I am always impressed by the way common words and phrases prevent substantive discussion of important issues. The phrase that is currently getting on my nerves is “good for the economy.”
What exactly is good for the economy? The economy is after all an abstraction, a way that we describe systems of production and distribution (among other things). How do you know what is good for an abstract system? Commentators who rely on this unfortunate phrase obviously do not mean something so absurd as “good the economy” in a literal sense. But teasing out what they do mean is not always easy.
On television news — especially local news — the state of the economy is always measured by the stock market. If the Dow went up, it was a good day for the economy, or so it is reported. But this makes very little sense. The rise and fall of the Dow is — at least theoretically — only an indicator of investor speculation on the future profitability of corporations within the Dow index. It tells us nothing really about production and distribution right now.
Even if we give some credit to those expectations as reliable indicators of what will happen, it is certainly not clear why rising profitability is “good for the economy.” It is good for investors of course since rising profitability increases dividend payments and the price they can command for their stock holdings. But for those who do not hold much stock, rising profitability means nothing at all, and could even be a bad thing.
For instance, firms can increase profits by driving down wages. The Dow would go up, but only because wages go down. Is this good for the economy? Well, that again goes back to the original question: how can something be good for an abstraction? It is good for certain people who are actors in the economy, at least in terms of their wealth increasing. But it would also be bad for other actors in the economy, namely workers.
More serious commentators seem to describe things as “good the economy” if they cause production to expand and the economy to meet its potential output. This too is a questionable way to talk. As the last 40 years in the United States demonstrates, rising productivity does not necessarily improve the lives of even the majority of the population. When the benefits of increased production almost solely flow to the super-rich, is increased production really “good for the economy?”
What this “good for the economy” discussion does is mask and prevent real discussions about production and distribution. The question is not whether something is “good for the economy,” but whom it is good for? Economic events affect populations — classes — differently.
Suppose for example that economic growth was better maximized by extreme inequality. Would that in and of itself mean that extreme inequality is “good for the economy?” Of course not. We could imagine a world with slightly less growth that is distributed far more equitably such that the overwhelming majority of people are better off than they would be in the extremely unequal maximum-growth economy. So which model then would be “good for the economy?”
That is not to say that everything needs to be couched in terms of how an action affects individuals on a class level. But at minimum, people should say what they mean. If by good for the economy, you mean something generates more economic growth or higher profits, the benefits of which could all flow to the top 1%, then say that. Don’t say “good for the economy.” The phrase has no coherent meaning, and discussions of economic policy and philosophy would be better served if it — and its converse, “bad for the economy” — was annihilated altogether.