Imagine That

Donald Boudreaux‏.

Only human beings have imagination—or so I imagine. Dogs and cats have no imagination; nor do snails or streams; nor do robots or smart phones.

The only evidence I can offer for the truth of my claim is that we don’t observe other creatures or things becoming. We don’t observe Rover or Secretariat seeking to transform their existences in any fundamental way. Humans, however, do imagine futures different from today, and we seek to make these different futures real.

This fact means that society isn’t a mechanism like a wristwatch or a microwave oven. The human economy is not a system infused with tight and unfailingly predictable reaction functions. Analogizing the economy to such a machine might have its benefits, but it also has its costs. And in the study of economics those costs have come to swamp the benefits.

I submit that human imagination and the open-endedness that such imagination imparts to the economy are relevant aspects of reality that economists largely and regrettably have too long ignored. Consider, for example, the economics of natural resources.

The very term “natural resources” sneaks in an assumption about the manner in which humankind relates to the natural environment, an assumption that hides the role of imagination by suggesting that we are much more passive and reactive than we really are.

To describe a resource as “natural” is to imply that it has value to human beings—that it is useful—simply by its nature, simply by its existence. Therefore, with the likes of land, petroleum, and titanium being bestowed on us by nature, our job is merely to gather them up and use them in economically efficient ways.

While the role of entrepreneurial imagination is (sometimes) recognized in devising new products that might be made with natural resources, such imagination is almost never recognized in the creation of the natural resources themselves. But in fact no substance is a truly natural resource. Each thing that we call a “natural resource” is something whose “resourceness” was created by human imagination.

The black smelly stuff that (I imagine) bubbled up into the creek waters of western Pennsylvania back in 1500 BC—and 1500 AD—likely was more of a nuisance than a resource to the people then living there. Petroleum’s “resourceness” required human imagination—someone to say to himself or herself, “Hey, what if I do this with that stuff?” or “I wonder if I can make that stuff perform this task for me.”

To impart “resourceness” to oil required myriad imaginations—imagining not only what useful outputs the viscous, malodorous stuff can be used to make, but imagining also how to get it out of the creeks and ground and deep oceans. The number of imaginings that had to happen to make oil a “natural” resource is staggering.

While any one of these imaginings might not have altered human existence in any noticeable way, the full panoply of them certainly did do so.

Imaginings such as these are utterly foundational to human society. And when we recognize them for what they are, it becomes clear that in reality resources are never “given;” knowledge is never “given;” technology is never “given;” human wants and the ways in which we interpret and react to our reality are never “given.”

The Reverend Malthus committed the most infamous case of assuming to be given what human imagination has since demonstrated should not be so assumed. Malthus failed—as today’s Malthusians continue to fail—to appreciate the reality and the economic productivity of human imagination.

The primacy of human imagination means that resources are not defined strictly by volume, weight, mass, wave frequency, location on the periodic table, or any other category that features prominently in books on physics or engineering. Imagination adds another dimension—a uniquely economic dimension—to any physical “things” that might be regarded as resources.

Only human imagination reveals—or creates—economically central aspects of resources: how resources might be used to satisfy our desires; how they might be located, extracted, stored, processed, recycled; and how they might be made to serve purposes performed by different resources.

None of these indispensable aspects of resources is exclusively, or even chiefly, a function of their physical properties. Human imagination must be mixed with them.

Imagination is not, of course, magic pixie dust that, when sprinkled on a lump of inert physical stuff, transforms it into whatever the human heart desires. The specifics of our physical world do matter. No amount of imagination is likely, for example, to turn cow manure into fine bourbon, or to create life everlasting for us mortal beings.

But . . . But . . . I pause here to confess to you how surprisingly difficult it was to write the previous paragraph—how challenging it was to list plausible examples of the highly implausible. I first wrote, “No amount of imagination will turn water into wine. That achievement really would be a miracle of biblical proportions!” But then I thought, “Why not turn water into wine? Is that prospect truly so unthinkable?”

Knowing of human imagination’s remarkable track record, who can dismiss the prospect that one day some imaginative person (or, more likely, a series of imaginative people) will, after much experimentation, create, say, a powder mix that turns ordinary tap water into a luscious Bordeaux-style wine?

If I—a middle-class American sitting in my office in Fairfax, Virginia—can pull from my pocket a little slab, press a few buttons in a certain sequence, and then video-chat in real time with a friend in New Orleans or Nairobi or, pressing yet another sequence of buttons, download into my little slab a recording of a musical performance from 50 years ago by four lads from Liverpool, what basis have I, or anyone else, to suggest that an inexpensive powder that turns water into wine is a laughable impossibility?

I can easily imagine such a thing really happening, although I personally haven’t an imagination remotely powerful enough ever to enable me to imagine just how to make such an achievement a reality. What I do have—what we all have—is the great good fortune to live in a society that boasts people with such fertile imaginations and that motivates them to unleash their imaginations in ways that allow even those of us without imaginations so fertile to enjoy the fruits of productive, creative imagination.

Human imagination and creativity are, as the late Julian Simon taught, the ultimate resource.