University of Washington
- Periodically, a mass society is shaken by a contagious new vision of the good life.
- 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.
- The new mania arouses new demands and supplies—a new economy.
- Driven by the mania for many decades, an economy defies the law of diminishing returns and perishes.
- Every “economy” is perishable. It lives and dies.
- Before an aging economy perishes, an opposing vision arises. It aims to correct mounting excesses.
- Two conflicting economies overlap. One rises, the other falls
- 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.
- Depressions are not preventable.
- Four U.S. economies rose and fell since 1790. A fifth is now rising.
- Franklin D. Roosevelt helped to jump-start the fourth, today’s Consumer Economy
Mainstream Economics (a la Milton Friedman*)
Nobel Prize 1976
- 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.
- Neither are manias central to economic decision-making.
- Supply and demand are determined by millions of individuals, each maximizing his or her own self-interests.
- One economy develops continuously and indefinitely by small changes.
- An economy is economic, not social.
- There is no recognizable pattern of development. Seeking only their own highest self-interest, individuals continually adjust their own contributions to supply and demand.
- 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)
- “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.
- If government acts appropriately, depressions are fully preventable.
- One economy changed almost imperceptibly from year to year since 1790.
- 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.)