George Reisman's Blog on Economics, Politics, Society, and Culture

This blog is a commentary on contemporary business, politics, economics, society, and culture, based on the values of Reason, Rational Self-Interest, and Laissez-Faire Capitalism. Its intellectual foundations are Ayn Rand's philosophy of Objectivism and the theory of the Austrian and British Classical schools of economics as expressed in the writings of Mises, Böhm-Bawerk, Menger, Ricardo, Smith, James and John Stuart Mill, Bastiat, and Hazlitt, and in my own writings.

Saturday, September 19, 2020

The False Distinction Between “Micro-“ and “Macro-“ Economics

Sound economics always considers the actions of the individual in relation to the rest of the economic system and the economic system as a whole in relation to the actions of individuals.

So-called "micro-economics” considers the actions of individuals as though divorced from the rest of the economic system, while so-called "macro-economics" considers the economic system as though divorced from the actions of individuals. It's a double error.

But it is so pervasive that it is sometimes necessary to use its terminology so that those who know little or nothing about sound economics will be able to feel a measure of the familiar.

Post is in response to a tweet by Mikiel de Bary, at https://twitter.com/mdebary/status/1307100397870473223?s=20