Glossary

Common Good
What is shared and beneficial for all or most members of society.
Fallacy of saving
Saving is a virtue when undertaken by a single individual or family. During a financial panic such as the Great Depression, however, increased aggregate saving becomes a leakage out of the consumption stream that also acts as a brake upon aggregate employment.
Fraud
Fraud always involves deception by a perpetrator or “perp,” typically to induce a victim to act contrary to their best interest. Not all fraud is illegal. So-called “nice fraud” may be legal, even common in society, such as advertisements attracting buyers under circumstances that may be deceptive.
Gaming
The risk of losing something precious in a game of chance, such as a casino. When someone is gamed, their money, assets or identity may be placed at risk, but without being sufficiently informed, they have been placed into a game of chance by whoever controls the game.
Homo economicus
Prototypical economic person who acts in a rational way consistent with the predictions of conventional economic doctrine.
Investment (productive investment vs. non-productive asset hoarding)
During the Great Depression, increased saving constituted a leakage out of the consumption stream, with potential employment-reducing impacts.
When invested, however, saving, alternately, may be used for economic expansion that also becomes consumption-stimulating.
For instance, a job-creating construction project may lead to economic growth supportive of the common good, including through expansion of future economic output. Definitionally, such investments are productive.
Saving used nonproductively, however, may be counted (perhaps erroneously) as investment, but rather may be an act of pseudo-capitalism. An illustration may be saving placed nonproductively to create a casino, for instance.
Lacuna (profit lacuna)
Lacuna means void. Economist Joan Robinson is associated with pointing out that capitalist doctrine lacks a specific theory of profit.
That is, capitalism lacks a specific description of what the extra reward shall be to the capitalist who places saving productively, as investment, vs. the pseudo-capitalist who places wealth nonproductively, in ways that do not benefit the common good.
Laissez-faire
Enlightenment doctrine advocating a limited role for government.
Leakage
Conventional laissez-faire doctrine assumes aggregate expenditures by households become aggregate receipts of the business community. Hence, it is assumed, there are no leakages of purchasing power out of the potential stream of income.
An example of a contemporary leakage is wealth used nonproductively in ways that do not support the common good, such as establishment of a casino rather than to use the wealth productively, to create economic output consistent with the common good.
Micro-economics, macro-economics
Micro is the theory of the individual decision-making unit: the individual, the family or a specific business. Macro, on the other hand, is the theory of how individual “transactors” may behave, in combination.
Natural law theory
Free-marketers typically assume there is a law of God or nature decreeing spontaneous market equilibrium when government is constrained from creating taxes, regulations or related policies.
Paradigm
An example of an economic paradigm is laissez-faire. At the macro level, this paradigm is a set of big picture assumptions about how the economic world is presumed to work.
From paradigms, which typically are difficult to test, may be derived specific theories, which often can be tested objectively, to be validated or invalidated.
Productivity
See investment.
Prosperity gospel
Presumes those who become prosperous are being rewarded by God for their obedience and faithfulness.
Pseudo-capitalism
A pseudo-capitalist may enjoy benefits conferred by society upon capitalists, but without contributing to the common good. Rigging and gaming schemes, for instance, are illustrations of pseudo-capitalist fraud, that may be either illegal or legal.
Public goods
By comparison, the owner of a private good may exclude others from consumption.
The benefits of consumption of public goods such as general education, however, are not excludable since one who does not consume directly, may benefit indirectly.
Spontaneous market order
The belief that natural law/natural market forces will reach equilibrium expeditiously (in the absence of government), indicated by equilibrium between quantity demanded by buyers with quantity supplied by sellers.
Utilitarian
The well-being associated with economic choices can be measured, it is presumed, to permit choice consistent with maximal utility, or happiness. Jeremy Bentham is associated with early utilitarianism.