Phantom of the Paradise

Picking back up on the “Redefining Capitalism” article from the latest issue of Democracy. In a prior post, I wrote:

The role of foundations as labs for innovation…The redefining-capitalism lens suggests that this function is essential to philanthropy’s role in the capitalist system. By focusing on specific problems and promoting creative solutions to them, foundations play their part in helping capitalism function more effectively. Which depending on your point of view, may not necessarily be a good thing. But this redefining perspective certainly makes it sound more palatable.

I’ve been thinking a lot lately about phantom needs that fuel the economy. Go into any Duane Reade drugstore (that’s what Walgreens is called here in NYC), and all along the aisles and in front of every checkout counter are little products someone came up with to entice people to part with their money: USB dongles that go in a car’s cigarette lighter, another kind of candy bar, light vanilla soy milk. What if you walked into a Duane Reade, or a grocery store, and the only things on the shelves were things you actually buy or have ever bought? How bare would those shelves be? Now layer on the version of that image for each person who walks in on a given day. How empty would the shelves be? What proportion of products never get bought by more than two or three people in a given week, or month? Yeah, you’d think those products would disappear from the shelves, and I’m sure the data analytics at Duane Reade are pretty decent to enable them to do so – but maybe some items are a package deal from manufacturers: want to sell Doritos, which you know people want? You gotta stock Funyuns, which no one wants, but we’re going to try to push anyway.

Funyuns are a phantom need. If they didn’t exist…meh. Would the world be any different? Would anyone’s well-being really be diminished? (Don’t touch my Munchies mix, though, those are vital to national security and the general welfare.)

And yet we’re told that what the economy needs is more businesses, more ideas, more people making…stuff. Like USB dongles and Funyuns. Those are invented needs. Which are EVERYWHERE. They fuel our economy: stuff we don’t need, and just barely want. But you know, just seem, maybe useful, once. I’m thinking ahead to spring cleaning, and looking at how many clothes I haven’t worn even once in the past year. Closet full of phantom needs.

This may ultimately be the value of the social sector: we focus on real needs, not phantom needs. The problems we focus on are hopefully ones that are genuinely worth solving. If that’s helping capitalism function more effectively (doing the right things) as opposed to just more efficiently (doing things right), then maybe that’s not such a bad thing.

Until you stop to think about the problems that capitalism creates, especially in the pursuit of phantom needs.

There are some problems that are just problems of resource extraction – fuel pollutes. Those are real needs, however bogus the solutions (“clean coal”). Those negative externalities should be internalized, and taken into account when making planning decisions.

But problems caused by the fulfillment of phantom needs, like the giant plastic island in the Pacific from plastic shopping bags? (Which, it turns out, isn’t an island, but is still bad news.) As the guys on ESPN would say, “c’mon, man!”

So, new rule: to judge the value of a solution, you have to weigh both the problems its solves as well as the problems it creates. And if the needs the solution solves are phantom needs, well, that’s just a problem in itself.

How good are nonprofits at defining and solving real needs and not phantom needs? How good are foundations?

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