Economics of the Mind

There is an inherent duality in the world of economics: Economics of the market and economics of the mind. Both of these must exist in perfect harmony in order to efficiently carry out economic activity. In the economic context of modern society people often overlook “mental economics” and primarily focus on the market. However if not fueled by the appropriate mindset market economics is futile.

Market economics is the exchange of goods and services in any way shape or form. Think of market economics as all the tangible aspects of our world that we deal with on a day-to-day basis. (i.e. buying, selling, producing, etc.) The idea of market economics is extremely simple to grasp, especially because we have witnessed it our entire lives.

Mental economics on the other hand is not as intuitive. It is the mindset that people assume when they engage in the market. In order to clearly understand mental economics we must take two basic steps:

1. Understand that the status quo is wrong

2. Rid ourselves of al the polluting information that is ceaselessly thrown at us by the world (i.e. media, ideas, people, etc.)

Understanding that the status quo is wrong is relatively simple. The current state of things dictates that economics is a problem. However economics must never be looked at as a problem rather a solution. Therefore current beliefs concerning the purpose of economics in the world are wrong.

Second, ridding ourselves of all the intoxicating information is essential in understanding the essence of economics. The only way that economics can efficiently prosper is in its freest and purest form. In order to understand the foundation of economics we must trace back to the origins of modern economics.

Adam Smith is the founder of modern economics; it s because of him that we have a clear idea of what economics is. Adam Smith believed that economics is a rational and positive reality that all must engage. Unlike many after his time, Smithian economics revolves around the idea of positivism and freedom. People like to identify Smithian economics as “laissez faire” economics, which literally means: “Let them do”. Smith believed that as long as everyone kept a positive economic mind, and was allowed to engage freely in the market, even the uneducated could prosper. He called this force that leads the market “The Invisible Hand”. He based his beliefs on the idea that if everyone worries about individual interests then the collection will prosper as a result of individual success. In other words, if everyone is successful individually a society automatically becomes successful as a whole.

Now that we have a clear idea of what economics is, it becomes easier for us to understand the source of our economic crisis. At the heart of the crisis lies government. Government places a multitude of rules and regulations on the market that pollute its simplicity, ultimately not allowing Smith’s “Invisible Hand” principal to take over. In tampering with the market system and trying to regulate/control it the government is corrupting the very essence of economics. Take the Federal Reserve for example. In trying to fix, control, and stimulate the economy it has come to be one of the destroying factors of the economy! Yet no one seems acknowledge that, in trying to control the economy and influence it, they are ruining it further.

The question then arises: If this is so simple why don’t people see it and fix it? The answer comes from our second step in understanding the economy, which if you recall, is to rid ourselves of the intoxicating information that is thrown to us by the media. The media is the government’s hypocritical mask; uncover this mask and you will then find the grotesque reality that lies beneath. So, why don’t people understand? The answer is simple; the government is an expert manipulator of reality. It will use all its available power and influence to make you believe that they are trying to help.

All this is not to say that government must be abolished, on the contrary. Government is a necessity. However the roles of government are two: Protecting private property and protecting national security. The first consists of protecting the country from any external threat or menace that infringes upon the rights and safety of its individuals. The second is to assure that all transactions in the free market are carried out peacefully and within legal parameters. Unfortunately today’s government has slithered its disgusting tentacles everywhere!

Now you have a clearer idea of what economics is as how it should work in its simplicity. Understand that the pursuit of personal interest leads to the success of all, and a positive mental state in economics is paramount to a successful market system. Economics of the mind is essential to success! Economics is the solution NOT the problem! Positivity is key!