We think we know who the enemies are: banks, big business, lobbyists, the politicians who exist to appease them. But somehow the sector which stitches this system of hypercapitalism together gets overlooked. That seems strange when you consider how pervasive it is. In fact you can probably see it right now. It is everywhere, yet we see without seeing, without understanding the role that it plays in our lives.

I am talking about the industry whose output frames this column and pays for it: advertising. For obvious reasons, it is seldom confronted by either the newspapers or the broadcasters.

The problem was laid out by Rory Sutherland when president of the Institute of Practitioners in Advertising. Marketing, he argued, is either ineffectual or it "raises enormous ethical questions every day". With admirable if disturbing candour he concluded that "I would rather be thought of as evil than useless." A new report by the Public Interest Research Centre and WWF opens up the discussion he appears to invite. Think of Me as Evil? asks the ethical questions that most of the media ignore.

Advertising claims to enhance our choice, but it offers us little choice about whether we see and hear it, and ever less choice about whether we respond to it. Since Edward Bernays began to apply the findings of his uncle Sigmund Freud, advertisers have been developing sophisticated means of overcoming our defences. In public they insist that if we become informed consumers and school our children in media literacy we have nothing to fear from their attempts at persuasion. In private they employ neurobiologists to find ingenious methods of bypassing the conscious mind.

Pervasiveness and repetition act like a battering ram against our minds. The first time we see an advertisement, we are likely to be aware of what it's telling us and what it is encouraging us to buy. From then on, we process it passively, absorbing its imagery and messages without contesting them, as we are no longer fully switched on. Brands and memes then become linked in ways our conscious minds fail to detect. As a report by the progressive thinktank Compass explains, the messages used by advertisers are designed to trigger emotional rather than rational responses. The low-attention processing model developed by Robert Heath at the University of Bath shows how, in a crowded advertising market, passive and implicit learning become the key drivers of emotional attachment. They are particularly powerful among children, as the prefrontal cortex – which helps us to interpret and analyse what we see – is not yet fully developed.

Advertising agencies build on this knowledge to minimise opportunities for the rational mind to intervene in choice. The research company TwoMinds, which has worked for Betfair, the drinks company Diageo, Mars, Nationwide and Waitrose, works to "uncover a layer of behavioural drivers that have previously remained elusive". New developments in neurobiology have allowed it to home in on "intuitive judgments" that "are made instantaneously and with little or no apparent conscious effort on the part of consumers – at point of purchase".

The power and pervasiveness of advertising helps to explain, I believe, the remarkable figure I stumbled across last week while reading the latest government spreadsheet on household spending. Households in the UK put an average of just £5.70 a week, or £296 a year, into savings and investments. Academic research suggests a link between advertising and both consumer debt and the number of hours we work. People who watch a lot of advertisements appear to save less, spend more and use more of their time working to meet their rising material aspirations. All three outcomes can have terrible impacts on family life. They also change the character of the nation. Burdened by debt, without savings, we are less free, less resilient, less able to stand up to those who bully us.

Invention is the mother of necessity. To keep their markets growing, companies must keep persuading us that we have unmet needs. In other words, they must encourage us to become dissatisfied with what we have. To be sexy, beautiful, happy, relaxed, we must buy their products. They shove us on to the hedonic treadmill, on which we must run ever faster to escape a growing sense of inadequacy.

The problem this causes was identified almost 300 years ago. In Robinson Crusoe, published in 1719, the hero remarks: "It put me to reflecting, how little repining there would be among mankind, at any condition of life, if people would rather compare their condition with those that are worse, in order to be thankful, than be always comparing them with those which are better, to assist their murmurings and complainings." Advertising encourages us to compare ourselves with those we perceive to be better off. It persuades us to trash our happiness and trash the biosphere to answer a craving it exists to perpetuate.

But perhaps the most important impact explored by Think of Me As Evil? is the one we discuss the least: the effect it has on our values. Our social identity is shaped by values which psychologists label as either extrinsic or intrinsic. People with a strong set of intrinsic values place most weight on their relationships with family, friends and community. They have a sense of self-acceptance and a concern for other people and the environment. People with largely extrinsic values are driven by a desire for status, wealth and power over others. They tend to be image-conscious, to have a strong desire to conform to social norms and to possess less concern for other people or the planet. They are also more likely to suffer from anxiety and depression and to report low levels of satisfaction with their lives.

We are not born with our values: they are embedded and normalised by the messages we receive from our social environment. Most advertising appeals to and reinforces extrinsic values. It doesn't matter what the product is: by celebrating image, beauty, wealth, power and status, it helps create an environment that shifts our value system. Some adverts appear to promote intrinsic values, associating their products with family life and strong communities. But they also create the impression that these values can be purchased, which demeans and undermines them. Even love is commingled with material aspiration, and those worthy of this love mostly conform to a narrow conception of beauty, lending greater weight to the importance of image.

I detest this poison, but I also recognise that I am becoming more dependent on it. As sales of print editions decline, newspapers lean even more heavily on advertising. Nor is the problem confined to the commercial media. Even those who write only for their own websites rely on search engines, platforms and programs ultimately funded by advertising. We're hooked on a drug that is destroying society. As with all addictions, the first step is to admit to it.

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