What is the role of the economy in our everyday lives?

Hardly a day goes by without people hearing something about the economy—good or bad. Just what is this grand presence that inserts itself into our lives? Generally, “the economy” refers to the production, trade, and consumption of goods and services. And economics is the study of that process. It is generally broken into macroeconomics and microeconomics: the former refers to the economy at large, and the latter refers to the economic considerations and transactions that we make in our everyday lives.

For most of us, our experience of the economy begins first with consumption of goods, and then with work. We perform labor in order to purchase goods, especially those that are necessary to life. And yet it’s not so simple. How do we choose what work to do? What counts as important work? Should work do more than pay the bills—should it satisfy the soul? And what exactly do we mean by “necessary for life”?

Our national mythology—the American Dream—is based on the belief that hard work will not go unrewarded. Yet recently that dream seems increasingly difficult to realize. We consume more and more but produce less and less. For the first time in history, we are participating in a truly global economy. Ultimately, what will be the outcome of such extreme shifts?

The authors and artists whose work you find in this chapter offer different perspectives on the meaning of economics in our lives. In the central work, Barbara Ehrenreich tells of her experience trying to make a living earning minimum wage; and in our classic essay, Jonathan Swift poses a novel solution to the woes of the destitute in eighteenth-century Ireland. Eric Schlosser (p. 431) asks whether we can enjoy the fruits of labor without exploiting the laborers, and Matthew B. Crawford (p. 449) looks at the nature of work itself, discussing what he calls “knowledge work” and “manual work.” Other authors in this chapter consider the plight of the poor and the future of the American Dream. Finally, we enter a conversation about materialism in American culture. Do we insist on consuming more than we need—more, in fact, than is good for us and for the world? Or is our consumption of goods and services a realization of the American Dream?