Maybe The Real Economy Was the Friends We Made Along the Way

I am not an economist. Most people I know aren’t either. But many of us fancy we know a lot about economics. And in a way we all do. The economy is just the sum of all the business people are conducting. As we all know, it’s sort of important.

In recent years, economics has questioned itself. Economists revelled in abstract and rigid models of human behaviour. Nowadays, many are interested in how people actually behave. I think this has been really healthy for the field. Economics now intersects with psychology! This intersection makes a lot of sense. The economy is a system made of people. To understand a system, you must understand its parts.

Some people see the economy as a large machine. Economics attempts to quantify this machine. But I think a machine analogy is limiting. Inside the machine are people living their lives. The economy isn’t a machine at all.

AI technology threatens our existing economic order. Supposedly. Our economic life is at an inflection point, where AI may make a large number of jobs redundant. I am a computer programmer. I worry about my future a lot. If my job is made obsolete quickly, I am going to need to retrain quickly. I just want to enjoy my life, man.

Whatever the case, the ghoulish proponents of AI would love to see their technology disrupt the existing order. It would mean their companies see revenue growth. It might even lead to profit. A lot of capital is staked on technology companies promising to bring the AI revolution, with the question are we in an AI bubble? repeated by analysts daily. Bubble or not, leaders of AI companies would love to see it automate everything.

But there is something short-sighted about wanting to automate everything. Or almost everything. Firstly, what do we all do when there is no work? If you could quit your job tomorrow, you would revel in the time you have for yourself. Time to crack on to those important projects of yours! If you’re reading this, you are probably an adult, and have a deck to build, a lounge to decorate, or mountains to hike.

But what would a young person do? No need for a job means no need to complete their education. The smart kids would be fine. They would indulge in creating music, building things, or working on community projects. But for a great many, their idle hands would find plenty of time to become the devil’s plaything. Young people today already find ways to get up to trouble. Without meaningful jobs, we would have more kids robbing the poor robot at the automatic vape shop.

The government could respond to this dearth of work by inventing make-work — things to keep people busy. But anyone who took such a job would feel wrong about it. People don’t like bullshit jobs — and make-work would be the ultimate. Most would tire of it and go back to doing their own thing. Given a choice, a great many of us would lounge and simply browse the latest machine-generated slop on our phones.

Besides, when the economy is automated, who is going to buy all the things the machines make? Between all of the metrics and models of economics are people making, doing, buying, and selling things. The economy is the result. The flow of money is very important to the economy. If it is disrupted on a large scale, businesses suffer. The effects ripple through people’s lives and cause pain.

In an economy, the resources are all there. The oil in the ground, the apple in the tree. But nothing works if nobody buys them. I think that there is a reason consumer-centred economies such as the U.S. do so well. Consumers compel the apple out of the tree with their hunger and hard-earned dollars. When people earn money in real jobs, their demand compels suppliers to conjure the stuff that is there. It may need transformation, but it’s there.

This is to say that exchange is the economy’s connective tissue. Automation might make production cheap. But without the consumer side, well, who is going to buy all those things? Uh, duh, we’ll have universal basic income, you might say. And sure, UBI seems sensible for a world where an honest income isn’t an option. But will each monthly sum of free money be enough? What’s the right amount to keep us all going?

I think there is more to the economy than just “producing things”. Myth and legend keep the economy alive. No really — and this take is getting a bit hot — but we human beings live off myth and legend! Ancient Greece needed its pantheon of gods to inspire and unite the people of its various kingdoms. Likewise, the economy is not real, it itself has beliefs. The beliefs are sensible and grounded in a scientific approach. But economics acts as a myth that keeps a social order.

Without something to believe in, disorder reigns.

The above said, the future won’t be the doomscape as we can imagine it. It will be a surprise. Reality is nuanced, promises become letdowns, and people adapt. There may be new jobs. Any jobs that remain will be altered. If things go OK, young people will train for the new work willingly enough, while only curmudgeons such as myself lament the change.

To disclaim again, I am not an economist. This is another of my Dailies, and I wanted to yap about this idea. Who knows how things will go. I am just sick of the focus on growth investment at all costs. I think we miss a goal we should aim for — to build a good society. But at the very least, we have a social order. If it does fall apart, we will look back at how foolish we were to let it go. It wasn’t just about producing more and more with less and less. The real economy was the friends we made along the way.