The global situation is unclear, but your skincare routine is not | EPISODE 1: The Anxiety Economy

Dear Reader,

On a Tuesday evening, after reading three articles about layoffs, two about ongoing war, and one particularly bleak piece about climate projections, you open your phone and buy a £49 French peptide serum whose name you rehearse before saying aloud.

It promises firmness, smoothness and radiance. You have no idea what a peptide actually does, but it feels… nice and stabilising.

This is not irrational behaviour, though it might look like it.

In fact, it is one of the more predictable responses to uncertainty. When people feel that control is slipping away in large areas of life, they instinctively try to restore it in smaller ones.

Psychologists call this compensatory consumption, a term that sounds clinical but describes something surprisingly human.

When the world becomes difficult to organise, people start organising whatever remains within reach, such as the wardrobe, the skincare routine, or the kitchen pantry.

The morning coffee ritual that now involves a grinder, a scale, and a level of precision previously reserved for pharmaceutical manufacturing.

None of these actions solve inflation, geopolitical conflict, or the labour market, but they restore something smaller and psychologically essential: a sense of agency.

Economists have been observing this behaviour for decades. They even gave it a name that sounds a little glamorous: the Lipstick Effect. 

The theory proposes that during economic downturns, consumers tend to reduce large luxury purchases while continuing to indulge in smaller ones.

So, instead of a designer handbag, you buy a luxury lipstick, I know, I recently bought one.

A holiday might be postponed, but the skincare upgrade survives. The renovation is delayed, but the espresso machine arrives promptly, along with an assortment of beans that come with tasting notes involving chocolate, citrus, and, inexplicably, cedar.

Indulgence does not disappear in difficult times; it just becomes smaller.

Recent spending data suggests we are seeing the pattern again. In the United Kingdom, spending on health and beauty rose notably in recent years, even as many households reported financial strain.

Consumers, it seems, were cutting back broadly while preserving a category of purchases that could best be described as emotionally strategic. Researchers sometimes refer to these as “little luxuries.”

They are small enough to feel financially acceptable but meaningful enough to produce a psychological lift. A speciality coffee, a pastry that costs slightly too much to be justified but not quite enough to provoke regret. A candle whose scent is described as something like “Nordic forest at dawn.” These products do not just provide pleasure; they provide structure.

A skincare routine introduces a sequence to the evening. A morning coffee ritual anchors the start of the day. A carefully arranged living room, bathed in soft lighting and neutral fabrics, creates the appearance that someone, somewhere, remains in charge of things.

But something about the modern version of this behaviour is different from past recessions.

In previous decades, people experienced economic anxiety privately. They worried at the kitchen table, perhaps with a newspaper nearby.

Today, we experience anxiety inside digital platforms.

And digital platforms are strange places to feel uncertain, because the environments they present are not chaotic at all. They are immaculate; Instagram kitchens glow with soft morning light, and apartments look perfectly organised. Someone, somewhere, is always calmly preparing a green smoothie while wearing linen.

This creates a peculiar cultural script. When life feels unstable, the appropriate response appears to be self-optimisation.

Upgrade the routine, improve the environment and invest in yourself.

The marketplace has responded accordingly. Many modern consumer products function less like indulgences and more like emotional infrastructure. They promise small forms of order and control: better skin, better sleep, a better morning routine.

Meanwhile, digital commerce systems have removed nearly every barrier between desire and purchase. Your payment details are stored, and checkout requires a single tap. The phrase “Buy Now Pay Later” hovers nearby like a polite but slightly mischievous financial advisor.

In this environment, consumption becomes unusually effective at regulating mood. The act is immediate, the delivery arrives tomorrow, and a tiny improvement has been scheduled.

The result is a curious paradox.

At precisely the moment when consumers feel economically cautious, a category of spending remains remarkably resilient. People are not spending recklessly. If anything, they are spending carefully, just not abstaining.

They are selecting purchases that provide small, manageable forms of control.

A better serum, a nicer coffee or a routine that makes the morning feel, if only briefly, like something that can be organised.

Seen this way, doom spending is not simply a lapse in discipline. It is a rational adaptation to an environment that feels increasingly unpredictable.

People are not just buying products; they are buying fragments of certainty.

And as long as uncertainty remains one of the defining conditions of modern life, the market for those fragments is likely to remain surprisingly strong.

This essay is the first in a series titled The Anxiety Economy: Consumption in an Uncertain World, which will examine how uncertainty influences contemporary consumption.

Cheers!

Akanksha