We are being told today that consumer confidence in October has dropped to its lowest level since the statistic began being kept in 1967. I don't doubt it's true, as I wrote earlier. But we have to think for a second what this statistic attempts to capture. Put most simply, it measures the way we as individuals interpret the economic environment around us.
Now, consider the difference in the environment between now and 1967. Chief among the many differences is the rise of communications media. As a result, there is significantly more communication today -- on TV, on the internet, in magazines, blogs, newspapers, on YouTube -- about the 'bad' economy than there would have been about the 'bad' economies of the 1970s, 1980s, and even the 1990s -- and certainly more than way back in 1967. Let's put it this way: There is far more influence on the way we interpret our environment today -- in our media age -- than in past decades.
Today economic organizations have to struggle to put forth a constant, 24-7 marketing campaign. They do this to draw consumers and grow. And they do it out of necessity -- that is, they do it to survive. Today's world is a communicative world. The organization that ignores this reality will not be around long.
Finally, it is not just organizations who must market their legitimacy to publics. The system itself faces a difficult communicative environment. The system's need to appear legitimate to its members is in crisis right now, as the consumer confidence numbers suggest.
In sum, the line designating the objective structure of the economy and the subjective judgment of the economy is becoming harder and harder to deduce. Economic analysis must take this objective-subjective blurring into consideration or, quite simply, the analysis is worthless. Communications media are not externalities that analysts can try to include in their analytical models about the system. Communications media are at the center of the system.
As such, all this is why economic sociology -- the willingness to put social interaction, individual sentiment, insitutional action, organizational structure, as well as systemic incentive at the forefront of economic analysis -- is so key to piecing together our crumbling system of private enterprise.