Why Do We Even Have an Economy?

Economists are fun people. They sit around in their offices of academia and crunch numbers all day. They play and crunch numbers and they come up with extravagant theories about how those numbers fit together and what they mean. Then they get tenure at the university and it takes a crowbar to pry them from their cushy jobs playing and crunching.

But often, all the playing and crunching causes the economists to get confused. They forget that in the real world, those numbers mean more than anecdotal folly. Those numbers often have names and former addresses before they were evicted from their homes.

So sometimes we have to step back and look at the big picture. We have to look at the big picture and assess our priorities and remember why we invented this thing we call “the economy” in the first place.

We invented the thing we call “the economy” for only one reason. So that each of us could have a life. As in make a living. As in having jobs so that we can make a living, have a family, raise and educate our children, and eventually retire with an RV so we can see Yellowstone before we die.

What about profits? Isn’t the point of capitalism so that you can make a profit and grow your business thereby creating jobs.

No. Whether you’re the owner of a hotdog stand or the CEO of GE, the only reason to make a profit is so you can make a living, get a dog, and one day take up fly fishing.

Now the cushy economists have all sorts of measures for how the economy is doing: GDP, PCE, GDPP and CPI. But if you understand that we only invented “the economy” so we could all have a life, then you realize that there’s really only one economic indicator that matters: the percentage of people who have good, living-wage jobs as opposed to those who do not.

So the next time you hear someone saying the economy is coming up roses even though the number of people with good, living-wage jobs continues to decrease, remind them that, unless the economy is helping everyone have a life, it’s really just pushing up daisies.


Skip to comment form

  1. I share your frustration.  The phrase I hate the most is “jobless recovery”.  How can you have a recovery if the economy is not producing good paying jobs and a significant portion of the population is either unemployed or underemployed?

    It is one of those corporate media created terms to make us believe that everything is Ok and it is really the individuals fault for being out of work.  Fuck that.

    • Edger on April 14, 2010 at 02:14

    Those who can count. And those who can’t.

  2. the elite always seem to be the main focus of the polity with the health of the polity measured by the well being of the elite. This is modernly abstracted into a word, but the reality represented by the concept is ancient. Recently, perhaps the last few hundred years, there have been many political/philosophical movements to change this. It’s hard to throw off with hierarchichal culture well established.  

  3. We can of course increase the percentage of those holding “good living-wage jobs” by continuing to define down what constitutes a “good living-wage job”.  It can be defined right down to the absolute minimum for fulling the reproduction of labor, that barest minimum that keeps the workers and their offspring from outright starvation and abject destitution. In the global race to the bottom, the rag-pickers of the garbage dumps outside Manila can be viewed as having “living-wage jobs”.

    Increasing productivity, increasing population, declining resource bases, and an economic structure in which survival hinges on employment are basic facts on a mutual collision course.  The current paradigm is unsustainable in the long-term, as we move deeper into the 21st century, the time frame of that unsustainability shortens.  Of course it doesn’t happen in a single cataclysmic failure, not even in a single mode.  Look at the growing numbers of “illegal immigrants” or “undocumented workers”, not just in the US but around the globe.  Everywhere as the governing conditions  of the system squeeze dry the demand for labor before the number of people who need work is used up, people are set in motion by desperation. As high-productivity manufacturing processes are pushed deeply into the less developed countries, the declining need for workers in what had been labor-intensive economies becomes widespread.  These massive armies of the displaced unemployed are forming everywhere.  Within China, it is estimated that over 100 million people live semi-nomadically, wandering back and forth across the nation seeking temporary labor of any sort.  Humans, capable in crisis of being rational beings, depart from their hopeless condition and make a beeline for the nearest high-income area where they can hope to make some marginal living providing some sort of personal service or other menial labor.  Arriving, they quickly  come in conflict with the workers displaced when the high-productivity manufacturing capability was removed from high-wage countries to the new immigrants’ nation of origin and elsewhere.

    I’m not ready to go all Bob Black yet, but the era of the Protestant work ethic, which says one should only eat if one works at recognized employment has to end if massive social conflict and upheaval is to be avoided.  However, as the Protestant work ethic is one of the base dogmas of the hegemonic order, making living independent of “making a living” can only be the end point of a revolutionary upheaval itself.

  4. … bullshit that mainstream economists pull when they pretend that “economics” means building models with their toolkit, and the fact that they are a bunch of pseudo-scientific charlatans who are not, in fact, engaged in a scientific approach to the study of the economy should be ignored while they get to defined who is an economist and who is not.

    People that do this:

    They sit around in their offices of academia and crunch numbers all day. They play and crunch numbers and they come up with extravagant theories about how those numbers fit together and what they mean.

    … are they really engaged in a scientific study of how a society provides for its material provisioning … or not? And if not, should we dignify them with the label that they claim for themselves?

    • RUKind on April 14, 2010 at 04:41

    That will help refine their mathematical models and align them with reality. While living under the bridge they should be forced to work for minimum wage at places like WalMart, McDonalds and coal mines -all twenty miles away from their bridge. No health care or dental care.

    And the cops should destroy their shelter and belongings once a month.

    When they graduate, they will have a firm grasp on how much real data is involved in their crunchy numbers.

    I think it was St. Reagan who coined the term “voodoo economics” – an oxymoron if ever there was one.

  5. the effort. I think if it had a chance of working, christianity or budhism or marxism or something-ism would have worked better.

    So, given my OBVIOUS TRUTH AND REALITY … or perspective –

    I’ve 4 ideas for channeling greed.

    1. the maximum wealth / income ANYONE can have would be 100 times the family median. when you attain it, you’re ‘retired’ – you have to go into a new field. IF you’re so special, instead of starting the next Oracle you’ll start the next Boeing. Good luck. In my 50 years, I just see too few examples of people inventing the next pencillin, google or mouse trap AND then inventing the next great thing – they focus on making their rockefellar gates empire.

    IF you blow your 100 times median wealth on a … old lear jet, and you’re broke … tough shit.

    2. we HAVE to know the costs of everything. everything costs time, time costs money. having tens of millions dependent upon their scumbag boss and their scumbag managers for their retirement, health and retraining … isn’t this REAL stupid? wouldn’t it cost less to have the community efficiently provide these basics? it costs society a lot to throw people on the side and turn them into dependents – and “society” does it all the time. couldn’t we figure out a way to make it cost less to support people through transitions, in hte long run?

    3. we gotta figure out an optimal amount of public investment to keep a thriving private market.

    4. we gotta reward people in the private sector and in the public sector for inventing the next mousetrap, OR for figuring out how to deliver specail ed services better – if you figure out how to streamline the licensing processes for 3,000,000 teachers, resulting in needing 40 or 400 fewer licensing bureaucrats, you should get part of that 100* the median income!! oh, by the way –



    I have a job – I’ve done saving the world for tonight, time for sci-fi book.


    • jim p on April 14, 2010 at 05:59

    I think the King of Nepal said we should measure.

    Why we count gambling as part of the real economy escapes me. If I were in charge of statistics any speculation in futures and derivatives and most if not all insurance would be classed as gambling, and the only statistic to note would be the 90% tax on any income so derived.

    The economic statistics would count the living human economy of solid objects and services.

    • jim p on April 14, 2010 at 06:05

    sang Fela in a song about Nigeria. Today, he could sing “All country…”

Comments have been disabled.