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Well, as the author of the code, you should be able to tell the function what type of variable you expect (string, int, or business entity e.g Book, Bookstore).

That way if you later try to call the function passing an int when it expected a Book, you have an early warning system at compile-time. Not run-time.

The evidence from a whole lot of code written by a whole lot of people seems to indicate that, for the most part, a given developer actually may not know "what [they're] doing with [their] variables".

For everything else, there's type inference.

The computer can indeed find out. Most statically typed language can infer types nowadays.