If you want to repurpose a production line to start making something different, you have to shut it down for a while.
Indeed, if I ever started a business from scratch, one of the things I would mandate would be the "factory fortnights" that once were a feature of Northern industrial towns. I’d make everyone go on holiday at the same time for a week or so twice a year. Staff wouldn’t all have to go to Blackpool together (although this would be strongly encouraged) but we would have to holiday at the same time. The reason is simple: it is an especially valuable thing for everyone to clear their desks together and then take a break together. It means everyone returns simultaneously to a clean slate, with a fresh sense of purpose, and an opportunity to break bad habits.
This principle of communal, simultaneous firebreaks in routine seems to be a common factor in many religions and traditions: sabbaths, festivals, carnivals, Lent, Ramadan. (In Old Testament societies, all debts were written off every 14 years.) Veganism is nothing new: a Lebanese friend of mine points out that, if you follow the dietary precepts of the Eastern Orthodox Church, everyone would eat a vegan diet for 100 days of the year. Recently, behavioural-change movements have picked up on the same principle: Movember, Dry January, Stoptober. It’s a very simple insight. Doing something new and good – or ceasing repetitively to do something old and bad – is much easier if you can adopt the new behaviour in company. In fact, many insane and self-destructive behaviours are impossible to stop unless everyone stops together. This is what is known in economics as a co-ordination problem.
Let’s take a simple and topical example of an "insane" collective behaviour – the panic buying of toilet paper. (As the proud owner of a Geberit Aquaclean Japanese-style bumwash toilet, I have been privileged to observe this behaviour with amused detachment.) Although described as panic buying, and widely derided as irrational, it is of course not that simple. If only 20% of people believe that toilet paper is in short supply and start stockpiling the stuff, then everyone else has no option but to follow suit. Indeed, it would be irrational not to stock up on extra rolls, since if you don’t stockpile bog-roll whenever you get the chance, someone else will. All it takes is a small group of irrational actors to ruin a market for everyone else.
Now here’s the tough question for the ad industry. How many other forms of consumption are, in fact, no different from the panic buying of Andrex? A product of what biologists call Fisherian runaway, resulting from a self-reinforcing feedback loop. Are we being panicked into buying exotic holidays and expensive goods every bit as much as we are into buying loo-roll? Economics lazily assumes that all consumption is welfare-enhancing, as though all purchase decisions are made independently of everyone else’s. This obviously isn’t true (thank you, Mark Earls). It also assumes that the collective good is merely the sum of individual goods. Yet a large part of consumption is positional – driven by a need to respond to the behaviour of other people, over whom we have no control. It’s like being in a round in a pub, where everyone is forced to drink at the speed of the heaviest drinker to avoid losing out.
Think about it. If a client in Frankfurt wants to brief three competing agencies, the task could easily be performed over Zoom. But it only takes one agency to break ranks and send two vapid account men to Germany by plane and everyone is forced to fly two people out to avoid looking unenthusiastic. The knowledge that a competing agency is likely to turn a tissue session into a full-blown presentation forces everyone else to follow suit. (It’s only a matter of time before we have to produce hand-illustrated decks, like the Book of Kells.) And if one agency hires a Hollywood director to make a film to accompany its awards entry, soon everyone is doing it. Suddenly business is like being in a game of poker where the table stakes keep being driven higher and higher.
Again, these behaviours, like hoarding bog-roll, are all perfectly rational at the individual level, while at the collective level they are welfare-damaging. Weddings would be a good example: above a certain baseline, spending more money on a wedding does not add to the enjoyment for the guests or participants, and may even make the event worse. And yet the average US wedding costs $30,000 – twice the real cost in 1990. Travel has very largely jumped the shark – when I was at school in the 1970s, a school trip meant a day at Penscynor Wildlife Park or St Fagan’s. My father (who has flown long-haul twice in 89 years) recently was grumbling that the local state school took a sixth-form trip to Yokohama. I travel far too much myself – but I also travel more than I want to. I recently asked a number of frequent-flying clients how they would react if they were banned from flying in eight months out of 12: all but one replied to the effect that "Secretly, I’d be delighted".
These competitive behaviours are not trivial. Bear in mind that the annual worldwide market for fashion and beauty products – what someone once described as "innovation without improvement" – is worth over $3tn; more than we spend on education. In order to break this cycle and redirect some of this rivalry towards better ends, it isn’t enough for some people to change their minds – a lot of people need to change their minds at the same time. It’s for this reason, incidentally, that brand value endures so well. As historian and philosopher René Girard said: "Our desires are not our own; we want what others want."
Now, at this point, the more cynical of you will wonder why someone in advertising, and one of very few self-avowed Conservatives in advertising, is essentially launching an attack on consumerism. My argument is very simple. Markets are far from perfect, but they are uniquely good at adapting to disruption. More than that, they are only really good to the extent they are frequently disrupted.
This simultaneous imposed lockdown provides a great opportunity for a huge – and voluntary – shift in behaviour. It is essentially an extended factory fortnight for the whole world. An extraordinary opportunity for people to recalibrate what matters to them, and to think afresh about what they might do differently in future. (Ironically, I have found social distancing oddly sociable – since I now have time to keep in touch daily with people whom I used to see every few months.) It would be weird if people emerged from this experience without acquiring the appetite for significant changes.
What has been gifted to us is an opportunity to recalibrate how we live and work together – and to change for good the tired metrics by which we judge things and each other. We may not have this chance again. If the advertising industry isn’t very different after this lockdown slowly ends, we will have failed twice: we will have failed ourselves, and failed the audiences we reach.
Rory Sutherland is vice-chairman at Ogilvy