This article is an excerpt from the Shortform book guide to "The Elephant in the Brain" by Robin Hanson and Kevin Simler. Shortform has the world's best summaries and analyses of books you should be reading.
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Why would someone buy a Tesla? Why do some people post photos of their glitzy hotel rooms on Instagram?
Just as body language allows us to communicate about things we’d never put into words, Kevin Simler and Robin Hanson argue that many of our actions double as social signals or conspicuous fitness displays. This is especially noticeable when it comes to how we spend our money and other resources.
Read more to understand the concept of social signaling through spending.
Spending as Social Signaling
The authors point to the well-known phenomenon of conspicuous consumption, where we buy expensive (and often superfluous or excessive) things to signal our wealth, status, and power to others. For example, strictly speaking, nobody needs a Tesla. But owning one suggests several things about you:
- You have a lot of money.
- You’re interested in new technologies (which implies that you’re well-informed and intelligent).
- You care about sustainable energy and vehicle emissions (which implies that you’re selflessly concerned with your impact on other people and the planet).
Note that none of these social signals is something we say outright. We don’t walk up to strangers and say: “I’m rich, smart, and selfless.” But a new Tesla promises to say all that for you. (Shortform note: Non-consumption can also send conspicuous signals. For example, one study argues that vocally quitting or abstaining from social media can be a type of political performance—in other words, by avoiding Facebook and saying so, people can signal that they value more authentic communication or that they reject Facebook’s status as a commercial entity.)
Simler and Hanson argue that this kind of signaling isn’t just about what you believe; it relies on your assumptions about what other people believe. They explain that lifestyle advertising (where companies focus on brand identity rather than extolling the strengths of the product itself) is meant to create common knowledge about the signals that certain brands send. For example, a Tesla wouldn’t signal the above qualities if nobody knew that Tesla makes expensive electric cars.
(Shortform note: This effect also explains the phenomenon by which people will agree with a political candidate’s policies, but not vote for that candidate for fear that the candidate “isn’t electable” or “doesn’t seem presidential enough.” This kind of vote has nothing to do with the voter’s opinion of the candidate and everything to do with what the voter thinks other voters will think about the candidate. Taming the elephant: Pay attention to times when you base your choices on what you think others think—this often doesn’t line up with what you actually want.)
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Here's what you'll find in our full The Elephant in the Brain summary :
- How human behavior is driven by selfish motives
- Why your own brain is hiding your intentions from you
- Why the purpose of education is to certify future employees