25 May 2004

rational economic agents

We consume largely to fill psychological needs ("false needs" as Marx would say) and not material needs. Economically, we're like drunk giants crashing through the world unaware of our power and how we're using it. Advertisers understand this implicitly, but economists and other social thinkers don't seem to talk about it much.

A few examples

1. Giving to charity: When soliciting people in Lobby 10 recently to give money to Sudanese refugees and IDPs, one man asked me "Well, how much would you like me to give?" He clearly had somewhere to be, so I said "people have been donating $10 or $20 lately, but you can give whatever you want" and he handed me a five dollar bill. (I started a conversation with another guy, or maybe the same one, with me: "Do you want to help Sudanese refugees?", him: Sure. What do you want from me? me: Mainly money. [He reaches for his wallet.])

He asked me how much to give because he wanted to know what would satisfy me. I was the one who had made him feel guilty about not helping (previously unknown) Sudanese refugees, so if he paid me off I would stop bothering him and he could stop thinking about the issue. Giving money would simultaneously relieve his guilt and end the awkward social situation in which I was demanding his attention.

Giving money is a clear way out, but he still needed to know how much was necessary. If I could have answered him honestly, I would have said something like "The WFP has asked for $98 million to feed everyone through the rainy season. I'd like you to think carefully about their appeal, research the alternatives, think about what your money means to you and decide yourself how much, up to $98 million, is appropriate." But this would violate all the rules of the game. Instead I told him how much money would make him fit in with the other donors, so that he could avoid both appearing stingy or easily manipulatable.

This may seem an uncharitable (haha) view of this donor's motives, but I would bet that many people give money away for similar reasons, even after devoting more serious thought to it.

Our fundraising methods ended up being affected by this, as we started to think more like advertisers. For example, should we ask people to write checks to our student group, which we would then donate to the WFP a week or so later, or ask them to donate directly on the WFP web site? If the former, we get the satisfaction of knowing how much we've raised; they get the instant gratification of our thanks, which is especially important if we were the cause of their guilt a minute earlier. (Also people might not follow through after promising to donate in person.) On the other hand, donating at home would mean larger and faster donations, which were especially important in this case since the rainy season would make aid much harder to deliver as time went on.

Our campaign tried to make people aware of how their donations would be used, but there were plenty of these small compromises with expendiency and public relations.

2. Driving: People get an emotional rush from driving far beyond the mere joy of travelling the 5 miles to Walmart in 12 minutes rather than an hour and a half. While a Zipcar model of car ownership might make sense economically and environmentally, Americans like to express personality and status in their choice of car. Cars are associated with independence, freedom, power and excitement. Nevermind that often the opposite is true; with public transportation you don't sit in traffic, worry about parking or have to watch how many drinks you have. More to the point is how people transfer their other desires onto their cars, so that they'll buy a sports car because of a mid-life crisis.

3. Smoking: Nearly 20% of deaths in the U.S. are caused by a need that is mostly social and psychological. Or do people actually start smoking because they want to get a buzz from it? Supposedly when sex was taboo in movies, filmmakers would use smoking as a metaphor for it. Now some people in Congress want the MPAA to give movies an R rating for smoking.


We fill our actual needs inefficiently. Since the needs persist, growth becomes an addictive behavior, like drinking to deal with emotional problems. Domestic violence ensues.


Maybe if we had a lot less money we'd take it more seriously? Maybe there needs to be some sort of social movement to explicitly raise moral questions about how we spend? Maybe the environmental movement could be this movement, if they'd stop pretending it's enough to make everything cleaner and more efficient? Quizas, quizas, quizas...

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