-never-know-when-you-might-need-it reasons devised by advertisers.

When you think that garnishing tools were introduced about ninety years ago, it starts to make more sense how kitchens today became stuffed with items such as ice cream machines, bread makers, mushroom brushes, chocolate fondue fountains, popcorn makers, iced tea brewers and strawberry slicers. Most of us buy these contraptions on impulse, possibly learn how they work, use them once, and spend time trying to find a good place to store them, until we admit that we are never going to make homemade ice cream and spend more time working out how to get rid them. In 2009, an average home in the UK contained twenty-five electrical appliances – an increase of 60 percent in just the last five years alone.[73 - Neal Lawson, All Consuming (Penguin, 2009), 41.] How did we lose sight of our real needs?

In his essay ‘Regrets on Parting with My Old Dressing Gown’, eighteenth-century French writer Denis Diderot tells the story of how the gift from a friend of a beautiful scarlet dressing gown changed his home. Initially delighted by his gift, Diderot discarded his old gown that he had worn for as long as he could remember. But in a short time, his pleasure turned sour as he began to feel as though the rest of his possessions and surroundings were shabby in comparison with the new gown. One by one he replaced the familiar but well-worn furnishings of his study. He replaced his old chair, for example, with an armchair covered in Moroccan leather. And the rickety old desk? That was out, too. In came an expensive new writing table. Even the beloved prints that had hung on his walls for years were taken down to make way for newer, more costly prints that matched the elegance of the new robe. ‘I was absolute master of my old dressing gown,’ Diderot wrote, ‘but I have become a slave to my new one.’[74 - Grant Grand McCracken, Diderot Unities and the Diderot Effect in Culture and Consumption (Indiana University Press, 1988).]

Today, consumer researchers call this kind of trading up the Diderot Effect. In the way that Diderot’s new smart gown had the unexpected effect of ‘forcing everything else to conform to its elegant tone’, we have been persuaded ever since the 1920s that we need complementary groups of possessions (colour, style or the up-to-dateness of an item). Ralph Lauren will take over an entire floor of Bloomingdale’s to market a self-contained universe to convince us of the need for a ‘total home environment’. Shoppers can purchase matching Ralph Lauren wallpaper, glasses, sheets, rugs, slippers and, yes, even a dressing gown.[75 - John Jervis, Patterns of Western Culture and Civilization (Wiley-Blackwell, 1999), 108.] Similarly, when women were exposed to an advertisement in Good Housekeeping or Ladies’ Home Journal for, say, a Swan electric kettle, in the background was the ‘ideal’ kitchen with the perfect housewife surrounded by her Swan electric toaster, fridge, dishwasher and so on. It was not about buying the kettle per se, but about aspiring to the complete lifestyle conveyed in the picture.

There is a line in the 1999 Oscar-winning film American Beauty when the main character Lester (played by Kevin Spacey) starts to rebel against his cookie-cutter life. In a voice-over, he mocks his wife Carolyn’s materialism. Carolyn works in her manicured rose garden. She is put together in a matching outfit. Lester remarks, ‘That’s my wife, Carolyn. See the way the handle on the pruning sheers matches her gardening clogs? That’s not an accident.’

This materialistic image of what life should be started to be embodied everywhere – films, radio, magazines, political speeches, advertising – and all was wrapped up in the famous idea of the American dream. The concept of the American dream, and the image of the perfect suburban home that went with it, became such an inherent part of the fabric of American culture and even a global advertisement to the rest of the world on the way to live that it became un-American to challenge it. Douglas Rushkoff comments in Life Inc., ‘It was less important for this life to provide actual satisfaction as for it to produce a class of people who behaved as if they were satisfied.’[76 - Rushkoff, Life Inc., 50.] This desire created a relentless pressure to buy more stuff. Now the barrier that companies needed to overcome was giving people an easy way to pay for it.

Buy Now, Pay Later

Richard Feinberg, a consumer psychology professor at Purdue University and a pioneer in consumer behavioural economics, has long studied the influence of credit cards on our spending decisions. One of the first experiments he conducted, with the help of a local restaurant, involved recording the size of the bill, the size of the tip, and the method of payment – cash or credit card – for 135 customers. He found that people who paid by credit card left tips 2 percent higher than those who paid by cash.

To make sure this was not simply a case of credit card customers being wealthier than cash customers (or company expense-account diners), Feinberg followed up with a controlled experiment in a laboratory. He randomly assigned one group of undergraduate students to a lab with MasterCard signs and logos intentionally placed in the corner. He told the subjects this paraphernalia was for another experiment and to pay no attention to it. A second control group had no credit card-related materials. He showed both sets of participants identical pictures of various products, such as a dress, a tent and a typewriter. For each item he asked, ‘How much would you be willing to pay for it?’ Remarkably, Feinberg’s participants exposed to the red and yellow logo (even though they were told to ignore it) were willing to pay up to three times more for products relative to the control group. The study showed that mere image exposure to a credit card logo is sufficient to affect what people will pay. Feinberg also discovered that students answered the questions faster in the ‘MasterCard’ group room, an indicator that people think less or at least for shorter moments when they spend with plastic.[77 - Richard A. Feinberg, ‘Credit Cards as Spending Facilitating Stimuli: A Conditioning Interpretation’, Journal of Consumer Research 13, no. 3 (1986): 348–56.]

Feinberg’s experiments, as revealing as they were, didn’t involve people making decisions about actual purchases. To follow up, MIT economists Drazen Prelec and Duncan Simester conducted a study in 2001 based on real bids for real commodities (the study was later appropriately named Always Leave Home Without It).[78 - Drazen Prelec and Duncan Simester, ‘Always Leave Home Without It: A Further Investigation of the Credit Card Effect on Willingness to Pay’, Springer Netherlands 12, no. 1 (February 2001).] MBA students from MIT participated in two real auctions, one for a pair of tickets to a Boston Celtics game, and the other for tickets to a Boston Red Sox game. The Celtics tickets were not just any tickets, mind you; they were for the last regular-season game with the Miami Heat, a game the Celtics had to win to clinch the division title. Tickets had been sold out well in advance and could be bought only from touts. The Red Sox tickets were for a regular-season baseball game with the Toronto Blue Jays.[79 - This experiment is well described in Stuart Vyse, Going Broke (Oxford University Press, 2008), 40.]

The students who volunteered for the experiment reported to a classroom at lunchtime and were handed a sheet of paper that described the prizes and gave instructions on how to record their bids. No information on market values for any of the prizes was given, but descriptions read like this: ‘One pair of 3rd row balcony tickets for Celtics-Miami game, Sunday April 19’. The students were told not to discuss their answers or anything else about the bid sheet. Unbeknownst to the participants, two different versions were handed out at random. Half the sheets stated that payment was required by winners in cash, the ‘cash condition’ sheet. It included a note that they had to indicate whether they had ‘ready access to a local cash machine’. The other sheet stipulated that payment must be with a credit card.

The results were clear. Students who agreed to pay with cash bid an average of $28.51 for the Celtics ticket, but the students who agreed to pay with plastic bid an average of $60.24 – an incredible 113 percent premium over the cash bids. The outcome for the Red Sox tickets showed the same pattern, but the price premium for credit card bids over cash was lower, at 76 percent, perhaps because these seats were not as desired or rare. Were the students who bid with credit cards less able to constrain their desire and more reckless with their bidding? And given that the bids were for items of an uncertain value, how much does this experiment apply to the world of goods with a price tag?

Dilip Soman, a marketing professor at the Hong Kong University of Science and Technology, designed a study to look at this very point. Soman intercepted forty-one students after they had made purchases at the campus bookstore and asked them to recall the exact amount they had spent. Of the respondents who had paid by credit card, only 35 percent could recall the amount; the remainder either named a figure far lower than the true amount or confessed that they had no idea.[80 - Dilip Soman, ‘Effects of Payment Mechanism on Spending Behaviour: The Role of Rehearsal and Immediacy of Payments’, Journal of Consumer Research 27 (March 2001).]

These experiments appear to demonstrate how credit cards – or even just credit card symbols – alter our perception of the value of a product. But they illustrate deeper clues into what is going on in our brains when we buy. When cash tangibly leaves our hands, we are more conscious that we are spending money than when we use a card.[81 - In The Decisive Moment, Jonah Lehrer made a similar observation: ‘When we pay for something with cash, the purchase involves an actual loss – our wallet is literally lighter’ (Canongate, 2009), 89.] What economists such as Feinberg, Prelec and Simester have shown is that credit cards, in contrast, make the transaction less ‘real’, detaching the act of purchase from payment. The behavioural experts call this phenomenon ‘decoupling’. Perhaps it is this decoupling that explains why credit cards have become the ultimate enablers or, more accurately, tranquillizers of shopping.[82 - Mickey Butts talks about this idea in ‘Why We Charge: What Behavioural Economics Can Tell Us’ (19 August 2003). This is a working article written by Butts while on the Knight-Bagehot fellowship for business journalists at Columbia Journalism School and Columbia Business School, http://www.mickeybutts.com/wj_ business.html.] Indeed brain imaging experiments indicate that the insular cortex, the region of the brain often associated with addictions and negative feelings, experiences less activity when people pay with credit cards over cash. George Loewenstein, a neuroeconomist at Carnegie Mellon, points out that ‘the nature of credit cards ensures that your brain is anaesthetized against the pain of payment.’[83 - Ibid.]

It’s hard to imagine life before credit cards. In stark contrast to the shopping behaviour this plastic device has come to facilitate, the basic idea for the credit card was invented by an individual, not a corporation, and for a practical reason. In 1949, in Major’s Cabin Grill, New York City, Frank McNamara, head of Hamilton Credit Corporation, took his partners to dinner. Their conversation centred on the problems of a customer who had borrowed some money from Hamilton Credit, but was now unable to pay it back. When the bill arrived, it was Frank’s turn to pay, but he realized to his embarrassment that he’d left his wallet in another suit pocket at home. He called his wife and asked her to drive over and bring him money, vowing to himself that he would never let this mistake happen again. At this moment he thought about the troubled Hamilton customer who could not pay his debts and his own personal embarrassment. ‘What if there was some way to pay the bill without cash in hand?’ Frank mused. Thus inspired, Frank developed the first dual-party credit card, Diners Club, and the credit card was born. In the credit card industry, this dinner is often referred to as the ‘First Supper’.

In just one year, twenty thousand people became card holders. Five years later, that number had increased tenfold. Other banks took note of the popularity of this new payment device, but the idea didn’t gain mass appeal until 1957. That was the year when the nation became obsessed with the story of Mr Harold Bortzfield and his wife from Lancaster, Pennsylvania, who set off on an around-the-world thirty-day trip with nothing more than an airplane ticket and a Diners Club card. Shortly thereafter American Express introduced the first ‘general-purpose’ ‘Don’t Leave Home Without It’ credit card made of plastic, and then along came ‘Master the Moment’ from MasterCard, ‘It’s Everywhere You Want to Be’ from Visa, and so on. The critical turning point in the history of credit cards was when American Express introduced the option of maintaining a revolving balance in 1959. Cardholders no longer had to pay their bills in full but could carry a balance from one month to the next. Joe Nocera writes in his book A Piece of the Action: How the Middle Class Joined the Money Class, ‘Thus did Americans begin to spend money they didn’t yet have; thus did the unaffordable become affordable.’[84 - Joe Nocera, A Piece of the Action: How the Middle Class Joined the Money Class, as quoted in Vanity Fair, ‘Rethinking the American Dream’, www.vanityfair.com/culture/features/2009/04/american-dream200904.]

Between 1989 and 2001, credit card debt nearly tripled, soaring from $238 billion to $692 billion. In 2007, it was up to $937 billion. The equation is simple: the more credit we have, the more stuff we can afford to buy, the more resources are consumed and the more waste is created. The credit card (or more specifically, credit card debt) has become as much a symbol of American life as apple pie, with US citizens holding more than 1.3 billion cards. There are more than four credit cards for each American. In contrast, the Chinese have only a total of 5 million credit cards, for all 1.2 billion of the population.[85 - George A. Akerlof and Robert J. Shiller, Animal Spirits: How Human Psychology Drives the Economy and Why It Matters for Global Capitalism (Princeton University Press, 2009), 128.] In Western Europe, there is only 0.23 credit card per person.

Think about your own credit card statement for a second (that is if you are not the one in four who has never looked at his or her statement).[86 - Steve Rhode, founder of myvesta.org, found that 26 percent of his company’s clients say they never look at the statement. Quoted in Mickey Butts, ‘Why We Charge: What Behavioural Economics Can Tell Us’.] What are the four logical pieces of information missing from it? You probably guessed the first two: your statement of interest and fees paid. But what about the interest rate itself and the length of time it will take you to pay off your debt at your current minimum monthly payment? This missing information begins to explain why the average family carries, often ignorantly, $8,000 of debt (over eight cards) and pays $1,000 a year in interest and fees alone.[87 - Juliet B. Schor, The Overspent American: Why We Want What We Don’t Need (Harper Collins, 1998), 72.] The nation’s credit card charges amount to more than $1.8 trillion a year.[88 - Demos, www.demos.org, April 2008.] So what have we spent all this credit on?[89 - While we were writing this book, President Obama signed the Credit Card Accountability, Responsibility and Disclosure (CARD) act. By July 2010, credit card companies had to meet an array of new requirements for disclosing fees, rates and terms on monthly statements. For decades, these numbers have been ‘conveniently’ and intentionally left out because the credit card companies wanted debt to feel ‘free’ and guiltless.]

Of course most of us benefit from credit cards at some point in time. As the credit card industry says, ‘We provide the credit, in many cases, for people to start businesses. . to buy more, to live a better life, to do things that they could never do any other way.’[90 - Interview with Elizabeth Warren from ‘The Secret History of the Credit Card’, produced by Frontline and The New York Times, www.pbs. org/wgbh/pages/frontline/shows/credit/interviews/warren.html.] So what’s the problem? Looking at the buying habits of a spectrum of consumers, we can see that credit cards have fuelled different types of unhealthy spending habits: accelerated spending, mindless spending, and latest and greatest spending. By no means are these three types mutually exclusive. It is common for one consumer to get caught in the trap of all three. The result, though, is the same and obvious: consumers spend more than they can afford and buy new stuff faster, more easily and more often.

Accelerated spending is the ‘I’ve got to have it right now’ shopping mentality that leads us to make purchases we can’t afford. David Laibson, an economist at Harvard, notes, ‘Our emotional brain wants to max out the credit card, order dessert, and smoke a cigarette. When it sees something it wants, it has difficulty waiting to get it.’[91 - Lehrer, The Decisive Moment, 91.] Most people’s brains are not wired to do the ‘buy now, pay later’ calculation, as we struggle to understand the principles of exponential growth (which is precisely what credit card interest is). Jonathan Zinman, an economics professor at Dartmouth College, uses an old puzzle to illustrate this point. Imagine a chessboard with $1 on the first square, $2 on the second, then $4, $8, $16 and so on. How many dollars on the final sixty-fourth square? Okay, so if you are like us, your brain does not even try to figure it out, but instinct would suggest it is somewhere around $100,000. Actually, the sixty-fourth square contains $9,000 quadrillion.[92 - Tim Harford, ‘Your Brain on Credit’, Forbes.com (March 2009), www.forbes.com/2009/03/19/credit-poor-judgement-markets-tim-harford.html.] When we borrow money to buy something now, we do not contemplate the interest hangover. Our brain can’t compute the cost of our actions, at least in the moment.

Mindless spending is the ‘I don’t know what I spent my money on’ type of spending that can take the form of aimlessly wandering around the shopping centre or popping into shops during your lunch break and coming home with things you never intended to buy. The moment when a person shifts from being a conscious consumer shopping for a specific item to an impulse buyer has been named the Gruen Transfer, after architect Victor Gruen, who constructed the first shopping centre in 1956.[93 - This first shopping centre, called Southdale, was in the town of Edina, just outside Minneapolis. Malcolm Gladwell talks about the Gruen Effect in ‘The Terrazzo Jungle’ in The New Yorker (March 2004), www.newyorker.com/archive/2004/03/15/040315fa_fact1.] Gruen’s original vision for the centre was to create an ‘idyllic shopping environment’ and a ‘kernel of the community’ – a grand plan far removed from the disorienting and sprawling maze we experience today.

Latest and greatest spending translates into ‘I’ve got to get it because it is bigger (or smaller), better, faster or even just newer.’ In most instances the existing product still functions; nevertheless it cannot fulfil our desire to have the latest version available. We tend to value whatever is new and original over what is old, durable or used.[94 - Ibid.] This tendency is not so far removed from the ‘utopia’ described in Aldous Huxley’s classic fantasy Brave New World, where children are indoctrinated from birth to consume. Newness as a trait is something to be cherished.[95 - Vance Packard, The Waste Makers (David McKay, 1960), 35.] In Huxley’s imagined world, these children undergo conditioning from teachers who whisper in their ears as they sleep, ‘I do love having new clothes. Ending is better than mending. . old clothes are beastly. We always throw away old clothes. . The more stitches, the less riches; the more stitches. .’[96 - Aldous Huxley, Brave New World (Penguin, 1959), 49.] The philosophy of Mustapha Mond, the dictator of

Brave New World, is ‘We don’t want people to be attracted by old things. We want them to like the new ones.’

Law of Life Cycles

Mobile phones have now achieved the dubious status of having the shortest life cycle of any electronic consumer product.[97 - Giles Slade, Made to Break: Technology and Obsolescence in America (Harvard University Press, 2006), 263–264.] The average person in America and Britain discards his or her mobile phone within eighteen months of purchase, even though mobile phones will last for ten years on average. (In Japan, the time span from purchase to discard is merely a year.) Every year more than 130 million still-working mobile phones in the United States and 15 million in the UK are retired. Only a small fraction are reassembled for reuse.[98 - Ibid.] The iPod is not far behind the mobile phone in claiming the ‘shortest life cycle’ crown. For a product introduced in 2001, it is remarkable that by 2009 it had already gone through six ‘generations’ of the first ‘Classic’ model (and that does not even include the extensions of the family such as the Shuffle, Nano, Mini and Touch). If you were one of those consumers who ‘upgraded’ to every new iPod that had come onto the market from 2001 to 2009, you would now own eighteen iPods.[99 - Liveblog: ‘Rock and Roll’ Apple iPod Event. Ars Technica, 9 September 2009, http://arstechnica.com/apple/news/2009/09/liveblog-rock-and-roll-apple-ipod-event.ars. Retrieved 9 August 2009.]

We are addicted to new products. According to Colin Campbell, a professor of sociology at the University of York, we suffer from ‘neophilia’. Campbell argues that novelty seeking is a new phenomenon. ‘Pre-modern societies tend to be suspicious of the novel. It is a feature of modernity that we are addicted to novelty.’[100 - Heidi Dawley, ‘The Disorder of These Times: Neophilia’, blog post for Media Life (June 2006), www.medialifemagazine.com/artman/publish/article_5439.asp.] Medieval period fashions changed slowly and slightly over the course of a thousand years. Clothing was primarily a matter of necessity rather than of ever-changing fashion.

The stories of the founding fathers of the automobile industry, Henry Ford and Alfred P. Sloan, illustrate a dividing line between comfort with the tried and true and the endless chase of the new. One believed in a hyperthyroid economy that could be sustained only through a constant consumer demand for new goods, while the other, the master of mass production, initially rejected force-fed repetitive consumption.

Henry Ford learned the honest values of quiet country living on a small farm in Dearborn, a rural town just west of Detroit. He spent most of his childhood tending the fields and milking cows. But it was clear from a young age that Henry would not be a farmhand forever. Indeed, he had a gift for mathematics and loved tinkering with machines of all kinds, especially watches. When he founded the Ford Motor Company in 1901, Ford knew that he wanted to make owning a car possible for everyone. Ford, committed to social change, believed a ‘one size fits all’ approach to cars could be a great class leveller. He realized this dream with the introduction of the first Model T in 1908, a car that was simple to drive, cheap, easy to repair, and durable.

Alfred Sloan, in contrast, had a wealthy and privileged upbringing in New Haven, Connecticut. He studied electrical engineering at MIT, where students were taught to focus on inventing the ‘next big thing’. After graduating at the top of his class, he joined Hyatt Rolling, a small ball bearings manufacturer, acquired by General Motors in 1916. At the age of twenty-six, he became president when his father, a prosperous businessman, bought the company. When Sloan became president of GM in the early 1920s, he faced the threat of an ever-expanding used-car market and an ever-lowering price tag of the Model T. It was around the same time that he brought the new Chevrolet to market. Observing how the fashion and textile industries were growing at a rapid rate by updating designs, he proposed that consumers would trade up for style as much as for technological improvements long before their old cars wore out. He convinced his team to restyle the body covering of what was essentially a nine-year-old piece of technology under the banner of ‘product innovation’. The Chevrolet was a remarkable success and the idea of ‘perceived obsolescence’ and ‘change for change’s sake’ was born. Obsolescence was now built not just into the product itself, but into our minds. GM went so far as to define its strategy as choreographed cosmetic ‘upgrades’ to ‘Keep the Consumer Dissatisfied’. In 1929, Charles Kettering, director of research for Sloan, wrote an article declaring, ‘The key to economic prosperity is the organized creation of dissatisfaction. . If everyone were satisfied no one would want to buy the new thing.’[101 - Charles Kettering, ‘Keep the Consumer Dissatisfied,’ Nation’s Business 17, no. 1 (January 1929): 30–31, 79.] This cry became an increasingly popular concept as companies realized they no longer had a production problem but rather had a demand problem. They needed to shift their attention to finding new ways to sell existing products.

For fifteen years Ford showed a fanatical dedication to sticking with the Model T’s original design (with the exception of a few minor changes). In 1922, he proclaimed, ‘We have been told. . that the object of business ought to be to get people to buy frequently and that [it] is bad business to try to make anything that will last forever. . Our principle of business is precisely to the contrary. . We never make an improvement that renders any previous model obsolete.’ Ford maintained consumer demand by competing on costs, bringing the price of the Model T down from $950 in 1909 to $290 by 1924 through the efficiencies and scale made possible by the assembly line.[102 - Susan Strasser, Waste and Want: A Social History of Trash (Henry Holt, 1999), 193.] But by 1927, with most families who could afford one owning a car, the increasing competition of GM’s lavish and continual design ‘improvements’ and the rumblings of the Great Depression, this strategy faltered. After the 15 millionth Model T rolled off the assembly line, production halted, and cars such as the Model A and V-8 with multiple different styles of models were born. Henry Ford lost the battle to obsolescence.

The efficiencies of mass production only grew during World War II. Goods rolled off assembly lines faster than they could be consumed, jamming warehouses. As Vance Packard writes in the The Waste Makers, ‘The challenge was to develop a public that would always have an appetite as voracious as its machines.’[103 - Packard, The Waste Makers, 20.] Advertisers called the time between when a product was made and when that product was purchased by the consumer ‘time lag’. To reduce that gap, manufacturers induced people to buy more and more products, faster, and to create desire even when customer needs were already met. Perceived obsolescence, making products feel out-of-date, less desirable, and in need of replacement, was a strategy mastered by the car makers, but it was not enough. Consumers still controlled their desires to update or upgrade. Manufacturers needed to take this decision out of their hands.

Designing for the Dump

In Arthur Miller’s Death of a Salesman, Willy Loman, the aging salesman with an unwavering devotion to the American dream, laments, ‘Once in my life I would like to own something outright before it is broken! I am always in a race with the junkyard!’ His outburst continues, ‘The refrigerator consumes belts like a goddamn maniac. They time those things. They time them so when you’ve finally paid for them, they’re used up.’ Willy was experiencing the pains of ‘death dating’, the idea of deliberately building into the product different ways to shorten its life, carefully controlled by the manufacturer.

Planned obsolescence was a concept first suggested not by an economist, a manufacturer or even an advertiser, but by a Manhattan real estate broker. In 1932, Bernard London wrote a twenty-page pamphlet called ‘Ending the Depression Through Planned Obsolescence’. London proposed starting a government agency that would determine the ‘lease of life’ of every manufactured product, be it a car, a hair comb, a ship or even a building. After the allotted time expired, ‘these things would be legally dead.’ Consumers would have a choice: they could give up the item, and be paid part of the price of a new one, or use the product past its ‘expiration date’ and pay a penalty tax. While the regulatory details of London’s concept were not enforced, the principle of the proposal was adopted by product designers in the fifties who started to ‘design for the dump’.

During the twentieth century, the average human life span in the United States increased by more than thirty years, twenty-five years of which are attributed to advances in medicine and public health.[104 - ‘Ten Great Public Health Achievements – United States, 1900–1999’, CDC (1999), Morbidity Mortality Weekly Report 48, no. 12: 241–243. PMID 10220250, http://www.ncbi.nlm.nih.gov/pubmed/10220250.] In contrast, over the last fifty years, the life span of everyday ‘durable’ goods including refrigerators, toasters and washing machines has decreased anywhere between three and seven years. In 1901, Shelby Electric Company produced an incandescent ‘Centennial’ lightbulb. The original, more than one hundred years later, still lights up the fire station in Livermore, California, where it was first installed. In contrast, in 1932, a memo circulated at GE stating, ‘We should change the life of the 200-watt 110–120 volt PS 30 bulb lamp from 1,000 hours. . to 750 hours.’[105 - Packard, The Waste Makers, 25.] GE, like many other companies, shortened the life span of its products to increase sales.

Just One More Factor

For many families today, the idea of owning one television is as odd as having, say, just one pair of shoes. In 2004, both America and the UK crossed a telling threshold: the average home had more televisions in it than people (there are on average three sets in the typical home and 2.55 people).[106 - Television Audience Report by Nielsen. Retrieved August 2009, http://blog.nielsen.com/nielsenwire/media_entertainment/more-than-half-the-homes-in-us-have-three-or-more-tvs/.] As a person is unlikely to watch two televisions at once, how did we end up being convinced that we need more than one television per person in our homes?

In the late 1950s, industrialists were worried. The Smiths had caught up with the Joneses. A degree of mass affluence meant that the average American family (and much of Europe) was satisfied with what it had, owning a home, new appliances and a car. Markets for goods were getting saturated while consumer demand was slowing. Social commentator Vance Packard summed up this phenomenon when he noted, ‘The way to end glut was to produce gluttons.’[107 - Packard, The Waste Makers, 25.] Manufacturers needed people not simply to want to keep up with the Joneses, but as Gregg Easterbrook wrote in The Progress Paradox, to have a desire to ‘call and raise the Joneses’.[108 - Progress Paradox, cited in David Camp, ‘Rethinking the American ADream’, Vanity Fair (April 2009), www.vanityfair.com/culture/features/2009/04/american-dream200904.] Given that most people had one of everything, consumers needed a plausible excuse to buy ‘just one more’ of a product they already owned, and so the surplus doctrine of choice was born.

Psychologist Jonathan Haidt conducted a simple experiment that we can re-create here. Pick a word from the following list most appealing to you: constraint, limit, barrier, choice. Odds are that, like the participants in the research, you picked ‘choice’, as the first three have negative associations.[109 - Jonathan Haidt, The Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom (Basic Books, 2006), 101.] We often believe as consumers that the more choice the better, even if it is more of the same. And this feeling relates not just to the hundreds of thousands of brands we have to choose from every day, but also to which car to drive, television to watch and phone to call on, and even which bathroom to use. As psychologists such as Barry Schwartz have shown in books such as the The Paradox of Choice, choice confuses us not only about how to satisfy our wants, but about what those wants are. This uncertain disorienting effect is what manufacturers wanted to create. If we don’t feel satisfied, satisfaction may be just one more purchase away. By 2005, according to Juliet B. Schor, a professor of sociology at Boston College, the average consumer purchased one new piece of clothing every five and half days.[110 - Jon Mooallem, ‘The Self-Storage Self’, The New York Times (2 September 2009), http://www.nytimes.com/2009/09/06/magazine/06self-storage-t.html?pagewanted=1.]

The more our houses and lives bloat with stuff, the heavier and more trapped we feel. As Neal Lawson wrote in All Consuming, ‘The more we consume the less space we have to be anything other than consumers.’[111 - Lawson, All Consuming, 11.] Similarly, the more space and time we spend dedicated to accumulating stuff in our lives, the less room we have for other people. Our drive for material wealth entailed the exclusion of our most basic social needs, such as family and community bonds, personal passions and social responsibility. We thought we could fill these needs through shopping and buying and accumulating more and more stuff. Some critics describe our era of hyper-consumerism as ‘autistic capitalism’. Regardless of nomenclature, we know two things about this disorder of hyper-consumption. First, it was driven by a belief that money – and the almost instinctual accumulation of what money can buy – equalled happiness. The second thing we know is that this disorder is fixable. The system of consumerism may seem like an immovable fact of modern life. But it is not. That the system was manufactured suggests that we can reshape those forces to create a healthier, more sustainable system with a more fulfilling goal than ‘more stuff’.

Chapter Three

From Generation Me to Generation We

Anyone who has travelled in rural Africa knows that one adjective describes its economy: ‘more.’ The people there need more. They need more water, food, infrastructure, education, health and governance. This lack of the most basic resources and the consequent poverty also confronted Adam Smith more than two hundred years ago. Smith, the great Scottish economist, sought a way out of the agrarian squalor of the eighteenth century. He believed a more productive society would lead to a wealthier society. In The Wealth of Nations, Smith argued that humans are motivated by self-interest and ‘self-love’, and that the exploitation of this trait leads to greater wealth for all and a more effective distribution of labour.[112 - Adam Smith, The Wealth of Nations (W. Strahan and T. Cadell, 1776).]

Looking back, one can understand why Adam Smith wanted to work out how to get the economy to produce more. Britain in the 1700s was not a nice place to live. The average life expectancy was just thirty-five years. Dead dogs, cats, rats and even horses decayed on the cobblestone streets, and raw waste spilled everywhere, creating a breeding ground for diseases such as bubonic plague, tuberculosis and smallpox. Medicine was still so primitive that in 1775 more than eight hundred deaths recorded in the Bills of Mortality were attributed simply to ‘Teeth’.[113 - ‘18th Century London – Its Daily Life and Hazards’, http://forums. canadiancontent.net/history/48176-18th-century-london-its-daily. html.] Most people lived in just one room in buildings made of crumbling bricks. It was not unusual for such buildings to collapse.