The Enduring Myth of 'The Economy'

In 1992, James Carville scrawled a slogan on a whiteboard in Bill Clinton's presidential campaign headquarters. “It's the economy, stupid,” has since become famous as a piece of blunt, homespun political wisdom. But I have to admit, it always confused me. Carville meant it as a rebuke to any members of the Arkansas governor's staff stupid enough to forget the campaign's outward focus on “rebuilding our economy.” But what exactly is the economy? What makes it “ours”—and just who are “we” here?

A century ago, most voters, and plenty of economic thinkers, would have found Clinton's slogan confusing. “Economy” meant frugality and prudence. The verb “economize,” and the now-endangered high school discipline “home economics,” are lonely survivors of this once dominant usage.