The Dependence Effect

The dependence effect is the most subversive concept in postwar economics, and the one the profession has been trying to forget ever since Galbraith introduced it in The Affluent Society. Orthodox economics assumes consumer wants originate with the consumer; the producer responds; the transaction is voluntary and mutually beneficial. Galbraith observed that in the modern economy the sequence operates largely in reverse. The producer creates the desire and then satisfies the desire it created. Advertising, marketing, product design, cultural conditioning — the entire apparatus of demand management — exists not to inform consumers about products that satisfy pre-existing needs but to manufacture needs the producer's products can then satisfy. The dependence effect does not require that every desire be manufactured; it requires only that the line between autonomous and produced desire be impossible to draw with confidence.