By Aftermath Ematics
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The International Monetary Fund says the global economy will lose £9.6tn as a result of the COVID pandemic. That’s £9,600,000,000,000. That sounds like a Bad Thing… but what does it actually mean? Most of the time, “the economy” feels like abstract stuff that’s overwhelming or hard to understand – the Budget, tax policies, trade deals, the FTSE 100… But we know that bad news about the economy usually means bad news for us. It means more anxiety about keeping the wolf from the door. So what is this thing called “the economy”? In fact, the economy is not “a thing” at all. It’s a lens, a way of looking at human activities. It measures things that are bought and sold. That sounds obvious but it means the economy is only an index of money. If you buy a ready meal from a supermarket and eat it while streaming a film from Am*zon or Netflix, that appears in the figures that make up the economy. But if you cook a home-grown meal for family and friends and spend the evening chatting and putting the world to rights, that appears nowhere. It might as well have never happened. In other words, if an activity isn’t bought and sold, it doesn’t count. It’s invisible. It’s even worse than this… When we look through the lens of “the economy”, we count the cost of building a road and driving a car on it, but we ignore the pollution, the damage to health, the loss of nature, the changing climate… Those negative effects have a huge impact on our lives but because they don’t have a price tag, they are literally not counted. Economists call these effects externalities. But there is nothing external to our world, there is no outside. Governments talk about restarting the economy as if it’s a machine that’s been lying idle. What they really mean is that they want us to start looking at the world again through the lens of buying and selling. They want us to stop weighing our lives against the values we have drawn on for the last few months and start measuring our lives again by money. There’s a great collection of writing on “the economy” and other lens for understanding our world here: https://thecommoner.org/.