Perhaps this is a good time to reiterate that I am not an economist. My economic knowledge was constructed from an economic textbook, an economics course on CD, writings of mainly famous economists, Wikipedia and the Powell Cabal’s misinformation network in support of laissez faire capitalism. I do not read peer-reviewed economic journals unless a particular research topic leads me to a particular article. These journals are where most empirical work in economics would be found. I must admit it is not entirely fair of me to criticize the lack of empiricism in economics when I don’t read the most empirical outlets.
On the other hand, by definition what is empirical has to make sense with what you experience. As a middle class person I have reiterated on The Middle Class Forum that laissez faire capitalism does not make sense to what the middle class actually experiences. The same claim can be made about some of the foundational premises of economics upon which all current economic schools of thought are built.
For example, take the definition of economics. I have come across two basic definitions. One is the distribution of resources; the other is the distribution of scarce resources. The inclusion of the word scarce distinguishes the economics of buying food from breathing air. Air is a resource, but it becomes distributed to you simply by inhaling. There is no exchange that needs to take place; no budgeted allocation of resources that necessitates you giving up something in order to breathe that air.
Yet the word “scarce” seems strange for some types of resource distribution. For example, I have a plan for my land line phone that allows me to get unlimited minutes. These are resources that I purchased, having to make a choice with what to do with my budget. But the very fact that they are “unlimited” makes it hard for a middle class schlep like me to view them as scarce. The word “scarce” may be more precise for the sake of economic theory, but that added qualifier is less accurate in terms of actual experience.
The word “scarce” is a loaded term. If an uncontrolled supply of a resource exceeds demand, then distributing resources can be done conceivably with everyone’s interest in mind. Ah, but distributing scarce resources, now we are talking about an economics as envisioned by Adam Smith, with an invisible hand of self-interest steering markets towards the best results. Now we are talking about an economics as envisioned by Herbert Spencer, with people and businesses driven by self-interest leading to the survival of the fittest. Now we are talking about an economics as envisioned by Milton Friedman, where profits being maximized through corporate control of necessary goods is a utilitarian indicator of economic success.
Sometimes much can be gained by thinking outside the box of established scholarship. This is hard to do even for real sciences guided by established paradigms such as Newtonian mechanics. Innovative thinking becomes all the harder for the field of economics where entrenched schools of thought idolize the writings of specific people. If we can think outside the box of scarce resource distribution there are likely to be subtle advantages.
For example, solar energy will never be able to generate the profits of oil energy. Oil is finite while solar is infinite for all practical purposes. Because of the infinite nature of both wind and solar a system of distributing energy resources could be set up eventually where we get “unlimited minutes” of energy in exchange for just a small portion of our budgets. Oh, but how profits will dive, particularly for those whose business is finite energy resources. Stock market indicators will drop, as corporate media provides dire feedback to remedy the situation. The “remedies” might prove worse than the problem if we remain committed to an economics of distributing scarce resources.
Depending on how we define economics the distribution of infinite energy resources becomes either an ultimate goal or something to marginalize at best. Depending on how we define economics the meanings of public interest and self-interest changes. Depending on how we define economics either greed or merit becomes the overall goal. The definition of economics affects the purpose as will be covered next.