Economics is
silly. If you don’t believe this, either you haven’t studied it, or have
studied far too much of it. It often makes a lot of assumptions, some of them
frankly ridiculous. This is done because it simplifies things enormously, and
we still get meaningful results relevant to theory. In models of the
macroeconomy, for example, we often take a single representative agent that
maximises their utility over an infinite time horizon. This is clearly unrealistic, but
where economics comes in conflict with reality, economics wins.
Our
representative agent is infinitely lived - a pitiless individual, without love, fear,
and condemned to maximise their overall consumption with mindless
determination for all eternity. We are talking about zombies
here. Not only that, but our economically representative zombies are
surprisingly rational, with a greater knowledge of economic theory than would
be expected from the recently disinterred, and the ability to solve present
value Hamiltonians in the time it takes to say ‘Braaaaaaiiiiins.’ Our economy,
ladies and gentlemen, is represented by the infinitely hungry and infinitely
lived zombie of Milton Friedman.
Despite his
longevity not everything is smooth sailing for zombie Friedman. Although
effectively immortal, zombies are not immune to the ravages of time, and they
view their arm hanging by the thinnest rags of rotted flesh with the same pleasure
as we do. So the zombie Friedman values his present consumption more than he
values his consumption in the future, when it’s possible that he quite
literally won’t have a leg to stand on, and will instead be so much cognisant mush of flesh and sentient bones. So, he places a discount rate on the future,
and prefers to have his consumption now.
You might be
tempted to ask, why does the zombie Friedman not smooth his consumption over
his death-time? Surely there has to be a market in which he can buy insurance
against the ravages of time; a brain bond to secure interest against his
withering infinite life? The truth is that in our alive-ist society, it is very
difficult for zombie Friedman to access these markets. It is hard to buy health
insurance when the pre-existing condition of being dead is enough to send
twittering actuaries scuttling over statistics with alarm; and while blood
banks exist, these have been the well-established domain of vampires rather
than zombies. It is difficult to make a living when society worries that you’re
already dead.
Facing
discrimination from all sides, and unable to access the free markets he fought
so hard to establish, death for zombie Friedman continues much as it always
has: a relentless maximization of consumption in all time periods, broken only
by the occasional face-off with werewolf Keynes for territory, or when he kicks
Headless Hayek in the nads.