… is from page 15 of L. Albert Hahn’s July 1943 article, “Should Government Debt, Internally Held, Be Called a Debt at All?”, as this article is reprinted in Hahn’s excellent 1949 collection, The Economics of Illusion:
The people of a country do not have a common pocket.
DBx: You definitely have a pocket. Your household or your family might have a common pocket. Your business firm certainly has a common pocket, as does your non-profit organization. But because you rightly do not regard your next-door neighbor’s pocket as belonging to you – just as your next-door neighbor can choose his or her own level of frugality or profligacy without consulting you, and you choose yours without consulting your neighbor – you and your neighbor have no common pocket. Nor do you share a common pocket with your fellow citizens. Your government can and does take from each of your pockets. It can and does also impose debt burdens on you and others who will be around to pay taxes in the future. But the economy of which you’re a part – your national economy and the global economy – is not correctly described as an entity with a pocket (or income statement or balance sheet).
Failure to understand this simple distinction – a distinction described by F.A. Hayek as being between an “organization” and an “order” – is the source of many confusions and destructive policies.
