AN ECONOMY ITSELF

There is no such thing as 'the economy' or 'an economy' except as a geographically defined ecosystem. And this is largely arbitrary, a product of political history; diplomacy, warfare, court intrigue & the odd peasant revolt here and there.

Animals have the food chain. Consenting humans have a meta-layer on top of this called the division of labour, which arises through people seeking their comparative advantage, rather than the predation we see by a lion upon a gazelle.

The division of labour is built on top of several exchanges which end with a consumption good or service like a chair, a laptop, a haircut or a showing of a movie at a cinema that some consumer purchases.

It serves the purposes of folks in the halls of power to tot up aggregated figures or the performance of this beast called the economy. Going into an election you want to be able to say "the pie grew faster with me in charge than it would have done, or will, with my opponent running things" because if people believe you they'll vote for you.

Of course promises aren't only about economic growth, but about this inequality shtick that has become fetishised over the last couple of decades. Inequality can also be measured in aggregate form and so makes an easy political football for politicians to kick in each other's faces for our enjoyment.

But what kind of existence does a national economy really exhibit? No offence, but not much. The majority of physical stuff purchased in British stores, for example, was manufactured outside of the borders of the United Kingdom. The division of labour - absent regulations to the contrary - doesn't stick neatly to national boundaries.

Also, economic activity consists of individual acts of gift and trade, with the latter functioning for all intents and purposes like mutual gift-giving. That mutual aspect of trade is probably the reason both parties to a trade say thank you.

The more of these trades are involved in the process of going from highest-order, originary factors of production down to the lowest order consumer goods and services, the more precisely and responsively those goods and services will be priced, and the more they will fall over time. Falling real prices lead to falling real poverty.

Talking about 'the economy' is all well and good but remember it's just an abstraction built by aggregating the distinct, separate economic activities of thousands and thousands of smaller divisions of labour, themselves comprised of thousands of individual trades between actually existing persons!