Frank Shostak says most macroeconomic data is just hype:
It is common for commentators and economists in their discussions to continuously refer to something called the “economy” — which sometimes performs well and at other times poorly. This “economy” is presented as a living entity apart from individuals.
For example, various experts report that the “economy” grew by such and such percentage, or the widening in the trade deficit threatens the “economy.” What do they mean by the term “economy”? Does such an entity actually exist?
The term “economy” is part and parcel of a “hampered” economic environment. In an environment free of government interference, the “economy” doesn’t exist as such.
It must be realized that at no stage does the so-called “economy” have a life of its own, independent from individuals.
While in a free environment the “economy” is just a metaphor and doesn’t exist as such, in a “hampered” environment the government gives birth to a creature called the “economy” via its constant statistical reference to it.
In a free environment, all an entrepreneur needs to figure is whether she/he is meeting consumer demands:
In a free environment it doesn’t make much sense to measure and publish various macroeconomic indicators. This type of information is of little use to entrepreneurs.
The only indicator to which any successful entrepreneur must pay attention to is whether he makes a profit. The higher the profit, the more a particular business activity is in tune with the consumers’ wishes.
Paying attention to consumers’ wishes means that entrepreneurs have to organize the most suitable production structure for that purpose. The information on various macroeconomic indicators will be of little assistance in this endeavor.
What an entrepreneur requires is not general macro-information, but rather specific information about consumer demand for a product or a range of products. Government aggregated macro-indicators will not be of much help to entrepreneurs.
The entrepreneur himself will have to establish his own network of information concerning a particular venture. Only an entrepreneur will know what type of information he requires in order to succeed in the venture. In this regard no one can replace the entrepreneur.
Thus if a businessman’s assessment of consumers’ demand is correct then he will make a profit. An incorrect assessment will result in a loss. The profit and loss framework penalizes, so to speak, those businesses that have misjudged consumer priorities and rewards those who have exercised a correct appraisal.
The profit and loss framework makes sure that resources are withdrawn from those entrepreneurs who do not pay attention to consumer priorities to those who do.