economy 1) *Economic efficiency, or an approach toward it. This sense refers to the activities of an individual *person, or individual *organization, with a *hierarchy of goals (although these can be subjective and changeable).
2) The overall state of production and *consumption within some *society, or *country, or other area—possibly the world. This second sense is quite distinct and somewhat dubious. For only *individuals can be said to have a clear hierarchy of goals and so behave economically, or otherwise. For this reason, F. A. Hayek (1899–1992) suggested the term ‘catallaxy’ for the overall voluntary interaction of individuals. However, unless one is a very strict *Paretian, it makes a rough sort of sense to say that some overall society is doing better or worse economically than it was; even though some tacit *interpersonal comparisons of utility are inevitable. It is sometimes worth reminding *collectivists that ‘the economy’ is not the unitary thing that a genuine economy is. But it would probably be a barren form of pedantry to insist on Hayek’s ‘catallaxy’ at all times.A Dictionary of Libertarianism