Of Automation, Economic Value, and Slavery: Defining the Economy

One point that arose in one of my recent posts about economics bears some elaboration: namely, whether machines can “impart additional value to the economy.”  It’s a truism among folks with my general worldview that the economy is not zero sum, can grow without taking away from anybody, and grows with innovation.

The problem is that scope has to be defined.  Clearly, if I’m selling comic books, there’s only a certain amount of demand.  If I gain market share, my competitor loses it.  On the other hand, if I create a product that people are willing to work to buy, I can get rich even as everybody else grows their income, too.

But I just smuggled something into the discussion.  Those people no longer have the free time they once did, which gets back to the idea of a “potential economy.”  At that level, there is clearly some maximum amount of economic energy, adding all of the value that people give to the total economy plus all of the potential value that they currently ascribe to non-economic activity.

Everything non-economic can be put in economic terms.  How valuable is my faith, my love?

Some years back, I went in search of a definition of “the economy” that took this larger view into account and couldn’t find one. It seems most people are content to think of economics in terms of its general laws and consider something like GDP to be its measurement.

But that can only be partial.  If, for example, we consent to massive government debt, for a period, to rev the economy toward some new innovation… say maximized production and distribution of food… once we’ve reached that target, we ought to be able to let the economy shrink and pay off our debt.  People will be able to eat without having to work so hard.

Naturally, powerful people don’t much like that idea, though, because what it really amounts to is the masses cashing in their economic potential for some other good, like enjoyment of life.

Disclaimer: The views and opinions expressed in The Ocean State Current, including text, graphics, images, and information are solely those of the authors. They do not purport to reflect the views and opinions of The Current, the RI Center for Freedom & Prosperity, or its members or staff. The Current cannot be held responsible for information posted or provided by third-party sources. Readers are encouraged to fact check any information on this web site with other sources.

YOUR CART
  • No products in the cart.
0