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… is from page 127 of Philipp Blom’s superb 2010 book, A Wicked Company [2]:
Muddled thinkers confuse the world of our senses with the way in which it is depicted in language.
DBx: Language, obviously, is indispensable to human knowledge. Most of what we learn we learn from other people, and most of what we learn from other people we learn through language. Yet as is true of all beneficial institutions, language is imperfect – it has, some might say, its ‘costs.’
Among the ‘costs’ of language is its tendency to cause us to suppose that the abstractions that we describe with words possess a concrete reality that these abstractions don’t possess. For example, we talk about how “the economy allocates resources.” This phrase isn’t meaningless; it conveys to those who encounter it an impression that usually is more or less, kinda, sorta, typically reasonably close to what those who say or write this phrase mean to convey. Yet taken literally this phrase is mistaken. The economy allocates nothing. The economy is not an entity that thinks, has purposes, and acts.
The economy is the phrase we use to capture, in summary form, the observed reality of individuals trading. From this observation – with help from the knowledge we have through introspection of human motivation – we conclude that trade occurs when each party wants that which the trading partner has more than he or she wants that which he or she must exchange to get what the trading partner has.
When observing two individuals – Smith and Jones – trade, we aren’t prone to say “the economy allocates resources.” We say that Smith and Jones traded with each other. But when we step back and recognize that such trades as that of Smith with Jones occur constantly, among millions or billions of people, involving all sorts of things (“resources”) and at varying levels of complexity, we say “the economy allocates resources.”
This shorthand phrase is not necessarily objectionable. But it poses a danger the moment anyone begins to think of the acting agent as being something called “the economy,” and the resulting allocation of resources something desired by, or planned by, this sentient creature – this “economy” – with purposes.
Nothing written above is new or the least bit controversial, of course. But the warning nevertheless is warranted. Incessantly we hear talk, or read writing, such as “when America trades with China,” or “we must secure our supply chains.” In reality, because neither America nor China is a creature with a brain that acts, America and China don’t trade with each other. Individuals in the geo-political location called “America” trade with individuals in the geo-political location called “China.” And these trades are not features of one large decision to trade taken by “America” (or by the American government) or by “China” (or by the Chinese government). When understood as being the results of countless individual decisions, much confusion is avoided – confusion that arises from the mistaken notion that America is an entity that trades with China.
The same confusion arises with discussions of supply chains. “We” don’t own or otherwise possess “our” supply chains. (Forget that the term “supply chains” is itself wholly inaccurate [3].) Nor are these “chains” designed – or design-able – by anyone. What is referred to by the now-familiar phrase “supply chains” is the complex web of different producers, usually spread around the world, each of whom contributes some inputs to the production of final outputs.
The “chains” are economic abstractions. They don’t exist in reality in the concrete manner that the term “supply chains” suggests. And so when political action is taken in response to uninformed assertions about “supply chains” and what “we” should do about them, government officials – whose actions are concrete – unavoidably interfere in the commercial decisions of individuals ignorantly and blindly.