≡ Menu

Quotation of the Day…

… is from page 275 of my late Nobel laureate colleague Jim Buchanan‘s January 1989 Business Economics article, “On the Structure of an Economy,” as this article is reprinted in James M. Buchanan, Federalism, Liberty, and Law (2001), which is volume 18 of the Collected Works of James M. Buchanan:

Let us by all means continue to strive for, and to support, efforts to analyze the structure of the economy, and to seek consensus on means to make this structure more capable of allowing us, as individual participants, to further those separately defined objectives that we seek.  Let us, however, guard against allowing intellectual confusion about what an economy is to offer legitimizing cover for the efforts of some persons and groups to impose their own purposes on others.  Beware of those who pronounce on the economy’s purpose.

DBx:  A regional or national or global economy has no purpose.  What we call “the economy” is the complex, unintended result of the pursuit by, today, each of several billion individuals of his or her individual goals.  (These goals, of course, might be heavily influenced by the choices of others.  These goals are also often pursued in voluntary tandem with others, as when individuals form a business firm.)  Talking, for example, about ‘the purpose’ of the American economy makes no more sense than talking about ‘the purpose’ of the English language.  As with a functioning language, an economy that works well enables each of the many individuals whose actions give rise to it the opportunity to better achieve his or her goals, but it itself has no goal or purpose.

Individuals have goals; economies do not.