No one escapes economics

Despite the common misconception that economics is mostly finance and banking (I haven't done a single finance module in my entire university career), economics is actually everywhere and it is almost impossible to escape it.

Today's world is as interconnected as it could possibly be; whether its next-day deliveries on amazon, ordering some cute Shiba-Inu themed socks from Canada, or paypal-ling a pal in a different country. Internationally, our economies are as connected as never before, both through trade and finance. Unions such as the EU have increased mobility enormously, it is now a lot easier to move to a completely different country, study abroad or simply travel than 50 years ago.

This interconnectedness brings many many advantages with it but it has also significantly increased some risks. Along the material interconnectedness through trade, for example, has also come financial globalization; banks nowadays hold monetary assets in other countries and people might have accounts abroad. While I won't bore you now with the details of financial integration (given that I barely grasped it myself in my last macroeconomics course) it is important to recognize the price we pay for EU-wide free roaming and ordering random stuff from across the ocean. Because this highly integrated system means that problems in one area can easily spread across the whole network as happened with the EU-crisis just a few years ago. How to remain connected while reducing the risk of crisis is a problem policy-makers still haven't solved. That has also to do with the nature of the crisis, given the complexity of the system no person understands all of it. That means you can put safety nets in place and try to anticipate potential problems but you won't know if your solutions work until the crisis hits.

But even if you ignore this international network and decide to consume and live only within your country (looking at you Trump) you will not escape economics. Because while nowadays we associate economics with big words like GDP, or labor markets, or stock prices, initially economics meant barter. Before money hit society people used to exchange goods for goods, one pair of shoes might have been worth 20 apples. We haven't lived in a full barter economy for many years but you have smaller forms of this in smaller units - such as prisons, where cigarettes act as a sort of currency.

I think the most striking example of how you can't escape the economy is that of the Westovers. Last weekend, I read the memoir "Educated" of Tara Westover, a woman who grew up in rural Idaho without any contact to the outside world. Her family were Mormons and her father did not want to interact with the government/ the establishment in any way, so Tara and siblings were born at home with a midwife, didn't have birth certificates (initially), didn't go to the hospital in any case, and weren't educated at a public school. It's a great book and I definitely recommend reading it to everyone, but one thing I noticed was despite trying to be completely self-sufficient, in his preparations for the end of the world Gene (pseudonym) Westover still couldn't escape the economy. He had to work so he could earn money, to pay for electricity and food, and later their family built a business around their mothers' herbal medicine - a business which could be explained with economic theories. I just found it impressive that no matter how hard you try to escape society, economics will always stay with you and the economic theories that we discuss on this blog can help organise and explain structures in almost any society.

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