America Failed at COVID-19, but the Economy’s Okay. Why? is the title of an article that was recommended to me by Firefox’s Pocket feature. The actual content of the article wasn’t particularly interesting. For the most part it felt like a survey class of a handful of countries’ macroeconomic policies with some positive publicity for the Democratic Party sprinkled on top. I came up with the title and premise for my own article immediately after seeing that reference to “America’s economy”. Although the write-up itself gives some lip service to inequality and unemployment, it didn’t change much regarding how I feel about the premises it’s implicitly based on. It lacks imagination, and and in the times we’re living in now I think that’s a problem.
Why am I so upset at such an apparently inoffensive article? I am tired of listening to people talk about the “economy” like it’s some insatiable dragon we have to keep paying tribute to in order to stave off catastrophe. The dragon is full, it is growing, and we are currently living through the catastrophe we’ve so desperately struggled to avoid. This article treats Gross Domestic Product (GDP) and “the economy” as interchangeable concepts. When the author says the economy is doing “well”, they mean that the reduction in GDP in the United States due to COVID may be lower than in other countries. GDP is a measurement of production in an economy, which may have very little to do with how happy, healthy, or secure people are in the real world. In fact, I can use pro-Capitalist liberal economic theory to explain why talking about the GDP as if it’s some barometer of our nation’s material well-being is counterproductive.
In his 1850 essay That Which Is Seen, and That Which Is Not Seen, French economist Frédéric Bastiat came up with what is now called the “parable of the broken window”. Essentially, according to a GDP-centric view, a broken window is great for the economy because it will provide employment for the glazier, inspires production, and moves money through the system. This is a patently ridiculous view when it comes to a material viewpoint. The broken glass is a drain on resources, and the time used by the glazier to install a new pane could have been spent on literally anything else. If production and employment were all that mattered, then all we would have to do is employ hordes of urchins to go around breaking everyone’s windows while the rest of us spent forty hours a week recycling glass and installing new windows. You’d have full employment, and GDP would just be a matter of optimizing the balance of supply and demand for windows. If we want a really sophisticated economy, we could even put people to work gambling over glass futures and investing in competing glassmaking firms.
This attitude has real world consequences. Even before the pandemic, Donald Trump’s administration was increasing deficit spending and taking on record debt in order to prop up the stock market and maintain the rise in GDP left over from the recovery. Much of this spending was, of course, funded by effectively redistributing resources from the lower class to the super rich through tax cuts and increased military spending. Throughout his administration, Trump has often cited the stock market as a barometer for his success, as have his supporters. Experts, of course, tend to measure the health of the economy by GDP growth. These are metrics that are very easy to measure and perform statistical analysis on, but they don’t necessarily measure the well being of most people.
Policy wonk and 2020 presidential candidate Andrew Yang has suggested using a “scorecard” that aims to measure genuine well being in order to better guide economic policy. While I think that this would be an improvement over the way we currently think about economics, there are still some very severe problems our country faces that are either difficult to quantify or aren’t politically expedient to solve. The most prominent of these in my mind is homelessness. At a very basic level, homelessness means severe alienation, reduction in the quality of life, and inability to participate in society on even a basic level. Because of this inability to participate, government policy, surveys, and statistics tend to gloss over the experiences of these incredibly vulnerable populations.
I can’t. I’ve seen the tent cities outside of Denver’s capitol. I seem them begging at the intersection every time I go to the grocery store. When I was going to school in Boulder, I would get a chance to talk to them every time I walked to and from campus. I’d find them in hidden places while I was exploring the mountains. You find the remains of their camps all over the city trails, whether you’re walking Boulder creek, the Greenbelt, or off 285. They are everywhere in Denver; sometimes they die in the streets and no one notices. People die every time there’s a cold snap.
It’s not as if this is an intractable problem. Helsinki has nearly eliminated homelessness, while a number of countries have managed to drastically reduce it. The solution is fairly straightforward: give the homeless homes. In 2014, the 100,000 homes campaign succeeded in their goal of putting 100,000 chronically homeless people in supportive, permanent housing. Housing first programs which provide homes to the homeless with no preconditions provide a foundation for people to handle underlying issues that may have led to their homelessness in the first place. This means improving outcomes for their health, mental well-being, substance abuse, and participation in society. Not only do we have the resources to solve this problem, we already have the houses. Counts of homeless Americans and vacant houses vary substantially depending on your source, but the consensus is that vacant homes vastly outnumber the number of homeless, possible by a factor of five to one.
Homelessness is by far not the only problem of this class. It is perhaps the most striking in illustrating how a lack of imagination in the way we discuss economic systems relates directly to human misery and death. For centuries, liberal economic theories have begged the question of whether an “efficient” market reflects a distribution of resources optimal for human goals. It doesn’t. Markets are not an end in themselves. They do not guarantee life, liberty, or happiness. They are tools to achieve human ends, and when they fail, they need to be reformed or replaced.
It’s time we give up on the dogma surrounding the infallibility of markets and propping up their existence as desirable for their own sake. This year of all years needs to be a wake up call in regards to the inability of our traditional economics to deal with even minor shocks, as well as the downsides of infinite growth. The chickens have come home to roost as the western United States burns, the pandemic tears through our population, and our essential workers suffer while resources are funneled to the well connected and powerful. Our institutions have proven to be incapable of dealing with any interruptions to constant expansion and growth. At this rate, we are going to eat ourselves alive.
Imagine if tomorrow someone invented a replicator, like in Star Trek, that removed all scarcity and the need for most forms of labor. Such a device should really be seen as an opportunity for people to work on developing themselves, making art, and advancing the collective intelligence of humanity. I don’t think that’s how it would happen in our current economic system. Putting an end to non-essential services during the pandemic should have meant that labor was guaranteed to be allocated towards supporting all people in their basic needs, but in practice it has meant that the poor grow increasingly destitute and vulnerable while the middle class is punished for not being able to work at jobs that no longer exist. Futurists of the past thought that automation and other increases in productivity would mean more leisure time for all people, but we toil far more now than we did during the 60s, when a senate committee predicted a 16 hour work week by 2000.
This is insane. It boggles the mind to think that technologies meant to make our lives easier actually make our lives worse. It’s astounding to imagine that while our technology has surpassed the wildest expectations of our predecessors, our society feels increasingly dystopian and our lives have only become more uncertain and stressful. It is entirely conceivable that we could have superhuman general artificial intelligence within our lifetimes, but at this point it’s hard to imagine it being used for any higher purpose than maximizing the market value of a large tech company. We are at the precipice, and the choices we make in the next decades are going to determine the future of humanity for centuries to come. This is not the time to be timid. We need to start using our imagination now, or perish.
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