It makes a difference to the economy whether someone spends a marginal tenner on (a) a violent film, (b) a Teach Yourself German book or (c) a packet of vegetable seeds. It makes a difference to the economy because of what the person is likely to do after having spent that money.
Just for the sake of clarity, here are some possible differences. A guy buys a violent film … it makes him more violent. One day he hits out at someone and ends up in jail. That’s a burden to the economy in a conventional sense.
The guy learns German and clinches an export deal to a supermarket chain in Bavaria (say, Shropshire Gold beer, which can beat any pils any day). That’s good for the economy.
The guy plants seeds and grows some of his own veg. He senses deep well-being … which means he has hit economic bulls-eye – “utility”.
So, what makes someone go for (a), (b) or (c)?
It is determined by the set of beliefs which the guy has.
So the beliefs which we have determine the shape of the economy and the degree to which we meet economic goals. In fact, I reckon that beliefs and the influences which shape those beliefs are more important to the shape of the economy than interest rates, taxation rates or any of the other quantitative things which economists spend their time counting.
We need to understand which beliefs create a good economy (one where lots of people have wholesome, meaningful lives), which beliefs create a bad economy; which beliefs can kick start a flagging economy; which beliefs send the economy into nose-dive.
People generally understand that beliefs are important to the economy because they understand that confidence is critical to the economy. But confidence in what? That is what we don’t yet know, because we don’t know which are the beliefs we need to have and how those beliefs can be instilled.