Abstract
This invited commentary is an edited transcript of remarks made at the opening session of the 40th Annual Macromarketing Conference at the Quinlan School of Business, Loyola University Chicago (June 25-28, 2015). The minor changes that have been added to the verbal remarks below (e.g., section titles, insertions of a few implied words) have been made for clarification purposes only. The theme of that conference was Social Justice Marketing as Provisioning Technology. The focus takes a very long macro view (40,000 years of homo sapiens as a species!). This telescoping lens enables us to view Homo sapiens aggregately, as a macro systemic sociohistoric structure, with an unknown but arguably alterable future. Hence the essay title, “The Long Macro View”.
Introduction
This invited commentary is an edited transcript of remarks made at the opening session of the 40th Annual Macromarketing Conference at the Quinlan School of Business, Loyola University Chicago (June 25-28, 2015). The minor changes that have been added to the verbal remarks below (e.g., section titles, insertions of a few implied words) have been made for clarification purposes only. The theme of that conference was Social Justice Marketing as Provisioning Technology. The focus takes a very long macro view (40,000 years of homo sapiens as a species!). This telescoping lens enables us to view Homo sapiens aggregately, as a macro systemic socio-historic structure, with an unknown but arguably alterable future. Hence the essay title, The Long Macro View.
Since my allotted time was about ten minutes of remarks, brevity was critical and, for that reason, I did not identify various scholars that influenced my thought and observations. After the conclusion of this transcript, I now identify some of the more salient individuals in that regard. My observations are not uniquely new; in some form, they have been stated before, but the key issue here is how they connect to the enterprise of Macromarketing scholarship. Hopefully, they will stimulate ideas for future research by macromarketing scholars and others that might be interested in further pursuing these thoughts. Toward that end, and not part of my remarks at the conference, four meta questions stimulated by the long macro view are offered for readers to contemplate.
Introductory Panel Remarks by Bob Lusch (June 26, 2015)
I want to thank Gene Laczniak and Cliff Schultz for the opportunity to share some thoughts, and I especially want to thank everybody in the audience. It’s a real honor and a privilege to be able to speak with this group and especially to the doctoral students because the challenge from Gene of ‘changing the world’ is going to take time and they have the best opportunity. Except for Olga Kravets, everybody on this panel is in the twilight of their career, so the real opportunity for scholarly progress and social change is upon many in the audience, but especially the doctoral students and young faculty.
I’m not going to use any slides today. I want to share with you four observations that reflect the long view and I’m going to take the long view perspective to the past and not to the future. I believe a long view of the past has profound implications for the research that marketing scholars conduct moving forward and therefore, for the future. The four observations and ideas are not about normative conditions; I think ‘the normative’ is very important and remains a critical element of macromarketing theory but more reflection on what has been and what is concerning the evolution of economic exchange systems is required. I’m going to go back thousands of years, initially to a tipping point of approximately 40,000 years ago where our species moved from Neanderthal man to Homo sapiens. Because I only have 12 minutes to do this, this necessarily is going to be a shortcut presentation.
Four Long Macro Observations
1. Increasing and massive trade or exchange is endemic to the human enterprise
The first observation is that Homo sapiens, increasingly and across many different ways of organizing economic exchange--not limited to capitalism, socialism, communism—commonly conducts trade or exchange with strangers. Each of you coming to this particular conference by getting on an airplane or getting in a car, and packing your suitcase, and checking into the hotel, and going to dinner last night and checking your cell phones has engaged in exchanges with thousands of strangers. Some of the exchanges are direct but there is a whole ecosystem of indirect exchanges that support the direct exchanges. These direct and indirect exchanges arise as the division of labor and specialization increases in society. The indirect exchanges auger more investigation.
2. Humans massively create tools or technology
The second observation is that Homo sapiens, perhaps instinctually, make tools. Now other species also make tools. Beavers make dams and honeybees make hives, but Homo sapiens over time are prolific and incredible creators of tools. All tools tangible or intangible draw upon some natural resources, upon matter and energy from the biosphere and beyond. The number of tools Homo sapiens make each year is growing exponentially. Again, I’m not making a normative statement or, if tool making today is bad or good, I’m just stating that we’re massive creators of tools and we need to start understanding that. In fact, fellow panelist Roger Layton refers to this development as “technology”.
3. Human choices involve massive and unseen costs
The third observation is that over time Homo sapiens, in part because they developed so many different forms of exchanges and amassed a large number of tools, have massive and diverse choices in front of them. Now we can debate the extent of personal agency and if Homo sapiens can have free will and so on, but the truth of the matter is that compared to the beavers, compared to the squirrels, and compared even to the admirable dolphins, we have huge choices in front of us. Every choice involves economic or non-economic cost (or both), even if it’s the cost of what you might have done otherwise. Coming to this conference meant there were many things that you didn’t do, and so, that’s an important opportunity cost.
The point is that as Homo sapiens develop exchange systems almost all of the costs of exchange are unseen. The price paid in a market exchange is only a relatively small part of what one pays, and what other actors in the system pay. We could also go on and examine hidden rewards, and ‘positive externalities’ but the amount of unseen cost by governments, by organizations, by individuals continues to skyrocket and we don’t have the systemic frameworks to understand that.
4. Humans create institutions to be cognitively efficient and to coordinate exchange and interactions with each other
The fourth observation is that Homo sapiens have limited cognitive capabilities and are therefore rationally limited by living in a complex world. The fastest microprocessor is firing substantially quicker than neurons in the human brain. Admittedly, computers still aren’t very good at “artificial intelligence” and one can debate if they ever will be capable of making all the calculations humans need to navigate through a complex dynamic world but progress has been rapid.
But despite limitations on wisdom and cognitive capabilities, humans are very clever at making tools. Institutions are one of those essential tools. Institutions can be thought of as shared heuristics or algorithms (i.e. norms, rules, values) that guide and often structure Homo sapiens about what to do in various contexts. Everybody came into this room today and virtually everyone sat in a chair; the chairs are facing the panel, they are not facing outside, they are located around a table, facing the podium. That’s an institutionalized solution. You could be sitting on the floor, lying on the floor, hanging from the ceiling, doing lots of different things.
Because of complexity in the world, Homo sapiens, over time, outsourced some of their thinking. I’m not saying that in a negative way, but the only way they can navigate through the world is to outsource their thinking; one way is via shared algorithms and heuristics, in short, via institutions. Institutions because of their shared nature and commonality also serve the function of coordinating human interactions, including exchange. The challenge faced with institutions is they develop within an ecological time frame for a particular ecosystem but they continue to carry forward with a long tail, an evolutionary tail, often with manifestations that are less needed or no longer applicable. I think that’s part of the challenge faced today: How to deal with institutions developed around an industrial revolution or other types of revolutions that perhaps need to be questioned and perhaps challenged.
Summary
The four observations are that Homo sapiens: massively engages in trade or exchange with strangers, massively and perhaps instinctually creates tools or technology, massively exchange with the vast majority of costs being unseen, prolifically creates institutions to be cognitively efficient and to coordinate exchange and interactions with each other.
In the past, I did not take such a long and macro view. I usually talked about a couple of hundred years. Today, I just went quickly through 40,000 years. That wasn’t a fair treatment of History; however, the essential nature of broad historical generalizations is to overlook a lot of fluctuations and discontinuities and to focus upon the long macro trends. Those are my remarks and my hope is that you will find some time to reflect upon how they impact Macromarketing. I thank you for the privilege of being here today.
Postscript: Meta Questions about the Long Macro View
What factors have led humans to exchange with strangers, how do societies historically and today vary their practices in doing deals with strangers; what are the consequences (outcomes) of the variation and growth of exchange with strangers and is society overall better or worse off?
What factors have led to humans creating tools (i.e., technology); how do societies historically and today differ in creating tools; what are the consequences (outcomes) of the variation and growth of technology and is society overall better or worse off?
Can some (or most) of the unseen costs of exchange be calculated; what theories have been or can be developed to support this; is it important that individuals, organizations and government consider unseen costs of exchange?
What is the role of institutional entrepreneurs, cognitive assistants (cognition as a service), and the reframing of old institutions (e.g., family, religion, corporations, government) in increasing the efficiency and effectiveness of the macromarketing system?
Selected Influences
Observation-1
Homo sapiens massively trade or exchange with strangers.
Plato, The Republic: Book II
Read, Leonard (1958), I, Pencil, Pamphlet.
Schmidtz, David, and Jason Brennan (2010), A Brief History of Liberty. Chichster, UK: Wiley-Blackwell.
Smith, Adam (1776/1904), An Inquiry into the Nature and Causes of the Wealth of Nations. London, UK: Printed for W. Strahan and T. Cadell.
Observation-2
Homo sapiens massively and perhaps instinctually create tools or technology.
Arthur, W. B. (2009), The Nature of Technology: What It Is and How It Evolves. New York City: The Free Press.
Layton, Roger A. (2008), “On Economic Growth, Marketing Systems and the Quality of Life,” Papers of the 33 rd Annual Macromarketing Conference of the Macromarketing Society, 84-104.
Mokyr, Joel (2002), The Gifts of Athena: Historical Origins of the Knowledge Economy. Princeton, NJ: Princeton University Press.
Penrose, Edith T. (1959), The Theory of the Growth of the Firm. Oxford, UK: Basil Blackwell.
Zimmerman, Erich W. (1951), World Resources and Industries. New York: Harper & Row.
Observation-3
Homo sapiens massively exchange with the vast majority of costs being unseen.
Personal communications over the last decade with Gene R. Laczniak and Frederick E. Webster, Jr.
Observation-4
Homo sapiens prolifically create institutions to be cognitively efficient and coordinate exchange and interactions with each other.
Loasby, Brian J. (2001), Knowledge, Institutions and Evolution in Economics. New York: Routledge.
North, Douglass C. (1990), Institutions, Institutional Change, and Economic Performance. Cambridge, MA: Cambridge University Press.
Ostrom, Elinor (1990), Governing the Commons: The Evolution of Institutions of Collective Action. Cambridge, MA: Cambridge University Press.
Simon, Herbert A. (1978), “Rationality as Process and as Product of Thought,” The American Economic Review, 68 (2), Papers and Proceedings of the Ninetieth Annual Meeting of the American Economic Association. 1-16.
Personal communications over the last five years, with Stephen L. Vargo and Jameson Watts.
Footnotes
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.