[Chapter from Skin in the Game] The salesman is the boss — How to drink poison — Advertising and manipulation
When people get rich, they shed their skin-in-the game driven experiential mechanism. They lose control of their preferences, substituting constructed preferences to their own, complicating their lives unnecessarily, triggering their own misery. And these are of course the preferences of those who want to sell them something. This is a skin-in-the-game problem as the choices of the rich are dictated by others who have something to gain, and no side effects, from the sale. And given that they are rich, and their exploiters not often so, nobody would shout victim.
I once had dinner in a Michelin-starred restaurant with a fellow who insisted on eating there instead of my selection of a casual Greek taverna with a friendly owner operator, his second cousin as a manager and his third cousin once removed as a receptionist. The other customers seemed, as we say in Mediterranean languages, to have a cork plugged in their behind obstructing proper ventilation, causing the vapors to build on the inside of the gastrointestinal walls, leading to the irritable type of decorum you only notice in the educated upper classes. I note that, in addition to the plugged corks, all men wore ties.
Dinner consisted in a succession of complicated small things, with microscopic ingredients and contrasting tastes that forced you to concentrate as if you were taking some type of exam. You were not eating, rather visiting some type of museum with an affected English major lecturing you on some artistic dimension you would have never considered on your own. There was so little that was familiar and so little that fit my taste buds: once something on the occasion tasted like something real, there was no chance to have more as we moved on to the next dish. Trudging through the dishes and listening to some b***t by the sommelier about the paired wine, I was afraid of losing concentration. I costs a lot of energy to fake that I was not bored. In fact I discovered an optimization in the wrong place: the only thing I cared about, bread, was not warm. It appears that this is not a Michelin requirement.
Venenum in Auro Bibitur
I left the place starving. Now if I had a choice I would have had some time-tested recipe (say a pizza with very fresh ingredients, or a juicy hamburger) in a lively place –for a twentieth of the price. But because the fellow dinner partner could afford the expensive restaurant, we ended up the victims of some complicated experiments by a chef judged by some Michelin bureaucrat. It would fail the Lindy effect: food does better through minute variations from Sicilian grandmother to Sicilian grandmother. It hit me that the rich people were natural targets; as the eponymous Thyestes shouts in Seneca’s tragedy, thieves do not enter impecunious homes, and one is more likely to be drinking poison in a golden cup than an ordinary one. Venenum in auro bibitur.[i]
It is easy to scam people by getting them into complication –the poor is spared that type of scamming. This is the same complication we saw in Chapter x that made academics sell the most possibly complicated solution when a simple one to the problem can do.
Hamburgers, to many, are vastly tastier than filet mignon, because of the higher fat content, but people have been convinced that the latter is better because it is more expensive to produce.
My idea of the good life is to not attend a gala dinner, one of those situations where you find yourself stuck seated for two hours between the wife of a Kansas city real estate developer and a Washington lobbyist.
Large Funeral Homes
Same with real estate: most people, I am convinced, are happier in close quarters, in a real barrio-style neighborhood, where they can feel human warmth, have company, but when they have big bucks they end up pressured to move into a outsized impersonal and silent mansions, far away from the neighbors. On late afternoons, the silence of the large galleries has a funereal feel to it, but without the soothing music. In addition, when large enough, the house will be professionally managed, like a corporation.
As Vauvenargues, the French moralist, figured out, small is preferable for what we would call in today’s terms scale properties –Book X is about scaling and scale transformations. Some things can be, simply, too large for your heart. Rome, he wrote, was easy to love by its denizens when it was a small village, harder when it became a large empire. Likewise, there is something desolate in a large mansion devoid of human warmth; there is something even more straining in a large mansion largely inhabited by servants.
Prosperous people of the type who don’t look rich are certainly aware of the point –they live in comfortable quarters and instinctively know a move will be a mental burden. Many still live in their original house.
Very few people understand their own choices, and end up being manipulated by those who want to sell them something. In that sense, impoverishment might be something desirable. Looking at Saudi Arabia which should progressively revert to the pre-oil level of poverty, I wonder if Vauvenargues would tell them that taking away some things from them –and the swarm of fawning foreigners coming to skin them –will make them better off.
To put it another way: if wealth is giving you fewer options instead of more (and more varied) options, you’re doing it wrong …
Nonlinearity of Progress and the S curve
Now let us generalize to progress in general. Do you want society to get wealthy, or is there something else you prefer –avoidance of poverty. Are your choices yours or those of salespeople?
Let’s return to the restaurant experience and discuss constructed preferences as compared to natural ones. If I had a choice between paying $200 for a pizza or $6.95 for the French complicated experience, I would pay $200 for the pizza, plus $9.95 for a bottle of Malbec wine. Actually I would pay to not have the Michelin experience.
This reasoning be have just shown that exists a sophistication that causes degradation, what economists call “negative utility”. This tells us something about wealth & the growth of “GDP” in society: this shows the presence an “S” curve beyond which you get incremental harm. It is detectable only if you get rid of constructed preferences.
Now many societies have been getting wealthier and wealthier, many beyond the positive part of the “S” curve. And I am certain that if pizza were priced at $200, the people with a cork plugged in their behind would be lining up for it. But it is too easy to produce so they opt for the costly, and pizza will be always cheaper than the complicated crap.
[To be continued…]
 Many have been mistaking this idea for an advocacy of Spartan choices rather than something about the restriction of freedom.