Last week I noticed several news articles that were worth blogging about, but I just started the blog a few days ago.  This is one of these blog entries.  I’ll get through that backlog shortly, I hope…

I saw in the New York Times last week indicating that Narcissistic Personality Disorder is being removed from the fifth edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-5) along with a few other personality disorders, and briefly discussed a debate among psychiatrists regarding this removal.  While most people that we might think of as being narcissistic probably don’t qualify as having NPD, narcissism certainly has been getting a lot of press in recent years; one good recent book about it is The Narcissism Epidemic: Living in the Age of Entitlement by Jean Twenge and Keith Campbell, which illustrates the increase of vanity and self-absorption in modern culture and the negative effects thereof.

Why is narcissism on the increase?  This is probably a complex issue with several root causes.  I’m going to look at one possibility in particular, namely the nature of our information economy.  While large corporations, for example, would be willing to pay lots of money for the right kind of information, it’s difficult to get the average customer to pay for just information.

One of the reasons is the ease of finding people willing to produce information for free.  Do you want a 5000-word-long, fairly well-written if bland in tone, referenced article about the Crusades?  Someone’s already written it on Wikipedia.  There is an enormous amount of information somewhere or another on the Internet, free for the taking.  This abundance of free information contrasts with the outcomes of the Industrial Revolution; while the prices of goods that started to be factory made decreased, it didn’t decrease to zero.

Another reason is due to the ease of reproducing information.  Information can be transmitted and copied endlessly almost instantaneously nowadays, and with a theoretically unlimited supply of a piece of information, it’s not surprising that the price go down to zero.

These two reasons aren’t necessarily Bad Things; it’s nice for people to share, and it only makes sense to give something away if it’s just going to be copied anyway.  However, if you’re someone that creates intellectual property, how can you get ahead financially?  Well, you have to sell something else; just selling your information isn’t going to work.  Certainly you could sell physical instantiations of your product (books, CDs, DVDs, etc.) or advertising, but you still have to stand out among the enormous pile of information out there.  How do you do that?  Well, probably the best way to stand out from the crowd is to sell yourself through being a celebrity or, if you can’t be a celebrity, at least act like one.

Certainly the allure of celebritydom is quite strong, at least in the United States, where people quit governing Alaska in order to become a celebrity.  Why?  Well, being a celebrity, or at least acting like you were one, gets you a lot of attention, which allows you to stand out in the crowd.  That attention should solve the problem of getting ahead financially as people flock to you and your product.  Being well-known has a lot of other advantages.  For example, Steve Jobs’ personality is certainly a good selling point for iPhones and iPads and iPods.  Even if you aren’t a CEO, there are obvious advantages to having a lot of people know you.

Getting back to the title, “The Personality Economy”, that may be a bit of an overstatement, there is a lot of economic activity generated via people’s personalities, and I can only see this increasing in the future.  Why are so many people narcissistic?  Because it pays off in today’s economy.