July 6, 2015

Beware of the 9th circle

Comment on Paul Schächterle on ‘In Greece, NO is the answer’


(i) I agree about the “unfortunate way that neoclassical economists actually do make politics by giving advice towards a very specific and highly disputed set of policies, but hide their political attitudes and beliefs behind a veil of pseudo-science.”

If there is a scientific analogon to Dante's Inferno all political economists will eventually meet again in the 9th circle.

(ii) The Greek referendum was a political manifestation and has to be accepted as such. It compares directly to political manifestations of the other European democracies which are uncomprehending.

(iii) When I speak of economic laws I clearly do not mean man-made laws but objective and testable structural laws. I agree, of course, that in economics any silly behavioral assertion is illegitimately advertized as a law.

(iv) You say “those well-defined scientific criteria *is* a somewhat political question.” That criteria are to some extent negotiable is in fact the representative economist's greatest self-delusion. The scientific criteria are material and logical consistency. And there is absolutely no way around this. There is true/false and nothing in-between. Economists know that neither Walrasianism nor Keynesianism nor the rest satisfies these criteria.

“... suppose they [the economists] did reject all theories that were empirically falsified ... Nothing would be left standing; there would be no economics.” (Hands, 2001, p. 404)

Because of this, economists have moved from science's true/false to Hollywood's good guy/bad guy. Actually, that's more fun for all.

(v) The task of Heterodoxy is to refute Orthodoxy according to well-defined scientific rules and not to complain about political bias. It is too easy to return this compliment and thus all ends with the pluralism of false theories and the uneasy coexistence of confused confusers.

Economics has to get out of politics before it drowns with it in idiocy. Better one iota of knowledge than a heap of opinion.

Egmont Kakarot-Handtke

Hands, D.W. (2001). Reflection without Rules. Economic Methodology and Contemporary
Science Theory. Cambridge, New York, NY, etc: Cambridge University Press.