Mr. Money Mustache wrote multiple times about weaknesses and inconvenience. This made me think about the modern world mechanics around them. I then understood that capitalism benefits from people being weak and avoiding inconvenience. Let’s see how.

Introduction

By capitalism I mean privately owned companies, which operate exclusively for profit. I am not trying to say that the system is bad - the modern world operates like that anyway.

By weaknesses I mean people choosing options, which are too easy (perhaps even harmfully easy) for them. Similarly for inconvenience - choosing options, which are too convenient.

Capitalism

A company’s goal is profit. There are artificial limitations created by governments, because, otherwise, company’s actions can be even harmful for the customers. E.g. they could use substances, which are harmful in the long term, to save costs. Alternatively they could become a monopolist and then start rising prices to have more profit.

Since the company’s goal is the profit, whenever there is an opportunity to increase the profit - the company is likely to take it. For simplicity, let’s consider only net-positive opportunities (i.e. ones which are in the end overall positive for the company, even if at the beginning they can be negative).

Humans

At the same time, humans have hedonic adaptation and get used to any current state and stop enjoying it. Majority of situations can be improved, so the current state can even be considered inconvenient or too hard. There are also many people, so from probabilistic view, some of them (outliers) will over-exaggerate and require unnecessary (from majority’s perspective) simplification.

Both together

Then when someone signals their desire for simplification, this can be a good opportunity to make money. As a result, if enough people happen to have this desire and are ready to pay for its solution, this may become profitable for some company. Since the company’s goal is profit, they don’t care about how weird or absurd the problem can be. The customers will pay, this is enough. At the same time the company can even claim that they are improving customer lives:

  • customers want this solution
  • they are paying for it (i.e. consider it valuable enough)
  • thus, they must have a problem and we are solving it for them.

Here we get a positive feedback loop. Enough people want some simplification. Some company fulfills this need. People get used to it due to hedonic adaptation (just start considering it normal) and want more simplification.

My own example is washing clothes. One can have a washing machine or wash them manually. The former saves a lot of time and effort. However, one still needs to hang the clothes to dry up. I got so used to the washing machine that I now consider hanging up the clothes as quite inconvenient. Basically I completely forgot how manual washing would have felt. I can imagine other people having similar feelings and then some company coming and fixing this issue. However, I personally remind myself that washing machine already solves 99% of the problem for me and going for that remaining 1% is an overkill.

One step further

Previously we considered people having a problem and wanting a solution. However, the companies are also incentivized to create a problem when there is none. In other words, people may consider something to be ok and normal, but this does not bring any money to for-profit companies. Thus, they are incentivized to come and “teach” people that their current state is inconvenient, sub-optimal, can and should be improved - just pay for the solution.

I consider this much more dangerous than fulfilling weird-but-real needs coming from people. In this case, the company itself affects people. What is even scarier, the company is interested in making money and they don’t need to consider entire scope of their effect on people. In other words, if they can make people to buy something, but at the same time there will be some unintended consequences, the company does not care as long as the customers pay and this is inside governmental boundaries.

Coming with particular examples is hard. I can imagine someone trying to define “beauty” in a way which helps them sell their product. E.g. some nose shape and plastic surgery or body weight and products for losing weight. It is peculiar that companies still can claim that they are improving people lives (e.g. people still buy their product in some sense voluntarily), but this is objectively questionable. E.g. if someone would consider themselves ok, but then they get affected by company advertisement and start considering themselves ugly, then the company just made them less happy. In some sense, this is caused by people’s irrationality. Yes, they may want to buy something, but the source of this desire may be external.

Another example is fear. Whenever one fears something, they greatly value protection against it. Thus, the companies can be incentivized to over-exaggerate how bad something is or just create the fear artificially.

According to Freakonomics, one particular example are mouthwashes (they use Listerine as an example). They are incentivized to make you scared of bad breath. According to the book, before Listerine the bad breath was not considered that bad, but their ads changed this perspective.

According to the New York Times, diamonds is another example. At some point in history diamonds were not that popular. However, companies selling diamonds wanted this to be different. As a result, they managed to convince many that having diamonds (and giving them as present) is good. This in some sense created a fear - “if I don’t present a diamond, my partner will be less happy”.

Due to the human nature, looking at products for kids often illustrates this even better. Each parent intrinsically wants the best for their children. As a result, creating artificial fears and simplifications here is even easier.

Remarks

Here I considered only existence of people wanting “weird” simplifications, while their quantity is actually much more important for estimating the actual effect. However, I don’t think such an estimation is feasible, so I just hypothesize how the mechanic works without any quantitative data.

It is also worth noting, I am not saying that these people are bad. This is their own choice and they are free to want something. I am just interested how some weird and absurd things end up on the market.

Another important observation is that the actual definition of weakness depends on your own life situation. E.g. I could say that having a dish washer is unnecessary and such people are weak. I can imagine someone else saying that having tap water is unnecessary and I am weak. Nevertheless I suppose that there are some products, which are considered unnecessary by the majority (e.g. 99%) of the population (hi, crazy pistachio).

Also I am not against all the simplification. I definitely enjoy having a washing machine, physical safety, medicine, grocery shops and so on. I think these and many others did improve my life and made it quite better. In some sense, these do solve major part of some problem for me. I don’t think that the remaining small part of such problems has to be solved. E.g. I don’t need groceries to be delivered to my place, I am fine with just going and buying them. Delivery companies could try to create a perspective that buying your own groceries is not cool (like not having diamonds during a wedding). I am definitely against such artificial perspective. Please note that for others this may make more sense, e.g. they are very busy and want to save time. However, I struggle imagining being so busy (like not having 1-2 hours per week).