For those of you who have been waiting patiently for Createquity to get off the economics kick it’s been indulging in for the past couple of weeks…well, all I can tell you is sit tight, we’re just getting started! While the main show thus far has been my debates with Michael Rushton, Adam Huttler, Tony Wang, and others, I want to take a moment to acknowledge the contributions from super-commenter Richard Reiss that show that I am by no means the first person to grapple with these issues (a fact that comes as no surprise to me). Here’s one from a couple of weeks ago:
Until behavioral economics can rescue economics from itself, here are a few good reads:
“Spent,” by Geoffrey Miller
“Spent” is essential reading in regard to the comment posted above that social status is a “weird ancillary factor.” From the standpoint of brands and marketers, status is actually a key driver in purchasing decisions. (Status is largely why brands exist, after all. Brands are signals to other people.)
The example of the Costner memorabilia aside.
“Life Inc.” by Douglas Rushkoff
“Life Inc.” is all about money and how it has to push towards the emotional marketing models described in “Spent.” (“Life Inc.” is really the history of corporations and central banking, but the economic stories overlap and resonate. Rushkoff’s description on Colbert Report is to the point.)
As to where classical economics apparently leads:
For a nightcap, hear how a consumer economy works from a marketing consultant using the tools of neuroscience, in “Buyology,” by Martin Lindstrom.
And here’s Richard chiming in on my follow-up post:
There are lots of thoughtful economists, so maybe the problem is more with the dysfunctional aspects of the neoclassical model and the textbooks.
For prominent economists with other views, beyond Paul Krugman, there’s Stiglitz, Robert H. Frank, Schiller, Akerlof, and Jeffrey Sachs. In the UK, Richard Layard, and this group:
And there’s Muhammed Yunus, who is trying to reconfigure capitalism to solve poverty.
Historically, one could probably include Keynes, as a pragmatist and student of human nature, and Simon Kuznets, on whose work in creating the GDP the foundation of the American economy rests. Kuznets was explicit in pointing out that GDP was an incomplete measurement of the well being of society.
That’s a critique on GDP echoed here by Douglas Rushkoff, whose book is worth reading:
If that measurement is wrong, much of the economics that follows from it will also be wrong by some undefinable amount.