THEE’s distinguishes between (i.e. ideas, abstractions, constructs) and (i.e. things, phenomena, realities). THEE is based on identifying and organizing ; while academic disciplines, by contrast, are built on .
Economic activity is real—we can see individuals buying, selling, making, investing, saving, &c. everyday, but «the economy» is a pure abstraction (i.e. not real). Prices are real and knowable—while «inflation» is an idea about which learned people argue and disagree endlessly.
Example Study—Not by an Economist: David Hackett Fischer: The Great Wave: Price Revolutions and the Rhythm of History (1999), Oxford University Press, USA.
This Framework will be the basis for the modelling to follow. A familiarity with the approaches/mentalities is assumed. Here is a brief summary with links to fundamental aspects. Some familiarity with other applications of the framework will also help: e.g. career development, cooperating, the commercial ethos, and business and market strategies.
Only the mentalities lie on the well-being diagonal tend to dominate societies, including their economic activities.is dedicated to wealth creation. So primarily individuals, and especially entrepreneurs, are the source of prosperity for all. However, people whose
The market provides discipline and demands responsibility. However, the brutal logic and insistent demands of a market are disliked by many, even those who are not anti-market-centred in principle.
Power-centred individuals, in particular, desire wealth without either responsibility or effort. Those power-centred individuals who end up in politics respond to social pressure—which in turn is a still greater power and largely irrational. They are forever in danger of sowing the seeds of economic impoverishment by distorting markets and economic signals «for the greater good».
Adam SmithAdam Smith, The Wealth of Nations (1776) & The Theory of Moral Sentiments (1759). took the same common-sense approach to people and society that drove the discovery of THEE. His essential ideas have stood the test of time.
Ludwig von Mises’s account of economic factorsLudwig von Mises, Human Action: A Treatise on Economics (orig. 1949, 4th Rev. Ed. The Foundation for Economic Education, 1996 is based, like THEE, on the primacy of human action and the importance of responsibility. So it provides a practical and ethical framework for our societies in regard to economic management.
The lucid and unequivocal formulations below may lack flexibility, but that is simply a reflection of the nature of reality—a nature that resists being twisted to suit wishful thinking or support infantile feelings of entitlement.
Read some simple Mises-influenced explanations of essentials:
The confusion on these everyday topics is unnecessary. This material should be taught to all in primary school.
Now proceed to adjust the TET framework to suit an economic focus.