December 12, 2015

Methodological kindergarten

Comment on Nanikore of Dec 9 on ‘Using models’


You say “Keynes criticised ‘pretty and polite techniques’.” And rightly so, indeed, but Keynes and the After-Keynesians in turn have to be criticized for not having a firm grasp of scientific methodology. To be more precise, Keynes was a political economist and not a theoretical economist. The political economist is an agenda pusher and interested in theory only so far as it serves his agenda.*

“I consider that Keynes had no real grasp of formal economic theorizing (and also disliked it), and that he consequently left many gaping holes in his theory.” (Hahn, 1982, p. x)

The largest hole in Keynesianism is that the profit theory is false.** And it should be beyond the slightest doubt that if one gets the pivotal concept of economics wrong all the rest of one’s theory is for the birds. The methodological incompetence of After-Keynesians is documented by the fact that they did not spot Keynes’s fatal logical blunder until this day (2011). From this follows that Keynesian policy proposals have no sound theoretical foundation. Keynesianism is commonsensical storytelling and that is enough for agenda pushing.

Keynesians insist that ontological uncertainty has been Keynes’s profound methodological insight. Think twice, this is blown up taxi-driver wisdom and the famous “We simply do not know” while obviously true is not exactly an interesting contribution to scientific progress. To the contrary, this correct self-description of Keynesians gives them sufficient reason to look for a more productive occupation.

With regard to methodology you say also that ‘Keynes and Friedman actually agreed’. This proves nothing. Both, Keynes and Friedman were political economists and what they uttered about methodology is either junk or trivial. You can be quite sure that neither of the two will ever be accepted as scientist — except perhaps by the delusional members of their respective sects.

To quote Keynes on scientific matters or to reiterate the silly Keynesian slogan ‘Better roughly right than precisely wrong’ is self-disqualifying.

Egmont Kakarot-Handtke

Hahn, F. H. (1982). Money and Inflation. Oxford: Blackwell.
Kakarot-Handtke, E. (2011). Why Post Keynesianism is Not Yet a Science. SSRN Working Paper Series, 1966438: 1–20. URL

* For details see ‘How economists became the scientific laughing stock
** See ‘Fundamentally flawed

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