It is common for commentators and economists in their discussions to continuously refer to something called the ‘economy’ – which sometimes performs well and at other times poorly. This ‘economy’ is presented as a living entity apart from individuals.
For example, various experts report that the ‘economy’ grew by such and such percentage, or the widening in the trade deficit threatens the ‘economy.’ What do they mean by the term ‘economy’? Does such an entity actually exist?
What is “the Economy”? The term ‘economy’ is part and parcel of a ‘hampered’ economic environment. In an environment free of government interference, the ‘economy’ doesn’t exist as such.
It must be realized that at no stage does the so-called ‘economy’ have a life of its own, independent from individuals.
While in a free environment the ‘economy’ is just a metaphor and doesn’t exist as such, in a ‘hampered’ environment the government gives birth to a creature called the ‘economy’ via its constant statistical reference to it.
This post was published at Ludwig von Mises Institute on April 3, 2017.
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