Personal Finance 101: What is the Diderot Effect?

All the concepts of philosophy or society we talk about today stem from the experiences and ideas of the past. The same goes for interdisciplinary studies and experiences. In other words, every phenomenon classified as economics, social life, or psychology for you is fed by the legacy of ideas left to us by influential thinkers of the past. One of these famous thinkers and intellectuals is Diderot. We are going to talk about “What is the Diderot effect?“, one of the major influences on personal finance management and social interaction habits.

Diderot was one of the most notable intellectuals of his time and later periods, and the ideas and concepts he produced are influential even today. Such a fascinating historical adventure makes the concept of the Diderot effect as intriguing as any other concept. Let’s start by talking about Diderot and his philosophical influence, especially the Diderot story, which we are sure you will say “where did it all come from?” when you learn it!

Who is Diderot?

Before talking about the Diderot effect, “Who is Diderot?” should be considered. Because without knowing this interesting and impressive historical figure, understanding the dimensions of his ideas is not possible.

French philosopher Denis Diderot was one of the most influential figures of the Enlightenment period. Encyclopédie is one of the most important works for educating, developing, and building the future of the population. The Encyclopédie is a very realistic and disturbing work in some quarters, as was the notion of the Diderot effect in later years.

In the past, certain parts of society were disturbed by the fact that people were moving forward with an ideology other than religion or with science as a guide. However, thanks to enlightened writers and philosophers such as Diderot, efforts to popularize science never stopped, no matter how much they were blocked. Contributing generously to the preparations for the French Revolution with his writings and works, Diderot was one of the most forward-thinking and innovative figures of his time, but like every philosopher, he was a deeply impoverished writer.

Having personally tested the concept of the Diderot effect, which we will talk about today while trying to overcome his economic difficulties, the famous philosopher brought a completely different dimension to personal finance management with this observation.

Of course, we will go into the details of this test and determination, but let’s just say Diderot is a personality choosing his ideas from life itself and uses these experiences pragmatically. Thanks to his character, Diderot continues to live in our minds as a famous thinker still written about today!

What is the Diderot Effect?

Living in the 1760s and managing to create an idea to define the budgetary movements of today and perhaps of the future, Diderot was certainly a very influential man. But let us conceptually clarify what the Diderot effect is.

The Diderot effect is an idea representing the incompatibility of any owned asset (item, product, tool, etc.) in the current environment for users. So, every time we have something new, actually the new one is incompatible with the others. But instead of getting rid of the new one to overcome its incompatibility, people feel the desire to renew their other possessions.

Imagine buying a new phone. When you look at your old headset, maybe a little worn out but still working properly, you see the headset as incompatible, not the phone. When you have the chance to use your new phone with your old, working headset, don’t you feel like getting a brand-new headset and fixing the incompatibility?

It’s just us… Of course, it is! Here is where the Diderot effect starts, every new acquisition or purchase can make you feel the need to replace another asset you already own, which compels you to shop, to feel a vicious circle, a Diderot effect.

The Interesting Story of Diderot

The only way to better understand the concept of the Diderot effect is to know his story. Because, as we have told you, Diderot is a theorist of the realities of his and people’s lives. As such, a small moment can turn into a huge idea. So let us introduce you to the background story of the Diderot effect.

As Diderot’s poverty continued into the middle of his life, when he was in his 40s and 50s, his daughter was due to marry. However, Diderot could not afford a wedding for his beloved daughter. However, despite all the financial difficulties, Diderot was one of the most recognized intellectuals of his time. Moreover, he was the chief editor of the most comprehensive encyclopedia of his time. To solve his problems, Diderot decided to sell his library, and the Russian Empress Catherine bought Diderot’s library for a considerable sum.

The birth of the so-called Diderot effect began with the happiness of Diderot, accessing the money from the sale of his library to pay for his daughter’s wedding. The philosopher was so happy with this profit that after his daughter’s wedding, he decided to reward himself with the remaining money and wanted to replace his dressing gown, which was so worn out that it no longer fit him properly. He bought himself a wonderful, glamorous dressing gown.

The Most Critical Point of Diderot’s Story

The story of Diderot’s purchase of the dressing gown, which was instrumental in the emergence of the idea of the Diderot effect, becomes quite interesting after Diderot purchases the dressing gown. Because from now on, our famous thinker begins to feel the incompatibility of everything around him while wearing a dressing gown.

He even writes about this situation in one of his articles as follows: “Now there is a complete incompatibility. The atmosphere has been ruined. There is neither integrity nor beauty anymore…” You see, when he had the red dressing gown, Diderot looked at the rest and thought, “I don’t have any beautiful things, I don’t have a holistic and functional environment.”

A Groundbreaking Dressing Gown in the Philosophy of Consumption

Now that you know Diderot’s story, let’s get to the secret of the dressing gown… The fact that one shopping gesture changes the way you look at other possessions is the beginning of Diderot’s effect that we are talking about today.

In other words, the Diderot effect is first experienced by Diderot upon buying the red dressing gown. All his other belongings, his surroundings, and everything he owns looks pale in comparison to the new and fancy look of the dressing gown. The most important consequence of this effect is the shopping frenzy observed today. Because with each new possession, people discover once again their other imperfect assets.

The Diderot effect is famous for the story of the dressing gown giving a new perspective to the philosophy of consumption. However, the consequences of this influence and the pressure on the masses in the following years are not an innocent and funny story. The scholars delve deeper into the subject, develop a vision of the Diderot effect and decide on its characteristics.

The characteristics of the Diderot effect are as follows;

• What people buy can become part of their identity.
• People want others to be affected by the things influencing their identity and character.
• After each new purchase, what the consumer previously had is categorized as obsolete.
• For the consumer, the compatibility of the existing products with each other is as important as the compatibility with the newly purchased products.
• Older products become worthless if not adapted to the newly acquired assets and need to be replaced.

As you can see, the Diderot effect is a perspective underlying what we have been referring to in recent years as the shopping mania or “disease”. So, the depreciation of what we have is partly related to what we have just acquired. As such, each new purchase makes the previous one worthless and this situation turns into a vicious circle.

Diderot Effect and Personal Finance

In the last century, the Diderot effect has become one of the most important references for sales and promotional activities. For example, wireless headphones, smartwatches, and other products introduced by famous technology giants together with their phones are interconnected with this effect.

Once purchasing a phone from one of the famous brands, your mind keeps thinking about the wireless headphones – the ones you didn’t take with you… When you wear a smartwatch, everything feels complete. Social engineers know exactly what this effect is and use it successfully on the masses.

Consumers should be inclined towards conscious consumption and harmonious living patterns rather than the Diderot effect cycle. However, it is easier said than done. Thus, of course, we are not saying you have to do it. But try it!

If interested in learning more about managing your finances better, be sure to check out our article: How to Manage Your Personal Budget Better with Simple Budget Planning Methods?

And then there is another must-do: making groundbreaking choices in your digital finance life. For example, download Ozan SuperApp, where you will benefit from 24/7 transfers and get your fill of cashback! Thus, step into a cycle full of gains in shopping and convenience in the mobile app!