What Do Addiction and Economics Have in Common?

People who follow me on Twitter get confused, I’ll bet. Half the tweets are about addiction and half are about the state of the economy or something related. “What do addiction and economics have in common,” you might ask. “Not much,” you might answer, at least not on the surface. I see a lot in common, but even if you don’t, they still have one thing in common: they aren’t the same as they were in our grandparents’ time.

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Image Courtesy of www.drugfree.org

In the case of addiction, there were no legal connotations at all until the Harrison Tax Act of 1905. Doctors saw it as an illness evidenced by lack of control rather than loss of control. People who had addiction weren’t considered normal people who chose wrongly, but rather ill people who had a problem. The general upswing in moral issues in America in the early 1900’s that lead us to Prohibition had earlier effects on medical care for addiction. The Harrison Tax Act forbade doctors from treating patients with addiction unless they had special licenses and registrations, and those were cut back year after year until they were pulled all together. Between 1905 and 1920 over 20,000 American physicians were fined or jailed for treating people with addiction.

In the case of economics, what’s changed is the loss of an actual standard. When my grandfather saved a dollar he was saving 1/20th of an ounce of gold, and if he needed it in five years, that $1 was still worth 1/20th an ounce of gold. He could actually save his purchasing power. Because saved money, money held back from consumption, is the basis of all investment, there was much economic growth in America from the end of the greenback regime to 1933. This was the period when the US dollar was freely convertible with gold. Since 1933 the dollar has, to a lesser and lesser degree, been backed by anything until in the last 40 years or so, it has been backed by nothing. This has led to a constant inflation that decreases the purchasing power of any saver’s money. So people save less. This means less money for actual investment, the normal fuel for an economy, so to keep the economy going more money has to be printed and given to banks to lend. This “free money” leads to more speculation and greater instability.


We can see both addiction and economics only within the social construct of our own culture. That gives us a very distorted view of what these things actually are. To see the reality in their natures we need another perspective. We could look back in time, to see how our grandparents saw things in the social construct of their culture or we could look at other cultures in the world currently to see how the problem or event is different in that culture.

For example, people are fond of pointing out the differences in drug use between cultures, but that has little to do with addiction. History and accessibility have a lot to do with what drugs people with addiction use in different countries, but it doesn’t mean that the illness is different in different countries. So khat addiction in Africa and cocaine addiction in the US are different because there is a different drug and a different culture, but if we look at the underlying neurobiology of why people are using khat and cocaine, there’s no difference. We could do the same thing with economics. We could look at inflation here and in other places. In those places where inflation has destroyed people’s lives, people tend to live closer to the actual means of production and have less faith in the system. Growth is slower but steadier and they survive catastrophes better. Because they have lower rates of growth doesn’t mean that inflation is different there than here, just that they have a different context.

One final way that addiction and economics are alike is the phenomenon of expectation. Addiction has a unique neurobiology where the Nucleus Accumbens codes for positive disconfirmation of expected reward. That means the higher the expectation, the higher the reward required for a reward signal. The lower the expectation, the less the reward that gives the same signal.

Expectation plays a role in economics as well. As economics has become unglued from physical reality and based on models of behavior, it has become paramount that people restrict their actions to those models. The models expect it. When people don’t, the unexpected happens and everyone says, “Who could have seen that coming?”

This expectation in economics actually interacts in a very specific way with the part of the brain where addiction lives. Because our current unbacked currency needs more and more currency printing to keep things growing in the absence of real savings, there is no way to save purchasing power. Because any saved money will actually result in a decrease of purchasing power, we have, for the last few generations, been getting used to faster and faster spending in an attempt to maximize the value of what we spend. Many people have said that addiction as an illness is worse than it was 40 years ago. I’m not sure that’s true. But if it is, the cause is not a particular drug or behavior, it’s the economic reality of our current currency system; that is, we see instant gratification as a rational choice that is reinforced as the societal norm.

Author: AddictionDoctor

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