Government workers, politicians, and pundits constantly talk about the economy as if it is a real, controllable thing, when it isn’t.
The economy is not a thing.
No, really. The “economy” that the talking heads yack about, is only an observation. It is the sum total of all the observable actions of all individuals; actions we choose after we make decisions that result in exchanges, such as time for money, or money for goods and services. Sometimes the actions are thefts resulting from the use of force (more on that in a bit), but it’s hardly a thing.
What goes into those decisions, the stuff in our heads, no one else can ever know. Economic analysis is not of what’s in the mind, but rather of things people do: work or not work, buy or not buy. Those who choose to spew words about the “economy” add no discernible value to our understanding.
Words can only be used to inform, or misinform, and in some cases, to influence the actions of others. Worst case, words can be used to threaten, and to defraud.
Ludwig von Mises, the preeminent Austrian-school economist, classified economics as a subset of praxeology, the study of “human action,” and “human action” can only be taken by one person at a time.
There are no group actions. There are no national actions. There are no organizational or corporate actions. There are no governmental actions. There are only individual ones. Even in a stampeding mob, each person can choose to run or not run, burn or not burn. Human beings can think of themselves as “a part” of these mental organizations, and can choose whether or not to act according to the words and behaviors of those around them.
But the fact that they might do so does not negate the fact that theirs is individual choice, for which they are personally responsible. If a soldier, acting upon orders from a sergeant, shoots an innocent civilian, that soldier is a murderer. Human beings may cling to words to excuse the harm they cause to others, but they are still the ones initiating the harm.
Yes, contrarians, unless there is a real “gun to the head” threat, human beings have choices. Losing your job is not an excuse for your actions and more than “I was just following orders.” To suggest otherwise is moral cowardice, and dishonesty.
Economic chatter, from politicians, and the press, usually takes the form of advice or plans for improving “the economy” or warnings about actions that will make it decidedly worse (or less fair, or inclusive, or whatever other horror they claim to have the power to prevent.) They’re all wrong, or worse, they’re lying. No one person, or group of people, can possibly predict or control the actions of millions of individual human beings.
Individuals take action based upon physical sensations they experience, like hunger or cold, or based upon their personal analysis of a situation. They respond to their needs as they perceive them. The usual suspects: fear of death, pain, or loss are negative motivators. Other are more positive, like protecting one’s family, feeding one’s children, and protecting the ones they care about from outside threats.
A big boogeyman for the “economy” commentators is “greed.” It tends to come up in discussions of “fairness.” I call this obsession with greed envy, as in “Thou Shall Not.”
The talk goes something like this:
“I should have this.”
But why should you have this?
“They have it and I don’t, and that’s unfair.”
But why is it unfair?
The answer tends to end in “-ism” or be one of several conspiracy theories about how the few “haves” intentionally deprive the “have-nots.”
The reality is that human being respond to incentives. Given the opportunity to improve our situations, materially or emotionally, we take it. Threatened with the loss of property, the fear of violence, or capture by criminals (or even by government), we avoid it. The genius of the market, of individuals, is the immense gray matter computing power we use to make every economic decision, from buying groceries, to airliners.
So when some Statist speaks of managing the economy, they are describing the lies, threats and bribes that they think will influence or distort the behaviors of enough people to cause the changes they want to see. In every generation, every politician and pundit believes he or she has the magic spell that will solve the “problem” that isn’t really a problem at all. Markets aren’t meant to deliver equal outcomes to every individual, they’re not intended to be “fair” either. As I said at the outset, they are the sum total of the decisions millions of individuals make.
Those who aspire to lofty positions as economic experts are the sycophants that would whisper in the King’s ear. Fools like Paul Krugman, who can barely conceal his motives, are never held accountable for the lies they tell. They pursue power over other people, the lowest form of human endeavor, while masquerading as problem solvers.
Some economic advisers who champion the free-market, like my broker Peter Schiff, spend countless hours trying to decipher the twisted motives of central bankers who can influence and defraud millions with a few lines of gibberish. What a waste of talent and effort.
Any discussion about policies aimed at improving the “economy” is just weak cover for the illegitimate use of force by those intent on amassing power for its own sake.
My solution, said long ago: “Laissez-fair nous”