David Brooks has been on a kick lately of denouncing consumers for their addiction to shopping and how they have lost touch with the “great bourgeois virtues.” In his most recent effort in this vein, he is responding to a Gretchen Morgenson piece about personal debt, and in particular one woman, Diane McLeod, who’s in way over her head. Who is to blame? Borrowers or lenders? Brooks says neither, and instead posits a “third way” of explaining how people get in over their head:

people are driven by the desire to earn the respect of their fellows. Individuals don’t build their lives from scratch. They absorb the patterns and norms of the world around them.
Decision-making—whether it’s taking out a loan or deciding whom to marry—isn’t a coldly rational, self-conscious act. Instead, decision-making is a long chain of processes, most of which happen beneath the level of awareness. We absorb a way of perceiving the world from parents and neighbors. We mimic the behavior around us. Only at the end of the process is there self-conscious oversight.
According to this view, what happened to McLeod, and the nation’s financial system, is part of a larger social story. America once had a culture of thrift. But over the past decades, that unspoken code has been silently eroded.

That sounds reasonable enough, but as Tanta at Calculated Risk points out, it’s always a little bogus to preach a return to a nonexistent golden age.

This nostalgia for the lost “culture of thrift” always gets on my nerves. America has always had both a “culture of thrift” and a “culture of conspicuous consumption.” We have had our Gilded Ages before the year 1992. The “BankAmericard” (which became the Visa) was invented back in the “thrify fifties,” about ten years after economist James Duesenberry first popularized the phrase “keeping up with the Joneses.” Collapsing the history of America into a lost golden age of thrift contrasted to a degenerate present of consumption excess is a reliable sign you’re in the presence of ideology.

Of course, that’s a given with Brooks that you are in the presence of ideology, though to be fair, it’s safe to say ideology is present in any sort of opinion piece. Brooks wants to pin our fall from thrifty grace on housing wealth and changing norms.

Some of the toxins were economic. Rising house prices gave people the impression that they could take on more risk. Some were cultural. We entered a period of mass luxury, in which people down the income scale expect to own designer goods. Some were moral. Schools and other institutions used to talk the language of sin and temptation to alert people to the seductions that could ruin their lives. They no longer do.
Norms changed and people began making jokes to make illicit things seem normal. Instead of condemning hyper-consumerism, they made quips about “retail therapy,” or repeated the line that Morgenson noted in her article: When the going gets tough, the tough go shopping.

Brooks probably wants to temper Morgenson’s thesis that lenders have deployed sophisticated marketing techniques to encourage more people to take on more debt and pin the blame those who some reactionaries have called “predatory borrowers”. But oddly enough, Brooks’s account roughly fits the leftist theory that Western countries entered into a late-capitalism phase after World War II, in which the economic emphasis shifted from producing to consuming. Since then, the theory goes, the populace of mass consuming sheep have perpetually had new needs induced in them to keep GDP growing for its own sake, regardless of whether or not that actually improves society’s living conditions. (Which is not far off from what I think—that consumerism in our society is the way to secure social approval and communicate our sense of self to others. Other routes to recognition have been systematically sealed off, so it’s harder to summon the wherewithal to derive esteem or even self-knowledge from any actions other than shopping. Hence, the ownership society—we are what we own. And this happens to nicely fit the lenders’ incentives. They profit through the myriad transactions required to keep the money needed for all these self-fashioning ownership projects circulating.) You’d think Brooks would adopt the conservative tack that consumer goods have democratized luxury, making income inequality irrelevant, but here he is, like a latter-day Carlyle, faulting “mass luxury” as a kind of moral failing.

So what’s his game? Retro-conservatism? He implies (somewhat risibly) that he’s a Burkean conservative in his op-ed. But I think Tanta has him pegged when she argues that he is trying to divert blame for our decadent social mores away from the media establishment he is a part of:

Brooks, writing in that influential arbiter of taste the New York Times, somehow fails to notice the role of the media in constructing popular standards for “risk” and “normal” consumption patterns. In Brooks’ weird little world, Americans responded to “rising home prices” that they apparently directly perceived, without media intervention. It was those house prices that “gave people the impression that they could take on more risk,” not the reporting on house prices or the columnists who solemnly opined that these prices meant that people weren’t taking on more risk by buying or refinancing. How incredibly convenient that line is.

Indeed. So when Brooks writes, “In a community, behavior sets off ripples. Every decision is a public contribution or a destructive act,” he ought to look in the mirror and think about what sort of contribution his own books celebrating bourgeois bohemia and living on “Paradise Drive” in suburbia have made.

—Rob Horning

Prolific Polish sociologist Zygmunt Bauman has written several books over the past decade about consumerism—which he for some reason prefers to call “the world of consumers”—hence the verbose title of his most recent book, Does Ethics Have a Chance in a World of Consumers?—in what he has dubbed the “liquid modern era.” (He also dislikes the term postmodern, and this is his way of avoiding semantic arguments about what it precisely means.) There’s not much suspense about the question the title poses: The answer, as you’d probably guess, is basically no.

It’s a not a question you’d ask if you were actually optimistic about it. Bauman, while not as thoroughgoingly pessimistic as such past consumer-society critics as Jean Baudrillard, is still left dispiritedly positing utopian scenarios after laying out his grim analyses of our social situation—he calls it a “battlefield” in the introduction—which, in his view, technology is rapidly worsening. The characterological changes brought on by consumerism are accelerating, he argues, turning the democratic ideals of liberty, equality and brotherhood into the diminished qualities of security, parity and networking.

In Bauman’s account—and it is a familiar, comfortable story to anyone schooled in leftist, Adornoesque social theory—the liquid modern world’s problems start when aspects that traditionally limited our possibilities in the world (religion, geography, class, occupation, family, ethnicity) gradually became less restrictive, thanks mostly to capitalism’s modus operandi of creative destruction. Things once regarded as more or less permanent or unmarketable were subsumed by the market, reified, branded, and made subject to neoclassical economic truths about privatization, rational choices, and marginal utility. No longer assigned a specific role in the community from birth, we are alienated, atomized, cut free as an individual, forced to make our place. This has tangible benefits, obviously, in expanding our freedom to act. But it also brought with it the scourges of insecurity and boundless responsibility. (This is Frankfurt school orthodoxy—not unlike Erich Fromm’s and Herbert Marcuse’s ideas about freedom, in Escape From Freedom and One-Dimensional Man respectively.) “As Alain Ehrenberg convincingly argues,” writes Bauman, who frequently selects choice quotes from other thinkers (one of the nice things about Bauman’s book is that it serves as a kind of index to recent theoretical trends), “most common human sufferings tend to grow from the surfeit of possibilities, rather than from the profusion of prohibitions as they used to in the past”—an insight he may have attributed to any number of behavioral economists as well. Overt coercion in the pre-consumerist world was replaced by the regime of flattering persuasion, which is just as coercive, only we feel like we are in control, volunteering to participate in it (we shop because we want to), making the meaningful choices (between the things supplied by the market to satisfy the needs it has trained us to adopt). “As Pierre Bourdieu had already signaled two decades ago, coercion is being replaced by stimulation, forceful imposition of behavioral patterns by seduction, policing of conduct by PR and advertising, and the normative regulation, as such, by the arousal of new needs and desires.”

At this point, I’m nodding in agreement, but none of this is new—this is more or less the case that all left-leaning thinkers have made about consumerism. It seduces us to control us, replaces the ideal freedom of citizens in the public sphere determining a future for society collectively with that of a a bunch of individuals free only to choose among doodads after having their brains filled with bafflegab.

But Bauman turns an interesting corner. He cites philosopher Emmanuel Levinas’s notion of society as not a limit on our selfishness, as Freud, for instance, claimed in Civilization and Its Discontents, but as a limit on our boundless ethical responsibility to our fellow humans. “Using the vocabulary of Levinas, we may say that the principal function of society, ‘with its institutions, universal forms, and laws,’ is to make the essentially unconditional and unlimited responsibility for the Other both conditional (in selected, duly enumerated, and clearly defined circumstances) and limited (to a select group of ‘others,’ considerably smaller than the totality of humanity and, most important, narrower and thus more easily manageable).” Society may be not the force that stops the Hobbesan war of all against all, but “an outcome of tempering their endemic and boundless altruism with the ‘order of egotism.’ ” (It’s like bizarro Ayn Rand.) That altruism—that feeling of ethical responsibility to others—is an impossible, crippling burden. Only by curtailing it can we accomplish anything. But in doing that, we also curtail the spontaneous impulse Levinas believes that we have to trust and help others. And possibly we curtail the source of life’s meaning.

The way consumer society allows us to escape from that responsibility—its innovative method, perhaps—is to train us to fix it on ourselves. “Responsibility now means, first and last, responsibility to oneself (‘You owe this to yourself,’ as the outspoken traders in relief from responsibility indefatigably repeat), while ‘responsible choices’ are, first and last, such moves as serve well the interests and satisfy the desires of the actor and stave off the need to compromise.” The celebration in consumer society of individualism and our “right” to convenience mean that we have a duty to free ourselves from having to consider other people’s needs—and the market works to supply us the tools to avoid impinging human contact. It sells us ways to avoid having to deal with other people and the hassle they represent. “The privatized utopias of the cowboys and cowgirls of the consumerist era show vastly expanded ‘free space’ (free for myself, of course),” Bauman explains, “a kind of empty space of which the liquid-modern consumer, bent on solo performances and solo performances only, never has enough. The space consumers need and are advised on all sides to fight for can be conquered only by evicting other humans—and particularly the kind of humans who care for others or may need care themselves.” (This ties in another subject Bauman has written about frequently: the systematic exclusion from society of the victims of the Holocaust.)

Along with that championing of individuality and training of responsibility on ourselves instead of others comes a newfangled responsibility for shaping and projecting our own identity, which used to be dictated entirely by our circumstances but is now subject (seemingly) to our control. As a consequence, we are now all required to continually fashion our identity and project it in social symbols, which are supplied by the language of consumer goods and brands. In order to keep the consumer economy dynamic, the meaning of these symbols are constantly in the process of redefinition, and we adapt our identities to follow suit, let our identities function as brands for ourselves. What Bauman doesn’t mention, but is sort of implied, is that in making identity formation a never-ending process, consumer society sells that process as pleasurable. Actually, it probably is in fact pleasurable—it makes real life into a kind of daydream in which we can impersonate anyone and fantasize freely and openly, playing pretend games in public. And when you embrace novelty as an end in itself, it becomes a need easily (albeit temporarily) gratified. If you’re a dog who likes chasing your tail, you’ll never want for entertainment. The point is that pleasure comes not in some final achievement of the right identity, but in the multiplicity of identities always available to us, and the freedom we feel in swapping them out. If we were easily satisfied, it would take a lot to motivate us as workers (we could just sit in the park and watch butterflies rather than work overtime to buy a flat-screen). Not accidentally, our consumerist refusal to be easily pleased, to demand more, is routinely portrayed as a positive trait, a testament to our superior discrimination.

Bauman argues that we all are forced to become pseudo-artists, with our identity as our chief work, a kind of temporary installation in our own bodies. At the same time, any continuity between identities is discarded, leaving us living through a series of discrete moments in which it is possible for us to be anything. Bauman argues,

What follows is that the sole skill I really need to acquire and exercise if flexibility—the skill of promptly getting rid of useless skills, the ability to quickly forget and to dispose of the past assets that have turned into liabilities, the skill of changing tacks and tracks at short notice and without regret, and of avoiding oaths of life-long loyalty to anything and anybody.

As individuals, we need to embrace capitalism’s creative destruction at the personal level, seizing upon a moment’s given opportunities with no recourse to past or future inclinations or sentimentalities. The most important aspect of that flexibility is the ability to forget—to believe that we have always been at war with Eurasia. Skirts have always been knee-length. Crocs have always been stylish.

The institutionalized contempt for continuity encourages us to replace friendships with the network: “relations set by and sustained by network-type connectedness come close to the ideal of a ‘pure relationship,’ one based on easily dissolvable one-factor ties, with no determined duration, no strings attached, and unburdened by long-term commitments.” What this gives individuals is “the comforting (even if ultimately counterfactual) feeling of total and unthreatened control over his or her obligations and loyalties.” Of course, if you control obligations, they aren’t exactly obligatory—they are voluntary. That is what conceals from us the larger dimensions of our cultural obligations.

Bauman implicitly likens this situation to the notion of “groups of belonging” and the conditions of exclusion that set up the parameters of the Holocaust. The illusion of control may mask our obligations to play the game. The coercion to be a consumer is experienced generally as freedom (our ideology’s accomplishment), but if you resist it, you run the risk of social exclusion—not on a stateless-person-headed-to-concentration-camp level, but moving in that direction. “All of this may be intuited,” Bauman writes, “from the dark premonitions that haunt them at night after a busy shopping day—or from the warning that goes off when their bank account falls into the red and their unused credit reaches zero.” To be without credit takes on multiple meanings—you become worthless as a human being.

This is a roundabout way of point out that in a society where purchasing power is how we experience freedom, being poor means being very unfree. In other words, poverty really sucks, moreso than it did when society was less open. (Karl Polanyi’s Great Transformation explores this simple truth at length.) The poor, and those who are sympathetic to them, or nostalgic for old roles, or repulsed by the identity shuffling were expeced to relish, perhaps “do not view this life as a kind of life that they themselves, given genuine liberty of choice, would wish to practice.” But these people obviously need reeducation. “Those who go solely by what they believe they need, and are activated only by the urge to satisfy those needs, are flawed consumers and so also social outcasts.” If you aren’t worried about keeping in tune with the zeitgeist, you are seen to be expressing some kind of contempt for the socially-agreed-upon way of being happy.

It is often said of such people that they are indifferent if not downright hostile to freedom, or that they have not yet grown up and matured enough to enjoy it. Which implies that their nonparticipation in the style of life dominant ... tends to be explained by either ideologically aroused resentment of freedom or the inability to practice it.

If they only loved freedom a little more, they wouldn’t be concerned with how the system is basically rigged to assure that they will never be regarded with dignity in the public sphere, that they will always seem helplessly out of touch. Their fashion backwardness seems to justify their social exclusion, as we are invited to see how they manifest their identity as an expression of their own poor opinion of themselves. “If ‘to be free’ means to be able to act on one’s wishes and pursue the chosen objectives,” Bauman notes, “the liquid-modern, consumerist version of the art of life may promise to all, but it delivers it sparingly and selectively.”

So what do you do if you don’t want to include yourself in the consumerist economy, you want to preserve an ethical code, but you don’t want to risk living as a semi-persecuted outcast. Do you “go live in a jelly jar”?  Bauman’s text doesn’t offer much in the way of answers. He urges that we become better educated in the sorts of things I was taught in civics class—fundamentals about the how politics works and so on—and that we become citizens instead of consumers. But it seems that in order for that to happen, citizenship will have to assume some of the technique of consumerism—it will have to be able to generate the personal, individualistic pleasures we have come to expect from consumerism and which we now regard as the guiding purpose of our lives. We need to make the pursuit of happiness an explicitly political matter once again.

—Rob Horning

A few days ago Will Wilkinson linked to this brief piece in the Harvard Business Review by professors Anat Keinan and Ran Kivetz, summarizing their research into consumer regret.

Our research shows that forgoing indulgences today can feed strong regrets later, and that near-term regrets about self-indulgence dramatically fade with time. These responses are so strong that we were able to influence people’s buying behavior simply by asking them to anticipate their long-term regrets.

The gist of this is that they are conducting research to support the contention that people are not indulgent enough in their consumer behavior, and they need to be persuaded to indulge themselves more. All work and no play, and all that.

People who unduly resist self-indulgence suffer from an excessive farsightedness, or hyperopia—the reverse of typical self-control problems. Rather than yielding to temptation, they focus on acquiring necessities and acting responsibly and they see indulgence as wasteful, irresponsible, and even immoral. As a result, these consumers avoid precisely the products and experiences that they most enjoy. Their hyperopia can inhibit consumption in ways that are bad both for their own well-being and for marketers’ bottom lines. We don’t advocate trying to motivate consumers to make ill-considered purchases, of course, but marketers can help customers make appropriately indulgent choices that they’ll appreciate over the long term.

The “of course, but” in that last sentence seems very telling. These are marketing professors after all. It seems to me that they are trying to motivate consumers to rethink their resistance to consumerism and are trying to encourage marketers to remind them of a future self that will nostalgically look back on that consumerism as a life well lived.

Our findings suggest that marketers of luxury products and leisure services could benefit from prompting consumers to predict their feelings in the future if they forgo the indulgent choice. For instance, a travel company might ask customers to consider how they’ll feel about having passed up a family vacation package once the nest is empty.
Consumers, too, can benefit from such prompts. In the words of the late Massachusetts senator Paul Tsongas, “Nobody on his deathbed ever said, ‘I wish I had spent more time at the office.’”

This rationale is often used in defense of advertising—it helps consumers find their wants, and get more out of the concept of desiring itself by stimulating it. It unleashes our impulsivity, which is freedom in action, right? I’m sure all those people who thought long-term about the houses they were buying in 2006 feel great about their purchases now and are so pleased that they didn’t stop themselves from indulging.

If desiring things is in itself pleasurable—and it clearly is—then advertising does us the great service of stoking it. But desire is not an unalloyed good; it’s a cognitively draining state of contradiction—mixed in with the excitement and fantasies of possession and the motivation to achieve that it brings, it also yields envy and disappointment and dissatisfaction at the same time. The point of criticizing consumerist desire is not that it’s inherently bad or unpleasurable, but that it restricts us to certain definitions of what is pleasurable, and casts our dreams and regrets (as the researchers discovered) into a specific mold. Clearly we should take more action in the present moment, but that need not take the form of making purchases, as this marketing research seems to imply. Seems like similar studies could be contrived to suit this unconsumption motto: Work less, buy less, do more.

—Rob Horning

At Slate, Michael Agger narrates his efforts to put a flattering picture of himself online. This strikes me as a topic that gets more and more depressing the more one thinks about it, because it ultimately forces us to recognize the arms-race quality of self-advertisement.

Remember for a moment how much attention people used to lavish on the perfect quote for their e-mail signature. Now that self-conscious energy is applied to a photo. There’s nothing inherently bad about the rise of Web head shots. They just turn what was once a space for burgeoning Cyrano de Begeracs into a space for burgeoning Brad Pitts.

When you expect to be judged by your photo—in the context of countless other such photos—and the technology exists to improve that photo, it becomes virtually incumbent on us to deploy that technology, present our visual selves in the most state-of-the-art way. We are forced to see our face as a brand or logo, and we must isolate and reify the qualities that we want to use to market ourselves, and in realizing we are marketing ourselves we must also recognize how we have devised these instrumental means of achieving our particularized goals. We say to ourselves something like, if I capture my face from the right angle, people will think I’m mysterious. If I relax while I take this picture, I might look natural. I might come across as authentic, as “real.” Until I get the right photo, I am in danger of being unreal. I don’t quite exist. And then you have to think about how sad that is, reducing our complexity to a pinpoint, or a desperate calculation, and having our being reduced to a lighting effect and a camera angle and a set of well-chosen props—ontology as mise-en-scène.

But it is probably true that how we look forms the basis, the starting point from which people will get to know us, and it supplies the framework into which are actions and behavior are integrated. Managing how we develop social relations online provides a stronger feeling that we can manage the entire process—provide the flattering picture as the launching point and then carefully groom the online profile to present ourselves as the attractive and appealing product we want to be. But then we are at the same time inviting people to consume us as a kind of reality-TV program, a well-edited entertainment product whose purpose is merely to please them and nothing more. When we objectify ourselves (with online photos and the like) we seem to be liberating others of having to conceive of a reciprocal responsibility toward us—we want to be looked at and approval rests in that, and when we look back at others, we do it in a different time, with a different mind-set altogether. That is to say, social relations online don’t occur in shared time; they are by definition managed, mediated exchanges even when the messaging is “instant.”

Agger mentions a new site called Facestat, on which you can post a picture and have people evaluate it through a series of questions that are vaguely research-like.

To date, Facestat has collected 16,818,344 judgments on 126,090 faces. The people behind the site, a group of programmers called Dolores Labs, have played with the data in fun ways. They noted which pairs of tags tend to appear together—athletic and driven, gay and cowboy, old and sour, young and uninterested. They’ve also built a graphical explorer, with which you can follow the webs of adjectives for an entire afternoon. The promise of accurate “market research” hasn’t been totally fulfilled. Looking around the site, I’ve found the crowd-sourced judgments to be fickle. For every person who thinks you’re “not bad,” there’s another that thinks you’re phony—or worse.

This seems to suggest that our efforts at face management are wasted. It may seem like we can better control how we will be perceived online, and it’s almost irresistible to make the attempt, but other people will see what is useful for them to see anyway. So it may be that the illusion of control is the lure of posting photos online, and it ultimately has nothing to do with the results the picture yields. This may be true of social networks in general; they let us pretend we are controlling something that is inherently slippery and fluid. They allow us to forget about the contingencies of friendship by making specific friends and whatever specific response they are having to you beside the point. The trick works because we are able to prevent ourselves from seeing how the pools of eyes in the networks we construct for ourselves become mirrors.

—Rob Horning

Okay, that entry title makes no sense for a post about the impending Freddie Mac/Fannie Mae bailout, but I just wanted to make a pun referencing the funniest movie of the 1990s.

Freddie Mac and Fannie Mae are in the business of guaranteeing residential mortgages, and not an inconsiderable amount of them—more than half, as economist Jared Bernstein notes here. Freddie and Fannie masquerade as independent companies, but investors have always assumed that they are really government agencies and therefore can never go broke. If a spate of mortgages they had guaranteed went bad, taxpayer money would simply be requisitioned to allow the firms to continue operating, since they clearly don’t have the capital on hand to deal with any significant problems. The wisdom of that assumption is now being put to the test, as Fannie and Freddie are spirialing into oblivion.

As mortgages became more and more subprime, they chose to keep up their market share, as Tanta at Calculated Risk details in this comprehensive post. Because of restrictions in their charters, they managed to avoid the worst of the housing bubble’s excesses, but, as Tanta argues, they therefore missed the opportunity to use their clout to impose some discipline on the subprime business, and instead it remained the wild west of financing, a place full of dupes, dishonest brokers, and fat profits to reap—as long as housing prices continued rising. That didn’t happen, as many housing bubble skeptics including Dean Baker and Nouriel Roubini had predicted at the time. To ease problems the credit crunch brought to the private-lending market, legislators pushed to expand Fannie and Freddie’s operations, a idea that investors are now seeming to recognize is a pretty bad one, likely to make their loan portfolios—already threatened by sinking home prices everywhere—become even worse.
With the companies’  insolvency looming, the government has to do something (without them, buying and selling houses in America could become well nigh impossible), but the Republicans in charge are loath to admit the necessity of nationalizing them, nor are they eager to stick it to Wall Street by letting all of Fannie and Freddie’s investors burn. So Treasury secretary Hank Paulson, confronted by a kind of ideological zugzwang, tried to gain a tempo by making an ambiguous speech (admirably parsed here by Felix Salmon). And that’s where things stand currently.

At the FT site, Willem Buiter has the best explanation of what’s wrong with all of this: it’s “dishonest socialism”:

There are many forms of socialism. The version practiced in the US is the most deceitful one I know. An honest, courageous socialist government would say: this is a worthwhile social purpose (financing home ownership, helping my friends on Wall Street); therefore I am going to subsidize it; and here are the additional taxes (or cuts in other public spending) to finance it.
Instead the dishonest, spineless socialist policy makers in successive Democratic and Republican administrations have systematically tried to hide both the subsidies and size and distribution of the incremental fiscal burden associated with the provision of these subsidies, behind an endless array of opaque arrangements and institutions. Off-balance-sheet vehicles and off-budget financing were the bread and butter of the US federal government long before they became popular in Wall Street and the City of London.
The abuse of the Fed as a quasi-fiscal agent of the federal government in the rescue of Bear Stearns is without precedent, and quite possibly without legal justification. The creation of the Delaware SPV that houses $30 billion worth of the most toxic waste from the Bear Stearns balance sheet (with only $1 billion of JP Morgan money standing between the tax payer and the likely losses on the $29 billion committed by the Fed to fund the SPV on a non-recourse basis) is the clearest example of quasi-fiscal obfuscation I have come across in an advanced industrial country. The decision by the Fed to ‘invite’ the primary dealers and their clearers to collude in the (over) pricing of illiquid collateral offered by the primary dealers to the Fed at the newly created TSLF and PDCF (by the Fed accepting the pricing/valuation by the clearers of the illiquid collateral) is another example of the abuse of the Fed as a vehicle for channeling taxpayer-financed subsidies to the primary dealers. This form of socialism for the rich is therefore well-established.

This is how oligarchs prefer the economy to operate: Privatize the gains, socialize the risk. And it seems to me that the obfuscation brought on by the sacredness attributed to homeownership—that anything is excusable as long as it helps “families” experience the indelible blessing of owning property—is what enables it.

—Rob Horning

In Technology Review, Bryant Urstadt has an interesting article about the potential for advertising on social networks. Obvioulsy, Facebook’s flubbed Beacon program, which notified member’s networks about the stuff they were doing on other internet sites, has raised suspicions that users may demand better privacy protections, but this doesn’t seem to correspond to the generational cohort’s general eagerness for indiscriminate online sharing. You would think people will eventually embrace something like Beacon, because it makes them seem like theya re so famous and important, their every mundane action must be tracked and reported. Maybe they are savvy enough not to be flattered by automated attention, and I’d probably just be creeped out if some friend of mine told me, “Hey, I saw you went online and bought a new pair of New Balances.” But then, I’m not of the generation whose members are supposed to be preoccupied with their own notoriety. But perhaps no one wants to be recruited without their consent and without recompense into an endorsement campaign. I’m sure if Beacon credited Facebook users a few cents for every time it blasted out a user’s shopping activity, more people would be eager to opt into it.

As Urstadt notes, “The problems with social-network advertising revolve around three main issues: attention, privacy, and content.” The privacy issues include not only the mining by advertisers of the personal information you supply to facilitate your social connections, but also, as with Beacon, the use of that personal information—some of it collected passively as your online activity is surveilled and logged—as leverage to persuade others. People may not mind being targeted thanks to information they supply—in fact that can often be somewhat flattering (though I don’t feel particularly important when Amazon sends me emails recommending books for me to buy). MySpace is going full steam ahead with “HyperTargeting,” which seeks to show you ads that you’ll find relevant based on the information your online activity makes available:

In 2007, MySpace launched its HyperTargeting system, which scans users’ profiles for information about their interests and demographics. It sorts the profiles into 10 rough categories—such as sports and entertainment—that are subdivided into more than 1,000 narrower categories, such as baseball or a specific film. (E-mail and personal messages are currently not scanned at either Facebook or MySpace.) Says Adam Bain, president of the Fox Interactive Media Audience Network, “People are essentially hand-raising every single day on MySpace and other social-media sites. What we want to do is take that and put it into easy-to-buy segments.”

Since these ads are more likely to be relevant, users, so the thinking goes, are far less likely to be turned off by them. (The danger is that the social networking experience will become so unpleasant that users will abandon them altogether—that MySpace, Facebook etc. will go the way of AOL and that nice cluster of advertisment targets will be dispersed to the winds.)

But it is a different matter when your personal information is not being used to target you but to target your friends—this makes you into a collaborator, an informant, part of the panopticon administering distributed surveillance in our postmodern dystopia. The temptation for advertisers and the networks themselves to take advantage of this possibility, to use you for your connections, may be impossible for them to resist.

Urstadt also highlights the problem of “content adjacency,” i.e., what the ads are placed next to, which can be unpredictable, as users frequently change the content they supply. Companies don’t want to be perceived as sponsoring some webpage full of neo-Nazi slogans and Prussian Blue videos, for example, though Facebook apparently performs a lot of “user content moderation” according to one of its spokespeople. Content adjacency is obviously a problem for advertisers, but it’s also problematic for content providers—I’m always surprised to see how this blog is contextualized by the ads, and how what I’m writing about is at times trivialized and my authority potentially undermined. The same would certainly happen for the cool-conscious, if attracting the right sort of ads on one’s profile pages could be brought into play as a mark of distinction. Advertising always has the potential for calling into question the credibility of what it appears to be sponsoring. Perhaps you really are trying to be very authentic in your profile—the presence of ads, which are generally oblique and often intentionally misleading in their presentation of information, undermines that authenticity and makes it seem like you are posturing too. The ads create a climate of persuasion, affecting all the discourse that is near it. Rather than mount a futile fight against this, users are likely to assume that the pages are advertisements for themselves and present their information accordingly, with the intent of convincing viewers of something about themselves rather than merely being. (It seems like this is generally true already. One doesn’t just exist within the virtual world of the network; one instead develops a profile and a network and then grooms them.) The social network then becomes a place where one can acquire no experience directly, where one cannot simply be in the moment and taking in events. Instead one is always positioning, repositioning and posing, and collecting people’s responses. In other words, it’s a place to revel in self-consciousness.

An unrelated question. Who is dumb enough to do this: “Chamath Palihapitiya expects Facebook to generate revenue by selling a variety of such services to users. The site has rolled out a “gift” program, in which friends spend real money to “give” friends virtual items, such as an image of a box of tissues with a get-well note.” This makes even less sense to me than spending real money to trick out your Second Life avatar. This seems like conspicuous waste par excellence, however, with an audience roped into the transaction by definition. So maybe it will really take off.

—Rob Horning