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The Enduring Myth of “The Economy”

Why politicians continue to pretend it's a living, breathing thing that can be nursed back to health


In 1992, James Carville scrawled a slogan on a whiteboard in Bill Clinton’s presidential campaign headquarters. “It’s the economy, stupid,” has since become famous as a piece of blunt, homespun political wisdom. But I have to admit, it always confused me. Carville meant it as a rebuke to any members of the Arkansas governor’s staff stupid enough to forget the campaign’s outward focus on “rebuilding our economy.” But what exactly is the economy? What makes it “ours”—and just who are “we” here?

A century ago, most voters, and plenty of economic thinkers, would have found Clinton’s slogan confusing. “Economy” meant frugality and prudence. The verb “economize,” and the now-endangered high school discipline “home economics,” are lonely survivors of this once dominant usage.

The addition of the definite article, “the,” changed the way the word was understood. Today, “the economy” refers to the systems of work, exchange, and consumption in a particular place—a city, a nation, or the globe. There’s the Akron economy, the Ohio economy, the U.S. economy, and the world economy; there’s a health care economy and an oil economy. The economy can describe how we eat, work, study, get sick, and die—like the cash nexus itself, we use the word for almost everything.

Scholars have tried to pinpoint exactly when this great expansion took place. The historian Timothy Mitchell has argued that “the economy” as we now use it is a creation of the 1930s, when John Maynard Keynes imagined a system of exchange that could be managed by experts. Mitchell’s explanation is compelling, but language is difficult to pin down so neatly: As the historian Quinn Slobodian points out, nineteenth-century empire builders in Europe routinely ­talked about building a “world economy.” It would have looked quite different from a bank in London, the docks of Liverpool, or a rubber plantation in Malaysia, and yet the slippery versatility of the phrase obscured those differences.

This is the incantatory power of the economy: It’s a simple name for something profoundly complex. We know, on some level, that a family farmer and a venture capitalist have different interests, that nations are bound economically to one another, that capitalism’s power and complexity limit what any individual, even a powerful one, can do to manipulate the global economic order. We know this, but “the economy” allows us to forget it. In this convenient fantasy, a sprawling monstrosity becomes a machine we can tinker with. We “fix it,” we “pump dollars” into it, and we “rebuild” it. And at the same time, a faceless machine is transformed into a living thing, which is “ailing,” “jittery,” or “stagnant,” waiting to be “nursed back to health.”

When Democrats style themselves as stewards of the economy, they perform another sleight of hand: As anyone with a job can tell you, your economy and your boss’s economy aren’t the same. Even so, politicians like Beto O’Rourke stress that we all deserve a chance to “participate in this economy,” as though it’s a baseball team where everybody hits. He seems oblivious to the fact that if you work a dangerous, insecure, low-paying job, your problem is precisely that you are participating in “this economy.” It just isn’t “ours”—its rules were written by someone else.