This piece introduces my 10-part series on economic sanity and alternative economic systems. Never mind that I am not an economist. Instead, please appreciate that I am not an economist.
Neither is Daniel Kahneman an economist, and he won the Nobel Prize for economics. He is a psychologist like me, but a very different psychologist in at least two respects. Firstly, his specialty is cognitive psychology, mine is organizational psychology. Secondly, I will never win a Nobel Prize.
Neither was Aristotle, an ancient Greek philosopher who ruminated on the matter of economics. Neither was Adam Smith, the putative father of capitalism. He was a moral philosopher. Neither, I am almost certain are any of the other thinkers profiled in this series.
And that, if I do say so myself, is the beauty of this series and of most any unorthodox treatment of the matter. Economics, any economy, and any economic system such as capitalism are not what orthodox thinkers in general and economists particularly think they are. They are first and foremost human inventions and human acrtions, and absolutely anything and everything involving humans, ipso facto is at their very core psychological in nature.
And that brings me to my "human equation" for explaining anything involving humans. If you have read certain of my writings you may be tired of reading it again, but I must mention it again without too much elaboration. The right side of the equation is the output side with two parts, human behavior first and its consequences second. The input side also has two parts, humans with all their characteristics and their situations and circumstances. An interesting twist, by the way, is that the equation is not linear. It is circular. Feedback from the right side can influence the left side. If a transaction of mine fails, for example, I am unlikely to repeat that transaction the same way again.
Getting closer to the subject at hand, human behavior, even habitual behavior, needs to be motivated. At the heart of human motivation are values, beliefs, attitudes, needs and wants, with the latter two being the most relevant for the topic of this series. Human needs and wants are the bedrock of any economy and any economic system. Money is not the bedrock. It is simply a medium. There was no money when the earliest humans started needing and wanting. Debt, as some economic thinkers think, is not the bedrock. Debt is merely an offshoot of a usually uneven transaction. And since no human, not even a member of a society's power elite is self-sufficient, satisfying one's needs and wants will in one way or another depend on what some other human beings do. So, you see, the psychology of human nature is the bedrock of economics, any economy and any economic system.
Part 2. Economic Insanity Close Up. Capitalism as it is practiced is economically insane, and it is devouring the American dream, so says the author of one of the books I have reviewed. Part 2 will summarize that review. 1
Part 3. Two Early Philosophers on Economies and their Systems. The ideas of Aristotle and Adam Smith are discussed in Part 3.
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