What is an Economy?

Understanding needs to be based on one's own experiences.

In a recent TV ad a group of adults were discussing insurance.  In their discussion they referred to “the economy.”  A 12-year-old who was listening asked “What is an economy?”

They attempted an explanation and smiled with satisfaction when they satisfied youthful curiosity.  The kid leaves, saying, “I’ll go look it up.”

How successful would he have been?  Here’s Google: “An economy is a system that determines how to use scarce resources to produce and consume goods and services. It's a social domain that involves the production, distribution, and consumption of goods and services, as well as the practices and discourses associated with these activities.”  That’s their AI product answer.  It is not much better on Wikipedia. 

But it gets me thinking about what people think we are saying these days when we say that the economy is bad, or the economy is good, and it is X’s fault.

We often don’t know what the h** we are talking about and even worse don’t know what the “code” words we are using mean to someone else.   

So many of us disagree as to whether “the economy” is bad or good. Could it be that it means something quite different to you than it means to me? Or, is it what we are Facebook handlers encourage us to suspect: that one of us can’t tell right from wrong or good from bad. 

What kind of “term” or word choice is “the economy”?  Does it refer to a set, a collection, of many different identifiable activities that we assume are logically related to each other?  So related, in fact, that we can talk about them as a whole? 

Perhaps, and that might be the problem, as we leave pieces out and make some questionable assumptions about how they are related. 

What if we disassemble the parts and evaluate each in turn.  That may be helpful in multiple choice examinations, but it avoids the problem that they interact with each other, and it is these interactions that are directly related to the “human welfare” we should be concerned about.

So should we just not talk about the economy and instead opine on “economics.”  Still not entirely helpful.  Harry Truman was fond, we’re told, of saying that he was scouring the country trying to locate a one-armed economist.   He was tired, he said, of his advisors always saying, “well, on the other hand.”

I have a modest suggestion.  What if we share with each other the dollar and “sense” experiences that we are having in our own lives?

That gets us into some real areas—wages, costs, stability over time, jobs, retirement. 

Then we might go further and talk about what we can do about these problems and what we think the people we have elected to help us with our needs (if we still believe that that is what they do at least some of time) should and can do about them.

We can ground, that is, the discussion in our own situations, in what we really know. 

I think that this will lead the discussion in a positive direction, but I could be wrong.  In any event I would expect less shouting and more respect for each other’s ideas as we follow a common path—together.