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Economists generally accept as a given the old adage that there is no accounting for tastes. The author of this text disagrees, and confronts the problem of preferences and values: how they are formed and how they affect our behaviour. He argues that past experiences and social influences form two basic capital stocks: personal and social. He then applies these concepts to assessing the effects of advertising, the power of peer pressure, the nature of addiction, and the function of habits. This method illuminates many other realms of social life previously considered off-limits by economists.