Philip Hensher: Millions, billions, trillions...We lack the imagination to grasp these sums

How much is a million?

Put it like this: how long do you think you'd be counting if you said one number per second? Want to guess? It would be 11 and a half days. What about a billion, then? How big is that? Fifty of those in your English pounds got wiped off the value of British shares this week, but let's stick to one, shall we? Well, counting in the same way, it would take you nearly 32 years to say "one billion" out loud.

And a trillion, which we started to hear about in the context of American public finances this week? I learn from the The New York Times that the first phase of the budget control strategy there cuts $21bn in 2012 "to address a projected deficit of $1.1trn in a budget with outlays of roughly $3.6trn". How much is a trillion? How long would you be counting to get to that? Well, as Spottiswoode says in Team America, "That's right. Nobody at all knows how much that is."

It seems likely that most people, asked to guess how long you would have to count to get to a million or a billion, would probably say rather less than 11 and a half days, or more than 30 years. Discussing the state of public finances or the global economy, we airily produce these figures with very little sense of how large they are. During the crisis of 2008, much was made of the inability, not only of ordinary people, but of those most intimately involved to understand the significance and implications of the immensely complex financial instruments which had crashed down about everyone's ears.

In a sense, there is a much more fundamental issue at work here. I don't believe many people understand what big money is at all, or have any realistic sense of the scale of events. We have so few opportunities to understand it without living through the hyperinflation of Weimar Germany. Psychologically, we deal in small, personal units – £1,000, £10,000, maybe £100,000. Then there are the big units that we might dream of, or which might be notionally embodied in our lucky properties – a million, maybe even, one day, 10 million. Beyond that, it is all vast and trackless, like the night sky, and might as well be measured in light years for all the sense it makes.

It is easy for people to get rather confused about the differences between these big numbers. Populist agitators sometimes get rather excited about government expenditure of five or six million quid on something rather elitist – MPs' expenses, an experimental laboratory, an opera house or two. Of course, every scrap of government money matters, and must be accounted for, but people forget what small sums these represent against the £703bn of public expenditure in 2011. An easy mistake to make. Years ago, when I was working for the House of Commons Treasury Committee, the news came in of a very rich and patriotic old lady who, determined to do good, had left her entire fortune to the Treasury to help out with the national debt. It was all of £4m, if memory serves. How many hours would that help out for? We laughed rather heartlessly, even back in 1995.

As I say, it's easy to mistake a large number for a very large number, and a very large number for a colossal number. As we have no real means of understanding the catastrophe of £50bn disappearing overnight from the value of the FTSE 100, or of a US projected deficit of $1.1trn, we have developed various means of understanding these figures. We parcel them out, one by one, and learn that we in the UK owe £15,202 each thanks to our national debt of £900bn or so. Every adult and child. Ah, that I understand: it means that the money I would spend on a new kitchen – or, for that matter, the money my 11-year-old nephew would spend on whatever an 11-year-old would spend £15,202 on – has now gone on, really, nothing at all. That is like an exercise in the 18th-century sublime: the imagination reconstructs the scale of a truly colossal object by a small, graspable, suggestive fragment.

Or we can parcel it out still more vividly, and leave money aside altogether. Because these catastrophic collapses are so strange to understand in terms of money, even divided up into personal allowances of £15,202. We can grasp them only in terms of personal situations, what they mean in terms of work, and behaviour, and patterns of life. The individual anecdote: the head of English at a good school I know of was asked by a parent how much he was looking forward to the summer holiday, and replied that he was going on working at the school, as a groundsman, to earn some money. There was no question of a summer holiday; the bills were pressing down too hard. That you can understand.

Or there are the pseudo-sociological indicators, drawing conclusions about the huge, unnatural scale of the financial collapse from tiny shifts in behaviour on the high street, in private, intimate areas. Nobody seems to be moving house any longer as they were in the boom years of the 2000s; instead, if anything, people seem to be investing what they have in improvements. A kitchen designer told me the other week that he'd never been so busy; an architect told me that his practice was busy with renovations and extensions.

This is all anecdotal, of course. The significance of these kinds of indicators are obscured by the fact that the very rich are sheltered from the storm as never before – there are still properties selling for tens of millions in cash around Sloane Street. But what to make of the apparent imperviousness of John Lewis, say, to the wider disaster? The cosy home of middle-class nesting is doing better than ever, showing a profit of £350m in 2010-11. What does that mean? How do we read the scale of our collapse in our need for comfort and snuggling up? Unable to make any sense of what hundreds of millions, billions, trillions really feel like, we gaze at cushions and curtains, and try to reach a conclusion. Like Roman haruspices, staring at the patterns made by disembowelled animals, we are unlikely to reach any reliable conclusions by this means. But the real figures are just too big.

There is a famous, discredited, theory of the correspondence between the rise and fall of finances and the length of women's skirts that goes like this – boom and short in the 1920s and 1960s; collapse and long in the 1930s and 1970s. It doesn't seem to work beyond that. But, really, behaviour is all we have to go on, all we can truly understand; panic, hysteria, nervous giggling, Weimar-ish sexual licence as if at the announcement of the end of the world, and rather a lot of expenditure in John Lewis's soft furnishings department. As for trying to understand just how much money is owed, has disappeared, has gone for ever: well, you'd be here counting for decades to try to make human sense of it.