So what do we do if the market and monetary exchange is faltering? One answer to is we need a more sophisticated model, like a tangled bank, to use Darwin's phrase. Instead of thinking about the economy as a market, or factors of production, we need to think of it like an ecosystem. Instead of consumer demand, we think about recycling and diversity and complexity. I'm just really thinking about this ecological metaphor as I go.
The borders of the market can shift over time, of course. Household work was a market good in the nineteenth century, with hired domestic staff paid to cook and clean.
Then for much of the twentieth century it was a non-market good, carried on within the household (mostly by women, using new labor-saving devices to replace some of the earlier drudgery). In the last generation many tasks which used to be performed by households, such as care for the aged or childcare, have been returned to the market or government provision.
Privatization in the UK and other countries returned many stae-owned industries to the private sector in the 1980s.
And it is possible of course that the boundaries of the market could shift again. New goods and services could be invented which people are willing to pay for.
But some things we want lose their value if we have to pay for them. What use is a friend you have to pay for? (Unless it is a dog.) As Michael Sandel argues, we have perhaps already commoditized too many things, treating them in terms of market value.
So it could be hard to extend the boundaries of the market further, to newer needs we want to satisfy once we have material abundance.
And even when new markets are developed, the plunging cost of many services means that they won't necessarily produce large numbers of jobs. I might pay flickr to keep my photos, instead of keeping the prints and negatives in a shoebox. But it is mostly automated. There are few jobs.
I guess in one sense there is a limit to ecosystems as a metaphor. Evolution does not have purpose. It does not care about legitimacy or virtue. It just generates variability and adapts. Whereas we need to consciously design an ecosystem that lets people flourish luxuriantly, like a vivid, colorful coral reef.