This article was taken from the April 2014 issue of Wired magazine. Be the first to read Wired's articles in print before they're posted online, and get your hands on loads of additional content by subscribing online.
Economics explains a lot: it explains why house prices surge when lending gets cheaper, why we prefer one partner over another, and if and where we might choose to go to university. In each case, it does so by skimming off detail until we are left with a calculation of costs and benefits, and then assuming that we will choose the best return.
The predictive power of economics shouldn't be surprising: economic theories explain modern life so well because modern life is organised according to those theories. In our complex, modern world, taking a rational decision means trading off costs and benefits, and we are only able to do so using the methods of economics. The real question is whether we want to live in a world where those calculations are the only reason for action and measure of outcome.
A generation ago, if you wanted to buy a house you had to visit the bank manager, who made a decision on arbitrary factors -- whether you looked flashy, or had an extravagant spouse. You took what was offered, so rationality didn't feature on either side. Now we can search the market for repayments and returns, houses to let or to live in. Out of infinite, unmanageable possibilities, we are offered a few feasible, rational pathways for action.
Or you might have met your partner at school or university, at work or the local dance, a very hit-and-miss affair. Now, we really can compare the market for possible mates, figuring out who is right for us, who offers the best return on our physical or intellectual capital. On these sites it is very hard not to act like an instrumentally rational "cyborg-dater".
Economic logic defines us as individually productive, like machines. It makes us individually responsible, too; we have to invest in ourselves to derive future benefits. A social contract that sees higher education as a national good -- better doctors, scientists and engineers make for a better, more prosperous society -- is replaced by one that sees university as a means of increasing one's future salary. Students become rational consumers, armed with rankings of satisfaction and salary uplift. It's not surprising that they approach their studies determined to minimise their risk and maximise their reward. Academics, driven by rankings and outputs, find themselves pursuing conservative, predictable research, not the kind of blue-sky thinking that has in the past led to extraordinary discoveries.
In healthcare, economic models and measures -- quality of life gained per pound spent, or even a recently proposed "cultural barometer" -- constrain doctors and change the shape of care provided. Quick and effective outpatient treatments have a better payoff; in 2006 the UK's National Institute for Health and Clinical Excellence suggested that treatment for Alzheimer's disease and dementia, although effective, should no longer be provided by the National Health Service on cost-benefit grounds. As the subsequent outcry showed, our responsibility to the aged and the sick is surely a matter that transcends costs and benefits. We face pressing problems at a planetary level too. Economic reasoning cannot even articulate responsibilities we owe to generations as yet unborn; on the contrary, it predicts a negative pay-off from costly and uncertain actions and urges that we do nothing.
Economics ignores such notions as the value of life, the worth of education, or the possibility of scientific discovery. Our responsibility to others -- built on empathy and care -- is beyond the reach of its analysis. As economics more and more shapes the world in its own image -- as it explains ever better -- we risk losing the very things that make us human.
Philip Roscoe teaches at the University of St Andrews. He is the author of I Spend Therefore I Am: The True Cost of Economics (Viking).
This article was originally published by WIRED UK
