How we make money, and what we spend that money on, has changed a lot throughout history. A little over century ago, most of the economy was devoted to producing food. A half century later, the economy had shifted to making and consuming things: the golden age of mass production. Today, we live in an economy that primarily produces services.
So, what’s next?
Signs point toward an unlikely commodity: stories. Like traditional commodities, stories require labor to produce and can be bought and sold. But story production will shape our economy in new and different ways.
The power of a good story
The economy is seeing an increase in narratives. From the success of self-published books on Amazon to the myriad of music on Spotify and the endless TV and film options of Netflix, economists like Joel Waldfogel have been documenting the increasing variety and quality of all forms of story-based media.
And it’s not just obvious storytellers like writers and actors: Marketers, tour guides, and lawyers all tell stories, too. The most successful sales and advertising executives know that the most effective ads have narratives that surround their products. Teachers also understand that forming narratives around facts is essential to learning; Neal Stephenson’s sci-fi novel Diamond Age is premised on the idea that teaching is simply storytelling. While the media industry currently only represents a small part of the US economy—1% of workers and 5% of the its GDP—if we add in these workers whom economist Deidre McCloskey classifies as “persuaders,” we find that storytellers make up one third of the US economy—and that number is growing.
Psychologist Dan Gilbert notes that human brains have a unique design compared to others in the animal kingdom—one that was created to soak up stories. “What does a pre-frontal cortex do for you that should justify the entire architectural overhaul of the human skull in the blink of evolutionary time … It is an experience simulator.” Early humans needed to know whether chasing an antelope over a cliff was a good idea, so the brain evolved to simulate different scenarios in our minds in order to decide the appropriate course of action. Our brain processes information by simulating narratives, and we use those narratives to both teach and learn from others.
Experiments show that you can get consumers to spend more on a product just by asking them to think about the past. Nowadays, even many of the material goods we buy get their value from the stories attached to them. Coca-Cola knows many people drink coke because of nostalgic associations; one experiment showed that you can get consumers to spend more on a product just by asking them to think about the past. Adam Davidson talks about the “Brooklynization of the US economy” as we shift consumption from Hershey’s chocolate and Budweiser beer to artisanal cacao bars and small-batch microbrews: “Instead of rolling our eyes at self-conscious Brooklyn hipsters pickling everything in sight, we might look to them as guides to the future of the American economy.”
Some of my students recently ran an experiment to see if the stories attached to products are what makes us buy them. Subjects were asked to drink and rate various cups of coffee that each came with a card ranging from a neutral description of the chemistry of caffeine to the elevation and oxygen exposure of the beans. People get more enjoyment from the same coffee if it came with a story about the fair compensation of the laborers who grew denser beans on cooperative land where they practiced responsible stewardship than just a regular cup of joe.
When it comes to experiences instead of products, time-use studies that attempt to tabulate how we spend every minute of our day show that we spend most of our leisure time engaging in stories. That time is still primarily spent on television (where streaming services like Netflix have greatly expanded our choices). But the fastest-growing leisure activity has been video games. Young men between the ages of 21 to 30 now spend 3.4 hours each week playing video games, which is a 70% increase from eight years prior. Games allow us to become an active participant in narratives rather than a passive one. As a result, economist Eric Hurst of the University of Chicago and colleagues found that even though young men today are working at record low rates, they also report being happier than men the same age from a generation ago.
The next generation’s leisure habits may be even more informative of this shift. Data by Common Sense Media finds that teens are on screens nine hours per day, over an hour of which is devoted to social media. And what are the 2 billion users of Facebook and Instagram doing? Reading and curating the stories of their lives.
The future of the storytelling economy
A chocolate bar made by a machine will never taste as good as a chocolate bar made by a human, even if chemically the two chocolate bars are exactly the same. But what about a story crafted by a machine versus one a human writes? We now have mathematical models that can optimize the number of plot twists in a story, but once we find out a robot wrote it, a story written by a computer will never have the same impact as a story written by a person.
Creativity is still difficult to automate, so encouraging growth in the storytelling economy could make up for the imminent mechanized take-over of other industries. After all, we used to spend most of our time producing food to subsist, and now just 1% of the US population produces enough food for the entire country. Manufacturing is headed in the same direction. Storytelling could be the next industry to fill that gap.
Every big shift in the economy creates painful dislocations for those adapted to the old ways, and every shift in the economy will create winners and losers between those who are well adapted to the new ways and those who are not. However, the idea of a story-based economy offers a more optimistic vision of the future that the robot-dominated dystopias currently being proffered. We worry about an increasingly materialistic future, but a story economy suggests the future could bring lives filled with meaning rather than just more and more things.