It is possible to determine in terms of money prices the sum of the income or the wealth of a number of people. But it is nonsensical to reckon national income or national wealth. As soon as we embark upon considerations foreign to the reasoning of a man operating within the pale of a market society, we are no longer helped by monetary calculation methods. The attempts to determine in money the wealth of a nation or of the whole of mankind are as childish as the mystic efforts to solve the riddles of the universe by worrying about the dimensions of the pyramid of Cheops. If a business calculation values a supply of potatoes at $100, the idea is that it will be possible to sell it or to replace it against this sum. If a whole entrepreneurial unit is estimated $1,000,000, it means that one expects to sell it for this amount. But what is the meaning of the items in a statement of a nation’s total wealth? What is the meaning of the computation’s final result? What must be entered into it and what is to be left outside? Is it correct or not to enclose the “value” of the country’s climate and the people’s innate abilities and acquired skill? The businessman can convert his property into money, but a nation cannot.
I don’t get it.Can we not just add up the sum of the wealths of the individuals, which he admits is possible? Or use GDP?
Frank Shostak actually quoted from that very passage in his article about GDP:
The GDP framework gives the impression that it is not the activities of individuals that produce goods and services, but something else outside these activities called the “economy.” However, at no stage does the so-called “economy” have a life of its own independent of individuals. The so-called economy is a metaphor—it doesn’t exist.
By lumping the values of final goods and services together, government statisticians concretize the fiction of an economy by means of the GDP statistic. By regarding the economy as something that exists in the real world, mainstream economists reach a bizarre conclusion that what is good for individuals might not be good for the economy, and vice versa. Since the economy cannot have a life of its own without individuals, obviously what is good for individuals cannot be bad for the economy.
The GDP framework cannot tell us whether final goods and services that were produced during a particular period of time are a reflection of real wealth expansion, or a reflection of capital consumption.
And furthermore,
The whole idea of GDP gives the impression that there is such a thing as the national output. In the real world, however, wealth is produced by someone and belongs to somebody. In other words, goods and services are not produced in totality and supervised by one supreme leader. This in turn means that the entire concept of GDP is devoid of any basis in reality. It is an empty concept.
According to Mises the whole idea that one can establish the value of the national output is somewhat far-fetched: [Mises quote you’re asking about]
The so-called nation’s wealth does not embody one single physical property. And what is else, the nation is not a single body owner of all the “national” resources. And we very well know that exchange ratios are formed on the margin. That is why even if we manage compute the nation’s wealth, the result will be meaningless.
Edit: I see that John James has provided some useful quotes.