The Imaginary Economy - Part 1

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. When the bubble of the imaginary economy burst many people found the foundation of their life’s work and its resulting wealth evaporated. However, the fact that so many are dependent on and participants in the imaginary economy makes it have a life of its own that may eventually be renewed by mutual trust and cooperation, and by endeavors that are beneficial to humanity and the planet.

Read in The Imaginary Economy - Part 2:
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?