December 31, 2014

Failure: method or incompetence?

Comment on Asad Zaman on 'The failure of economics is due to the use of axiomatic method'

Blog-Reference

• Asad Zaman's assertion has been fully refuted in the parallel thread about the proper use of math in economics. See here.

• The failure of economics is not due to the use of the axiomatic method but to wrong or non-existent axiomatization.

• Failure is never due to a tool but always to the user. “My opinion continues to be that axiomatics, like every other tool of science, is no better than its user, and not all users are skilled.” (Clower, 1995, p. 308)

• It is not alone orthodox economics that is a failed science but heterodox economics too.

• The representative economist cannot tell the difference between profit and income. The profit theory is wrong since Adam Smith (2014). Economists have not captured the essence of the market economy. Their policy prescriptions are scientifically worthless. “At all times, including the present, in judging from the standpoint of the requirements of each period ... the performance of economic theory has been below reasonable expectation and open to valid criticism.” (Schumpeter, 1994, p. 19)

• The failure of economics is due to the scientific incompetence of the representative economist.

Egmont Kakarot-Handtke


References
Clower, R. W. (1995). Axiomatics in Economics. Southern Economic Journal, 62(2): 307–319. URL
Kakarot-Handtke, E. (2014). The Three Fatal Mistakes of Yesterday Economics: Profit, I=S, Employment. SSRN Working Paper Series, 2489792: 1–13. URL
Schumpeter, J. A. (1994). History of Economic Analysis. New York, NY: Oxford University Press.