Happy New Year readers-all. For a variety of reasons, I’ve eased back into my writing here slowly but, even a month in, I hope you are still bathing in some of the warm glow of optimism that comes from unburdening yourself of 2023, and have some sense of the ‘possible’ in 2024.
For my part, despite it being no annus horribilis for me, I still felt 2023 had a lot of baggage about it. The messiest parts of the pandemic (so far!) still lingered large in the rear-view mirror, and the zeitgeist we tried to hide all that garbage behind—across politics, climate, and technology—just piled on further dread.
Clearly, that stuff hasn’t gone away. But, as Emily D. reminded us, “‘Hope’ is the thing with feathers” and, if we allow it, it will soar above all that detritus. Regardless of what 2024 brings you, my small hope is Little Teapot will cause you to occasionally look up and find her there—however distant she may seem in the headlines, the social posts, and around the dinner tables this year.
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This piece is part of my series on Democracy. If you’ve just joined us, you might find a quick glance at the previous posts (at that link) will set you up for this one.
Economics, as mostly studied and understood in its textbook neoclassical form, all starts at one tiny pinprick of an idea.
It is an idea hidden in the charts and tables and TED talks and manifestos and post-doctoral theses, but one that is so miniscule—so obscured beneath all the verbiage and ink—that we mostly either don't realise, or we forget, it's even there.
It is the idea that humans are self-interested creatures; rational to a fault.
Humans will, in other words, only put effort into something for their own gain; and only covet something that represents value to them.
Of course, you'll laugh and say: “Don't be ridiculous! Economists study charitable giving and gambling and addiction; they study governments and Universal Basic Incomes—those are things that directly prove you wrong!”
But how does an economist assess those things? Mostly through the lens of money; a thing which can only exist because it so conveniently measures self-interest. And yet, at the end of the day, money alone can’t explain love, or someone painting beautiful art in their attic and not showing it to anyone else, or sacrifice, or sharing.
It can't even explain why someone would bother to hold open a door for a complete stranger.
Now, if you've been reading me for a while, you'll know I'm not one to throw away an idea just because it has some holes in it (my comments section has always been open to anyone willing to tear holes in my own stream of consciousness!), and I’d be happy to concede the economics profession still has things to teach us about some aspects of ourselves.
Unfortunately though, economics is a greedy monster, intent on devouring as much of the world as possible, and it just doesn’t like to stay in its lane!
There’s a reason why economists can do all this while the rest of us look on with a confused expression on our faces. Economics is a humanities subject, essentially suited to help us build debriefing models of explicit human action. It is not an empirical science any more than philosophy is, because no economic model could ever be built to capture all the inputs of society. If it could get to that point, it would instead be called “prophecy”.
However, the masterful trick that those with power have played on us was convincing us that economics can predict the future, and therefore we should continue to laud the ‘smart people’ who will then use it to optimise society for us.
So, because economics can serve the agendas of the powerful, in the past 60 or so years, it has firmly refused to stay out of things it can’t explain. It's stuck its finger firmly into pies all over the neighbourhood. And in each of those pies it has left that grimy little pinprick of residue known as the “self-interested human”
Of course, the “self-interested human” alone is not enough to fool anyone for long. To realise not everything we do is ‘financially self-interested’, all one needs to do is help tie your kid’s shoelaces while knowing they could’ve done it themselves, or drop some spare change in a beggar's hat as you walk past them, or buy a burger you know will disappoint you when you’re not really even hungry.
So economics had to invent The Market to distract us from all that ‘noise’ of actual human existence, where behaviours could not otherwise be easily measured.
What The Market does is boil every human interaction down to motivation. It basically states that a human won't act without there being at least some measurable reason to act—some “return on investment” for spending their “hold the door open for a stranger” currency. It does this by describing things in terms of margins—where the way you act is measured against the individual choices you have in the moment you act.
For example, you might pay $10 to get a taxi to within 5 minutes walk of your house, or $40 for a taxi that drops you right outside your front door. Saving 5 minutes is unlikely to be worth the extra $30 for most of us. However, if getting home 5 minutes early will allow you to give your daughter a hug before she leaves for a 6-month overseas trip, it might be worth the cost.
And that’s how you turn the love for your daughter into an, easier-to-measure, $30.
This is what we might describe as rationality. And, while anyone who lives outside the confines of their own skull cavity has countless examples of it not being the way the average Jo-Human actually lives their life, it really does make our existence much more compatible with Microsoft Excel®.
Still. People spend decades studying this stuff, so I don’t want to boil it down to a sentence-and-a-half and pretend that’s all there is to it. The point is, The Market exists to justify the idea that self-interested choices lead to social progress. Because people who behave rationally and in self-interested ways can be relied on to choose things that progress them the most—financial, spiritual, political, cultural, emotional, or otherwise. And, if you plunk a bunch of those ‘self-interested’, ‘(good)-choice-making’, humans together in the “there’s no such thing as society”1 world, that’s the basis for human civilisation.
…According to economists.
And, money, being a convenient neutral currency, happens to be a fabulous way to compare the virtue of any rationally-chosen service, product, value, or idea.
What The Market essentially does is justify our disconnectedness via a ‘measured’ society—from personal vehicles to detached houses to self help to effective altruism—and ensures every aspect of our lives remains a capitalism-sustaining competition for being.
Now, I should say, I’m not anti-markets, I’m anti-The Market—the slimy idea that there’s a simple calculation that can be applied to any interaction.
A market is where you agree to pay or trade or share something you have, for something someone else has and is, by definition, win:win.
It might not always be objectively win:win—sometimes one side will get a better deal (from the perspective of an outsider, or in retrospect)—but provided the trade is made within fair moral and agreed legal boundaries, all that matters is the two parties are happy with the trade.
That’s different from The Market, which makes every human action a self-interested quest for maximum marginal value.
This seems like a subtle difference, but a market is about trying to reach a consensus goal:
“I want to buy x / you want to sell x”; or “I know x / there’s value to me in you also knowing x”
Whereas The Market is about each side trying to reach their own individual goals, shepherded by rational marginal decisions.
“I want to buy x / you have x”; or “I know x / there’s value to me in you wanting to know x”
You might think of this kind of thing (although acolytes of it don’t like to) as “zero-sum”: An interaction where the aim is to win for yourself, regardless of the consequences to others.
This, conveniently, again lines up super-nicely with money, because money is also zero-sum: Unlike, say, human mess like love, or even a political opinion, we can’t ever both have the same money—if you have it, I don’t!2
Of course, you might believe this “war” really is the thing that actually drives human progress. You might genuinely believe that, if all our interactions were instead founded on “trust”, we’d be stuck trading bushels of wheat for buckets of eggs in muddy huts without running water. But actually what The Market does is, ironically, alienate us from our most human autonomy by positioning any action taken for money as always being “right and proper” because, if we start from the assumption that humans make rational decisions, and rational decisions can be measured with money, it must be.
If you struggle to make choices in this ‘rational’ (measurable) version of the world, you either have to learn to; or inherent enough power so others will patiently work around you (for their own rationalised reasons); or suffer.
But this isn’t just a problem faced by unruly children, the mentally unwell, minority cultures, or differently-abled people. If you’ve ever stood in front of an aisle of potato chips or toilet rolls in the supermarket and had the sense that, what appears to be “endless choice” is actually just a “sea of sameness”, you yourself have had an irrational thought.
How can you question the value of all that choice?!
Unfortunately, the misalignment between actual humans and economic humans goes far beyond that supermarket contradiction. It’s probably already occurred to you that no-one can operate in tidy rational boxes all the time, because it is literal human nature to bring some entirely ‘irrational’ approach to gender or race or ability or taste or location or love or family or work.
The Market is designed to make us forget that inconvenient truth. We’re instructed that, in order to survive—let alone thrive—in our society we just need to trust the logic of rational decisions, made on the basis of marginal value. We’re taught not to notice that every measured decision becomes a type of currency, and when things are currency they sacrifice their full meaning.
You might be wondering what this has to do with democracy. But the key is in thinking of your vote as a marginal choice. In a democracy framed by The Market, we blinker out the truth that, behind each “purchase” of our chosen politician with our vote-currency is a series of externalities that affect the lives of neighbours and their children and their children’s-children. Because we’re told those things are meant to just resolve themselves as part of the magic of The Market’s collection of self-interest.
Basically, when democracy operates under the spell of The Market we forget what it is for, because it defaults to each individual’s marginally-measurable “what’s in it for me”, rather than the aspirational “what’s best for us”.
The thing is though, that is mostly ‘do-as-I-say-not-as-I-do’ bullshit from those lauded ‘smart people’: The full consequences of The Market only really apply to people who can’t use their privilege to exclude themselves from it.
We’re going to get into that a bit in my next newsletter… stick around.
-T
Margaret Thatcher, of course
To be clear, at a macro level, money is not zero-sum: Modern economies simply ‘magic’ money into existence when they like, via lending, bonds, and so on. And, indeed, the money supply growing is integral to the economic growth under our systems. However, while you and I can simultaneously both ‘get’ more money in this process, we still can’t have the exact same dollars, meaning the introduction of new money always needs to balanced against the absorption-capability of the economy (i.e. productivity)