From the Very Nature of Economic Theory, Averages Can NEVER Form a Link in Its Reasoning

Yet we are doing nothing less than this if we try to establish direct causal connections between the total quantity of money, the general level of all prices and, perhaps, also the total amount of production. For none of these magnitudes as such ever exerts an influence on the decisions of individuals; yet it is on the assumption of a knowledge of the decisions of individuals that the main propositions of non-monetary economic theory are based. It is to this ‘individualistic’ method that we owe whatever under standing of economic phenomena we possess; that the modern ‘subjective’ theory has advanced beyond the classical school in its consistent use is probably its main advantage over their teaching.

If, therefore, monetary theory still attempts to establish causal relations between aggregates or general averages, this means that monetary theory lags behind the development of economics in general. In fact, neither aggregates nor averages do act upon one another, and it will never be possible to establish necessary connections of cause and effect between them as we can between individual phenomena, individual prices, etc. I would even go so far as to assert that, from the very nature of economic theory, averages can never form a link in its reasoning.

—Friedrich A. von Hayek, A Tiger by the Tail: The Keynesian Legacy of Inflation, 3rd ed., comp. Sudha R. Shenoy (London: Institute of Economic Affairs, 2009), 16-17.