July 6, 2015

True/false is different from good/bad

Comment on ‘In Greece, NO is the answer’

Blog-Reference

Yes, the Classics called themselves political economists. But at the same time they claimed to do science, even Marx, who arguably was the most political of all political economists. This is where the schizophrenia started. However, as the quote from J. S. Mill shows, it was quite clear from the very beginning what it meant to be an economist who is committed to science.

Economics has been, but is not longer, about the economy of the polis. Nowadays it is about the world economy. Because of this, there is no such thing as an American, European, or Greek economics as there is no American, European, or Greek physics or mathematics. Economic laws apply everywhere.

Of course, economics is intertwined with politics. As a matter of fact, political economics has hijacked theoretical economics. The conclusion from this is that economics has to emancipate itself from politics.

The only relevant criterion for economics as a science is true/false and not whether it serves any political party, or social group, or nation.

To instrumentalize economics for any power struggle whatever is the original intellectual corruption in economics and incompatible with the ethics of science. The fact of the matter is that it is simply beyond human capacities to be a politician and a scientist at the same time. All this is long known.

“But if a man occupies himself with investigating the truth of some question for some ulterior purpose, such as to make money, or to amend his life, or to benefit his fellows, he may be ever so much better than a scientific man, if you will — to discuss that would be aside from the question — but he is not a scientific man.” (Peirce)

So, eventually a decision has to be made. To be more precise, (i) you can look at the actual economic conditions in a country like the US or Greece and come to the conclusion that they are unacceptable for a number of good reasons and therefore have to be changed; this is a political decision, or (ii), you can look at economics and come to the conclusion that it is unacceptable according to well-defined scientific criteria and therefore has to be changed; this is a scientific decision.

What I say is that to flip-flop between the two spheres has not yielded results for over two hundred years. The proof is in the dismal state of economics as a science and of too many economies as the inevitable practical result. False theory makes bad policy. As economists our task is to fix the former.

Egmont Kakarot-Handtke