No two men find themselves in identical circumstances, nor is there any one man whose circumstances do not vary from day to day.

Frédéric Bastiat
Economic Harmonies

Today’s quote may seem innocuous but, according to me, it has deep implications when one is trying to understand Economics.

On one hand, it is an acknowledgment in which it recognises diversity. This is important because diversity is what allows wealth creation through economic cooperation and exchange. The comparative advantages of the ones and the others in order to produce this or that is one of the key elements of wealth creation in today’s world.

What is also important is then to recognise that the accounting unit that matters is the individual. A bottom-up analysis of society is a way to recognise the value of the individual and acknowledging diversity means that one should beware hasted conclusions based on averages. Macroeconomics analyse aggregates. This may sometimes be legitimate but more than often, it is used in an abusive way. There are circumstances for which it might be interesting to compare the GDP per capita in one country with that of another country but GDP per capita in my own country is of little help to me when I look at my own salary (be it above or below).

Besides, by recognising that circumstances vary from one day to the other for each of us, Frédéric Bastiat was anticipating what Friedrich Hayek explained brilliantly in his Nobel Price acceptance speech, namely the impossibility there exists in consolidating knowledge in order to take the right decisions in a centralised way.

Other quotes from Private and Public Services:
Exchange – Value – Monopoly – Individual – Responsibility – Rights – Revolution – Ethics