July 24, 2013
Comment on Fred Zaman on 'Rethinking Keynes’ non-Euclidian theory of the economy'
It seems that political economists have run out of arguments. Hence it is appropriate that this thread's summary is given by a theoretical economist: “..., before accepting the conclusions of any economist’s model as applicable to the real world, the careful student should always examine and be prepared to criticize the applicability of the fundamental postulates of the model; for, in the absence of any mistake in logic, the axioms of the model determine its conclusions.” (Davidson, 2002, p. 41)
Keynes has to be praised for “throwing over” the classical axioms (aka Euclidean). Post Keynesians have to be criticized for failing to establish a new set of axioms (aka non-Euclidean). Theoretical economics is, therefore, hanging in the air and, as a consequence, Political Economy with it. Economists have not yet done their science homework.
Davidson, P. (2002). Financial Markets, Money and the Real World. Cheltenham, Northampton: Edward Elgar.