Monday, November 24, 2008

Bizarro economics

If I ever get my shit together and go back to school, I think I'll study economics. Probably not as my major, but would definitely take a few classes. The problem is that I'd probably fail them. Economic theory seems really fucking stupid to me.

I was reading the local fishwrap today, and came across an article in the back of the business section. I'll link to it, though I don't know how long the link'll stay live. My paper tends to archive stuff after a week, and then makes you pay for access. The story's on AP, so there's a good chance that it'll lurk around somewhere on the net.

The story itself is about how tough economic times are causing people to tighten their belts. I'll say it for you: "Duh!" Interesting reading nonetheless.

Frugality is making a comeback.

Fearful that economic conditions could get worse and stay that way, Americans are showing an enthusiasm for thriftiness not seen in decades.

This behavioural shift isn't simply about spending less. The New Frugality emphasizes stretching every dollar. It means bypassing the fashion mall for the discount chain store, buying second-hand clothes and furniture or trading down to store brands.

No surprises. This makes perfect sense. And in fact, it's probably better for people as a whole, in addition to the planet. Rampant consumerism is not just wasteful, it's actually immoral, and it's really about fucking time we stopped basing our economy around the consumption of stuff.

Not long ago, yoga teacher Gisele Sanders shopped at the Nordstrom's in Portland, Ore., and didn't think twice about dropping US$30 for a bottle of Chianti to go with dinner. That was before her husband, a real estate agent, began to feel the brunt of slowing home sales.

Now Sanders, 53, picks up grocery-store wine at $10 or less per bottle, shops for used clothes and plans to take her mother's advice about turning down the thermostat during winter.

"It's been a long time coming," she said. "We were so off the charts before."

The whole yoga teacher thing is fascinating. Yoga, as you know, is ancient Hindu meditation, coupled with physical exercise. The idea, as far as I understand it, is to centre your mind i nyour body, and achieve inner harmony. Contrast this with the idea of consumer culture, where you ignore your mind and simply work toward gratification. Obviously this woman missed a class somewhere. But what's more astonishing to me is that she recognizes the shallow and wasteful aspects of her previous existence, and didn't shoose to do anything about it until the bottom fell out of the yoga market.

The causes of this recession are myriad and complicated, but I wouldn't be surprised to find that part of the problem is that we have reached the carrying capacity of the planet. The economy must grow, you see, in order to be healthy. The problem is that there's no way for traditional econmic thinking to recognize the limits of expansion. Quite simply, if we continue to use the traditional paradigm, we're quite fucked. The next paragraph is an excellent example:

That kind of scrimping may be good for stressed family budgets, but it's bad for the overall economy in the United States -- and that has the potential to reinforce the miserly mood. Yet with home prices, retirement accounts and job stability suffering, such frugality is likely to be more than a fad.
Get that? Reasonable and rational behaviour is bad for the economy. The problem is that as people have less, they spend less. That means the economy shrink even further, and more people have even less. It's a positive feedback loop, though there's nothing positive about it.

Looking at it another way is even more depressing, but here it is. A man who's third marriage is failing, who drinks too much and takes way too much medication, who drinks and drives, who smokes, and who indulges every whim of his mistress and his children is just awesome for the economy:

  • His divorce requires lawyers.
  • His alcoholism provides funds for distillers and brewers, servers and retail outlets.
  • When he drinks and drives, he gets into accidents, which helps out body shops and mechanics, and provides work for medical personnel.
  • If he really smashes up his car, he gets a new one, which is good for auto manufacturers and retailers.
  • His insurance premuiums go up, which is great for the insurance company.
  • The accidents emply more lawyers.
  • His high blood pressure and depression provide income for pharmacists and drug companies.
  • The video games he buys for his son keep programmers and retailers humming.
  • And the imported food is great for oil companies, trasportation firms and more retailers.
Someone who shops at a thirft store, bikes to work, has a stable, happy family life, and shops locally for his food is a real drag on the economy.

See? It's fucked. We're all right fucked. Doing the right thing is bad for everyone. That's why, after 9/11, Americans were told to go out and shop. They were also fed a bunch of horseshit about duct tape, plastic film and bottled water. Terrorism is bad for the economy. When morale gets low, so does the GNP. Fear, however, is good for the economy. People drink more and take more drugs. They watch more movies. They consume more news. They indulge a little. Fear moves dollars.

In some ways, I'm hoping for a complete economic collapse. The current model is unjust: it collects wealth, despite what neocons would have you believe. It's unsustainable: it requires the consumption of non-renewable resources. It's idiotic: saving costs more in the long run. And it's immoral: it causes wars for resources, sweat shop labour, and other human rights abuses.

I'd definitely flunk out.

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