There is an old joke about the trains in Nazi Germany being so efficient that they left ahead of schedule. Missing a train that left early creates a paradox of efficiency. Things can be too efficient, and there is something similarly paradoxical in our reaction to hyper-efficient markets. Nobody likes the annoying and constant inefficiencies that plague lousy markets. The closer a market comes to perfect efficiency, the less human it will be, and there is something off-putting in that perfection.
Before digital, no market really came very close to perfection. All physical transactions and goods are loaded with friction that prevents perfect exploitation by the most efficient supplier. In the digital realm, though, perfection is, if not obtainable, at least visible in the distance. Digital can reduce information and transaction friction to almost zero. And where purely digital exchanges take place there is a strong push to monopoly or something close. It’s not so much an advantage of scale (though that’s critically important to social media), it’s that without friction, even small competitive advantages will nearly always win.
It’s no surprise, then, that almost every core digital service is dominated by a single company. Amazon owns Ecommerce to an extent that no physical retailer (not even Sears) ever matched. Google dominates search and advertising. In social media, there is a dominant platform for each kind of interaction. Twitter for public debate and news. LinkedIn for professional business. Instagram for visual influencers. Meta for personal connections. TikTok for short-form video. Even secondary markets have their monopolies. Steam has a near monopoly on PC gaming. Netflix had a near-monopoly on streaming that has been broken but that market will almost certainly shake back down to one or two suppliers. The Match Group owns online dating (and like Meta has a bunch of targeted offerings for different customer segments), though their market share is a paltry 25%. There’s apparently still a lot of friction in dating.
Frictionless markets aren’t just an economic phenomenon. In the political sphere, every aspect of vote harvesting has seen dramatic reductions in the amount of friction and inefficiency. Voting itself, once the most frictive of activities, is now much simpler. In most places, you can vote at your convenience and drop your vote in the mail. You can have your spouse fill out your ballot. You can do it as part of a drinking game — take a shot every time a Democratic candidate mentions diversity in their statement or a Republican mentions family! Registering is automatic and effortless. It’s as easy to vote as it is to get a latte. Maybe easier.
It isn’t just voting that’s gotten easier, though. Fundraising has moved from a high-touch exercise to an electronic process that has almost no limitations. The Obama campaign was legendary for the efficiency of their fundraising efforts and their constant dunning of their lists. Right up to the day of the election, they kept asking for money and accelerating the number of appeals to each person on their list. Years later, I heard one of their managers claim that they never found an upper threshold where the number of appeals to each voter drove diminishing returns.
Messaging is far more efficient now as well. Online allows for fine grained targeting, nearly free amplification of messaging, and vastly extended reach. Every aspect of digital messaging is more targeted, less costly, and more easily amplified than traditional techniques like TV or direct mail.
All of these changes have made the democratic marketplace far more efficient and have accelerated the competitive landscape in that marketplace and its tendency toward consolidation. The lower the friction in a market, the more complete its exploitation.
Because of these technical changes, there has been another, even more important change in the way politics is done. It’s a change driven by the availability of these low-friction methods of vote harvesting and it, too, has a close analog in economic marketplaces.
Modern advertising spend is dominated by brand and lifestyle marketing. It’s a form of advertising that eschews product features in favor of attaching a product or brand to a lifestyle. Apple, of course, is famous for this. But, in fact, it’s the most common form of modern advertising. Global brand advertising spend is about 500 billion dollars — and nearly all of that is about lifestyle not product.
The reasons for this are complex and many.
The average Western consumer is exposed to something like 3,000 messages a day. [1] That kind of advertising overload makes it almost impossible to convey information and have it either noticed or remembered. Nor are most discretionary product purchases driven by need. Yes, a lot of spend is driven by need, but there’s no point advertising pork chops or gasoline. Advertising is all about driving incremental or discretionary spend, and in most cases, the advertising we get is for things we don’t need. That means advertisers are more likely to focus on creating desire instead of arguing about how their product meets some extant need better than the competition. Finally, consumers have become much more focused on brand as a part of their identity. This may be pathetic, but as people have increasingly divested themselves of any value or value systems other than optimizing their preferences, they seem to have felt an unspoken need to believe in something. And if that something isn’t God, country, honor, or morality, it might as well be Apple, Nike, BMW or Budweiser.
These days, you can just do it in your ultimate driving machine, because this Bud’s for you, you sexy dancing outline.
You might think that lifestyle marketing is exclusive tothere’s been an identical and even more dramatic shift in the way political marketing is done. The lifestyles in political marketplaces are called ideologies. And they are designed not to encompass some set of values or public policy positions but to represent an idea(l) consuming type.
We think of an ideology as being a coherent set of principles encompassing a system of values and based on some fundamental set of assumptions and principles. But that’s not at all what modern political ideologies are. From a philosophical perspective, they are an incoherent mass of contradictory policy positions bundled in a giant, nicely wrapped package held together by a little word cloud of catchphrases.
Modern political marketing eschews any relationship to public policy or even candidate character in favor of selling (or reinforcing) a packaged ideology that’s designed to provide consumers with a part of their identity and lifestyle.
Lifestyle marketing has become dominant in the political realm for the same reasons that lifestyle advertising has in economic marketplaces. It works better in an incredibly noisy information environment and with consumers who lack any independent value system.
And here’s where the two strands come together. Because the decreasing friction of the political marketplace enables these consumer-packaged ideologies and the growth of ideological marketing in place of both patronage and indirect rewards makes it easier to engage in frictionless vote harvesting.
The shift to exploitation of ideas instead of patronage or indirect rewards is driven by the frictionless environment created by modern content production and delivery. But selling ideology is different than selling ideas. In the modern political marketplace ideas are sold the way Costco sells meat, soft-drinks, or toilet paper — in very large bundles. Selling wholesale ways of thinking is cheaper, more efficient, more reliable, and more scalable than selling individual ideas.
Bundling ideas makes every part of the sales job easier. It reduces the cost of sales and increases effectiveness. Selling individual ideas is expensive relative to value. It’s hard to get attention and it’s hard to drive conviction. Try to sell a single idea to a person and you will often run afoul of conflicting viewpoints in their trust group or in their existing constellation of beliefs. If you can package ideas, you can leverage the influence of the group to discourage dissent and more rapidly insert new ideas in the community. Once someone has bought the bundle, they are part of the ecosystem and selling them new ideas is almost cost-free. Bundling also boosts retention, because the cost of changing one’s mind about any specific idea often means giving up the whole package — not least because the community is strongly self-reinforcing.
In the political marketplace, ideologies function like Apple’s walled garden. If you can bring people into the garden, you can capture an immense amount of mindshare and hold it very cheaply.
One of the original drawbacks to bundling ideas into an ideology was the seeming necessity for coherence. If you start with a few core premises and then elaborate them across multiple political problems, you can generate a large package of ideas. Unfortunately, consistent enumeration of almost any basic set of principles will result in some political positions that are unpopular or unpalatable. It’s like getting that sucky, blue-flavored juice in your Costco assortment.
It was a profound advance in ideological bundling when political marketers were able to de-couple the bundle from any requirement for coherence. This happened over time by building up brand affinities within a community. Eventually, people valued the label more than the ideas or any underlying relationship between the parts. It’s the same process that makes people “Apple” consumers. They didn’t start out with that identity — they grew into it as they loaded more and more of the marketing into their identity. This allows packagers a great deal of flexibility in what gets shoved into the bundle. It’s as if Costco could sell a giant package that included whatever happened to be most profitable: Sirloin Steaks, Tofu, Vegan Chicken, Organic Blueberries and GMO Whole Milk — and people would still buy it.
No conceivable set of philosophic principles could arrive at the strange, eclectic and incoherent ideas that make up the belief set of the modern “conservative” or “progressive”. On every issue they must disagree, but which side they are on is not derivable from principles. It’s unsurprising that when Donald Trump became the leader of the conservative brand, he and it could alter almost every one of its supposed ideological precepts in a matter of months without losing more than a handful of voters. Indeed, to suggest that there is any coherent idea underlying something like Trumpism is fanciful. The same is almost as true of the incoherent mess that is modern progressivism with its Vitamix blend of neo-Marxist drivel, classic labor liberalism, relativist cant, and racial politics.
The key to understanding our current political environment is the realization that modern political movements are not serious intellectual endeavors (even by the rough and ready standard of political argument), they are lifestyle brands filled with empty-headed consumers of packaged ideology.
This growth in consumer-packaged ideology carries a stiff price both to democracy and the individual.
The price to democracy is well captured by Churchill’s quote. Ideology is dangerous and far less rational than political self-interest. It tends toward massive consolidation (duopoly not monopoly for reasons that are worth thinking about). And this consolidation of interests drives a much more radical polarization than the highly variegated interests served by indirect rewards.
The cost to the individual is less obvious but may be higher. Though a great many (probably a good majority) of people are happy to live in a valueless world filled only preference optimization (the world of “I want, I want, I want”), a lot of people do discover how unrewarding that is. Sadly, most of them end up suckered into buying something even worse — a packaged ideology that provides only the illusion of meaning.
It’s to this problem — the politicization of the self — that I’ll turn in Part 4.
[1] Duke Corporate Education (The future of Lifestyle Brands is in Danger) 2017