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I read this in late sixties/early seventies but it may have been a few years old at the time. People live in utopian society but everything they use has "hypnods" built in so basic gruel tastes and seems like finest steak, cold water like rare wine etc.

The "hypnods" are in plates, forks and glasses , tables, walls, roads and everywhere. Protag somehow has a Matrix moment and sees all this, now he wants to wake humanity as all creativity is dying out, so he devises a hypnod blocker.

This proves disastrous as people look in shock at the squalor and especially at their spouses. Young men find they are married to wrinkled old crones or vice versa.

I can't remember the outcome or any further details.

EDIT/UPDATE: Now the story has been identified for me :- I had some memory errors in this, the protag didn't have a Matrix moment, that was the city mayor, in connivance with the controlling computer, who wanted mankind to move on to space exploration to escape the resource depleted Earth.

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The Mad Metropolis by Philip E. High

but everything they use has "hypnods"

Everything uses "hypnads"

so basic gruel tastes and seems like finest steak

(from novel:) "Yes, that was my order for you, but did you have it? Remember, room service plates have a controllable hypnad, so did you eat mush with the service hypnad projecting an image of steak—you don't know, do you?

Young men find they are married to wrinkled old crones or vice versa.

(from novel:)

A man might suspect he held a crone in his arms, but she didn't feel like a crone, and, after a generation, no one suspected or cared.

Protag somehow has a Matrix moment and sees all this

Protagonist was genetically engineered to be hypnad immune.

now he wants to wake humanity as all creativity is dying out, so he devises a hypnod blocker.

I'm not sure that was in the novel or not

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