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“The economy”—pandemic edition

from David Ruccio

We’re back at it again: “the economy” has broken down and we’re all being enlisted into the effort to get it back up and working again. As soon as possible.

The Congressional Budget Office has announced that it expects the U.S. economy will contract sharply during the second quarter of 2020:

    • Gross domestic product is expected to decline by more than 7 percent during the second quarter. If that happened, the decline in the annualized growth rate reported by the Bureau of Economic Analysis would be about four times larger and would exceed 28 percent. Those declines could be much larger, however.
    • The unemployment rate is expected to exceed 10 percent during the second quarter, in part reflecting the 3.3 million new unemployment insurance claims reported on March 26 and the 6.6 million new claims reported this morning. (The number of new claims was about 10 times larger this morning than it had been in any single week during the recession from 2007 to 2009.)

Just as in the aftermath of the spectacular crash of 2007-08, the supposedly shared goal is to do whatever is necessary to engineer a recovery so that the economy can start operating normally again.

That presumes, of course, that we were satisfied with the normal workings of the economy before, and that such a state of normality is what we all desire moving forward.

But before I attempt to address that issue, it’s important that we stop and think a bit more about what we mean when we refer to this thing called “the economy.” In a fascinating recent interview, Anat Shenker-Osorio [ht: ja], argues that the economy is often portrayed as an all-powerful, personified entity.*

Previously, we would hear politicians admonish that we can’t pass X policy because it will “hurt the economy” — as if it were a being to which we owe our efforts and loyalties. And now, all the more brazenly, Republicans tell us we must sacrifice ourselves or perhaps our elders to the economy.

Another oft-used metaphor for the economy is the human body.

Conservatives, aided and abetted by progressives who also unwittingly employ the metaphor, tend to talk about the economy as a body. You can hear this expressed in language like “it’s suffering” or “the economy is thriving.” We have a “recovery bill” to get the economy “off life support” and “restore it to health.” What this metaphor suggests is that in grave cases, we must “resuscitate the patient” (perhaps with a stimulus bill.)

It seems to me, there’s a third common metaphor for the economy: a machine. Often, especially in conservative political discourse and neoclassical economic theory, the economy-as-machine is said to be functioning on its own, in a technical manner, with all its parts combining to produce the best possible outcome.** Unless, of course, there’s some kind of monkey wrench thrown into the works, such as a government intervention or natural disaster. However, according to liberal politics and Keynesian economics, the economic machine by itself tends to break down and needs to be regulated and guided, through some kind of government policy or program, so that it gets back to working properly.

As Shenker-Osorio correctly observes, the metaphor of “the economy” that is shared by both sides of mainstream political and economic discourse puts progressives at a distinct disadvantage:

we see progressives attempt to make arguments about how social welfare programs will “grow the economy” in the hopes of sounding like the reasonable adults in the room. This tacitly reaffirms the toxic idea that our purpose ought to be to serve the economy — that the correct evaluation of policy is how it affects the GDP

Much the same argument is made in favor of other liberal or progressive programs: raising minimum wages, extending health insurance, anti-poverty programs, education and job training, and so on. All are justified as contributing to making the economic machine work better, more productively, by including everyone.

So, what’s the alternative? One possibility, which Shenker-Osorio offers, is to reject the existing metaphors and refuse to continue to debate “who loves the economy best” and, instead, force “the far more relevant discussion: What is best for people.”

I don’t disagree with Shenker-Osorio’s goal but I wonder if there might not be another way of proceeding, by teasing out the implications of thinking about the economy as a machine.

If we continue with the machine metaphor then, first, we can demonstrate that the existing machine, in the midst of the novel coronavirus pandemic, is simply not working. It is an unproductive machine. For example, the U.S. economy-as-machine hasn’t been able to protect people’s health, for example, by providing adequate personal protective equipment for nurses and doctors, ventilators for patients, and masks for everyone else. Even more, it has put many people’s health at additional risk, by forcing many workers to continue to labor in unsafe workplaces and to commute to those jobs using perilous public transportation. Finally, it has expelled tens of millions of American workers, through furloughs and layoffs, and thus deprived them of wages and health insurance precisely when they need them most.

Second, we can read the decisions of the Trump administration—both its months-long delay in responding to the pandemic and then its refusal to enact a nationwide shutdown when it finally did admit a health emergency—as precisely enacting the general logic of the economic machine: that nothing should get in the way of production, circulation, and finance. It fell then to individual states to decide whether and when to shutdown parts of the economic machine and to distinguish between “essential” and “nonessential” sectors.

Finally, we can interpret the repeated calls to reopen the economy—not only by Trump and his advisors, but also by a wide variety of others, from Lloyd Blankfein, the billionaire former CEO of Goldman Sachs, to Republican Sen. Ron Johnson of Wisconsin—as a rational but unconvincing gesture, based on no other reason than that the machine needs to keep operating. It expresses the rational irrationality of the existing economy-machine.

All of which leaves us where? It seems to me, their continued reference to the economy as a machine creates the possibility of our demanding, in the first place, that the machine should remain closed down—for health reasons. People’s health should not be put under any further stress as long as the pandemic continues to ravage individual lives and entire communities.

And in second place, it becomes possible to imagine and invent other assemblages of the existing economy-machine, and even other machines, instead of obeying the logic of the current way of organizing economic and social life in the United States. In fact, while many of the changes to people’s lives have been designed to keep the existing machine functioning (for example, by working at home), it is also possible that people are taking advantage of the opportunity to experiment with how they work and live and creating new spaces and activities in their lives.***

If the common refrain these days is that “nothing will be the same” after the pandemic, perhaps one of the outcomes is that the economy-machine will finally be seen as an empty signifier, unmoored from the reality of people’s lives and incapable of organizing their desires.****

Then, maybe, the existing economy-machine will stop functioning. Before it kills any more of us.

 

*As in the episode of South Park, “Margaritaville” (the third episode in the thirteenth season, broadcast in March 2009), which Shenker-Osorio discusses in her 2012 book, Don’t Buy It: The Trouble with Talking Nonsense about the Economy.

**There is also, of course, an ethics of the economy-as-machine. As I explained back in 2018,

According to neoclassical economists, the capitalist distribution of income is fundamentally fair. If every factor of production (e.g., capital and labor) is remunerated according to its marginal contribution to production, and each individual sells to firms the amount of each factor they desire (because of utility-maximization), the resulting distribution represents “just deserts.” It’s fair on an individual level and it represents justice for society as a whole. Let free markets operate, without any external intervention (e.g., by the state), and the result will be both fair and just.

For Keynesian economists, the machine can be made to operate fairly, and therefore in an ethical manner, when the state can step in (e.g., via fiscal and monetary policy) to create full employment.

***I understand, some of those changes may be experienced as losses—of laboring alongside fellow workers, of certain leisure activities, and so on. But people are inventing all kinds of new ways, even at a physical distance, of provisioning, socializing, and much else.

****And, yes, for those who are interested, as I prepared to write this post, I did go back and reread some of the works of Gilles Deleuze and Félix Guattari, including AntiOedipusCapitalism and Schizophrenia.

  1. April 9, 2020 at 4:13 am

    Or “The Economy” is implied to be a natural force, relentless and irresistible, to which we can only submit.

  2. Ikonoclast
    April 9, 2020 at 4:16 am

    I agree with the general thrust of David Ruccio’s and Anat Shenker-Osorio’s comments. The metaphors of economy as (human) body and economy as machine do have their limitations. It has also been discussed on this blog many times how the neoliberal, or market fundamentalist, false mathematization of the economy also has its very grave limitations. If anything, the “understanding” derived by mathematical economics is even worse than that derived from the metaphorical modelling approach if the most apt metaphors are chosen. The mathematical models are pure theory and based on over-simplifying and un-empirical assumptions This is when they are not outright wrong like the absurd assumption of homo economicus.

    In the final analysis, free market dogma and its mathematization is prescriptive and not descriptive. It tells us how to run an economy according to a given value ideology of private property, inequality differentials, ignoring real human and real environmental needs and ignoring negative externalities in general. In contrast, apt language metaphors within a democratic liberal humanist or democratic socialist tradition can easily prescribe a more appropriate, workable, humane and environmentally sustainable approach than the ideological prescriptions and false mathematization of market fundamentalist economics. In addition, apt metaphors can function well rhetorically which is useful in the debate.

    If we use body metaphors correctly, we can note that all parts of the body are needed to function in cooperation and union to make the whole body and mind work effectively and efficiently as one. If the extremities are starved of oxygen and nutrients they go gangrenous and die. Slums are certainly ulcerous or gangrenous areas on the civic or national body. The people in slums clearly suffer pain and deprivation. We can use a further body metaphor. If the pains and agonies of the extremities of neglected persons are not transmitted to the government (the executive brain of society) then action is not taken to preserve those parts. This is a leprosy-like condition of the civil body where the extremities cannot transmit pain to the brain and more injury and degeneration occur. It is important that the poor and dispossessed protest vigorously and transmit their message and their pain to the insulated elites and that they be assisted by the middle class who exist in the middle, mediating position.

    If we also use machine metaphors, we can note that market fundamentalism is like an over-simplistic auto-pilot system which lacks self-correction via adequate feed-backs. The feed-backs lacking include feed-back from the poor (the governmental and rich elites ignore them), feed-backs from the environment (most of these negative externalities are ignored), feed-backs from the insights of moral philosophy (religious and humanist ethics) and feed-backs and predictions from the impact sciences. In addition, we can add feed-backs from internal contradictions within capitalism which capitalism denies exist. These are feedbacks from increasing unemployment, inadequate capacity utilization, wage stagnation, asset inflation and the over-accumulation of financial and fictitious capital. Free market capitalism cannot even react properly in the “free market on auto-pilot” sense to its own internal contradictions let alone to external contradictions (like limits to growth) and external shocks (like the black swan of COVID-19).

    The free market leads to rampant inequality, regular financial bubbles and crashes in a cyclical fashion AND THEN it fails absolutely and completely to a single serious exogenous shock. This is like a car that breaks down sporadically even on trips to the local supermarket and then breaks down completely and without fail every time you try to take it on a road trip. Who would keep such a car? Well, only the poor who have no other choices. It’s time to give everyone a choice of another economic system. This one is ready for the junkyard. The new economic system we require is democratic socialism. Spelling out the details of democratic socialism and why it is not equivalent to the Party Dictatorship State Capitalism of China would take another long post.

  3. April 11, 2020 at 5:41 pm

    Good to read some more common sense from economists.

    The various establishment/orthodoxy metaphors are often championed by those who try to turn the ridicule around and say things like ‘People often make the mistake of thinking of the economy like household management.’, when, in fact, that is exactly what the word means. *Their* ‘Economy’ is a machine or algorithm for continuously moving wealth from the natural world by the agency of the labour of the poor, and delivering it as an ever growing source of riches and power to those who are already too wealthy to know what to do with their riches other than count them and compare them with those of lesser mortals, to feed their own narcissistic obsessions.

    *Their* machine has had to be mothballed, but the actual economy keeps going to provide the essentials of life to the maximum extent that is possible to the whole population under the circumstances. *Our* *Humanity’s* economy only stops when we go extinct as a result of our political and economic systems being commandeered by parasites with morbid narcissistic personality disorders. To save ourselves, we have to do what George Washington urged, and get the party tribalists out of governments, the world over; replacing them with proper representatives of all people, who will introduced a proper functioning economic system that uses labour and human endeavour wisely for the good health and well-being of people, planet, and future generations.

    The real economy is now beginning to work for the first time in my life. Let’s try to keep it that way.

  4. Ken Zimmerman
    April 23, 2020 at 12:59 pm

    Economy is a thing. Or Ding (Norse) — a public discussion about an important matter of concern. Who’s included and excluded from that discussion is always the topic at hand. Along with how inclusion and exclusion are accomplished. Humans often resort to forms of short-hand to identify matters of concern, such as the economy. Everything humans do is modeled on the human body, including the most “advanced” technologies. The known hierarchies (dominant and not dominant) are also mixed into the discussions. Anthropologists emphasize revealing how these models and metaphors are created and used. It’s good to see that at least a few economists aren’t as dumb and self absorbed as I often accuse (correctly) them of being.

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