Back in January, physicist Brian Stewart asked me to give a talk to his “Radical Sustainability” class at Wesleyan University. The talk was to be in early April, and Brian offered to fly me to Connecticut for the occasion. Luckily I decided at the time to give the lecture virtually. So when the coronavirus forced us all to stay home, nothing much changed.
On that note, here’s a video of the talk. I decided to make it relevant to our current situation, so I discussed how biophysical economics relates to the coronavirus pandemic.
[Embarrassing technical note: pop-up windows on my screen (which I’ve edited out) cut off a few of the slides. You can download the original slides here.]
Referenced links:
Wikipedia article on modern monetary theory
Interview with L. Randall Wray
Vox article on modern monetary theory
Summary
As I see it, there are two constraints on our ability to deal with the coronavirus pandemic. The first constraint is money. This gets all the press right now — and rightly so. To slow the spread of the coronavirus, millions of people are staying home from work. Since we don’t want these people to starve, we need to somehow give them money. But where should this money come from?
While this appears like a monetary constraint, it’s actually a social constraint. Money is a social fiction that we can create and destroy at will. So at the societal level, ‘not having enough money’ isn’t a real constraint. No, the real constraint is about who has the power to create and distribute money. We usually give most of this power to the private sector. (Banks create the majority of money when they issue credit.) We forget that the government can also create money. Fortunately, many governments of the world are rediscovering this power, and are paying their citizens to stay at home.
While this (apparent) monetary constraint is on the top of our minds, there are also biophysical constraints on how we can deal with the coronavirus pandemic. These biophysical constraints are little discussed, but they’re more fundamental than the lack of money.
These biophysical constraints have to do with industrialization, which has greatly changed the structure of society. Some of this social change makes coping with pandemics easier. Some makes it harder.
Let’s start with the bad. Two hundred years ago, most people lived in rural areas. This made it easy to keep your distance from other people (if you had to). Now the vast majority of us live in cities, making it hard to stay away from other people. So urbanization has made it more difficult to fight pandemics.
Fortunately, another demographic change offsets the affects of urbanization. To slow the spread of the virus, many of us are being paid to sit at home and do nothing. Two hundred years ago this would have been impossible. Why? Because at the time, most people were farmers. If they didn’t go to work, the population would starve. So a sweeping ‘stay-at-home’ order would have been impossible.
Now things are different. As Figure 1 shows, the US has undergone an astonishing
demographic inversion. The vast majority of people now work in the service sector. This means that many of us can simply not work. Sure, without a large service sector we can’t get our lattes or our manicures. But we won’t starve.
So the coronavirus pandemic is forcing us to run a vast social experiment. The research question is this: in the short run, how many jobs can society do without? The answer, it would appear, is an awful lot.
Further Reading
Fix, B. (2015). Rethinking economic growth theory from a biophysical perspective. Springer.
Graeber, D. (2018). Bullshit jobs–a theory. Penguin.
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