Building Products for the Affluent Society
I am employed as a sales engineer. Interest rates, as we know, are up for the first time in my career and it’s causing some reflection on the historical dimension of my work. Basically, I had to ask myself, “it’s been hard enough to sell a product as it was, now what?” I found it rewarding to sit down and try to explain why it got so seemingly hard to sell a product in the first place. The story is best told through a certain attitude — really, let’s call it a buyer ideology — that I see in clients and in coworkers. It’s an ideology with about a century of history, it tells an illuminating story, and I think it’s critical to confront it with courage and context.
Now, there is a standard tale about why it’s hard to build new products, but it won’t teach you much. Any VC worth taking money from can tell you a short description of the world we currently live in: economic growth in the Global North is scarce, and, despite rising interest rates, there is a very large amount of capital that cannot find anywhere to invest itself. The result is a lot of speculation, which presents a world where the United States economy looks extremely different from how it did during most of the Twentieth Century. Many of the technological breakthroughs that landed us on these shores are unrepeatable, and Robert Gordon awaits you if you need more details. So, as we look for the Next Big Thing, there are lots of bad products out there and this exasperates people.
Specifically, I think, the standard story leaves out a widespread social attitude — one whose existence demands a more historical answer. I want to understand how we got to a place where not only do we have speculation everywhere, but where people are willing to go out of their way to declare speculative products to be solutions lacking problems. This is the culprit ideology, and I call it “Naive Realism”: the belief that the world presents a seriously offensive overabundance of products without clear necessity.
This is the ideology that makes people say things like “see here pal, a product is something that people actually want to use, that just works every time, is based in real tasks getting done the real way, and it come from real people doing real work.” This goes beyond mere tunnel vision or perhaps future shock— there’s a certain desire with this ideology to go outside of one’s cave and declare things out in the world to be “real” or “not real”. You see it when your friends and family want to dismiss some newfangled thing as a symptom of some societal problem — your uncle, for instance, who feels the need to parrot the Wall Street Journal’s screed about GrubHub. “Who needs that?” You hear it from would-be clients using sales meetings to vent about all these recommended software solutions Accenture keeps trying to sell them. Finally, there’s often no accompanying drive for excellence when we hear a Naive Realist complaint— it seems like it so often comes out as an expression of distress and a desire to name enemies. My uncles doesn’t seem to understand that yes, I too get exasperated, and he doesn’t really have a vision for what we should be building. Yes, it’s a bit of future shock, but I think there’s something more.
For example, Elon Musk famously complains about how production is 99% of manufacturing and how a glut of MBAs has ruined America’s ability to build real products that just work. (Notice that Elon Musk — the richest man in the world — wears a leather jacket and tries to sound like a common man when he says this. Elon also seems to believe in excellence, but for rhetorical effect decides to blame the credentials instead of suggesting that we need to encourage our workforce to step up.) I have been sent this video by my friends in Silicon Valley a couple of times, which is part of why I find the Naive Realist attitude so salient. There’s an eagerness to share the exasperation and to constantly mock the MBAs and the venture-backed digital platforms.
This bothers me, and it probably bothers you. Why do we feel so emboldened to act stuck in the attitude? Where’s the curiosity or drive for excellence? While I understand feeling bewildered by changing up your software at work every quarter or an exasperation with being required to use solutions that get in your way, why do we care so much whether or not a certain product out in the world is “real?” Doesn’t the market decide that on its own time? Don’t we trust that the venture dollars are actually coming from willing investors and not from our taxes? Why the pessimism and the need to share it?
And what do we mean by “real” anyway?
First, let’s talk about who the Naive Realists are. I posit that they really fall into two categories:
- Hard-working Americans —frequently individual contributors but also small business owners etc. — who feel somehow sidelined;
- Counter-elites such as Elon Musk who stand to politically benefit
The taxonomy should illustrate that there’s a bit of a weird marriage going on. There’s an excellent article in The New Yorker recently about counter-elites and how they’ve operated for the last sixty years. I get into the time period below fueled by my own research, but the article is excellent and I highly recommend following its references.
So, to retrace some of the steps, how did we get to Naive Realism?
The answer, as I believe the VC is rightly concerned to say, is ideology. And ideology is historical. In the United States we’ve been mass-producing consumer goods for over a century, and no small amount of them have been duds or gone out of fashion. Despite the perennial Industrial Age turn toward Luddism, a hundred years ago there was less concern about the supposed peril of producing things that don’t solve real problems. There were upsets back then — I recently read, for instance, in Beverly Gage’s opus G-Man about the Turn of the Century producing a certain crisis of masculinity as urban men became increasingly unchurched and physically unexerted as a result of the proliferation of Managerial-Revolution desk jobs — but none of them so starkly decried new products for solving issues no one had.
No, the Naive Realist feels a certain pride about knowing which needs are “real” and which ones aren’t. And, historically, it seems that this is an attitude that’s been encouraged by the likes of Elon Musk through the strange marriage I mentioned above. Specifically, this is a pride that was built during the Gilded Age when industrialists unquestionably atop the American Mount Olympus — he who produced the widgets lifted the nation up and was met with their praise and admiration. Pride on a mythological scale, in fact. And pride dies hard.
This, inter alia, is the thesis of John Kenneth Galbraith in his masterpiece The Affluent Society. After the New Deal, the structure of social prestige in America radically shifted. Franklin Delano Roosevelt managed to extend the power of the federal government to a level that could contend with the prestige of the tycoon-producers, foreshadowing the creation of an expert class that would crystallize in the Mid-Century. (We still love the aesthetic.) Through the massive extension of Federal employment and power, many elites could convert their Jazz Age money into prestigious state service. And it wasn’t just liberals: the FBI under J. Edgar Hoover, for instance, famously alchemized established Southern money into prestigious jobs for the grandchildren of the Reconstruction Era.
But, of course, Roosevelt would prove to be the most divisive president since Lincoln. Said Galbraith in 1958, “in doubting the supreme power of production, we are challenging a myth of heroic power.” Much of the moneyed producer class felt not only snubbed but potentially obsolesced. American society had simultaneously grown so affluent — for the first time in human history, wages for the median worker had risen above subsistence, and the effects could be seen in the electric lights that were becoming ubiquitous thanks to the Rural Electrification Act — that wealth no longer presented the Haves quite so ostentatiously above the Have-Nots. After the Depression, servants were no longer socially acceptable. Within a generation, the great estates of Long Island had been sold to the state. Social prestige afforded by Gilded Age wealth was liquidated and replaced by the rule of government and academic experts. But, more importantly, private wealth disparity was now a matter of affluence in degree rather than a question of have-or-have-not. The prestige of production, earned over Heraclean generations of American toil, was at risk.
Now, in the era of increasing affluence, privately-produced products faced secular issues other than just the prestige they might afford their manufacturers. Indeed, our productive capacity had risen above what was needed to satisfy the prosacic needs of food, beer, and shelter. Products got harder to sell to consumers, and it transformed the economy. The military-industrial complex formed, famously, under Eisenhower: we got Georges Doriot, Stanford Research Park, and the RAND Corporation, among many other names. The creation of the High Technology. Stomachs full, houses lit and insulated, laundry day automated — it was actually difficult to ask a corporate executive what exactly the country’s consumers would buy. Our primary economic concern became the innovation of new products and the ability to put them in front of consumers. The birth of the YCombinator adage to “just put things in front of people.”
This phenomenon is epochal. To this day, human needs have become so specific or else complicated — think of all the consumer brands that operate ephemerally off of Instagram selling physical objects that cater to mere whimsy, or all the digital collaboration tools whose outright creepy sales emails endlessly hound the inboxes of corporate VPs — that it is, indeed, just hard. Our meritocrat engineers, demographic 1 above, should give themselves a break as they build their GPT wrappers and struggle to sell them. They should read Edward Bernays. Product discovery only gets more difficult as affluence increases. The very nature of human needs becomes flightier, and even knowing that you might need a certain product is a matter of the producer bringing your attention to it.
Now, Galbraith insisted, there was no mystery what the Global North actually needed by 1958: public goods. The gripe will be familiar to the Internet-literate New Urbanist:
The family which takes its mauve and cerise, air conditioned, power-steered, and power braked automobile out for a tour passes through cities that are badly paved, made hideous by litter, blighted buildings, billboards, and posts for wires that should long since have been put underground.
There came after the Second World War a peculiar American inability to invest in public wealth the same way as private wealth. The expert class, Galbraith reminds, threatened a generations-old ideological structure placing the businessman-producer-heroes of the Gilded Age atop the American Mount Olympus. They were not going to concede their mythos without a fight.
And why specifically America? Because Roosevelt had made us the leader of Western Civilization. In Germany, for instance, the Weimar businessmen had been liquidated — it was easy to get taxpayers to agree to building and maintaining roads, to municipal levies for forest and watershed management, to air quality controls. Roosevelt had forced France and the United Kingdom to surrender their colonies and their protectionist trade zones. They built welfare states after the war. (Although, in the UK, you could argue there was a bit of the same fight as in the US, and you see it today in the strange affinity between our finance cultures.) Japan was now ruled by Douglas MacArthur. Fortress America stood alone with our widgets.
What did the fight look like? Ask Lyndon Johnson. The creation of serious social programs, lifting immigration laws, and causing the entirety of the Southern Democrats to rout over the Civil Rights act. There are volumes to be said about Johnson — Robert Caro wrote them, not I — and the point is simply thus: we had quite the fight. Business interests aligned against the expansion of public services for reasons that must be more ideological than financial. This would distill, rather concretely I think, into Naive Realism as I have outlined it.
Twelve years after Galbraith’s book, we had arrived in Nixonland. Nixon had fanned the flames of a counter-elite backlash. In his sights was, of course, the expert class. The Kennedys, especially, exemplified what Nixon and his followers saw wrong in American society: pedigreed elites afforded privileges and prestige on the basis of credential rather than what they’d personally produced. (I note that the fact that the Nixon-aligned business class wasn’t aiming to join the experts, which is largely what happened in Germany or Japan, indicates an ideological rather than financial preference.) The idea of the “Orthogonian” — the American common man who was just trying to do his best and solve real issues that affect real people — enabled Nixon to put together a new coalition of the Right. It didn’t hurt that he was largely right about the Kennedys. This, I think, is what allowed our meritocrats (demographic 1 above) to sentimentally align with our counter-elites (demographic 2 above). It gave an afterlife to the Olympian cosmology, and this continues on to the present day.
Even resigning amid scandal, Nixon had ordained a marriage that I think is still as happy as your favorite aging boomers. The ball keeps rolling. In 1978, for instance, taxpayers in California would explicitly revolt against public goods. William F. Buckley played godfather for the neoconservative family despite the basically different provenance of the Orthogonian meritocrat from the counter-elite. We still haven’t lost our love of cars. The 1980s and 1990s did not see any significant uptick in public goods investment. Even as George W. Bush took office, we were still talking about lowering taxes and encouraging private wealth as the backbone of the American system. Dubya, wearing a leather jacket to conceal his Yale credentials under the guise of a lovable Texas everyman, shaking Tony Blair’s hand as we launched an invasion of Iraq. Into the Halliburton era, “real” problems always boil down to inflation affecting households at the gas pump.
We still live in Nixonland, insists Rick Perlstein, even if perhaps the Kennedy-class elite are entering their own dire straits in the post-2016 world. Nixon created the marriage that defines our political period: private wealth, the wealth of the widget-makers and the products of the military-industrial complex, was the pride of the everyman under assault by the Kennedy class and their Harvard-educated experts. Private goods versus public goods — a Manichaean dichotomy, clean, simple, mass-producible and ready to sell to the American consumer.
Even today, after 2016, we see politicians and counter-elites appealing to the same familiar sensibility of building “real” things. We want to bring the factories back and produce “real” assets like steel instead of selling US Steel to a Japanese conglomerate. There’s a whole host of folks excited about “investing in atoms” who write think pieces about El Segundo, a blessed strip of Souther California where we still believe in going to the moon. Look, I personally think that a lot of these causes are worthy, and you need to find support where it exists — what’s noteworthy is simply the choice, anticipating a receptive audience, to appeal to a sense of what’s recognizably a “real” problem. The Nixon marriage celebrates a happy anniversary.
To recap: products are hard to deliver because of affluence, and specifically because affluence means that needs are to a large degree ideological. For political reasons we’ve formulated an idea of what “real” needs are and given a way to use a conception of “common sense” to decry solutions that we disagree with. It’s delivered through the vehicle of right-wing populism, but it has an undoubted psychic reality. Many atavistic upwardly-mobile meritocrats really do want somewhere to direct a sense of frustration with the system, and the idea of an expert class who proffers complicated and non-”real” answers is all too convenient an image. We see the willingness of Orthogonians to persist in the strange marriage. Naive Realism, I posit, is an attitude grown the silty soil of our American affluence, and in it root any problems with creating products today.
Thus, I conclude, the historical dimension of Naive Realism tells significantly more than a standard macroeconomic narrative might. When we think about products, we have to consider what the nature of our needs has come to be, and how we’re inclined to think about our needs. Since affluence allows the “reality” of needs to be a question of ideology rather than the question of more prosaic necessity it might have been a century ago. When we think about building, we should approach the Naive Realists with courage, understand the corpse they’re trying to worship, and accept with grace that we’re building products for the affluent society.
