Reality Check 2: Corona, Contagion, and the Economic Mind-Body; A Story of Two Bugs

Abstract

The coronavirus did not cause the weakness of the economy but painfully exposed it. The ‘underlying condition’ which made our collective economic mind-body so vulnerable was caused by another virus. This one isn’t a pathogen but a mental bug in the form of the mechanical worldview that infected mainstream economics many years ago. It basically views the economy as a machine, the market as an automaton, and humans as robots. What this ignores is the fact that humans have conscious minds which, via trading and technologies, extend into real and financial markets. Problems thus start when such a view is turned into practice via mechanical policies, regulations and strategies. Specifically, they interfere with the chain of (e.g. price) discovery that sustains the economic system for the benefit of society. Such discovery relies on conscious minds. Crucially, there is nothing mechanical about consciousness or discovery. In fact, treating (extended) conscious minds in a mechanical way is very damaging. It goes against their nature and at some point this leads to reality checks. Reality checks are ontological, and sometimes also existential. In 2008 we experienced our first. This paper argues to make this our last by curing economics’ paradigm.