Reflections on the intersection of economics, history, politics, psychology and science

How social psychology requires us to reframe how we view market capitalism, what makes it successful and the government’s role in maximizing its potential.

Although core to the economic life of all Americans (and many other citizens around the world), capitalism as a system is often misunderstood or conflated with other “free market” notions such as laissez faire economics or even libertarianism. This is partly due to political expedience and partly due to the fact that capitalism is a complex subject requiring a reasonable understanding of a number of economic principles – principles that are not normally taught in school outside those who choose to focus on the “dismal science.”  Please check out the article Not as Laissez as You Think on our Resources page for a more in-depth discussion on the pre-conditions and failures of capitalism, as well as the relevant role of government.

Key Terms Used

cognitive dissonance, confirmation bias, externality, friction (economic), laissez faire, moral hazard, natural monopoly, perfect information, prisoner’s dilemma, public good, rational decisions, structural unemployment, velocity (of money)

Not as Laissez as You Think