As of today, James Quillian, Common Sense Economics is the best economist in the world. This is only temporary. In time folks are who are much smarter than James will begin understanding the principles in the Common Sense Economics Blog and this blog will no longer be necessary.
Here are a few principles that mainstream economics doesn’t recognize.
1.) In mainstream economics it is assumed people are born free and remain free for there rest of their lives. Reasons cited are from early writings of the founding fathers. Mainly it is assumed that rights come from the creator, not the from one’s government. What happens in practice is that from birth until death, human beings bargain away their rights in exchange for comfort. In makes no difference how rights are originally obtained. They are dispensed with to the highest bidder starting immediately. This is the most basic transaction human beings make and the effect on the macro economic scene is astronomical.
2.) The cloud of euphemisms people live under separates them from any value their common sense their common sense provides. Without looking through cloud of euphemisms, what a person sees just by looking out a window is closer to reality than anything learned in a text book.
3.) Mainstream economics treats all people as independent thinkers who make rational decisions. This is completely false. Independent thought is actually rare. Only about 3% of the population have independent thoughts. Normally the mind makes a recording of a sound bite and the listener mistakes this as a personal thought.
4.) Herd mentality is not recognized as a human condition. In actual practice, the herding instinct in humans is as strong as it is in other animals, possibly stronger. Observe from outside of the cloud of euphemisms and man’s herding nature becomes obvious.
5.) Mainstream economists study institutions in keeping with how they are formally defined. James recognizes the folly of this approach and treats institutions according to how they function in practice. Here are a few examples. The supreme court is treated as an unbiased legal entity. Actually, their authority is only according to custom. Nothing in the constitution gives the Supreme Court the authority to determine the constitutionality of laws. James treats the supreme court as a political entity with members who are devoted to furthering their political agendas. They are appointed strictly for their political ideologies.
The Federal Reserve functions also as a political organization and their decisions have nothing to do with “fixing the economy.”
6.) Self interest is a part of every human activity. Advanced economic models filter out self interest as the guiding incentive for what people do. Self interest is assumed to disappear when folks go to work for the government but it doesn’t.
7.) James knows that all any government can do to improve an economy is enforce free market discipline. Any other initiative serves to redistribute wealth in the direction of those who create the initiative.
8.) Without preventive measures, crime and government merge over time. In democracy, the political process is open to criminals, mostly the un-indited. Criminals are highly motivated and government provides the only leagal means to steal money.
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