7th May 2020
Reading a recent Economist leader – The game’s the thing – as covid-19 causes sports cancellations, what can be done? (reg may be necessary), took me back to my university days studying political theory & philosophy and raised a thought relating to the C-19 crisis.
One section of the piece caught my eye – John Maynard Keynes talked a lot about the importance of “animal spirits” to economic growth. ‘How will consumers feel when all forms of collective enjoyment are denied them? There are only so many Netflix shows one can binge-watch without going stir crazy. The Romans understood the importance of “bread and circuses”—keeping the public not just fed, but entertained, too. Hence the provision of gladiatorial games and chariot races in ancient times.’
Keynes referenced ‘Animal spirits’ in his 1936 book The General Theory of Employment, Interest and Money , to describe ”the instincts, proclivities, and emotions that ostensibly influence and guide human behaviour – which can be measured in terms of, for example, consumer confidence. It has been argued that trust also included in or produced by “animal spirits”.
This, on ‘animal spirits’, from the above book – ‘Even apart from the instability due to speculation, there is the instability due to the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism rather than mathematical expectations, whether moral or hedonistic or economic. Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as the result of animal spirits—a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities.’
I first become aware of this phrase via the philosopher Thomas Hobbes , who used the phrase “animal spirits” to refer to passive emotions and instincts, as well as natural functions like breathing; but it appears it goes back to Bartholomew Traheron in his 1543 translation of a text on surgery and then picked up by William Wood in 1719, who was the first to apply it in economics: “The increase of our foreign trade…whence has arisen all those animal spirits, those springs of riches which has enabled us to spend so many millions for the preservation of our liberties.” The expression has also been employed by Daniel Defoe , Benjamin Disraeli and Karl Marx.
On the back of this impressive literary roll call, it is interesting to observe the importance of this emotional, almost spiritual, aspect of the human condition. This is accentuated when contrasted with the current predilection for conversation around facts and figures, eg : Health Focused – numbers of cases, hospital beds (not) being used, PPE provision; and Economic – employees furloughed, government loans, market prices and investment levels.
Keynes point about the spontaneous nature of ‘animal spirits’, clearly presents the possibility of negative associated effects; but as it is a reality it is something that government and society must needs consider. In my area of expertise (marketing and advertising) there are some clear lessons for marketeers and brands.
The importance of consumer emotion, confidence and trust – in the product selection process, is well known in marketing circles. Tapping into these and the ‘spontaneous optimism’ of human nature is especially important during these difficult times. Even if consumers may not be looking to make selections in specific product categories at the moment (eg; travel & tourism, automotive and housing) they will surely be soon.
By way of examples, in the Travel and Tourism category, some destination brands that are positively, emotionally engaging with consumers currently, are Texas (Texas from Anywhere); Australia (Take the time to daydream, we’ll see you again soon); and South Carolina (Dream Now, Discover Later).
In the current crisis, the role of a brand can be to provide some light at the end of the tunnel. If it can make connections through spirit and positive emotion (in an appropriate fashion) this could provide the opportunity to benefit from ‘pent up consumer demand’, when this is finally released. It will be brands who have engaged with this positive ‘animal spirit’ that will be looked upon most favourably, rather than those who don’t.