June 15, 2015

McCloskey and the lizard's tail

Comment on ‘Silly economics’


Deirdre McCloskey is critical of the profession “... economics and its imitators in other social sciences exhibits a good deal of foolishness, strutting about claiming dignity ...” (See intro)

In earnest, that is the world's problem with economics? False dignity of economists? Oh, that's easy. Let's poke fun at them.

The audience likes this ‘human, all too human’ critique and, after all, every spin doctor will tell you that you must always show a small weakness in order to distract from the real issue. What is the real issue? Re-read the first part of the sentence (see intro). McCloskey praises economics “For all its sober achievements ...” A fine piece of rhetoric, indeed, when the indisputable fact is taken into account that, on closer inspection, there are no sober achievements.

The problem of economics is not that it is silly but that it is downright unacceptable as science. To belittle General Equilibrium or DSGE or the New Classicals or the New Keynesians as silly is beside the point. In these cases, absurdity has only grown out of proportion so that every idiot can see it.

The point where economics becomes an intelligence test is not rational expectation but much, much earlier. The student who accepts supply-demand-equilibrium is already lost for science.

“At every stage in the development of an economist, beginning with the first introductory course, the neoclassical theory serves as a screening device to filter out the disbelieving. Usually just an exposure to the subject is sufficient to divert into other fields those hoping to understand economic and other social processes. The unrealistic nature of the assumptions, proudly proclaimed, are a clear warning that those seeking knowledge should steer clear of the field.” (Eichner, 1983, p. 518), see also (2011)

What the intelligent student realizes in Econ 101 is that supply function, demand function, equilibrium and the underlying utility maximization are all nonentities. The average student swallows the lesson and flunks out of science already at this early stage.

McCloskey has never realized that silliness in economics starts with supply-demand-equilibrium but has herself produced 'A Study Guide for the Applied Theory of Price.' What do you see on the book's cover? Yes, the economist's most sober achievement thus far, the disqualifying, scientifically forever unacceptable epitome of silliness, the supply-demand-equilibrium cross.

McCloskey's rhetorical swap of a little dignity for the entire loss of scientific credibility is for all intents and purposes a good deal.

Egmont Kakarot-Handtke

Eichner, A. S. (1983). Why Economics Is Not Yet a Science. Journal of Economic Issues, 17(2): 507–520. URL
Kakarot-Handtke, E. (2011). Why Post Keynesianism is Not Yet a Science. SSRN Working Paper Series, 1966438: 1–20. URL