economic unpredictability – From prices to place-based opportunity, economist Alex Mayyasi explains five forces that make the economy feel constantly in flux.
The economy can feel like it’s changing faster than you can adjust. but that sense of unpredictability has a logic behind it.. In a new book. Alex Mayyasi. a journalist focused on business. economics. and food. lays out five economic forces—centered on information. technology. incentives. and even geography—that help explain why the picture rarely stays still.
Mayyasi’s core idea is straightforward: the economy isn’t a fixed machine or something centrally run from above.. It’s an evolving system where information, technology, and human behavior interact continuously, reorganizing opportunities as conditions shift.. The result is a world where everyday signals—especially prices and employment patterns—move in response to many influences at once.
A price tag can look small, but it often behaves like a rapid digest of complex events.. If the price of gas rises at a station you pass. that single number can reflect disruptions in oil supply. seasonal travel demand. or both.. You don’t have to identify the exact cause to understand the effect: prices synthesize supply-and-demand forces into a signal people can act on.
Prices don’t just communicate information; they also change behavior.. When gas gets expensive, drivers are encouraged to drive less when supply is tight or demand is high.. Businesses, seeing the same signal, may expand refining and selling to increase supply.. In this way, price changes help coordinate millions of decisions without any one person or organization directing the overall outcome.
Technology, another powerful driver of change, doesn’t simply eliminate work—it tends to replace tasks rather than whole jobs.. Mayyasi points to the rollout of ATMs in the 1970s, when automatic teller machines took over specific teller functions.. Yet bank tellers did not vanish.. Over time, the number of tellers in the U.S.. kept rising, in part because ATMs replaced only portions of daily work.. That freed up teller time for activities machines couldn’t do, such as pitching credit cards or offering financial advice.
The same shift also reshaped how banks operated.. With lower branch operating costs, banks could open more locations, which supported additional staffing.. The transition was not frictionless—jobs can change dramatically—but the broader lesson is that technological automation often creates new opportunities even while it removes certain tasks.
A third reason the economy can feel unpredictable is that the prices of goods and the prices of services often move in different directions.. Mayyasi illustrates this with a cultural contrast: when Agatha Christie became a parent in the 1910s. she and her husband employed live-in help. and owning a car seemed like an extreme luxury.. Today, many people own cars, while hiring a live-in servant is widely seen as unattainable.
The explanation is rooted in how innovation affects what gets cheaper.. Technology and innovation have reduced the costs of many physical goods over time, including cars and televisions.. But as countries grow wealthier, labor costs rise, pushing up the prices of labor-intensive services.. Haircuts, daycare, and concerts are examples of services that typically become more expensive when wages increase.
For parents and for workers in creative fields, these service-cost pressures are often felt directly.. Mayyasi notes that artists can struggle to earn a living. and he points to the high cost of childcare in the U.S.. describing it as a major component of living expenses in a dynamic. growing economy.
Meanwhile, an additional force—often invisible in everyday conversation—can make outcomes feel winner-take-all.. Mayyasi describes how the economics of entertainment changed with technology.. Before streaming services and CDs, people mainly heard singers by hiring them directly.. The top performers earned more, but not dramatically more than other strong artists.
Today, technology allows audiences everywhere to access the world’s biggest stars.. If you can stream Taylor Swift’s albums or listen to Bad Bunny’s halftime performance. then a “very good” singer is competing against the very best at global scale.. The financial result can concentrate heavily: some artists earn millions, while performers who are merely strong may need day jobs.
This dynamic can be beneficial or harmful depending on what kind of career you want.. Mayyasi argues that for people who are willing to work very long hours to become the very best. winner-take-all industries can reward that effort.. But for those aiming for work-life balance. he suggests looking toward professions like nursing or sales. where compensation tends to be more stable across the broader workforce.
Location, too, can determine who gets access to opportunity, even within the same country.. Mayyasi highlights research suggesting that the American Dream remains alive, but it isn’t distributed evenly across places.. He describes findings from economists that showed upward mobility—poor families becoming middle class—tends to cluster in certain cities and regions.
The mechanism appears to involve social capital: networks of friendships and connections that cross class lines.. Researchers are still working to clarify exactly why this matters so much. but the implications are already visible in policy directions. including replacing public housing restricted to low-income residents with mixed-income neighborhoods.
The power of place shows up in business clustering as well.. Mayyasi points to the way tech companies concentrate in Silicon Valley. advertising firms gather in New York. and TV and film industries cluster around Hollywood.. Economists often refer to this as agglomeration: when companies and workers are near one another. it can be easier to hire. build networks. and exchange ideas.
Even the pandemic’s disruption to work patterns reinforced this point in a new way.. When remote work expanded. many people tested whether it would work well. and some were surprised by how effectively it could function.. Still, Mayyasi argues that because the power of place is strong, many people returned to in-person work and local hiring.
Taken together, Mayyasi’s five explanations offer a unifying picture of economic volatility at the ground level.. Prices react quickly to changing conditions. technology reshapes tasks and business structures. goods and services can diverge in cost. winner-take-all markets concentrate rewards. and geography influences access to opportunity.. In that system, unpredictability isn’t a mystery so much as the predictable outcome of many forces moving at once.
Misryoum
economic unpredictability prices and incentives technology and jobs winner-take-all economy cost of services agglomeration social capital