Hayek held that calling the market an ‘economy’ smuggled in household-style needs-provision

Evidence

Much confusion had been caused by the use of the same word to refer to two distinct phenomena, he argued: on the one hand, ‘economy’ referred to the deliberate arrangement of resources in the pursuit of a unitary hierarchy of ends, as in a household, an organisation or an enterprise; on the other, it referred to the overall structure produced by the interrelation of these households, organisations and enterprises, which we often call ‘a social, or national, or world “economy” and often also simply an “economy”’. According to Hayek, the use of the term ‘economy’ to refer to the overall market order smuggled in the idea that society as a whole should be organised on the model of the household in order to provide for people’s needs. This confusion, he argued, had brought about a profound transformation in both law and morals; while a spontaneous order requires abstract, universal rules that enable each individual to preserve ‘his’ own ‘protected domain’, the rules of an organisation are directed to the achievement of specific ends. — Jessica Whyte, The Morals of the Market, 155

Categorization

• DEFINE: Distinguishes Hayek’s two senses of ‘economy’ and the conceptual smuggling he accused the conflated term of.
• XREF: connects to: Hayek justified markets by dispersed knowledge, not happiness maximization — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 2195; Hayek located rationality in impersonal market processes, not individuals — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 223

Broader Connections

• Hayek justified markets by dispersed knowledge, not happiness maximization #expands (0.85) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 2195
• Hayek located rationality in impersonal market processes, not individuals #expands (0.80) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 223