How advertisers, marketers & business got here & what's next (economists peer into the future).

And how we 'practical' people in media, marketing, and business communications became slaves to defunct economists and their ideas.

John Maynard Keynes was one of the two most influential economists of the 20th century and said almost a century ago, “The ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist.”

In the 21st century, came the Turn in the practice of advertising and the Descent in the role of marketing. Now we are entering a fourth decade of the decline of media and journalism, the suppression of innovation and growth, and the consequent polarization that must be admitted as causing devastating damage to society and well-being.

My contention is talking within the advertising and marketing industries is a necessary first step but insufficient for fundamental change. Perhaps some of the glaring and endemic fraud will be cleaned up. Perhaps more talented marketers and their agencies will be empowered to build brands with the insight and imagination of which they are eminently capable.

Why has this happened? To understand The Turn and The Descent we have to start with Economics. Keynes himself, whose influence lives on and whom no-one would call defunct, definitively showed the essential role of the state in the economy, regulating markets and investing where private corporations could and would not, above all in public services where profit was not a relevant metric, or in industries and innovations where long-term growth required a vision and tolerance of risk incompatible with shareholder supremacy.

In the 1980's Keynesianism was challenged by the Austrian school of economists, whose ideas were taken up at the University of Chicago and above all by Milton Friedman whose advocacy of free (i.e. unregulated and financialized) markets developed into the neoliberalism that became the economic policies of Thatcher in the U.K. and Reagan in the U.S. Friedman wrote that “The Social Responsibility of Business Is To Increase Its Profits”, an essay as polarizing today as it was on its publication over 50 years ago. Most saw this as auguring a phase in American economic life where “Greed is Good” and profits are the sole goal of business in a 'free market' system.

The ideas of these economists were behind post-war prosperity, and then the rapid rise in inequality that began in the 1980's and is now ending. Here's three enlightened perspectives from the past, present, and future of economics, and the consequences.

Reading them, marketers and advertisers in the 2020's can better understand the system in which they have been working for the last 40 years, and how and why it is changing.

Brad DeLong

"The focus shifted from providing information to capturing attention – and capturing attention in ways that played on human psychological weaknesses and biases."

A professor of economic history, with a government career involving some of the now poorly regarded policies of the 90's, DeLong writes here with intuition a definitive history of the competition of ideas in economics, why they matter, and their impact on society

Essential read is his 'magisterial' (Paul Krugman) book Slouching towards Utopia

Yanis Varoufakis

"Once you want something as a result of interaction with a machine, the machine sells it to you directly. Amazon has replaced the market. There are a lot of sellers and buyers, but it’s the algorithm that matches them in a way that has nothing to do with any notion of the market as we know it."

A Greek economist and politician, he is co-founder and Secretary-General of the Democracy in Europe Movement 2025 (DiEM25). He was Greece's finance minister during its decade-long debt crisis. No-one writes better about what really happens between national governments and global finance.

Essential reads are everything he has written and now his most recent and urgently relevant 2024 book Technofeudalism. What killed Capitalism?

Essential listen is the podcast In the Eye of the Storm: the Political Odyssey of Yanis Varoufakis

Darren Acemoglu and Simon Johnson

"AI redistributes power and prosperity away from ordinary people towards those controlling data and making corporate decisions."

Deeply immersed in the history of nations, their economies and finance, these two authors reinterpret economics to peer into the future and anticipate the consequence of a sole reliance on AI, and what must be done to redirect innovation to benefit everyone and not just corporations.

Essential read is Power and Progress. Our Thousand Year Old Struggle over Technology and Prosperity.

DeLong emphasizes how economics and markets become distorted when media and marketing exploit human psychological weaknesses and biases. One of my three recommendations to the advertising and marketing industry is then:

• Reform our institutions to set standards for training, certification, accreditation, transparency, and codes of conduct backed by a mechanism for collective enforcement.

Varoufakis skewers Amazon as an 'automated Don Draper', and his work is consistent with my recommendation to advertisers and marketers to:

• Explore and experiment with going to market and brand building strategies through their own communities and data without paying tolls to big tech.

Acemoglu and Johnson reveal that technological progress has never automatically converted into prosperity and well-being for most of the population, making it imperative that we:

• Develop collaborations and programs across the media, journalism and the arts that generate public participation and revenue for all players.

Economics is in the process of its own paradigm shift, with young entrants and new movements developing around Modern Monetary Theory, Degrowth, and Eco-socialism. The marketing and advertising disciplines should be equally bold.

Stewart Pearson

Stewart believes in Consilience, the unity of knowledge across disciplines. He has lived, worked, and traveled globally in Europe, Asia, and the U.S. He settled in the Evergreen State and Seattle. After studying Statistics and Marxist Economics in the U.K. he had four decades of experience in marketing and advertising focused on building client brands directly and globally.?He was Global Chief Client Officer and Vice-Chairman of Wunderman when it was the fastest-growing major agency in WPP. David Ogilvy once sent him a telex from India and Lester Wunderman told him stories of Picasso from the village in France where both of Stewart’s heroes had lived. Stewart is on LinkedIn and Twitter, and at [email protected].