The Imaginary Economy — Part
I
The imaginary economy started
when gold, something with no intrinsic value, became
a widespread standard of exchange. Bags of grain,
a slab of salt, livestock, animal skins, a basket
of vegetables, the day’s
catch previously drove an economy that was material
and unambiguous. Now our economy is mainly based on
numbers moving electronically through cyberspace.
In my thirty-five years of working
I have never been paid in cash or other material
goods. Every month numbers appear in my bank account,
and they are moved around as bills are paid. I rarely
touch money in paying for anything either. I insert
or slide my credit card and take my groceries, clothes,
or gas. If a bill needed to be paid I would write
the appropriate numbers on a check causing another
movement of numbers from bank to bank. Now,
I seldom even write checks. Insurance, utilities,
services and many purchases are paid either on websites,
or by automatic withdrawals. My wealth has always
been based on trust, underwritten by mutual agreement,
a sum of numbers translated into savings, goods and
services.
Economic booms and busts seem
in my simplistic concept of economics as so many
emotional ups and downs -- crises of faith or the
euphoria of confidence or wishful thinking. Even
the value of something is often not inherent in the
object itself but rather based on emotional responses.
Hence, people will create higher values based upon
image and advertising hype causing them to willingly
spend money on things they don’t
even need. The economy is even a mirror of the emotional
state of people in the society. Hopelessness and fear
breed recession while hope and confidence is an economic
stimulus even inflating prices.
Given that our economy is based
on the trust of numbers, how are the numbers allocated?
Economists still use the Gross National Product (GNP)
as a measure of a robust economy. However, people’s wealth and
worth in the imaginary economy are seldom measured
by productivity. Invariably, the CEO of a corporation
earns more than its most productive worker. People
involved in intellectual professions, entertainment,
and sports earn the highest salaries and are thus “worth
more.” Their worth is based on imaginary value
rather than material value. My first realization of
the imaginary versus the material value of labor was
when I lived in a bush village in the Ivory Coast as
a Peace Corps Volunteer. I realized that I would not
be able to survive in their traditional agrarian economy
even with my university education!
As a huge population approaches retirement age they
are fast becoming dependant on pension funds and investments
where they have parked sums of money in the purse of
the drag queen of the imaginary economy, the stock
market. That imaginary economy allows people to buy
equities for sums far grater than their actual material
worth, or even invest in the presumed value of some
future worth for material commodities. The ups and
downs of this imaginary economy strongly reflect the
bipolar moods of the market, based on either confidence
or fear.
The imaginary economy demonstrates
the evolution of science, labor and the psychological
consequences of non-material productivity. The changing
concept of value in this economy is based on an increased
speed of communication and an interdependent technological
world consuming products of agrarian or industrial
worlds. At the same time it challenges us to deal with
the fundamental, underlying principles of those economies — trust,
value, innovation, labor, justice and equilibrium.
There is an historical gulf between the populations
living in this imaginary economy and the populations
living in economies where their daily labor produces
the tangible basis for survival.
There is something inherently
non-materialistic in the imaginary economy that could
develop into a spiritual understanding of sharing
and trust as the basis of economic health and justice.
At the same time humanity must tap the wisdom of
sustainable and respectful systems of material productivity
to understand how we can live harmoniously in a material
economy that meets the needs of human life while
protecting the natural environment. Future world
peace, justice and survival demand that those living
in the imaginary economy come to terms with the material
contributions and needs of the rest of humanity.
If the bubble of the imaginary economy should burst
many people would find the foundation of their life’s
work and its resulting wealth would evaporate. However,
the fact that so many are dependent on and participants
in the imaginary economy makes it have a life of
its own that sustains it.
Next
month: What models ought we use for future
economic development? How would sustainable living impact
the economy? What will become the basis for personal
value and worth? >> read article
© 2008
Richard V. Sidy
