Economics Dictionary of ArgumentsHome
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| Aggregation: Aggregation in economics refers to the process of combining individual economic units—such as consumers, firms, or markets—into a single, overall measure. This simplifies analysis by creating broad categories like total demand, total supply, or GDP, allowing economists to study the economy as a whole rather than in individual parts. See also Econometrics, Aggregate capital._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Donald J. Boudreaux on Aggregation - Dictionary of Arguments
Boudreaux I 8 Aggregation/economics/Boudreaux: [this kind of thinking] assumed that the interest of the state is identical to that of society. Thus, any policy that strengthened the state was believed to strengthen society. (…) aggregative thinking lumps together a great many individuals into large categories such as “the nation” or “the government” and then treats each of these categories as if it is a unitary thinking, choosing, and acting individual. Keynesianism/Boudreaux: This manner of analysis, the spirit of which was revived by Keynesians, renders unnecessary the kind of economic analysis that was inspired by the work of Adam Smith (1723-1790)(1). Adam Smith: Analysis done in the tradition of Smith examines how multitudes of individuals, all pursuing their own individual interests and possessing only their own unique bits of knowledge, come to have their plans and actions coordinated - chiefly by adjustments in market prices and the resulting profits and losses - in ways that are not only economically orderly and highly productive of material goods and services, but also unplanned and unplannable. Keynesianism/Boudreaux: With aggregative thinking, “the social welfare” is promoted by “the government,” with the latter treated as if it’s an organism possessing a brain, and as if that brain’s main interest lies not in serving itself but, rather, in serving the nation. Overlooked are the processes (…) that lead individuals with diverse interests to undertake actions such as forming governments, becoming government officials, and dealing with government both as citizens who receive benefits from it and who incur costs to sustain it and to affect its activities. BuchananVsAggregative thinking: Buchanan called such aggregative thinking the “organismic” notion of collectives - that is, the collective as organism. Boudreaux I 9 Democracy: In the immediate post-WW II free world, widespread acceptance of the organismic conception of state and society was almost certainly encouraged by the use in those countries of regular elections - a key feature of democracy - as the means of choosing government leaders. The thinking was this: Because in a democracy the People choose government officials (and, thus, ultimately government policies), and because each voter has just as much say as every other voter, governments chosen democratically reflect the will of the People. Such governments, therefore, are good because they embody the general will. >People, >General will, >Government policy, >Nations, >Democracy, >State. 1. Smith, Adam. (1776). An Inquiry Into the Nature and Causes of the Wealth of Nations._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Boudreaux I Donald J. Boudreaux Randall G. Holcombe The Essential James Buchanan Vancouver: The Fraser Institute 2021 Boudreaux II Donald J. Boudreaux The Essential Hayek Vancouver: Fraser Institute 2014 |
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