Internet economy

Here we are with gross domestic product (GDP) growth at a 13-quarter low of 5.7 per cent. Distress calls on feeble GDP growth for the June quarter are spilling into the stock markets, prompting the government to consider stimulus packages for the economy. But the question is whether a large fiscal stimulus will nudge the economy? Maybe not. Because data show a slowdown despite the government spending already. Private sector production started slowdown right after March 2016. The average growth of government spending for 16 quarters ending FY16 was four per cent. For FY17, the average stood at 21.5 per cent! That has now dropped to 17.2 per cent. What does that mean? The government has been spending and spending enough already in order to fill the void left by the private sector. With that kind of spending, our economy should be screaming by now. But the fact is, it’s not. And if you push a machine too hard for too long (for example, spending and spending by the government in order to get the economy going), they say you’re going to break the machine. This machine, as shown by the June quarter GDP growth figure, won’t run, but sputter. The government is doing everything in its power to make the economy go, but it just sputters. The rules must have changed.

Enter virtuality. Millennials roaming cyberspace can make an economy sputter even further by not participating in Real Life. If the basement-dwelling mouse-clicking people simply decide to spend less money, even a couple of per cent, it’s enough to get the whole thing to sputter some more. 

All this may sharply contrast all that we have we come to heavily expect of a healthily growing economy. We expect something like high single-digit growth per quarter, high enough to take India into the First World in the course of a couple of lifetimes. Meanwhile, our current lifetime goes to stress, illnesses and hectic schedules, ending up as collateral damage of rapid economic growth. Now, think how different, how much simpler India was around Independence, when India was a subsistence economy, as opposed to a growth economy. But we expect now to go beyond subsistence, persistently, and towards growth, forever, as evidenced by the high growth estimates for the June quarter that the GDP sorely missed. 

Photo: iSTOCK

The vision of perpetual enrichment unfolds like this: if all are devoted to getting more stuff, their passions fan the economy, their demand fuels profit, and the profit fuels still more passions. The machine runs.

But the internet throws a small wrench in the works, by offering satisfaction for free. Suppose we discovered we could satisfy all of our mental needs by sitting down in a quiet room and meditating. The economic consequences would be catastrophic. A society of monks needs food and a bunch of caves — that’s it. Therefore, a society moving towards monkhood will have an economy in free fall. If everyone spends all his hours meditating, what if everyone spends all his hours double-clicking? Let’s find out by comparing two groups of people: “Suit-Boot People” and “Internet People”. Suit-Boot People want big houses, fast cars, fine food, prestigious degrees, and high-powered jobs. They want stuff to play with and they want stuff to happen, all the time. They are out and about. Internet People, on the other hand, want freedom — freedom from work, obligations, expectations. They connect online, hang out at home, and commit to nobody and nothing. They want to pass the time as cheaply as possible. Cue in Cheap Thrills: “Baby I don’t need dollar bills to have fun tonight,” Sia sings on the chorus. “I love cheap thrills.”

As seen above, Internet People are not monks by any means, but they are a lot closer to monkhood than Suit-Boot People whose material needs are 90 per cent higher. Removed from materialistic existence, Internet People focus on virtual fulfilment of their needs by double-clicking virtual castles into existence. They still want stuff, but they’re happy to get it virtually. Back in Real Life, they live a subsistence lifestyle, not caring much about growth, not contributing much to it either. They are our only hope, our only ticket, to a mouse-clicking, less-materialistic economy from a growth-obsessed, consumer-driven one that we currently suffer. 

ashish.sharma@bsmail.in