Morning Memo – 2024-02-15

My pencil was dead so I skipped my morning scribble and proceeded directly to my morning memo. As a result I have given little thought to what I’m about to say, so whatever comes out forgive me for any incoherence.

I spent some time yesterday making some design changes to the navigation on The Free Market Center website. I’m trying to pattern that website after the notes in my Zettlekasten, which is where I dictate these morning memos. My reason for doing that is to reflect the interconnection between concepts about free markets. I believe that the idea of macroeconomics is basically invalid. Yes, markets do exist, but unlike most descriptions they emerge is a web of connections between different players interacting to satisfy their own desires. Markets very much resemble forests. Every tree stands alone, but it does not exist by itself. One can make generalized statements about forests, but in doing so they must keep in mind the individuality of the tree.

Because of the individual nature of the actors in a market, concepts like GDP, CPI, and a whole litany of other market indicators generally have little validity. The current discussions about inflation provide good example. I can’t remember, but I think that the current CPI is being reported at around 3 1/2%. That figure has little significance to the family for which the individual items they pay for have gone up between 15 and 20%. For these people the CPI has little or no meaning.

Because macroeconomics consists of errors of abstraction and aggregation, people should not look to the government to improve “the economy.” The market wide problems that we suffer arise for the most part because of government interference. When people list the economy as one of their primary electoral concerns. They are doing themselves a huge disfavor.

In my upcoming posts on The Free Market Centered Journal and my Language and Logic newsletter I will describe some of the thinking tools you can use in order to examine the validity of statements made by these macroeconomists.

Later,
Jim Berger