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March 6th, 2017

Equivocal Economy

Tyler Cowen is concerned that Americans are relocating across state lines at a lower rate than we used to. This reluctance to pull up stakes and move elsewhere in search of economic opportunity, Cowen tells us, is a sign of an unhealthy complacency, one that is having a deleterious effect on "the economy." Cowen blames our newfound complacency, at least in part, on the algorithms that figure out what we like and funnel more of the same back to us while filtering out experiences and opinions that the algorithms determine will not be to our liking. I agree that this is not only happening but that it is turning us into hothouse flowers in a number of ways.

But I have a quibble, and it has to do with what seems to be a presupposition about the meaning of the word "economy." When I Google for a definition, I find two. The first definition concerns "the wealth and resources of a country or region, especially in terms of the production and consumption of goods and services." This is the economy that can be said to suffer as Americans hunker down in a conservative stance and worry more about preserving what they have than trying to make a big score.

But there is a second definition that means "careful management of available resources." When the first kind of economy is strong, or when you are making lots of money, you can trade that money for goods and services that are often by distant strangers. You don't need to maintain good relations with the people who make your clothes and grow your food, not as long as you have cash on hand and the networks of communication, money transfer, and distribution remain intact. Not only do you not have to stay in any particular person's good graces, but in most instances, you will never know who baked your cookies. And the person who baked them (or who tended the machinery that churned them out) will never know who ultimately consumed the product of their labors. In such an arrangement it would seem fanciful to count the relationships one develops over time by living in the same place as "resources."

But there are other sorts of economies, like household economies. When the long-distance supply chains and systems of credit and abstract monetary exchange breakdown, or when you no longer have the money needed to participate in that sort of economy, your local economy based on relationships with people you know and whose well-being is tied specifically to yours becomes increasingly important.


People who believe that politicians in both majority parties primarily serve the interests of corporations and the donor class, people who have seen their own prospects for success in the larger abstract economy dwindling, have good reason to promote the careful management their local, tangible, specific and personal resources over the wealth and resources of their country or region. They realize, at least on some level, that the bigger and more abstract the economy, the more wealth accumulates in the centers of power. The more we have invested in the larger abstract economy, the more we stand to lose should that system breakdown or contract suddenly. What Tyler Cowen sees as short-sighted complacency might turn out to be a prescient conservatism that creates a sort of resilience at an intimate scale that will serve us well in turbulent times.

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