Fat Tire’s first prize: an obsolete bike. The rationality of costly signaling.

Fat Tire Beer is holding a contest, and first prize is an old-fashioned bicycle. It is a cumbersome and heavy one-speed bike that lacks most of the useful features found on modern bicycles. What does it have going for it? Nothing much worth my while. I buy my bicycles for performance, features and functionality, not looks. Others would say that the Fat Tire bicycle has an unique style worth coveting. I know a woman who recently paid a large amount of money for a "retro" bicycle much like the one in the photo. She bragged about her bicycle only in terms of what it looked like, and seemed to get irritated when I asked her whether she would miss some of the useful features found in most modern bicycles, features such as multiple gears, high-tech gear-shifting, feather-light frame, and front or rear suspension. It appears that Fat Tire Beer is looking for customers like the woman I just described, people who are obsessed with the looks of a bicycle rather than its functionality. I recently posted on Geoffrey Miller's terrific new book, Spent. At page 97, Miller discusses the "signaling value" of many modern products. Miller points out that modern corporations work hard to avoid competition based upon objective features that can be compared. Fat Tire Beer, for example, did not choose to offer a modern bicycle that could easily be compared to the many other bicycles currently being sold. Instead, the company chose to offer an old-fashioned bike that would signal a certain trait for the owner and his/her friends/acquaintances. Modern corporations

Use advertising to create signaling systems--psychological links between brands and the aspirational traits that consumers would like to display. Although these signaling links must be commonly understood by the consumer's socially relevant peer group, they need not involve the actual product at all. The typical Vogue magazine ad shows just two things: a brand name and an attractive person . . . there is a hidden rationality at work--the rationality of costly signaling. What matters in most advertising is the learned association between the consumer's aspirational traits and the company's trademarked brand name--the fountainhead of all profitability.
Therefore, don't waste your time trying to figure out what obsolete styles of bicycles have to do with beer. The bicycle featured on the label of Fat Tire Beer has nothing to do with the taste or quality of the liquid in the bottle. Rather, buying Fat Tire Beer is an opportunity for a consumer to display to others that the consumer can afford a premium beer. The bicycle on the label gives consumers a further opportunity to suggest that tradition is more important than functionality. Those who buy Fat Tire Beer let the beer do their talking for them: "I'm a person who values tradition over functionality." That's my guess. I wouldn't accept that cumbersome and sparsely-featured contest bicycle even if someone offered it to me for free, because I know less-costly, less wasteful and more effective ways of convincing others that I often value tradition. It involves hard work and no gimmicks. It requires that you willingly put your life under a microscope, that you repeatedly show rather than tell, and that you show your values in ways other than through conspicuous consumption.

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Anniversary of a New Land

Today marks the 40th anniversary of "...one giant leap for mankind." On July 20, 1969 a human first stepped onto the moon. Oddly, there is a significant minority of people who don't believe this. The Moon Landing Deniers (on whom I reported here 3 years ago) now have to increase the complexity of that conspiracy theory because of some recent news. Here are some new pictures taken from lunar orbit in the last few weeks of some of the Apollo landing sites. The point of the Lunar Reconnaissance Orbiter wasn't to prove the doubters wrong, but rather to gather an accurate survey of the moon to aid the Chinese (and maybe ourselves) in future exploration. You may recall that Apollo 11 almost crash landed on a rock pile, and Armstrong had to manually hover the lander over to a smooth area, landing with scant seconds of fuel to spare. They don't want to repeat that experience. Also, the orbiter should map out interesting mineral and erosion features that merit closer investigation. As one who watched the first landing live, I like to think that we'll be back.

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The Missing Past and Short Attention Spans: A Space Odyssey

Stan Lebar worked for Westinghouse in the 1960s. He led the developmental team that produced a state-of-the-art camera for NASA---the camera that was taken to the moon on Apollo 11 and recorded the first moonwalk. Most people have seen those images, many times---grainy, fuzzy black & white pictures of something that looks kind of like an astronaut slowly descending something that kind of looks like a ladder on the side of a large object that we are told is the lander. Whatever. We suffered through these scenes, probably many of us annoyed at the quality, impatient that better pictures weren't available. (Better still pictures became available, shot with specially-made Hasselblads, that remain absolutely stunning in clarity and detail, so made up for the sub par video, at least for some of us.) After all, even Hollywood, using by today's standards primitive technology, could create vastly superior space vistas---compare the images from the 1966 film 2001: A Space Odyssey with the NASA footage from a few years later and you grasp the disappointment. (It has long been my opinion that support for the space program waned because NASA managed to take something as exciting and sexy as space exploration and turn it into the equivalent of a lecture on statistics. The late, great science fiction author Robert A. Heinlein chastised NASA at Congressional hearings for not doing more P.R., better P.R. When he was told that the government didn't do P.R., he had further things to say about campaigns and such like and then pointed out "NASA has a press department, doesn't it? That's the job of the press department." Anyway...) The camera built by Mr. Lebar's team was far superior to the poor images we all saw---and continue to see. The recording medium, however, was incompatible with broadcast television at the time.

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Civilian Rocket Helps to Fill the Gap

As you may know, NASA's 1970's technology Space Shuttle is about to retire, and NASA hopes to have a replacement system after a gap of a few years. Good planning, guys! Sure, the U.S. has plans to hire French and Japanese and possibly even Chinese technology until we can catch up in space. Enter SpaceX spacex logo This completely private, completely civilian company has just launched a satellite, and has paying customers queued up for future launches. Including NASA. Kudos to PayPal founder Elon Musk for going from start-up to commercial flights in just 7 years.

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Health-less

The boogeyman of Socialized Medicine is being dragged onto the field of rhetorical combat to block the move toward anything smacking of Single Payer Health Care in the United States. The argument is old and hoary by now, that adopting a system like that available in Canada or the United Kingdom would lead to a collapse of American health care. Somehow the fact that expenses might be shared and disbursed through the government will render the world’s best health care system somehow crippled inside a generation is not seriously questioned by most people. Because most people don’t know. You can find case after case of anecdotal evidence to support the notion that British health care is worse than ours. Someone knows someone who, as the argument goes. And there is something to that. The waiting periods alone, the pigeonholing of treatment—horror stories abound which we glimpsed here when HMOs were instituted and accountants seemed to be in charge of medicine. There is, in fact, too much information for the average American to digest much less make sense of. Technologically, the United States has an extraordinary medical system. Unmatched in the world, despite some annoyingly negative statistics. That we achieve what we do in a country peopled by citizens who do the least for their own health than in any other country comparably empowered is amazing. Americans eat too much. Medicine can only do so much against a rising tide of obesity related illnesses. The tradition of the doctor giving you a physical and then telling you to eat right and get some exiercise is not a quaint leftover from an age that didn’t know as much as we do—that is sound advice and more than half the battle in maintaining good health. The explosion of Type 2 diabetes in children has been alarming, and this can be tied directly to diet and exercise. We also work longer hours under higher stress than almost anywhere else in the developed world. The need for vacations and long weekends is acute. This may sound sarcastic, but the link between stress and several major illnesses is no joke. We are also a violent society. If one looks at emergency room statistics, it becomes quickly clear that we are a people who like to beat, stab, and shoot each other at higher levels than almost anywhere else. What makes all these factors so overwhelming is that we have the means to do all this. Because a certain percentage, a significant percentage, of the population can afford to go to the doctor and have the consequences of all these lifestyle disasters “taken care of.” I put all this out front because the one factor that is muted in the national debate over the rising cost of healthcare is the fact that we are, collectively, idiots. We do not do, statistically, the simplest things to avert the need for medical intervention. The last detail in this litany has nothing to do with idiocy but with sentiment and perspective. It has been said for decades and it is true—80% of individual health expense in this country is spent in the last two years of life. We are, as a people, loathe to die and we will direct our health services to do absolutely everything to give us another day. In Europe, such people are told to go home and die. That sounds cold, I know, and I’m sure there are people in France and Germany and Italy with the resources to reject this advice. But the nations as a whole are not expected to pay for it. Here we are. Through health insurance.

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