In 1954, Marshall McLuhan coined “The Media is the Message”. McLuhan proposed that the communication medium itself, not the messages it carries, should be the primary focus of study. He argued that media, as artifacts, affect society by their characteristics or content.
Economics is an extension of the human mind, and how we express our economics is what we should study — not its history except to understand where economics has not served our intent. We express economics through models; hence, the model becomes economics.
This is the way economists now work. They have a model, and they change it when it does not satisfy the intent. When inflation occurs, the Reserve Bank looks at its model, adjusts it, and then adjusts the real world. The problem is their modelling tools are poor models of economics.
Agent-based tools like AnyLogic or NetLogo can be implemented directly and become economies. In the model, individuals make economic decisions that affect others. If the model is agent-based, we can make a copy of it and try out different scenarios. If the real-world model does not react as expected, the model copy can try different ideas and bring the best back to the real-life model.
If we have an implementation that is also the model, we can experiment with the model and see if the changes work. We then deploy the model, observe what happens and adjust the model dynamically to meet changing circumstances.
The model itself is made of many models, each of which is independent. Every individual will have their own model, and they will be able to see the effect of government policy changes or the changes in oil prices on them and make adjustments to their model to meet the challenges.
Agent-based models will democratise economic decisions as groups of people in Permanent Asset Markets (PAM) can make their own decisions within the boundaries set by the coordinators of PAMs.
Markets will become more effective. The disparities of wealth will still exist but will be less pronounced. Economies will become more resilient while being better connected globally. Customers will become owners, and costs and consumption of scarce resources will drop. The Reserve Bank will become more like the Bureau of Meteorology and issue scenarios and suggestions for policy changes due to natural disasters.
Economists will have a much more interesting job. Businesses will have more control over their viability. Individuals will know the effect of their choices on their wealth and future economic prospects. An unstable economic world can ensure the world stays within planetary boundaries. It will also become very difficult for bad actors to influence the overall system as their disruptions — which will occur frequently — will be quickly countered.
