In the past, I’ve told a handful of key stories to explain why I’ve complemented my main major of economics with marketing. This covers things from refining the skill of persuasive communication, learning to see from other perspectives, and understanding the incentives that drive economic exchanges. Truth is, it simply just happened. I fell in love with both marketing and economics courses– all thanks to the remarkable professors teaching them. I simply was obedient to the best advice I’ve ever heard: follow where the good people go.
It might be because the brains of economics majors are finely tuned to pick up on economic insights everywhere, or it might merely be narrative bias, but a recent class assignment has led me to appreciate yet another aspect of the relationship between marketing and economics.
In Econ 101, you may have learned that markets coordinate self-interested exchanges for the good of society, generally solving the economic problem of allocating scarce resources to their highest valued use. This is often referred to as the phenomena of the “invisible hand,” as explained by Adam Smith (link if you’re interested in remedying my poor simplification.) I say that marketing is the wrist of this invisible hand, as it directs the flow of information which usually provides the basis by which individuals and firms decide which things to exchange, how to price them, and where to next innovate.
In “Marketing’s Contributions to Society,” Wilkie and Moore summarize that:
“In a market-based system, consumers’ response to marketers’ offerings drive supply allocations and prices. Depending on society’s decisions on public versus private ownership, the aggregate marketing system plays a greater or lesser role in allocating national resources” (205).
In a sense, marketers act as the ambassadors between the individual and the firm. Goods and services will be provided as are communicated by the individual and interpreted by the marketer. The health of this essential relationship will determine the overall success of the economy, as if it were guided toward prosperity by a benevolent invisible hand. For me, the practical takeaway is this: if I don’t like how the “invisible hand” is functioning, maybe it’s time to assess the signals I give to marketing departments through my consumption choices.
In my studies, a sort of chicken-and-egg situation has been presented when it comes to determining whether marketing forms culture or whether culture forms marketing. Or even, if the individual has wants that marketers address or if marketers create those wants in the individual. This is nonsense. In my four years of courses and two years of work as the Director of Marketing for a local publisher, it is clear to me that marketing responds to signals from the consumer. The goal is to create value for the consumer; entrepreneurs introducing new products or services are still connecting it to some inherent desire on the part of the potential buyers. Thus, the consumption decisions that you and I engage in (or not) are what determine the commercials we see, billboards we drive by, and the products that are created. In our marketplace (not so much in government), individuals always have the power to say no.
The higher builds upon the lower, but the two must not be confused. The fulfillment of marketing’s promises, which is concrete and true in a sense, is obviously limited to the visible material world. While my wonderful little laptop has greatly augmented my search for knowledge and joy (hello Pinterest home decor ideas), it’s consequently my daily task to remember that I do not need it. Arthur Brooks explains this point well in Abundance Without Attachment. Finally, I’ve shared this before but it merits frequent repetition:
“It is not wrong to want to live better; what is wrong is a style of life which is presumed to be better when it is directed towards “having” rather than being”…It is therefore necessary to create life-styles in which the quest for truth, beauty, goodness and communion with others for the sake of common growth are the factors which determine consumer choices, savings and investments” (Centesimus Annus, John Paul II).