What Economy?
October 9th, 2008It is impossible for me to treat the current economic collapse with anything but a hint of amusement. That’s not to say it doesn’t worry me at all - I was watching the new very carefully whilst waiting for the details of the recent nationalisation and sale of Bradford & Bingley, since I have a savings account with them which contains most of my money. I would not like to lose that, of course.
That said, though, I have for several years treated the very notion of the modern economy and money itself with a great degree of skepticism. A few years ago I wrote a quasi-satirical article for a now defunct website (alas, the way-back-when machine hasn’t catalogued that particular article) giving a brief history of the concept of money and illustrating that it is now, essentially, an un-claimable IOU with no inherent practical value. And that’s in its everyday, physical form, the notes and coins we use (with decreasing frequency). Most money nowdays doesn’t even exist in reality, it’s just represented digitally on some bank’s computers someplace. Which is why the current situation is somewhat entertaining to me.
You see, for the past few months, but with increasing frequency of late, huge figures have been floating around. Figures like $700 billion or £400 billion, and then there’s the collapse of several large investment banks or the fact that certain major UK banks lost almost half of their value in one day. It all sounds very serious, of course. All these massive numbers, sums of money, are almost totally incomprehensible to most people. Actually, the global financial markets and national economies are the only time figures of this scale ever appear (outside of Zimbabwe, where you’ll likely find them in shops again in a few months), and these are things which we in the western world are all convinced are hugely important. But I’m not convinced.
See, although these vast sums of money seem as though they should be incredibly important, and the economic problems will impact everyone by making things marginally more expensive to buy, there’s one simple fact that people overlook. None of this money, these vast sums, actually exists. And even if it did, it would have no inherent practical value. It’s not as though any tangible, useful, physical thing is lost in all of this. Half of your food doesn’t disappear from your cupboard when your bank’s share price halves. So the fact that everyone (that is to say, the media) seems to be treating this as though the very source and sustenance of life on earth is failing seems rather absurd and thus entertaining to me.