This stems from the fact that there is a fundamental flaw in the very definition of “the economy”. Economics, as defined in most basic textbooks, is about the allocation of resources, real resources. It is not about the allocation of money, or the Gross National Product, or how well the DOW is doing, or even the deficit. Those are merely convenient abstractions. But it is these measurements that have become what we understand by economics. We focus on what can be counted. And we focus on the big numbers – summations and short-hand that hide nuances and cripple our ability to really understand what it going on.
Gross National Product, the yardstick of economic growth, only takes account of product that has a defined monetary value, regardless of whether that product kills or heals. And, it ignores any value added by labor within the household, often performed by women. For instance, if I buy and eat a can of Campbell’s Tomato Soup from the store, then the price of that can becomes part of GNP. It is a consumable. But if I make soup from tomatoes that I grew myself and from onions I traded for surplus tomatoes, all simmered in rainwater in a solar oven in my neighbor’s backyard, none of that counts. Not my labor, not the ingredients, not the energy used to cook the soup. And yet, I am still nourished. I still “consume”.
As consumers have begun to pull back, they have adapted to shrinking incomes by doing more cooking, gardening, childcare and home repairs for themselves. We are seeing a shift from the market economy that measures everything in money to this “other” economy that is not so easily measured. Beyond this, with the rise of “collaborative consumption” and the impact of the greater propensity to share or to barter, this non-monetary part of the economy is becoming even more important. And yet, when it comes to economic policy, we continue to ignore this, to equate prosperity solely with the relentless growth of the money economy.
If we can find a way to incorporate a qualitative view into how we look at consumption, is it possible that then we will feel wealthier in the true sense of the word?