2nd-order desires determine what kind of person one wants to be. A typical 1st-order preference is between chocolate and vanilla ice-cream. But when one thinks, “Liking ice-cream is not manly. I am just not the sort of guy who has any interest in ice-cream,” he is expressing a 2nd-order desire. He is contemplating not what he wants but what he wants to want: “I like ice-cream, but it’s a nasty temptation; I’ll purge the desire for it from my soul.”
This distinction is crucial to understanding the so-called “dependence effect” or the idea that our wants are determined by society.
In the paper linked to, Hayek points out that while all entrepreneurs collectively determine the maximum extent of the choices for all consumers collectively, no individual entrepreneur can compel any individual consumer to buy his product.
But there is a deeper issue here.
A company can cater to men whose self-image is either “strong rugged individualists” or “effeminate milk drinkers” (including those men who are not yet but are trying to become those types of people). These personal identities will generate the requisite first-order desires. The company can, upon guessing or predicting people’s self-images and deciding on their target demographics, seek to inflame or stimulate those 1st-order desires, such as through marketing and advertising and even affirmations of the identity.
But it is a losing strategy for a company to try to change self-proclaimed tough individualists into weak milk drinkers as a precondition to selling them their product. An attempt to inflame 2nd-order desires will be perceived by the consumers as a threat to their very identity. They will not take this assault kindly and will reject it with contempt and disgust.