The Narrative Economy
Last week, Apple stumbled. (More on that in a moment.)
The backlash reminded me of something I heard at BrandSmart in Chicago, a talk that’s stayed with me ever since.
It was all about stories.
We’re wired for them.
We replay them in our minds.
We shape our sense of self through the stories we tell about who we are… and who we want to become.
Storytelling is ancient. From cave walls in Lascaux to TikToks and Kindles, it’s how we’ve always made sense of the world and our place in it.
At BrandSmart, Kristian Alomá introduced a compelling idea:
The Narrative Economy — the notion that stories don’t just reflect the world. They shape it.
I was intrigued. So I dug deeper and came across Narrative Economics, a 2019 book by Nobel laureate Robert J. Shiller. He explores how shared stories, especially viral ones, can drive real economic events: booms, busts, political shifts, even revolutions.
"In a world in which internet troll farms attempt to influence foreign elections, can we afford to ignore the power of viral stories to affect economies?"
— Robert J. Shiller, Narrative Economics
Shiller makes the case that it’s not just interest rates and trade policy that move markets, it’s stories. Stories that resonate, repeat, and reinforce. Stories that travel faster than fact and stick longer than logic.
We’ve seen this in action:
The rise of meme stocks.
Viral trends influencing consumer behavior.
Sudden shifts in brand loyalty, sparked not by product changes, but by narrative dissonance.
So why do stories have this power?
Behavioral psychology helps explain it. We're not just passive listeners; we’re pattern-seeking creatures prone to biases. A few key ones stand out:
Confirmation Bias – We latch onto information that supports what we already believe, and ignore what doesn’t.
Recency Bias – We overemphasize what’s happened most recently, even if it’s an outlier.
Narrative Bias – We instinctively weave facts into stories, even when the connections aren’t real.
Two elements make a story especially potent:
Specificity – Details build trust.
Cause and Effect – Clear logic gives a story purpose and staying power.
So, what does this mean for companies?
It means we have an incredible opportunity… and a huge responsibility.
As Kristian Alomá said so clearly:
“Brands succeed when their story naturally fits into the personal narrative of their customers.”
It’s not enough to shout your value. You have to understand the person on the other end.
What do they care about?
What do they dream of?
What personal story are they trying to tell, and how does your brand help them tell it better?
When your brand becomes part of someone’s identity, you earn more than a transaction.
You earn advocacy. Belief. Loyalty that lasts.
But here’s the trap:
If your story feels inauthentic—or if your actions contradict it—you’ll break that bond in an instant.
Which brings us back to Apple.
In their recent iPad campaign, Apple released a video showing an industrial press crushing musical instruments, books, paints, and other creative tools—intending to symbolize how the iPad replaces them all. Instead, it horrified many in the creative community—Apple’s most loyal base. What was meant to convey empowerment felt like destruction.
Why did it backfire? Because it clashed with the personal stories of Apple’s audience. Artists didn’t see themselves reflected—they felt erased.
That’s the risk of brand storytelling without empathy. It’s also the power of getting it right.
Ask yourself:
What stories are your customers telling themselves?
Where does your brand narrative fit?
Do you reinforce their identity or try to replace it?
Are you the hero of the story, or the guide who helps them win?
The companies that thrive in the narrative economy are the ones that listen deeply, speak authentically, and make their customers feel seen.
