In his interesting letter (letter, August 3), Konstantinos Gravas says that “money is a machine,” and reiterates the idea in various ways. On the contrary, money is not a machine. Financial markets are not machines. Economies are not machines. The mechanistic metaphor, when applied to money, markets, and economics, is a source of fundamental errors.
All of these are complex, uncertain, recursive, reflexive, anticipatory, unpredictable, intertwined, interacting events, not machines. We don’t have a good name for these fascinating and often surprising worlds in which we live and interact.
FA Hayek in 1968 suggested the name “catalaxy” to express that they consist of continuous exchange, based on the Greek word “to swap”. That didn’t catch on.
My suggestion is to call them “interactivities”. A key aspect of interactivity is that no one is outside of them looking down in a divine way. Everyone, including central banks, regulators and experts of all kinds, is part of the interactivity exposed to its fundamental uncertainty.
Alex J Pollock
Senior Fellow, Mises Institute
Lake Forest, Illinois, USA
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