Defining Economy

Fiscal cliff crisis talk: Grand Bargain or Grand Betrayal? Austerity to cut the deficit or stimulus to create jobs? Give investors more to invest in what they think they can make some money or take some money from them to invest in what we think the public needs to invest? Everybody says let's just do what is best for the American economy. But which and whose economy? And what do we mean by "economy" anyway?

Two definitions from the Oxford dictionary:
1. the state of a country or region in terms of the production and consumption of goods and services and the supply of money.  2. careful management of available resources

But it is helpful to consider the origin of the concept from the same dictionary.
Late 15th century (in the sense 'management of material resources'): from French économie, or via Latin from Greek oikonomia 'household management', based on oikos 'house' + nemein 'manage'. 

The household or home is the realm of sustaining life (Arendt).  Oikos is also the land and the earth, our first and basic home, the origin and sustainer of all life. And so the word "ecology" is from the same root. One of the tragedies of industrial modernity is the separation of economy from ecology; and thus the loss of the sense of a universal ecosystem.

Economy is distinguished from the polis or the civis--from which we get the words politics and civilization. In the city or state, free citizens step out of their private households to join with others in speech, decision, and action as equals to create and conduct the affairs of the commons.  This includes the protection of private households and personal life and happiness (economy/ecology): walls (laws) for defense of earth's resources and personal property, market places, safety nets, disaster centers, routes and centers of commerce, and police to protect them. But action in the commons includes so much more than protection of personal life, by making space and time for public happiness: learning centers (universities), entertainment centers (arenas), cultural centers (theaters, museums, institutes, temples), parks and recreation centers, government centers, and above all centers for free speech and action.

Culture/religion belongs to both realms.  There are household gods, shrines, and rituals that give meaning to life.  There are public gods, shrines, and rituals that give meaning to common action. New thinkers question the gods and rituals, especially in the public realm, at considerable risk as Jeremiah, Socrates, Jesus, Giordano di Fiori, Galileo, Ghandi, and Martin Luther King demonstrate.

Economy, therefore, cannot be understood without its relationship to ecology, to the commons or public realm, and to culture or symbols of meaning.

But that is precisely what left, right, and center in the present conversation on the economy are trying to do. They neglect the intimate interaction of the systems of economy, ecology, politics, and culture.  They use the definition of the Oxford dictionary and as Korten points out, identify resources with money and wealth with the supply of money instead of using money as simply an accounting tool for true wealth.

Next: Sustainable capitalism.