Introduction

Economics 1a

Economics 1b

Economics 2

Economics 2a

Economics 3

Economics 4

Economics 5

The following open-ended series of essays attempts to set out the economic vision of Idle Theory. The essays are an exploration of economics, and together they comprise a kind of journey. They start with simple concepts and simple economic affairs, and thereafter they study ever more complex systems. The series of essays will most likely remain unfinished, if only because the study can extend indefinitely. New essays will periodically be added, and existing essays very likely be edited.

The attempt in these essays is not to address any current pressing economic problem, but to consider economics in the abstract. The aim, of course, is to find out enough about economics to be able to address a few current economic problems.

The essays represent a radical or foundational departure from orthodox economic thinking, much in the same way as the rest of Idle Theory departs from other orthodoxies.

The essays start with the nature of wealth, the cost and value of tools, the trade of tools between tool producers, prices, various forms of money, and trade cycles. The discussion is inherently mathematical in nature, but none of the mathematics will be progress beyond simple algebra. A computer simulation model will be introduced later on, and most calculations will be performed therein.

The Dismal Science *

Everybody has experience of dealing with money, and everybody in some sense knows what it is, but the complexities of economic life - prices, profits, interest rates, inflation, business cycles - are daunting to most people. Even among economic philosophers there is a quite dizzying range of opinions, and a variety of different schools of thought about even the most fundamental questions. In some ways the problem may lie in the way that the economic problem is conceptualised. Different schools of thought are the consequences of thinking about economic problems in different ways.

If most people find economics difficult to think about, it is most likely because they have no conceptual schema within which to work: they don't have any way of thinking about it. And if they do adopt a conceptual schema, it will most likely be that of the economic orthodoxy which has grown up over the past few hundred years.

Modern economic philosophy seems to have only come into existence in the last few hundred years. This is in itself rather remarkable. One would have expected the philosophers of the classical world of Greece and Rome to have addressed its questions. Perhaps they did, and their books are now lost, as have many books from that time been lost.

Idle Theory offers (yet another) conceptual schema for thinking about economic matters. It addresses many of the fundamental problems that are to be found in economics, such as: What is the value of goods? How do goods acquire prices? What is the origin of profit?

Idle Theory's approach to economics owes more to physics than to anything else. In Idle Theory living things, humans included, are regarded first and foremost as gaining, storing, and expending energy. They have to work to stay alive. Or at least, they work part-time to stay alive. Predators like tigers do not spend all their time hunting. Nor do grazing animals spend all their time grazing. And plants can only capture the energy of sunlight in their leaves during daylight hours. And when they're not busy, living things idle, their metabolism ticking over slowly. Very often they sleep. And hibernating animals often sleep for months on end.

And humans are no different. Except that while many animals sleep in their idle time, humans are often very busy, doing any number of things. And, unlike most animals, humans make and use a variety of different tools. And, again unlike most animals, they exchange these and other goods with each other, very often using money in the exchanges. And some of them often possess a great many of these goods, while others have very few, with the disparity breeding dissension.

The Nature of Wealth

Human life, at its most fundamental level, is a process of regularly working to find and eat the food that will sustain life for a few more days or weeks. Humans are not handed a 'lifetime' at their birth. What time they make for themselves is the product of their industry and foresight. The most fundamental fact of life is that people have to work to stay alive.

It is not that anyone wants food for its own sake, but rather for the few days of life that the food provides. The food is a means to an end. Whether they like the food or not is unimportant.

The extra few days of life that food provides may be regarded as idle time, that can be freely disposed of in any way whatsoever. But some part of that idle time must be devoted to working to get the next meal. And the same again thereafter, over and over again. And this work entails concentration of attention upon some activity, usually entailing physical work and often repetitive in nature - like ploughing and sowing and reaping. And because this work is essential to survival, it cannot be shirked. It is not work that can optionally be exchanged for some preferred activity.

And so the hours of a day will alternate between busy and idle periods, between work and play. Such a day might be depicted graphically as a sequence of periods, some busy working with a spade, the rest sitting idly smoking a pipe.

In Idle Theory, the fraction of their time that anyone is thus idle is called their 'idleness', which can range from 0% to 100%, or 0 to 1. So someone who is idle for four hours in every twelve enjoys an idleness of 33%.

And the amount of work that must be done to get the food that will sustain life for another day may vary from almost no time to almost all of the time. Someone living in a barren land may need to work day in and day out just to survive, and have hardly any idle time as a consequence.

And such a person is on the brink of starvation. For if life gets any harder, and it takes much longer to come by a day's worth of food, even working every minute of the day may not produce enough. The amount of idle time in a day is a cushion against misfortune, and the less there is of it, the greater the danger of starvation and death.

Alternatively someone might live in a land rich in easily collected food, so that little work needs to be done, and their time is nearly all idle time.

In this circumstance, even if food starts taking twice as long to find, there is such a large cushion of idle time that they are not under threat of starvation. And so the more idle time anyone enjoys, the more secure their existence.

To the extent that people are busy working to survive, to that extent they are constrained in what they do. It is only in their idle time that they are free to choose how to dispose of their time. And so the amount of idle time they have is a degree of a rather fundamental kind of freedom.

And since it is only in their idle time that anyone can make and enjoy the luxuries and amusements that are often regarded as 'wealth' - for example a pipe to smoke -, they are only wealthy to the extent that they have idle time.

And so, since people generally prefer to be wealthy and secure and free, they will prefer to live idle rather than busy lives. And they will regularly act to increase their idleness, so far as it is possible for them to do so.

It is the view of Idle Theory that someone's idleness is the most fundamental measure of their wealth and well-being. To the extent that people are busy working to simply survive, to that extent they are largely engaged in compulsory work. It is only in their idle time that they can devote their attention to other matters. It is during idle time that all the art and music and literature and philosophy of any civilisation is created. If there is no idle time, there would be none of them. The busiest societies, with little idle time, must always be poor societies, largely devoid of art and music and the pleasant luxuries of rich life. And idle time is also 'free time', in which people are free to do as they choose, rather than do as they must, and so the idleness of any society is also a fundamental measure of the degree of freedom it enjoys. And the degree of idleness a society enjoys is also a signal of its security, since that idle time is a buffer or cushion against misfortune, that can be mobilised in the event of some calamity.

A great many goods that people use serve to increase idle time. The value of a good like food is that it provides future days of life, and equally the value of a variety of other goods - knives and axes and saws and baskets - lies in their ability to save labour and thereby increase idleness. An axe that saves a woodcutter some number of days of effort in felling trees, or the basket that saves a shopper from multiple journeys, both serve to increase their users' idleness. The value of such goods is measured in time.

Not all goods are valued in this way. Many of the things that people enjoy in life - like art and music and literature and games - do not increase idle time. Instead they use it up. Movies and novels and games of football do not generate any idle time, but provide ways of disposing of it. Such goods may often be what people most keenly desire to possess and enjoy - nobody yearns to own a screwdriver or a can-opener -.

And some goods may be valued both for the idle time they produce, and for the pleasure they afford. The consumption of food produces a further few days or hours of life, but eating is very often a pleasure as well.

The primary purpose of economic activity is the maintenance and increase of idle time. It is only when there is sufficient idle time made available by this primary economy that it becomes possible for a secondary economy to emerge, in which a variety of luxuries and amusements and pastimes are manufactured and traded. Before idle time can be disposed of in making and enjoying these luxuries, this idle time first has to primarily be produced.

Seen in this way, the study of economics should therefore begin with the study of primary economies, in which a variety of useful, idle time-producing tools are manufactured and traded and used. The study of the secondary, luxury-producing economies which may emerge out of successful primary economies must be of secondary concern.

Economic Orthodoxy

Before proceeding any further, a more orthodox view of economic life than that of Idle Theory should be considered.

In the orthodox view, wealth largely consists of things of one sort or other - land, houses, cars, gold, precious stones, works of art, and the like -. And above all wealth is seen to consist in the money that will purchase these things.

It is relatively easy to describe the economic orthodoxy from the point of view of Idle Theory. If in Idle Theory humans are regarded as being chronically short of idle time, in the orthodox view there is no shortage of idle time or leisure at all. There are 24 hours of it in every day, and it is all idle time. Orthodox economies are, in effect, 'secondary economies', in which otherwise idle people set themselves to work to make and sell a variety of luxuries and amusements whose utility it is to provide pleasure or happiness or satisfaction. If people eat food, it is partly for its nutritional value, but more because they enjoy eating. And if they wear clothes, it is out of modesty, or to observe the prevailing fashion. And if they live in houses, it is for the sake of the privacy they afford. Nobody is much concerned with the energy content of foods, except weight-watchers counting calories.

The value of goods, in this orthodox view, is largely subjective in character. Goods only acquire value to the extent that people want them. And people want them for the pleasure or happiness or satisfaction they afford. And such wants and pleasures and satisfactions are psychological rather than physical in nature.

The orthodox economy also includes a number of tools. But these tools are only useful in making the sort of goods that people really want. It is the end product, or final good, that people wish to buy. The tools that are used to make them are simply producer goods used in making final goods, the things people really want.

In the orthodox view, the economy is composed of people making and selling other people things that they want. And the reasons they want them are as infinite as the number of goods that are available. And without these luxuries and amusements, life would be very dull. The alternative to a busy and productive life is a life of tedium, with nothing to do. The economy is the product of a restless human drive and ambition, of an urge to achieve great things, to do something rather than do nothing. It is powered by a divine discontent, which the uncharitable might call greed or cupidity. It is, in the orthodox view, precisely such ambition which brought every civilisation into being, to build pyramids and temples and roads and aqueducts, rather than fester in mud huts.

In this sort of economy, people only get rich by working hard. And they are rich to the extent that they possess the sorts of things that make up wealth - houses, cars, swimming pools, diamond necklaces, chocolate cakes -. The harder they work, they richer they get. And the economy as a whole is successful to the extent that it provides people with this cornucopia of wealth, and with paid employment that will earn them the money with which to buy it. The ideal economy is one in which there is full employment in wealth creation. And in this ideal economy, 'keeping busy' is regarded as a virtue and a moral duty, while idleness is regarded as a vice.

The difference between Idle Theory and economic orthodoxy is over the origin of leisure. In the orthodox view, leisure is regarded as a given. In Idle Theory leisure is something that people have to work to attain. In the orthodox view, leisure is ubiquitous and unimportant. In Idle Theory it is the summum bonum upon which all other goods depend.

Or, in Idle Theory the value of a loaf of bread is the objective few hours of additional life it provides. In the orthodoxy the value a loaf of bread lies in the delicious pieces of hot toast and butter it will go towards making. It is not that Idle Theory denies that there is subjective value in delicious pieces of toast and butter. Nor is it that the orthodoxy denies that there is nutritional value in bread. It is rather that in Idle Theory objective valuations are primary in nature, and subjective valuations secondary, while in the orthodoxy it is the other way round.

The net effect is the same in both the orthodox account and in Idle Theory: people make and sell things to each other. But the explanation of why they are doing so is radically different.

Idle Theory's vision of the economy is almost the complete converse of the orthodox view, and rather than the economy being seen as composed of idle people trying to get busy, it's seen as composed of busy people trying to become idle. Only when they have become idle may they busy themselves 'creating wealth' of the sort that the orthodox desire.

It is worth bearing in mind that current economic orthodoxy has grown up in a time of considerable prosperity in countries like Britain and America. And since prosperity is very largely a function of Idleness, it may well be that these economies have enjoyed very high idleness throughout this period. The numbers of luxury consumer goods in shops is an indicator of the level of idleness. So also is the ability to mobilise very large armies in wartime. And so rather than being perfectly idle societies, and the entire economy a secondary economy trading in luxuries, it may well be that modern Western economies are around 90% idle (this is a wild guess), and so 90% of their economic activity takes place in the secondary economy. And because 90% of economic activity takes place in the secondary economy, a modern economist might reasonably argue that modern Western economies actually are more or less 100% idle, and the small fraction that is the primary economy can be ignored. And perhaps that's true. But it could change overnight. There's nothing that says that the idleness of an economy can't go down as well as up. And if the idleness of the primary economy falls, the secondary economy must shrink. An economic theory that treats economies as if they are secondary economies may be appropriate in good times, but not in bad times.

Point of Departure

Economic orthodoxy offers no assistance to Idle Theory. It is 'good time' economics. It is the economics of a happy playground in which children are making sand castles and selling each other these delightful properties. It is not that this economic orthodoxy is mistaken or wrong, but that it deals with a circumstance which is historically fairly unusual. The Victorian economic philosophers wrote about the society in which they found themselves, and they looked at it through slightly rose tinted spectacles. Theirs was a world in which any number of delightful new products were appearing on the market, and they were perhaps enchanted by this glittering plenty.