From Flatlining to the Breakaway Economy : What mechanisms influence individual contributions to the economy, and can the individual influence the economy as a whole?

Gasser, Christina and Hesketh, Anthony (2024) From Flatlining to the Breakaway Economy : What mechanisms influence individual contributions to the economy, and can the individual influence the economy as a whole? PhD thesis, Lancaster University.

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Abstract

This thesis explores the role and significance of the individual in the economy and produces an unexpected finding: individual decisions and interactions might have the power to alter the norms and even the very structure of the economy. Building upon previous ideas of the individual in the economy by Lindahl (1919), Hayek (1935) and Wagner (2020), this work takes the perspective of the combined reflexive lens, a theoretical framework which views the economy as a system shaped by the reflexive decisions and interactions of the individuals within it as they interact with the economic environment. This work asks the following two questions: a. What are the key mechanisms that drive how individuals decide to contribute to the economy? b. What is the impact of individual decisions in evolving the economy? Critical realism underpins the methodology of this work, providing a lens through which we can understand the data as working within the multi-layered contexts of the real, the actual, and the empirical. The critical realist framework created by Vincent and Wapshott (2014) underpins the interview analysis of twenty-one students, university personnel, industry workers and members of local government from Korea, the UK, and the US. Five key findings emerge from this research. The first finding from this study is the uncovering of perceived downwards economic constraints in Chapter Four and perceived cultural economic constraints in Chapter Five which shape and limit how individuals participate in the spontaneously self-evolving economy. This finding illustrates that individuals are perceived to face various barriers that constrain their economic participation before they begin working, while on the job, and throughout their careers. The second finding is a new understanding of individual resistance behaviors, or upward counterforces employed by individuals to mediate the downwards constraints from Chapters Four and Five. Termed economic nonconformity, these behaviors show that not only do individuals react emotionally to the economy, they actively employ various strategies of resistance or rebellion, illustrating their creative and volitional powers to shape their economic realities. The third finding is the suggested emergence of new features at the macroeconomic level perceived to be stemming from the actions of individuals. These are the Breakaway Economy, where individuals have foregone a traditional institutional job and created their own sources of income, and the Gateway Economy, where individuals have both a traditional job and a side hustle which they would like to turn into a full-time job in the Breakaway Economy. The primary drivers of these new emergent features are new technologies such as online platforms and social media. The fourth finding is that these mechanisms are evidenced by perceptions crossing both national and generational boundaries. While differences among these groups remain, there is a convergence in perceptions and values which transcends the groups and becomes more obvious when we see the individual response to recent challenges such as COVID-19. The fifth finding is the proposal of the model of the Spontaneously Self-Evolving Economy, a synthesis of the foundational theories of the combined reflexive lens with the analysis of the data from this work. It proposes a dynamic model of the economy based on a continuous interplay of individual reflexive decisions and interactions with the evolving economy to produce a system that is spontaneously evolving on the microeconomic and macroeconomic levels simultaneously and where individual decisions can create emergent effects in the larger structure that might not be anticipated. These findings encourage us to ask the question of how we can define labor market participation and workers should these new perceived economic structures prove to be true with further analysis, as the terms employed, unemployed, and underemployed no longer seem to encompass the totality of workers in the economy. They also encourage us to ask whether and how traditional institutions and policies will change to entice workers to take traditional jobs, and how the potential Gateway and Breakaway Economies might affect the economy in the future. In addition, these findings call for the development of new economic indicators which would more accurately describe the results of individual contributions and their impact on economic reality, therefore bringing us closer to a convergence between economic theory and reality. Last, these findings illustrate that we should be focusing on individuals within the economy not merely as passive participants but as active creators of economic reality.