Intro to Economic Life 1: Creatures on a Planet
Interdependence, and the foundations of value
This is the first instalment of Intro to Economic Life 101, a short course that I introduced earlier this week (see here for the introduction). I’m piloting this format for paid subscribers of ASOMOCO, and the beta Version 1.0 of this course will initially take the form of a series of articles, released once a week. This can expand and deepen over time into a Version 2.0 with videos and live sessions.
Intro to Economic Life 101 is for anyone who wants to holistically grapple with ‘the economy’, and their position within it. In creating it, however, I’m primarily imagining a young adult (or the young adult in us all), who is looking out at the economy they’re supposed to join, and who finds themselves confused about the point, structure, logic, culture and politics of it all. My goal is to build something that acts as a gateway into thinking critically about our economic system (and the Economics discipline that traditionally claims to describe it). I also want people to ask whether there are better versions of it that can be built, and to see these how alternative visions interact. This is a work in progress, so feedback is welcome.
Introduction: Illusory Separation
We are stuck between a myth and an illusion that reinforce each other. The myth is that we are separate from one another, and from the earth. The illusion is similar. When you step into the economy, it looks and feels like we are separate from others, and from our ecological systems. For example, you walk into a shop and see this.
You appear to be looking at objects, but what are you not seeing? For these objects to exist, tens of thousands (if not hundreds of thousands) of people had to produce the elements within them, and get them to you. There were oil workers on the North Sea, overseers in Chinese tin mines, chemical engineers producing taurine, and accountants checking inventory at shipping companies. Each of these people works in an industry that relies on other industries, which rely on other industries, and so on. If you tried to trace the full supply chain of even a single object on that shelf, it might eventually encompass tens of millions of people, perhaps even hundreds of millions. It might even encompass you, without you knowing it. You could be staring at something that - a thousand steps removed - emerges in some tiny way from yourself.
The detachment we feel when looking at this shelf reveals the state of separation we experience from the people who created these things. Economic statisticians sometimes split the activities of these people into broad ‘sectors’: primary sector workers are involved in extracting raw materials, secondary sector workers get involved in processing those materials and manufacturing stuff, while tertiary sector workers provide services around that extraction and manufacturing base. In reality, though, the basis of the ‘primary sector’ is this.
This is a giant planet in the light and heat of a burning star. We live on it, alongside many other creatures. This planet, along with that burning star, is the foundation of all life, and is also therefore the foundation of all economic life. It’s not part of ‘the economy’. Rather, the economy is part of it.
Nowadays we’re used to superimposing a political layer over this, with nation state borders and the names of countries. Much like you can’t see the shape of a letter without your mind conjuring a meaning, we can’t see the shape of continents and countries without our minds auto-generating names like ‘Africa’, ‘Europe’, or ‘India’. If, however, you try hard enough, you can pierce through those and see the underlying reality. At our most raw, we don’t live in countries. We live on a planet, within ecological systems that don’t recognise artificial national boundaries.
Not only are we are creatures on a planet, but every single thing around us is derived from the planet’s geological and ecological systems, and their linkage to the sun. This should always be the first element of any economic analysis. Look at the shelf full of drinks. They seem ‘artificial’, right? They don’t seem like they’re part of ‘nature’. They’re branded consumer products, supposedly existing in a fundamentally separate realm from, say, a mountain stream or some other ‘natural’ thing. Indeed, if we saw an empty Red Bull can in a mountain stream, it would seem out of place.
When we strip away surface appearances, though, a ‘can of Red Bull’ is much more than it appears. If you ignore the recognizable shape, logo and words, and pierce through those, the thing you’re seeing might be described as:
A collection of collections of processes involving tens of thousands of people who relied on sunlight, air, water and food to keep themselves alive while arranging metals from rock ore, liquids from clouds, and chemical compounds (originally formed in the heart of long-dead stars) into combinations that we’ve labelled in our head and culture as ‘Red Bull’, while assisted by energy derived from burning fossilised organic matter
A bottle of Red Bull might look like a discreet object, but it’s a collection of processes, and these processes go on even as its sitting on the shelf.
The Economics discipline traditionally separates things we produce into ‘goods’ and ‘services’, but in reality services are acts of human labour (requiring that air, sunlight, food and water), and all goods are just collections of services bundled together. Think, for example, about making a simple mud sculpture. The first ‘service’ is the act of pulling mud up out of the ground. The second service might be shaping it. The third might be hardening it. You end up with a single object, but it’s actually multiple acts of labour combined with the sun and earth. Every object around you, in the final analysis, is like this. Even high tech machines that are manufactured by using other machines are like this: somebody had to make the machines that make the machines, and extract the materials they’re made from, and turn them on, and so on. Look far enough back into a supply chain, and everything traces back to human energy applied to the earth.
Pointing this out isn’t just a geeky matter of being pedantic. There are huge political and ecological consequences to our perceptions of separation, and to our inability to see the organic processes behind products sitting on a shelf, or on an Amazon.com page. For example, the illusion of separation can conceal exploitation of both people and the earth. We don’t see the exploitation. We just see an object, detached from its origins. When you hear economic myths that tell you that the economy is just a collection of separate people trading things, be aware that this is also a story that could serve a political purpose: for example, it’s a story that could promote the continued concealment of exploitation.
Our economic myths and illusions can also be downright dangerous, leading to ecological collapse, but at a more mundane level they also just hamper our ability to understand our place in an economy. They prevent us from feeling connected to what’s going on, and reduce our ability to make good decisions. They make us feel alienated. They make us obsess about stuff. They can create confusion and anxiety, or inspire apathy or numbness. To truly feel our economy, and remove that numbness, we need to reground our understanding of it, and that requires going back to first principles.