This book and its summary are pretty long, I extracted the useful advice in a shorter article.
- Major killers in 1900’s USA were Pneumonia, TB, and Diarrhea that are pathogen based while major killers in 2000s are heart diseases, cancer, and lung diseases that are lifestyle diseases. The developing world, which has shifted to a western diet, is seeing the same fate.
- Aging is tied to Telomeres, a tiny cap at the end of chromosomes, which prevents DNA from unraveling. Some amount of it is lost on every cell division. So, shortening of Telomere indicates aging. Smoking triples that rate. Meat, soda, dairy, fish, and refined foods are associated with shorter Telomeres. Plant diets with rich antioxidants are associated with longer Telomeres. Plant-based nutrition is the only intervention which helps in growing Telomerase, an enzyme which helps in regrowing Telomere.
- Vegetarians transitioning to meat once a week experienced a 146% increase in odds of heart attack, 152% increase in odds of stroke, 166% increase of odds of Diabetes, and 231% increase of odds of weight gain. India, despite a low increase in per-capita meat consumption, is facing high lifestyle disease rate due to an increase in refined foods like white rice. So, don’t just go for a vegetarian diet. French fries + Coke is vegetarian but not healthy. Go for an evidence-based diet. The current evidence suggests a whole plant-based diet is healthy. Calories in junk food are cheaper but when you take nutrition beyond calories into account then junk food loses out to whole plant-based diets. Moreover, farms with animals are associated with a higher rate of cancer. Plant-only farms are not. Poultry farms are the worst. Pet companionship is associated with lower cancer rate though.
- A healthy lifestyle is key. Not smoking, not being obese, 30-mins daily exercise, and a plant-based diet is sufficient to wipe out 80% chance of chronic diseases. Non-genetic factors account for 80-90% of the major diseases today. For example, colon cancer rates were 1/5th in Japan compared to the USA in 1950. Now, due to increased meat consumption, they are almost the same. Diet is a gradual process and not all or nothing. If you eat Pepperoni Pizza once a week, going down to once a month is better than not giving it up at all.
- Thanks to dairy and meat lobbies, you will hear “eat more veggies” message but no “eat less meat” message. The latter message will be made more cryptic by saying “avoid saturated and trans fat”. But in reality, no amount of trans fat is safe as it always leads to a risk of Coronary Heart Disease (CHD). However, trans fat is unavoidable in a non-vegan diet. Order of nutrition quality: Unprocessed plant food > Processed plant food = Unprocessed animal food > Ultra-processed plant food = Processed animal food.
- Patients regularly overestimate the benefits of drugs. Doctors are hesitant, to tell the truth since no patient would take a drug which has only a 5% chance of success. Big pharma spends a lot on advertisements. They advertise drug, not diet changes. Drugs make money for them, diet changes do not.
- Washing vegetables remove 50% of pesticides. Washing in 5% vinegar (expensive) or 10% saltwater (cheaper) is much more effective. Rinse again after saltwater though.
- After consuming acidic food, rinse the mouth with water to avoid enamel decay. However, don’t brush since that will damage the already softened enamel.
Daily Dozen checklist of Good Health
- 3 servings of Beans
- 1 serving of Berries
- 3 servings of other fruits
- 1 serving of Cruciferous vegetables
- 2 servings of Greens
- 2 servings of Other Vegetables
- 1 serving of Flaxseed
- 1 serving of Nuts
- 1 serving of Spices
- 3 servings of Whole Grains
- 5 servings of Beverages
- 1 workout session
Why Nations Fail
The book is a good read on why some nations are rich today while others are poor. While the book Breakout Nations provides useful information on the current situation in many countries, Why Nations Fail offers valuable historical lessons on critical aspects of economy and politics that have shaped countries around the world. The theme of this book includes:
- Inclusive vs. Extractive Economic and Political Institutions
- The Myth of Geography/Culture
- Path-dependence of the Past
- Centralization of Power
- Creative Destruction
- Critical Junctures
- Defending Prosperity
- Skin in the game creates a diversity of beliefs and ideas, for example, restaurant businesses. Lack of it creates a monoculture, for example, journalism.
- Skin in the game comes with a conflict of interest. For example, a shareholder is more inclined to say positive things about the company, whose shares he holds. Even then, skin in the game is preferable over no skin in the game. A lack of skin in the game, usually, produces a monoculture of beliefs.
- Bureaucrats, with no skin the game, usually make the problems worse by deciding things from the top.
- Beware of “good” advice where you will get both the good and the adverse outcomes of that advice while the advice-giver will only get a good result.
- Metrics puts one’s skin in the wrong game. For example, a doctor who has to optimize for a five-year survival rate of a cancer patient might go for radiation therapy as opposed to laser surgery even though radiation therapy has worse 20-year survival rates.
- Pilots have more skin in the game than surgeons. If a plane has a 98% chance of surviving a flight, then all pilots would have been dead for now, while medical science can operate with a much lower survival rate since skin in the game is primarily of the patients and much lower of surgeons.
- An academic experiment where one is supposed to wager a bet and hypothetically believe in a specific scenario is devoid of real risk and hence devoid of skin in the game.
- Academia, when left unchecked, for the lack of skin in the game, evolves into a ritualistic self-referential publishing game.
The book talks about randomness, associated maths, and the psychological biases which interfere in a more stochastic approach to thinking about life.
- Probability is not about odds but a belief in the existence of an alternative outcome.
- The right way to judge the performance in any field is not by the results but by the cost of the alternatives. A million dollar earned through dentistry is more valuable than a million dollar won via playing Russian roulette. The alternative outcomes in the case of Russian roulette are far worse.
- Our habitats have evolved faster than our ability to evolve with it. Things like probability do not come naturally to us.
- When a random process scales (“repeated”), its results regress towards the mean. A 15% return with 10% volatility implies a 93% chance of a positive return in a year (=> 7% bad years) but only a 67% chance of having a positive month (=> 33% bad months) and 50.02% chance of a positive second (=> every other second will have a negative return).
- Over a short time, one sees variability in the portfolio not returns. Over a long time, one sees returns, not variability.
- The wise man listens to the meaning; the fool only gets the noise.
- Law of large numbers – A population consisting of a large number of bad managers is virtually guaranteed to produce some who will have amazing track records. Moreover, the extent of the greatness of their results depends more on the initial sample set than their ability to produce results.
- In real life, a lot of events have skewed payoffs. The likelihood of an event can be lower but the corresponding payoff (or damage) can be much higher. Maximizing the probability of such events does not translate into maximizing the payoffs.
- An option seller makes continuous “small” amounts of income while an option buyer loses money and makes money in one-shot only in case of the occurrence of a rare event. Selling options gives psychological kicks while buying is economically optimal.
- Path-dependent outcome – Computer keyboards are QWERTY because typewriters are QWERTY and that’s because that was the preferred way to slow down the typists to avoid jamming the typewriters. It is not rational to have them today but path-dependent outcomes are the cornerstone of life.
- The same effect can explain why Microsoft’s Windows was able to win by creating a networks effect around its operating system.
- The endowment effect is a manifestation of that.
- Polya process is a more accurate model of the real world than “independent events” approach. Economists fail to realize that.
- We have two systems of reasoning – one is for fast decision making, the other one is for the slow decision making (more details in Thinking Fast and Slow).
- One major implication of it is that ideas do not sink in when emotions come into play.
- Consumers consider 75% fat-free hamburger to be different from only 25% fat hamburger. Mathematically, they are the same.
- Affect heuristic – the emotions associated with an outcome determine the probability of that outcome in our mind
- Attribution bias – People ascribe skills to their success and random unfortunate events to their failure.
- Simulation heuristic – playing alternative scenarios in the head. “I was about to exit the market right before the 2008 crash, I just missed it”
- Hindsight bias – We an incident happens, we believe that we knew that it was going to happen all along. Even though, if earlier, we were asked about our belief in the occurrence of the incident we would not have been that certain. The worst aspect is that it fools us into believing that we can predict the future.
- History appears deterministic even though it is just a manifestation of the potential random paths that were realized.
- Unlike hard sciences, one cannot experiment in history.
- Survivorship bias implies that the highest performing realization is most visible since the loser never speaks up (or survives).
- Availability heuristic – We assign probabilities based on how easily can instance of that incident be recalled.
- People don’t like to buy insurance against something abstract, only the vivid risks merit their attention, therefore, it is easy to sell travel insurance against terrorist act vs travel insurance against loss of life.
- Representativeness heuristic/Conjunction fallacy – We assign the probability of a person belonging to a particular group based on how similar the person looks to that group.
- A feminist student is deemed more likely to be a feminist bank teller than to be a bank teller. Even though the latter is a superset of the former
- Wittgenstein’s ruler – If you have a scale, whose accuracy you aren’t confident of, and you use that to measure the table then you are measuring the scale as much as you are measuring the table. Or more formally, unless the source of the statement is a qualified author the statement is more revealing of the author than the information intended by him.
- Sandpile effect – “The last straw on the camel’s back” are examples of how a linear change can have a non-linear impact on the complex systems (causing a collapse).
- Firehouse effect – A group of people with a similar mindset, after spending too much time can come to the conclusions which are ludicrous to an outsider.
- Psychologically, the frequency of positive events matters more than magnitude. A negative event of the same magnitude is more devastating than the positive event of the same magnitude.
- The inverse skills problem – The higher up the person is in a corporate ladder, the lower is the repeatability of their work, and hence, lower is the actual evidence of a contribution. A person engaged in repeatable work is easy to judge. One engaged in non-repeatable work cannot be easily judged since their results might be a pure manifestation of randomness.
- Humans and even non-humans start seeing patterns in randomness and develop superstitions around how those patterns can benefit or harm them.
- Rational thinking has little to do with risk avoidance, most of it is about rationalizing one’s actions by fitting some logic to them.
- Some details of our daily life like career decisions and investments can harm us or even threaten our survival, it is good to be rational and scientific about them. Other mundane details like the choice of religion can be a very irrational one.
- It does not matter how frequently something succeeds if the failure is too costly to bear.
- Common sense is nothing but a collection of misconceptions acquired by the age of 18.
- Depending on the use-case, extreme values are noise or devastating signals. Average temperature (excluding extremes) is great to decide next vacation destination but for climate scientists, it’s the extremes that matter. Similarly, extremely rare events can bankrupt a company.
- As per Karl Popper, there are two types of theories, falsified and yet to be falsified. Something which can not be falsified is not a theory.
- More knowledge does not always lead to more information, sometimes, it just leads to a stronger belief in meaningless noise.
- Markets always go up in 20 years more or less holds but only a few markets have really survived over time and it was not obvious with hindsight that which ones will survive. For example, Germany, Imperial Russia, Argentina blew up completely.
- Most humans stop when they are satisfied (satisfied + suffice) with a result than working towards the most optimal outcome. Satisficers are happier; optimizers end up being more successful on any traditional metrics of success. The causality is not clear though.
- At a given point in the market, the most successful traders are likely to be those that are the best fit for the latest cycle. This does not apply to dentists since that profession is more immune to randomness.
- People become leaders not because of the skills they possess but the superficial expressions they make on others (“charisma”).
- When people merely work hard, they lose focus and intellectual energy. Work ethics, however, draw people towards signal than the noise.
- Extreme empiricism, an absence of a logical structure, and competitiveness can be quite an explosive combination.
- Someone’s raw performance and personal wealth can sometimes (but not always) be an indicator of their success.
- We learn from mistakes by doing them not by reading/listening to them. Learnings from history cannot be acquired via pure reading either.
- Listening/reading current news neither provides one with any predictive ability nor improves one’s knowledge of the current world.
- Spontaneous remissions of cancer can suddenly cure the disease and the patient might think that whatever pill they have consumed in the meanwhile has the cancer-killing property.
- The unpredictability of the behavior is a deterrent. Sometimes, the government has to overreact on small things, so that, others cannot figure out the precise limits of tolerance.
The book provides a scientific perspective on the history of how humans came to dominate the planet. The books biggest focus is on the three revolutions the cognitive revolution which started 70, 000 years ago; the agricultural revolution which started 12, 000 years ago; and the scientific revolution which started 500 years ago which shaped the destiny of our species and the planet.
Species – Animals belong to the same species if they tend to mate and give birth to fertile offsprings.
Genus – Species evolved from the common ancestor. They, usually, won’t mate but can be induced to do so. Eg. Mule (Horse and donkey), and Liger (Lion and Tiger).
Homo Sapiens – “Homo” genus and “Sapiens” (intelligent) species. Some other members of our genus are, no extinct, Homo Erectus and Homo neanderthalensis. Homo Sapiens’ closest living species are Chimpanzees.
The Cognitive Revolution
The rise of Homo Sapiens
Homo genus has unusually big brains and big energy drains. Homo Sapien brain consumes 25% of energy at rest, 8% is the norm for other apes. The big brain is an even bigger cause of human infants which are born relatively prematurely (in terms of physical strength) compared to the other species. The long gestation period and the raising of the child implied that the evolution favored strong social ties in humans. Regular use of the fire started about 300, 000 years ago. The carefully managed fire was not only used to clear forests but can also be used for cooking food (faster to digest). Long intestines and large brains are both energy drains, it is hard to have both. Cooking food lead to shortened intestines and hence, our brains could grow bigger. As Homo Sapiens spread from East Africa to Arabian peninsula, Europe, and Asia, they drove other Homo species like Neanderthals to extinction. Some interbreeding did happen but it was mostly the Sapien’s superior social skills which allowed them to tribe up and drove other Homo species everywhere into extinction.
The Tree of Knowledge
About 100, 000 years ago, Homo Sapiens migrated out of Africa but retreated after losing to Neanderthals. About 70, 000 years ago they tried again, and this time they succeeded due to the invention of language which allowed them to invent tons of things like boats, lamps, needles, etc. This Cognitive revolution allowed Homo Sapiens to dominate the earth. Anthropologists believe that our complex language was used more for gossip than to discuss where the prey. And from there evolved the ability to create and believe in myths. The myths allowed us to collaborate and cooperate in large numbers in the form of tribes and now, in the form of nation-states.
A man can be convinced to die fighting for his nation for the promise of heaven; a monkey cannot be.
Religion is a myth; nation-states are myths; the Limited-liability corporation is a myth; US declaration of independence is a myth; all are figments of our imagination. Unlike animals, trees, fish, rivers, the aforementioned myths have no association with a real physical entity. These myths, surprisingly, allow believers to work together and collectively. These myths are not different from the primitive myths of the tribal men most modern people would laugh at. Homo Sapiens ability to believe in myths allows us to form big groups of millions of individuals who have never met each other. In other animals, groups are limited to the size of 25-30 animals who all know each other; such animals cannot form large groups. The other big advantage of passing myths via language is that it does not require any DNA mutations. Catholic & Buddhist monks pass on the celibacy, not via genes but by imparting their religion (myth) to the followers, some of who, convert. And that’s probably how Homo Sapiens defeated Neanderthals. While Sapiens would have lost one-on-one combat, they could form much larger groups which Neanderthals could not.
A day in the life of Adam and Eve – The hunter-gatherer society
Except for the past 10, 000 years, Sapiens evolved in pre-agricultural hunter forager societies. They shaped our psychological and social characteristics. These ancient foragers know a lot more about their surroundings than us. While we, collectively, as a human society know a lot more, the individuals today know a lot less. Forager societies tend to end the wide and varied diet and hence, had a lower chance of malnutrition than the farmers who would eat a few staple crops. Their working hours were lesser(30-35 hours per week), and since they neither engaged in the domestication of the animals nor stayed in dense settlements, the epidemics were rare. Some anthropologists, therefore, call hunter-gather societies the original affluent society (ashishb’s note: This is not without its own controversies). Little beyond that is known about these hunter-gatherers. They probably believed had animistic beliefs. No one knows whether they were monogamous or not, had a concept of private property or not, their festivals, and their taboos.
About 45, 000 years ago, some Sapiens living on Indonesian islands figured out the art of building boats and eventually reached Australia. This was the first time, Homo Sapiens stepped out of the Afro-Asian ecosystem, and they wreak havoc on the isolated Australian continent ecosystem. 23 out of 24 species larger than 50 Kg became extinct within few 1000 years. The marsupials, mammals with baby-carrying pouches, failed to adapt to the onslaught of the humans. Their slow pregnancy cycles with few kids, lack of fear of humans since humans don’t look that harmful, and potentially burning of the forests to set up agricultural land disrupted the food chain entirely.
Unlike the Afro-Asian animals who evolved with humans over thousands of years, the Australian animals were caught completely by surprise with no time, on the evolutionary scale, to adjust.
Climate change just worsened everything.
About 16, 000 years ago, the invasion of America happened via Siberia which was connected to North-western Alaska when the sea levels were lower. Unlike other species of Homos, Sapiens adapted to the harsh colder climate by sewing boots and thermal clothing. They thrived on eating the juicy animals like mammoths which given low temperatures can be eaten over days. Around 14, 000 years ago, global warming melted the glaciers in Alaska which blocked the way to rest of the Americas. And that’s when Sapiens ventured into the American continents. With 2000 years, Sapiens reached the southernmost point in America.
No animal had moved so quickly through variety of habitats virually using the same genes.
Americans fauna suffered. Mammoths (& mammoth ticks), Mastodons, and tons of animals which just like Australia, had survived in isolation from Afro-Asian ecosystem faltered. Fossils had repeatedly pointed these disappearances to be about 12, 000 BC in the Americas and around 5, 000 BC in Hispaniola, both times when Sapiens entered the ecosystem. The same story has been repeated island after island.
First wave extinction: Sapiens as hunter-gatherer enter the ecosystem
Second wave extinction: Sapiens become farmers and forests burnt and reduced to grasslands
Third wave extinction: Industrial revolution
Throughout the history, Homo Sapiens have been the deadliest species to enter any ecosystem.
The Agricultural Revolution
History’s Biggest Fraud
Agriculture started in about 9000 BC and domestication of crops was over by about 3500 BC. Today, we eat the same crops – Wheat, Maize, Rice, Potato, Millet, and Barley. Only a few species could be domesticated, and they were in the middle east, China, Central America but not in Australia or Africa. And that’s where, independently, domestication of crops started. Wheat went from an unknown crop to a crop which has spread everywhere on the planet. Human bodies were not designed for agriculture and farming. Wheat demand protection from pests, animals, and even other humans. The only advantage farming has is that it leads to more food per unit area and allowed humans to multiply exponentially. Overall, the agriculture revolution in the short run made the life of humans miserable, so, why did it happen?
The currency of evolution is not pain or misery but copies of DNA helixes.
Agricultural revolution leads to permanent settlements which allowed women to have more kids. Over time, as farmers multiplied they cleared, even more, lands, reducing the scopes for foragers even further. Just like the modern day luxury treadmill, agriculture soon became a necessity to support the ever-increasing population. And there was no going back. Similarly, domestication of animals proceeded with slaughtering the most aggressive, weak, and economically unworthy animals first. Over time, domesticated animals evolved to be more economically worthy and more submissive. While just like wheat, animals like chicken, sheep, pig, and cow spread over the world, they were treated brutally. From repeated impregnation to castration, their life became miserable compared to life in the wild.
The evolutionary correlated with the individual suffering for animals and humans.
The food surplus exploded the population from 5-8 million in 10, 000 BC to 250 million in about 100 AD. The food surplus eventually leads to the emergence of bigger political orders like cities and nation-states. Rather than being based on some ingrained human characteristics, these were imagined human orders based on shared beliefs and myths. “All humans are created equal” is completely incorrect from a biological stance. Humans born and they are all different from each other. Just like animistic beliefs are a myth, so are human rights. There is nothing biological about them. They only exist in our shared imaginations. A natural order is a stable order. If people don’t believe in gravity, apples would still fall. If people don’t believe in human rights, society will collapse. While some violence (police and army) is required to enforce an (imaginary) order, they themselves have to believe in something to organize in favor of that. And same goes for the elites who rule. Christianity, capitalism, democracy, all are imagined orders with a large number of believers.
Christianity, capitalism, democracy, all are imagined orders with a large number of believers.
The biggest lie though is to train a human right from childhood about the imagined order as a natural order. “God is one”, “People are equal because God created them that way”, and “Free markets are best because it is an immutable law of nature”. Over time, the order is embedded in the material world, for example, individualism is enforced via private rooms. The imagined order heavily controls our desires. Consider the desire to travel abroad, a millionaire today might solve his relationship crisis by taking his wife to an expensive trip to Paris. In ancient Egypt, he would have built a tomb, which she always wanted.
A millionaire today might solve his relationship crisis by taking his wife to an expensive trip to Paris. In ancient Egypt, he would have built a tomb, which she always wanted.
The two of the biggest imagined orders of the modern world are romanticism and consumerism. Romanticism teaches us that we must have as many experiences as possible to fulfill our expectations. Consumerism teaches us that we must consume as many goods as possible.
The imagined order is inter-subjective. Radioactivity is objective, it happens whether you believe in it or not. An imaginary friend is subjective, since it exists only as long as you believe in it. Preciousness of gold is inter-subjective since it exists not only in your imagination (belief system) but also in the belief system of millions of others.
To change an inter-subjective belief system, one has to convince everyone else and to convince everyone else; they have to believe in an even bigger imaginary order. For example, the existence of a particular company listed on NYSE is an inter-subjective order. To make everyone else not believe in its existence either, one has to go to a bigger imaginary order (NYSE). There is no way out of the imagined orders. We have to believe in a bigger one to dismantle a smaller one.
Unlike animals, humans pass a lot of information via teaching and not encoding it in the DNA. The empires generated a huge amount of information. The brain has a limited capacity to store information, humans die, and brains are best at storing social, topographical, and qualitative information. What empires want to store was numbers. And that’s how writing was invented by ancient Sumerians in about 3500 BC. The initial writing was only for the record-keeping, therefore, it was a partial script. A full script can express almost everything that can be spoken. Sumerians also invested in the cataloging of this information and the schools where these scribes were taught. This new bureaucracy specialized a new compartmentalized way of thinking as opposed to usual holistic thinking.
There is no justice in History
The American declaration of independence, empowered men over women, whites over blacks and native Americans. Many modern westerners scoff at one imaginary system (racial hierarchy) but believe that another one (different schools for rich and poor) is perfectly fine. Hierarchies allow two complete strangers to decide how to talk to each other. At the same time, they limit the potential of individuals.
Every imagined system disavows its fictional origins and claims to be natural and inevitable.
Racism in the US: Purity and pollution are used as a standard argument for all the social hierarchies, some based on birth, some on race, and some on religion. In the US, white Europeans decided to import slaves from Africa since it was nearby, there was an existing slave market, and Africans had partial genetic immunity towards Malaria and Yellow Fever. This eventually was justified by the imagined order of white skin being superior to black. Such an imagined order is easier justification than to say that it is economically expedient to import slaves from Africa. Over time, this acted as a vicious cycle, where blacks are inferior fueled discrimination which further leads to poverty among blacks.
The hierarchy between men and women: One hierarchy more or less same all around the world is the superiority of men over women. In many societies, women were seen as the property of men. And crimes like rape were property violations where marry-the-rapist was seen as a solution (ashishb’s note: This happens even today, even in the US). Of course, one notable difference between men and women is womb but as we have seen in modern times, women can vote, live independently, and think for themselves, all of which is the imagined reality of ancient cultures, they were incapable of doing. Since almost all societies (even before having any contact) around the world put men above women, it cannot be a pure coincidence, there are theories around it. One theory is that men have more muscle power, the objection is why are women historically excluded from less strenuous jobs like politicians and priests. Another theory suggests that men are more aggressive and thus, better suited to be soldiers, and wars have dominated our history. This theory falls apart as well since historically, soldiers from the bottom rung never rose to the top. The top was reserved for the aristocrats. Another theory suggests that since women need cooperation from men during pregnancy, they have to become more submissive to the man they are bearing the child of, so that, he sticks around. This theory falls apart since support network does not have to be a male. Bonobos have all female support networks.
How did this happen that the species, Homo Sapiens, whose success depends on being more cooperative with each other has less cooperative individuals (man) dominate woman is still a mystery
Biology is willing to tolerate a wide spectrum of possibilities. Nature does not prohibit homosexuality; it’s the culture which labels it unnatural to restrict it. Something which is unnatural like humans doing photosynthesis just won’t happen.
Biology enables, culture forbids
The unification of Humankind
The Arrow of History
Unlike the self-consistent law of physics, cultures have internal contradictions in them. Solving them leads to a change. The modern world continuously fights with contradictory ideas of equality and liberty. All cultures from a psychological perspective are “cognitively dissonant”. But the human-worlds has unified and connected to each other over time and have similar ideas, nation-states, a similar concept of monetary transactions (currency), and similar legal system (international law). For a long while, humans still believed in “us” vs. “them”. Merchants, prophets, and conquerors to expand their territories or customers, believers, and subjects made us believe in a new imagined reality of the global brotherhood.
The scent of Money
A barter system does not scale. If there are 100 types of goods than the two parties who are exchanging the goods have to know C(100, 2) = 4950 combinations of exchange rates every day. Money ends up being a central mechanism to linearize the problem since every seller has to know the price of their good in a single currency. Of course, just like religion, money is an intersubjective reality which only exists in our imaginations. And it does not have to be coins or notes. In Nazi concentration camps, cigarettes were a currency. The only requirement is that it should easy to transport, store, and has a wide enough acceptance.
Money is the most useful and efficient system of mutual trust ever devised.
The original form of money like Barley had an intrinsic biological value. Over time, we moved to unmarked gold and silver which had no biological value. Then to marked gold and silver coins, so, no weighing required to find the value. And then to fiat currency which had no intrinsic value, and then to the electronic currency which had no physical existence. Money as a source of universal convertibility and trust has replaced priceless things like honor, loyalty, morality, and love. When we use money as a medium of exchange, we don’t trust each other; we trust money. When someone runs out of money, we run out of trust in them.
An empire is characterized by cultural diversity and territorial flexibility. All empires have engaged in the brutal slaughter and assimilation of the people outside its borders to extend its territory. Slowly, the newly acquired population forgets what they stood for. For example, in the 7th century AD, Arab empire crushed Egyptians with an iron fist, today Egyptians think of themselves as Arabs. One major change which happened over time in the Imperial vision was that empires changed their imagined reality from “we are conquering you from our benefit” to a more benevolent “we are conquering you for your benefit”. Persian king changed from “Persian king” to “everyone’s king”. This was the first time in history, Sapiens were (pretending) to get rid of “us” vs “them” feeling. These imagined realities of benefitting the Conqueror exist even today when the US presidents use F-16 to deliver democracy and human rights
These imagined realities of benefitting the Conqueror exist even today when the US presidents use F-16 to deliver democracy and human rights in Iraq and Syria.
Of course, this benefitting the conquered approach still assumed the inferiority of conquered. That’s why M.K. Gandhi, a London-educated, qualified barrister was thrown out of whites-only seats from a train.
Almost, all imperial empires follow the same style. First, they conquered territories. Then those territories adopt the new culture. Then the people of these territories demand equal stature. And then eventually empire flames out but the imperial culture remains (ashishb’s note: Christianity, Islam, English, and French are some of those cultural remnants which can be seen all around the world).
Not only all empires are founded on blood and used war and oppression to maintain themselves, but also they are the source of almost all modern cultures. There is no untainted authentic civilization which is without those sins.
The Law of Religion
Along with money and empires, religion is the third unifier of mankind. Religion is a system of human norms and values founded on the belief in a superhuman order. The religions which are universal and missionary like Islam and Christianity succeed in spreading themselves.
Religion legitimises imagined realities (like “Eating pork is sin”) by claiming them to be coming from a superhuman entity.
Origin of Religion
Animistic religions originated since hunter-foragers wanted to maintain interests of other plants and animals (Eg. cutting a tree would anger the tree spirit, and it will take revenge). As Sapiens evolved to farmers, they desired absolute control over their animals. Gods acted as mediators. Sacrifice a lamb to fertility god and the god will ensure a bumper harvest. As kingdoms and trade networks established, multiple gods (like gods of war) appeared in a typical polytheistic fashion. While Animists thought Sapiens are just another creature, polytheists treated the world as a reflection of the relation between Sapiens and God. Polytheist religions like Hinduism believe that there is a supreme power which is devoid of any interest in the mundane desires of human beings. Therefore, a worldly human would not pray to that supreme power. They would, however, pray to a god with a sub-divided power like Lakshmi for wealth. Since these gods have only partial power, they have interests and biases, and it is possible to negotiate with them.
This plurality of gods results in open-mindedness, therefore, polytheists rarely prosecute infidels.
They don’t normally engage in conversion either. Romans, Egyptians, and Aztecs rarely send missionaries. When empires expanded locals were never asked to give up the gods, they can worship the new god along with the local god. Romans happily added Asian god Cybele to their pantheon. Though they refused to add monotheist Christ. Roman Emperor did force Christians to worship the Emperor’s protector god as a mark of political loyalty and prosecuted them when they refused. Romans prosecuted a few thousand Christians in three centuries, Christians prosecuted millions of other Christians over the next 1500 years to defend their slightly different interpretation of their religion. Over time, some polytheistic worshippers started to believe that their god, while having interests and biases, is supreme. Christianity, an esoteric sect of Jews, whose leader Paul of Tarsus, claimed that the Jesus of Nazareth was their Messiah and if he has incarnated in the flesh then his message is worth spreading to the world. The esoteric sect of Christianity took over the Roman empire. Islam, another monotheist religion, repeated this model of success. Since monotheists are usually more fanatical in their beliefs, they took over the world. Most of the world today outside of East Asia follows monotheism. Christianity, however, adopted most polytheist gods back as Saints. For example, Celtic Ireland uses to worship Brigid, today, Christian Ireland worships St. Brigid.
Monotheism also gave birth to Dualism. Dualism explains evil by saying that there are two powers – a good and a bad. This explains the existence of evil why mystifies monotheism but is itself mystified by the order which governs the universe (since “good” and “bad” have equal power). Zoroastrianism is a notable dualistic religion. Monotheists like Christians, Muslims, and Jews absorbed dualistic beliefs. They not only accepted the concept of a powerful Satan but also believed that the god need helps in its battle against Satan and labeled those battles Jihads and Crusades. Even the concept of Heaven and Hell is dualist in origin, with no mention in the Old Testament. Most modern monotheists are syncretic in their beliefs. Several natural law religions like Jainism, Buddhism, Confucianism, and Stoicism appeared as well. They disregarded the existence of super-human Gods and prescribed more in terms of the way of living to attain a good life. For example, Buddhism’s central teaching is that suffering arises from craving and the only way to liberate your mind from craving is to train your mind to accept reality as it is. Of course, since most Buddhists don’t spend their life attaining Nirvana but in the more mundane worldly tasks, they also go and worship in Boddhisatvas for bringing rains and even winning bloody wars in exchange of fragrance sticks and a gift of rice. Communism, Capitalism, and Liberalism, are modern religions with
Buddhism’s central teaching is that suffering arises from craving and the only way to liberate your mind from craving is to train your mind to accept the reality as it is.
Worshipping The Man
Liberal Humanism is the most famous religion (“ideology”) which worships humans as being scared and with belief that they have certain basic “human rights” which cannot be normally withdrawn from them. A murder is effectively destabilizing the cosmos order and punishing the murderer brings nature back in order. Social Humanism thinks about humans in a collective way, it holds a strong belief in equality. Evolutionary Humanism, the most radical one, was popularized by Nazis, it thinks of humans as a mutable species, and strongly believes that advancing the quality of the species and eliminating everything which is of lower quality should be the end-goal of the humanity.
The Secret of Success
While a globally interconnected society was inevitable (given the ability of humans to form large networks), the contemporary global society is one of the possibilities which got realized.
History has wide array of possibilities, many are never realized.
The success of monotheism, nationalism, and liberal humanism was one of the potential outcomes out of several possible ones. History is a complex level 2 chaotic system (Level 1 chaotic systems like the weather is unchanged when we try to predict, Level 2 chaotic systems like the stock market react to predictions). Genes lead to organic evolution; memes lead to cultural evolution. Some scholars see culture as a mental parasite, as soon as one country is infected with nationalism, slowly, the surrounding ones catch the infection as well.
The Scientific Revolution
The Discovery of Ignorance
Before the scientific tradition, it was believed that religious books contained everything that was important. Scientific tradition, in western Europe, a part of the world which played little role in the history till about 1500AD. The scientific tradition is willing to admit that a lot is unknown and even what’s known can be incorrect if the new evidence to the contrary shows up. The focus of education has shifted from Theology to Mathematics and other “exact” sciences. Even the heavy emphasis on technology in the military is a recent phenomenon beginning in the 19th century. Most cultures used to believe that golden age use to be in the past and hence, nothing much can be done to improve things. Scientific myth busting fixed all that. The scientific progress has drastically elongated the life expectancies. The scientific research, however, is almost always funded by entities who have their own social, political, or economic agenda. Science in itself cannot set its priorities, an ideology (religious, racial, or economic) determines the same.
The Marriage of Science and Empire
Western Europe and Britain which had played almost no important role in the history of the human civilization till about 1500 AD started to emerge and Europe took over to become the economic powerhouse between 1750 and 1850. While the development of both modern science and capitalism in Britain in a mere accident. The similar social structures (and imagined realities) of France, Germany, the US, and the other western nations allowed them to quickly follow up and copy Britain’s success. Societies in India and China, the economic powerhouse of that era, were organized differently and hence, they could not do the same. While the Arab world, India, and China also produced intellectuals and scholars (which Europeans did study), it was only in Europe that these intellectuals worked alongside the capitalists towards for-profit initiatives. The Imperial voyages to the distant lands would consist not only of military but also some scientists to make discoveries.
Europe’s biggest success was the marriage of modern science and capitalism.
This scientific mindset is illustrated by the example of Columbus vs. Vespucci. Columbus reached the Bahamas and the Americas in 1492, but he simply did not want to believe that there exists a new continent which the Bible and all other religious text could have missed. Vespucci reached there around 1500, and he argued that this is a new continent unknown till then.
For the first time in the history of the world, a culture was making maps with empty areas marked for exploration.
Europeans did not have an exceptional technological edge in the 1500s over other cultures what made them different was their insatiable desire to explore and conquer. In 1492, Columbus reached the Caribbean; the local population was colonized, killed, and enslaved with an iron fist. And the Aztecs in Mexico knew nothing about it. In 1517, after hearing rumors about a powerful Aztec empire, 300 Spaniards landed in Mexico. An empire of millions, unprepared for interacting with unknown humans, did not perceive a threat from 300 Spaniards. They pretended to be the diplomats of the king of Spain and use that deceit to capture the king Montezuma. They held him, hostage, while planning out a coup. By the time, Aztec elite revolted and kicked the Spaniards out; they had found huge support among subjected people, who preferred unknown Spaniards over Aztec rulers. That miscalculation was costly. Within a century, 90 percent of the local population was wiped out. The survivors were under an even greedier regime. The same story was repeated by the Spaniards with the Inca empire.
Lack of interest in the world beyond their empire ended up being costly for the Incas and the Aztecs.
The Ottomans, the Indians, and the Chinese heard about these stories but showed little interest in Europe. Their world revolved around their empires while the Europeans enjoyed the undisputed mastery of America and Oceania. The wealth and the accumulated knowledge was then used to invade Asia. The detailed understanding of the local culture allowed Europeans to leverage and rule the populations far larger than theirs (ashishb’s note: The Spanish destruction of Inca and Aztecs; and the British colonial rule of India has strong parallels, the author missed out the right phrasing here which is divide and rule policy). While Imperialists claim that their empires were altruistic projects, a white man’s burden, the truth was locals were subjugated with an iron fist.
In 1764, Britishers conquered Bengal, the richest province of India, due to the policies of the British East India Company, a third of the population (about 10 million) died from 1769-73 in the Bengal Famine.
The linguistic basis of Indo-Aryan languages was further used to come up with the argument of a superior Aryan race – a race of tall, blue-eyed, blond, fair complexion, super-rational humans. They emerged in the north and invaded Persia and India, regrettably, degenerating themselves by intermingling with the locals (the core of Hitler’s argument).
The Capitalist Creed
Throughout human history, “economic pie/wealth is fixed in size and not growing” was the self-fulfilling prophecy. The idea of extending credit, therefore, was meaningless. The modern-day belief, based on The Wealth of Nations, is that the individual greed is good for collective prosperity. While the idea of reinvesting profits to increase production further sounds trivial today, for a long while, humans believed that the production and consumption are more or less fixed; and had it not been for the scientific revolution that would have been true. Many of the imperialist voyages could not have been easily funded by a single investor, and that’s what lead to the emergence of joint-stock ownerships and eventually stock exchanges (and bubbles). In many cases, the government came to the defense of the investors. In the Opium war in 1839 in China Britain fought Qing dynasty for protecting opium trade from India to China by British traders. Greek rebellions raised funds via bonds in London Stock Exchange, and where their fight against the Ottoman Empire started to lose momentum, the British Navy sent their ships to defend their bond investors by ensuring that Greece becomes free. The popular free-market doctrine wants us to believe that there should be no political interference in the market and left to its markets would benefit everyone. Except that is only a half-truth, all the Atlantic slave trade, most of the colonization, and millions of deaths of slaves on the plantations happened because of free markets and not the government. The European middle class happily bought shares of the slave trading companies and made about 6% a year in the 18th century.
While Nazism killed millions out of burning hatred. Capitalism killed millions out of cold indifference coupled with greed.
The Wheels of Industry
The invention of Steam Engine and further Electricity freed us from the day-night and winter-summer cycle of nature. The rise of industrial agriculture increased production drastically. And who will consume all this? Consumerism came to the rescue. All prior religions had encouraged austerity; consumerism encouraged conspicuous consumption. In fact, capitalism won twice when people overconsumed since it allowed them to sell the cure for overconsumption later. The capitalists follow the commandant of “Invest” while consumers follow the commandment of “Buy”. Two sides of the same coin.
Consumerism is the first religion in the history of mankind whose followers do what they are asked to.
A Permanent Revolution
The Industrial Revolution turned timetable and assembly into a template for almost all human activities. With the advent of the railroad, local time differences across cities became a nuisance. In 1880, Britain legislated a single time for the whole country. Today a single family has more timepieces than an entire medieval country. The biggest change, however, is how the Industrial Revolution broke the family into individuals. Throughout human history, the family and the community were the biggest support system a human had. Even the kings maintained themselves primarily via support of family heads. The market and the nation-state made a new offer to the individuals, free yourself from the family and become an individual, follow our rules instead, they won. The sacred parental authority, the (lack of) right to choose a spouse, and all such family powers have been taken over by the nation-state.
Previously, bride and groom met in the family living room and the money passed from one father to another. Today, courting is done at bars and cafes and money passes from the hands of the lovers to the waitresses.
The nation and the consumer are the new imagined communities of our era which have replaced families. And just like money and human-rights, these are inter-subjective realities which live in the minds of millions. Given that most wealth is not physical anymore, the wars have become less profitable. Simultaneously, due to trade, peace has become even more profitable. We are living in one of the most peaceful eras in human history.
And They Lived Happily Ever After
History talks about facts but rarely talks about how has human happiness evolved. Studies have shown that people with more money, good marriages, better social support, and lower subjective expectations (vs. the reality) are happier. Illness decreases happiness in the short-term. The subjective expectation is the most crucial aspect; advertisements make us miserable by increasing subjective expectations. The bigger question might be the meaning of life. From a scientific perspective, life has no meaning. But for our happiness, meaningless life is an unacceptable choice. It’s when our delusions about the meaning of our life synchronize with the collective delusions, that’s when we feel happy.
Its when our personal delusions about meaning of our life synchronize with the collective delusions, that’s when we feel happy.
Most of these studies take the “liberal” approach of believing that humans are best to decide when they are happy or not. Religious leaders, as well as psychologists, disagree. For example, Buddhism believes that real happiness comes when one disassociates oneself from inner feelings and can just calmly observe them.
The End of Homo Sapiens
Till now all evolution has been evolutionary, it is likely that the future evolution will be Intelligent Design based designed in Laboratories. Either we will enhance human genes (ashishb’s note: CRISPR/Cas9 gene editing), we will add non-organic parts (cyborgs), or we will create life from completely inorganic material based on Artificial Intelligence. Due to a massive PR risk around ethical issues, most of these debates have focused on targeting plants, targeting amputated humans, and building AI for targeted tasks.
The book talks about Martin’s experience as a brand consultant where he tries to expose the subtleties of marketing used by corporations to create or increase demand for their products. Some techniques mentioned in the book are morally questionable. Overall, it’s a great read into at the intersection of psychology and business. I would recommend reading this in conjunction with “Influence: The Psychology of Persuasion“.
Marketing to the kids (including the unborn)
Childhood memories and associations are more resilient to traumas than the ones formed later in life. A small hint of fragrance, surroundings, or familiar objects can bring them back. But it extends beyond childhood. A fetus can hear not only the maternal sound but also the sounds coming from the outside and studies have confirmed that newborns react positively to the music tastes of their mother. The one-off unscientific real-world marketing attempts have confirmed that this is not just limited to the sound but extends to smells and the taste of food as well. Kopiko candy brand gave out free candies in maternity wards and in just four years of existence became the third largest candy brand in the Philippines. Children who grow up recognizing brand logos not only prefer them later in life but also believe that the brand corresponds to personal qualities. Marketers love targeting kids entering precocious puberty (“early puberty”) since it allows them to form early preferences for things like razors, deodorants, and makeup.
- Organizations like Girls Intelligence Agency help brands convert young girls with free cosmetics and party invites to convert them into brand ambassadors.
- Gillette sends out free razors to boys on their birthdays (age varies according to state regulations). There is a 92% chance that a boy who has tried Gillette razor twice will use it for the rest of his life.
- Kool sends out cigarettes for the three months starting on the 18th birthday. If the boy or girl is not hooked in those three months, they are a lost cause. And if they are hooked, then they are able to milk them for life.
Marketing to kids not only sets their future preferences but also influences the preferences of the whole family. Many times parents would buy what the child is asking for just to calm him/her down. Marketers call this “pester power”. The reverse “hand-me-down influence” happens when parents shape the preferences of the child. Overall, both are in play simultaneously.
A fetus develops taste for the sound, smell, and taste. The effects last into the adulthood.
From flu epidemics like swine flu to hurricanes, marketers love capitalizing on fears selling food which boosts immunity with zero scientific evidence to hand sanitizers where hand wash would suffice. Fear raises adrenaline which leads to the release of epinephrine, which produces a satisfying sensation, more so for adrenaline junkies. Fear of failure is higher than the promise of success. More men end up going to the gym to avoid a flabby body than to develop muscles. Fear is used to sell
- Fear of failure is higher than the promise of success. More men end up going to the gym to avoid a flabby body than to develop muscles.
- Fear is used to sell home security systems to single women and life insurance to men with families.
- Mother of all fears is the fear of a first-time mother. Women are more prone to fear and guilt than men. First-time mothers even more so. From selling tons of child safety equipment to food items which require a small finishing touch, first-time mothers are the biggest opportunity for the marketers.
- Pharma companies capitalize on the fear of social isolation due to being overweight, being bald, having sexual performance issues, having cancer, etc. Sometimes they terrorize with minor things like restless leg syndrome and even shyness. Among big pharma, twice as much money is spent on advertisement than actual R&D.
- Fear of staleness – Whole Foods use chalked boards to display prices to evoke the feeling of freshness, toilet papers in hotel rooms are sealed to imply room cleaning, seafood sold on ice, tomato-colored bottle of Heinz and sweating cans of coke are all meant to disguise into believing that the food is fresh and free of preservatives.
Among big pharma, twice as much money is spend on advertisment than actual R&D.
Dopamine, the feel-good neurotransmitter, is behind our addictions from cigarettes to smartphones. The greater we use a dopamine inducing substance the more the tolerance we build up of it for generating dopamine, and more we have to use it to generate the same amount of dopamine and feel better about ourselves.
Our lives are divided into two states, the routine state (the weekdays), and the dream state (the weekends). It’s during the dream state, we experience new brands, and bring them back into our routine lives. For the craving to build up, some subtle clues are dropped in the environment, like the sound of the soda can popping up or addictive ingredients like MSG, corn syrup, caffeine, and sugar. Studies have shown again and again that addictive ingredients trigger the brain the same way narcotics does. Games & Gamification cause severe addiction by providing a repetitive task with increasing level of difficulty, causing a regular release of the “feel-good” dopamine.
Sex does sell. While men respond more to explicit imagery or sexual innuendos, women, on the other hand, respond more to ads with a romantic touch. Seeing a scantily dressed young person of the same sex puts us into the dream state of imagining ourselves as desirable as them.
The story of Axe body spray
Unilever surveyed 12, 000 single men and teenage boys, asking uncomfortable questions ranging from their fantasies to their pick up strategies. They concluded that the ultimate male fantasy was not to be irresistible by a woman but by several women. They further accompanied several men to bars & nightclubs and segmented the males into six categories –
- Predator – a loser & mostly likely liar looking for a drunk woman
- Natural talent – someone whom most women would actually desire. Due to positive self-delusion, most men thought they are a natural talent
- Marriage material
- Friend – the ones who get friend zoned
- Insecure Novice – looks creepy like a predator but pure at heart
- Enthusiastic Novice – looks really eager
Unilever decides to target two groups, the insecure novice, and the enthusiastic novice. They also decided to target natural talent mainly to provide a finishing touch to them. The boundary-pushing sexist ads campaign which showed an ax-sprayed man with several women worked wonders for Unilever, earning $71M in 2006 ($50M more than the nearest rival Tag). Eventually, as more and more dorks started to cover themselves with ads, the brand became the brand of losers and took a huge hit in sales. Unilever’s Euphoria was another success where the idea was to design a fragrance which gave women the feeling of imprisoned lust (euphemized as melancholic).
- One car company looked for a particular animal name to design a car targeting middle-aged men. (ashishb’s note: The book does not mention the name but gives enough clues that it was Rolls-Royce Stallion), the car was themed by the smooth, black, and silky appearance of the animal.
- Simpon’s strategy – where a term like “golden showers” or “12 inches of flavor” which is not overtly sexual but obvious to the wallet-carrying adult is used for producing humor suited both to the child and the adult.
- In the US, the rise of single mothers, fearmongering among men, and new cosmetics marketed towards men to smooth out their rough edges while keeping them look masculine have all contributed to the growth of the male grooming industry.
- Termites, bees, and birds appear to move in unison as if they are communicating with each other. In biology, these are called complex adaptive systems where simple individual actions result in a complex final outcome. Humans to some extent behave the same way.
- Humans flock behind more confident individuals. Even toddlers have been studied to play with toys similar to how they have seen other toddlers playing with them.
- When people look at the photos of a party they attended, they first check out their photos, and then they check out people surrounding them in those photos (to compare and to see their reactions towards them).
- In 2009, Cepia staged Zhu Zhu Pet Hamster giveaways at Zoos, hospitals, and MLB games. Then they staged several influential parties for mommy bloggers, organized radio shows, and cut the production to create artificial scarcity. This created a demand big enough that Cepia made millions by selling this toy.
- Viral phenomena like Smirnoff Icing game (with no role from Smirnoff) or small clips uploaded by Viacom on YouTube to market its shows, if successful, can result in a huge windfall for the marketers.
- Bestsellers list recommended music, and all such curation system help us guide what to purchase. We love buying what is already popular since it implies implicit social approval of our taste.
- In a survey of 100, 000 teenagers in30 countries, roughly 50% said that they won’t buy an item of clothing without a visible branding on it.
- Using counterfeit products, not only, fails to improve our self-image but undermines our internal sense of authenticity.
- A reverse peer pressure develops when older people start using the product, in that case, younger ones try to dissociate themselves from it. A product which is going to be explicitly disapproved by the older generation has a high chance of success with younger ones.
- Most Russians drink a large amount of Vodka quickly (after Nostrovia – Russian cheers). Neither they like the taste, nor they like binge drinking but peer pressure keeps this ritual alive. Younger generation hates it, therefore, a new brand of Vodka capitalized on that by having a better taste and a slow drinking ritual decided to take on the Russian market ( the author did not reveal the brand name).
We love buying what is already popular since it implies an implicit social approval of our taste.
First experiences might not always be better but they always seem better in the hindsight. We always remember beautiful memories and associations of the past. Many memories, especially of childhood and teenage are usually of fewer responsibilities and youthfulness and hence, are more beautiful. We are attracted to small things which remind us of that nostalgic past. When we buy a product from the past, we are not just buying the product but a nostalgic trip to our childhood. We know that the time is fleeting and just the mention of the word “time” in an advertisement makes it more likely for us to act.
Nostalgia demands authenticity and nothing authentic can be perfect. From pre-washed T-shirts to (apparently) randomly broken chocolate pieces, (machine generated) chalk signs a Whole Foods, all these are attempts to fake authenticity with imperfection. Perfection, like a perfect burger, makes us conscious of mass-produced factory goods.
When we buy a product from the past, we are not just buying the product but a nostalgic trip to our childhood.
When Evian water, a French bottled water company, entered China, their first attempt to sell bottled water flopped since they chose a well which tasted more like the modern day urban China than the rural farmland, most of China was a few decades ago, after realizing this, they found new wells with grassy moldy taste and this time it succeeded.
- In modern democracies, royal families are effectively celebrities. Things like royal marriages and royal births boost their popularity. They have to project an aura of being special but at the same time not too aloof from the commoner.
- While the childhood dream of most boys is powerful superheroes and princess for the girls, the future-self of everyone is the same: rich, attractive, and famous. And that’s what attracts us to celebrities, we envy what they have.
- South Beach Diet published in 2003 was relatively unknown until the “celebrity” Clintons endorsed it. And it wasn’t just 15 minutes of fame, the book still commands strong sales in the US.
- Vitaminwater gave shares to celebrities hoping to get endorsements in return which they indeed got.
- Companies come up with preferred, exclusive, and club offerings all the time, marketing them as exclusive, even though, anyone who is willing to pay an exorbitant fee can get in.
- Cosmetic companies put doctors on their board since the recommendation from experts (even where there is a perceived bias) is pure gold.
- Celebrities lend their names to products or publicize products in return for either ownership stake or royalty based on goods sold. Despite this bias being visible, it still works since consumers do want to associate themselves with Elizabeth Taylor by buying perfume with her name on it. And this is not just limited to useful goods, Marilyn Monroe’s empty prescription bottles were sold for $18,750. The key is celebrity association and not usefulness.
- Just like “peer pressure”, celebrity endorsement is a way for us to let someone else make a decision for us.
Marketing Health – physical, mental and environmental
- Goji berry is found in China and Malaysia but is associated with Himalayas and Buddhism to imply purity, authenticity, and Eastern enlightenment. In fact, most of Freelife’s Goji berry juice is produced in Arizona. Marketers exploit the mental shortcut which looks at the bottle and associates it with Eastern enlightenment. Acai Berry uses “Brazilian rainforest” for the same effect.
- Pomegranate marketing overemphasizes the absolute benefits of pomegranate without admitting that it is not much better than most other fruits and vegetables.
- In the US, “organic” is a regulated term but “natural” is unregulated. And marketers love adding the word natural whenever they think it can give them a boost.
- “multigrain” just means more than one grain and it might or might not be healthy.
- “energy drink” is a positive spin to a drink with more calories.
- “contains real fruit” does not mean much, technically, any little amount of real food in a drink would qualify for it to claim that it contains real fruit.
- “zero trans fat” usually implies the presence of saturated fat, both being equally bad for the heart.
- Cosmetics and clothing can make even more outrageous claims due to little regulation. VitaSea -shirts, claimed to be made from Seaweed, contained no seaweed.
- Green, recycled, and socially responsible good are usually more expensive, even when they don’t have to be. Companies love creating this aura of it costs more to be socially responsible and environmentally friendly while milking extra money.
- Buddhism, yoga, new age spirituality, and halal labels are all used for selling goods in the pretext of purity.
Data Mining (consumer insights)
- Before a hurricane, Walmart analyzed data from a past hurricane to conclude that top selling item was not flashlights but beer and Strawberry Pop-Tarts.
- Credit card purchase monitoring, which is further sold to third-parties is the most common way to find customer behaviors. This data is used for further sending targeted emails.
- Homeowners spend ~$12, 000 in the first six months of a move and that’s why property deeds are a major source of data for the companies.
- Loyalty cards while giving a discount to consumers allow the stores to profile the buyer even more closely.
- When Mark & Spencer in the UK spotted in the sales data that a lot of Indians dishes and food is being purchased there, they realized that a lot of Indians are coming there to shop. They started both currency exchange and travel right inside the store to make money off of the trend.
- Shoppers who go counterclockwise spend twice as much as those who go clockwise. A store decided to put an entry to the right to ensure counterclockwise motions.
- Given the amount of information which is being tracked about us, both online and offline, it is safe to say that we are living in a post-private world.