I get the impression that a lot of people in the west fundamentally fail to understand what the purpose of an economy actually is.
An economy is a model for allocating labour and resources in a way that meets the needs of the people in the country.
The original argument for capitalism was that market economy with private ownership is the most effective way to allocate labour and resources in a way that benefits everyone.
Measures such as the stock market and GDP were meant to act as proxies for measuring how well the economy was accomplishing its stated purpose, which is to improve the standard of living for everyone.
Understanding that these metrics are simply proxies has been lost today, and they’ve been turned into goals of themselves. People have started treating the stock market and GDP as the economy.
This is why we’re seeing an increasing disconnect between the economy that people are experiencing in their daily lives and news reporting on how the economy is doing.
And that’s why we see absurd articles like this one arguing that the recession people are experiencing isn’t real.
https://www.wsj.com/economy/it-wont-be-a-recession-it-will-just-feel-like-one-1919267a
Economies are no more “models for allocating labour and resources” than Darwinian evolution maximizes the happiness of all species. All past societies have existed on the simple condition that they were compatible with their material bases. They are not necessarily perfect or optimized for productivity, happiness, justice, etc.
You probably didn’t mean it this way, but an economy is not necessarily a consciously applied, a priori model. Most societies have not had planned economies, let alone for any purpose like meeting the needs of the population.
Of course there must be some way that societies reproduce themselves. It is typically brutal as a ruling class exploits another class, the most obvious example being the various societies based on types of slave labor.
“The history of all hitherto existing society is the history of class struggles.” — The history of society has been the history of economies for the benefit of a single class, or in legal terms, the history of exclusive property rights held by privileged classes.
The point is that we consciously decides on the rules that act as the economy. This becomes the system that creates selection pressures that drive behavior. Once the system is in place, there is Darwinian style selection happening within the scope of the system. However, the system itself is very much designed.
Systems like capitalism or communism produce different selection pressures for behavior, and we see different outcomes as a result. The part I’m focusing on in the post is that whatever metrics we decide to use to measure whether the economic system is achieving the stated goals need to be crosschecked against the actual outcomes. And those are seen in the material conditions that the system produces.
I realize it wasn’t the main point of the post, so without getting too debatey I will clarify a little more before I leave it.
The idea of “an economy” as an external object attached to a society is peculiar to capitalism, for the fact of commodity fetishism, in which relations of production dominate over capitalist society as an external force. Only under these conditions does it make sense to treat an economy as a model that appears dispensable or interchangeable (but is not actually so).
Although societies have started out with consciously defined rules — and by rules I mean property relations — the aim of these rules has nothing to do with creating a stable society. The purpose of the rules is to define who retains privilege, who is oppressor and who is oppressed. Only after the rules are set does the task begin to make these rules practicable. This logical sequence is glossed over when talking of societies’ economic relations as external objects called economies.
I generally agree with that, and I think we need to be aware of what an economy represents and whose interests it serves. This is precisely the reason why we need a dictatorship of the proletariat to have an economy that’s intended to serve the people.