A pioneering departure from Mainstream Economics

Jack Lessinger,
Professor Emeritus,
University of Washington

1. Periodically, a mass society is shaken by a contagious new vision of the good life.
2. As the “contagion” spreads, vision explodes into a mania to transform the way we live—our values and attitudes; what we want and how we get it.
3. The new mania arouses new demands and supplies—a new economy.
4. Driven by the mania for many decades, an economy defies the law of diminishing returns and perishes.
5. Every “economy” is perishable. It lives and dies.
6. Before an aging economy perishes, an opposing vision arises. It aims to correct mounting excesses.
7. Two conflicting economies overlap. One rises, the other falls
8. Schizomania begins when opposing manias create a peak probability of depression. The Great Depression was caused by conflict between the industrial and consumer economies of the 19th and 20th centuries.
9. Depressions are not preventable.
10. Four U.S. economies rose and fell since 1790. A fifth is now rising.
11. Franklin D. Roosevelt helped to jump-start the fourth, today’s Consumer Economy

Mainstream Economics (a la Milton Friedman*)

Milton Friedman
Nobel Prize 1976
Photo: Wikipedia

1. To predict the future state of the economy, economics does not analyze shared visions. Economic decisions depend primarily on self-seeking motives of separate individuals.
2. Neither are manias central to economic decision-making.
3. Supply and demand are determined by millions of individuals, each maximizing his or her own self-interests.
4. One economy develops continuously and indefinitely by small changes.
5. An economy is economic, not social.
6. There is no recognizable pattern of development. Seeking only their own highest self-interest, individuals continually adjust their own contributions to supply and demand.
7. Economic corrections are made within markets. Provided government acts appropriately, the free market automatically solves economic problems.* (Charlie Rose interview with Milton Friedman; 12/26/05)
8. “Milton Friedman…argued that the Depression was the consequence of an incredible sequence of blunders in monetary policy.”* (J.B. DeLong, U. of Calif. And NBER, February 1997.
9. If government acts appropriately, depressions are fully preventable.
10. One economy changed almost imperceptibly from year to year since 1790.
11. Roosevelt's policies were very destructive. [They] made the depression longer and worse than it otherwise would have been.* (John Hawkins interviews Milton Friedman, Right Wing News, undated.)