Climate change and depletion of natural resources means we’ll hit a natural limit to economic growth. So either we collectively decide who has to stay poor, or we can live in a world where intangible value makes up a greater part of overall value. The metaverse sounds dystopian to those with a choice – I’d rather hug my family than interact with their avatar. This ignores the fact that digitization offers us more options: now I can work from home and see more of my family instead of commuting. Or I can virtually hug my family if we live thousands of miles apart. The experience may in some ways be better: playing video games with my friends might be more engaging than playing board games in person, because they’re so much more immersive. Even a small marginal benefit can make a virtual activity worthwhile, because the marginal cost of delivering intangible value is effectively zero. For example everyone in the world has free global access to instant communication (unless their government represses it) via several competing social media apps, a technology that would look like magic to any previous generation.
In this way, intangible value can be egalitarian: as Warhol put it “the president of the United States can’t get a better Coke than the bum on the corner of the street”. Where inequality exists, intangible value is a great leveller: a Michelin-starred steak costs 10x more to deliver the same number of calories. High-end restaurants are factories for manufacturing social status, in return for a wealth transfer to deserving service workers. The discount shoe store Payless made headlines selling $20 shoes for hundreds of dollars in a fake luxury store – Palessi – before revealing the prank. Fashion influencers invited to the launch of the fake store had no idea the shoes were from a bargain brand, in many cases mentioning the quality, sophistication, and elegance of the shoes, in their reviews of what they thought was a new luxury boutique. "The right cultural codes can completely transform the perceived value of just about anything” said DCX Chief Creative Officer, the agency behind the stunt.
Simply re-framing the perception of things creates the context in which we can enjoy ourselves. A muffin is really a ‘breakfast cake’ – they have the same ingredients. As Sutherland says ‘tiny homes’ and ‘hovels’ share dimensions, but not associations. If re-branding a toaster oven as an ‘air fryer’ lets you increase the price, and customers are happier with their purchase, true value has been created. In 2007 Joshua Bell, world renowned violinist, spent 40 minutes busking in a New York Subway station, earning only $52.17 from 27 people out of the 1,097 who walked past. His typical fee would be a minimum of $75,000 to $150,000 for such a performance. To classical music aficionados watching him perform in Carnegie Hall, Bell is worth that much or more. For the average person on the street, he’s worth at best a couple of bucks: almost all the value is perceptual. “Perception is reality. If you are perceived to be something, you might as well be it because that's the truth in people's minds.” – Steve Young
Annotated captions of Rory Sutherland: Life lessons of an ad man in English
In Defence of Advertising
Joshua Bell Booking Agency Profile
Joshua Bell: 16 facts about the great violinist
Life lessons from an ad man
Payless sold discount shoes at luxury prices — and it worked
Sutherland Tweet, Airfryers
The time when Joshua Bell went busking in the subway, and no-one noticed