James Quillian, 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 Fantasy Free Economics Blog.
Understand this. macroeconomics as it is taught in colleges and universities is based on fantasy. Give up fantasies and you are already a better economist than all Federal Reserve members, college professors, statisticians, accountants and others who hold themselves out to be professionals. Pretense of knowledge is a terrific way to make millions of dollars but it does nothing for the world and provides no utility to society. Do you know that every plan for economic intervention by a government calls for the equivalent of John Maynard Keynes’s straw man? The role is assumed to be filled but there is no such thing as a straw man in reality. Self interest is the only incentive nature provides. Just knowing this debunks every macro economic theory that is in use today. Learning economics the way it is currently taught is about like forcing chemistry students to understand all of the thoughts and theories of the alchemists of the middle ages before doing anything meaningful. Economic theories fail for the same reason chain letters fail. False assumptions are made about human nature. What is pleasant is assumed to be right for no other reason than doing so is more pleasant.
Reality is too harsh for the mind to cope with. Perhaps life is good. Certainly life is deemed good, but how good is it? Living things flourish by killing and consuming other living things. The more a species kills and consumes other species, the more that species flourishes. In the human realm gains are made by the use of force. Within the human species, not everyone kills. Killing is done by specialists for the common good. It is easy to be lulled into believing that peace abounds. The human condition is universally explained in keeping with what we like to believe about ourselves. For studying economics, man is an animal and animal behavior is what is being studied. Treating mankind as minor league divinity delivers wrong answers.
James starts at the beginning while mainstream economists skip the most basic incentives human beings experience. Economics begins with survival. Laws of dominance and subservience determine what people do with their time and energy. The question of who is dominant is settled anytime there is an encounter between two or more people. The question of dominance is normally settled so peacefully, that no stress is noticed. For example, a physician is dominant when an accountant is a patient. The accountant is dominant when doing a physician’s taxes. With respect to entire countries, the question of dominance is settled by war or threat of force.
Here are a few principles that mainstream economics doesn’t recognize.
1.) Mainstream economics assumes 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 freedom in exchange for comfort. It makes no difference how rights are originally obtained. They are dispensed with to the highest bidder starting at birth. This is the most basic transaction human beings make and the effect on the macro economic scene is astronomical.
2.) Work is a second choice. Main street assumes that work is a first choice. The first choice of all mammals is to live off the efforts of others. hyenas which are the mortal enemies of lions are identified as scavengers but observers know that lions are scavengers first and predictors second. The poor are regularly chastised for living off of government but the ultra rich are many more times guilty of that.
3.) The cloud of fantasy and euphemisms people live under separates them from their common sense. 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.
4.) 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 has independent thoughts. Normally the mind makes a recording of a sound bite and the listener mistakes this as a personal thought.
5.) 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.
6.) 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 various political agendas. They are appointed strictly for their political ideologies. Supreme Court justices are in fact not the best legal minds among jurists. They are the best politicians among jurists.
The Federal Reserve functions also as a political organization and their decisions are only ostensibly focused on “fixing the economy.”
7.) 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.
8.) 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.
9.) 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 legal means to steal money.
10.) One number does not cause another. What is the cause of inflation? A mainstream economist will say something like too much money chasing too few goods. James Quillian teaches that the cause is the incentive that leads government to create more money. Incentives are true causes and they cannot be reduced to numbers.