{"id":1361,"date":"2017-12-20T16:26:14","date_gmt":"2017-12-20T16:26:14","guid":{"rendered":"http:\/\/www.morawealth.com\/?p=1361"},"modified":"2017-12-20T16:26:14","modified_gmt":"2017-12-20T16:26:14","slug":"merry-shopping-indebted-new-year","status":"publish","type":"post","link":"https:\/\/www.borealcm.com\/de\/merry-shopping-indebted-new-year\/","title":{"rendered":"Merry Shopping and Indebted New Year"},"content":{"rendered":"

Critics of capitalism are not short of culprits to whom to blame for all its supposed evils. However, whilst others concentrate all the ire, marketers are quietly getting away with murder.<\/p>\n

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For example, whilst bankers can always claim to play a social role by fostering an optimal allocation of capital \u2013 matching thrifty savers with creditworthy entrepreneurs and consumers, and thus lifting both the supply and demand side of the economy. Marketing masterminds, on the contrary, work only for the benefit of the supply side. They strive to stimulate demand for their products with all kind of shenanigans, regardless of the impact that binge consumption may have either on the environment or the consumers\u2019 finances \u2013 conveniently stretched by vendor financing.<\/p>\n

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But marketers are not deprived from their own line defense in our consumption-led economy. A century ago, frugality was deemed a virtuous trait whilst prodigality a weakness of character. Nowadays, perception has changed, and a certain degree of self-indulgence is seen as a socially responsible behavior. This line of thought is backed by mainstream economics. Growth models since Solow show us that, given the decreasing marginal returns of capital, its mere accumulation cannot lift economic growth. Thus, there is a so-called \u201cGolden Rule\u201d savings rate that balances savings and consumption, optimizing economic output as a result.<\/p>\n

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No matter how powerful this economic logic is, it still creates strong cognitive dissonance in many of us who have been raised in relative austerity. This happens because contrary to economic models, in the real world there is not such a neat line dividing investment from consumption. One can treat clothes, furniture, electronic devices, autos and others, as disposable items that have to be constantly replaced, or as durable goods that should be kept as long as they perform their function.<\/p>\n

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Marketing places a crucial role here, acting as the \u201cinvisible hand\u201d of our modern economy pushing consumers to increase their purchasing intensity. Vendors manipulate our psyche with a number of tricks and subterfuges that include, amongst others, making us long for \u201caspirational\u201d goods up in the Maslow pyramid, hurrying us to buy for fear of missing a bargain, rewarding us for our loyalty, or \u2013 more worryingly \u2013 coercing us to conform to conveniently-planted societal norms; like for example buying diamond engagement rings, or chocolates for Valentine\u2019s Day, courtesy of De Beers and Cadbury respectively.<\/p>\n

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Globalization and the Internet are compounding the attack on our free will. We are now individually targeted by retailers who infer our preferences from our surfing or shopping patterns, and unfortunately culture does not provide a shield any longer. The year has ceased to be divided by astronomical seasons, and now is punctuated by a series of shopping events that include Halloween, Black Friday, Cybermonday, Christmas, all kind of seasonal sales, mother and father days and, if you are lucky enough not to be subject to the Valentine\u2019s tax, I am afraid you will soon be celebrating Chinese Singles\u2019 Day.<\/p>\n

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We will never know whether by embracing conspicuous consumption, humanity is following the optimal path dictated by the Golden Rule. One can easily think of counterfactual scenarios in which responsible consumption and higher investments in education and environmentally friendly technologies would yield larger economic gains in the long run, but the failure of the USRR reminds us of the risks of trying to tame our animal spirits. After all, the short-termism tyranny of our society may just be a reflection of our survival instincts.<\/p>\n

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Fernando de Frutos, MWM Chief Investment Officer<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Critics of capitalism are not short of culprits to whom to blame for all its supposed evils. However, whilst others concentrate all the ire, marketers are quietly getting away with murder.   For example, whilst bankers can always claim to play a social role by fostering an optimal allocation of capital \u2013 matching thrifty savers … Continued<\/a><\/p>\n","protected":false},"author":2,"featured_media":1360,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[131,132],"tags":[331,333,332,336,334,335],"class_list":["post-1361","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economic-indicators-de","category-macroeconomics-de","tag-christmas-shopping","tag-consumer-spending","tag-consumerism","tag-marketing","tag-savings","tag-society"],"acf":[],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/www.borealcm.com\/de\/wp-json\/wp\/v2\/posts\/1361","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.borealcm.com\/de\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.borealcm.com\/de\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.borealcm.com\/de\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.borealcm.com\/de\/wp-json\/wp\/v2\/comments?post=1361"}],"version-history":[{"count":0,"href":"https:\/\/www.borealcm.com\/de\/wp-json\/wp\/v2\/posts\/1361\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.borealcm.com\/de\/wp-json\/wp\/v2\/media\/1360"}],"wp:attachment":[{"href":"https:\/\/www.borealcm.com\/de\/wp-json\/wp\/v2\/media?parent=1361"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.borealcm.com\/de\/wp-json\/wp\/v2\/categories?post=1361"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.borealcm.com\/de\/wp-json\/wp\/v2\/tags?post=1361"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}