January 7, 2016

Which breakdown?

Comment on Erik S. Reinert on ‘Capitalism collapses when money flows to the financial sector per se’

Blog-Reference

Capitalism breaks down because of immanent logical necessity (no crisis and no criminals and no banksters needed) as soon as private and/or public households start to redeem their debt in the aggregate (i.e. new credit, rollovers, and redemption netted out). See ‘Mathematical Proof of the Breakdown of Capitalism

This is a result of the correct profit theory. Profit theory has been messed up by economists (2014), including Marx. See ‘Profit for Marxists

How did the Walrasians, Keynesians, Marxians, and Austrians mess up profit theory and with it the rest of theoretical economics? Because they have in the main been occupied with political economics. Schumpeter identified the ultimate cause of the failure of economics.

“In this and many analogous cases, of which modern economics is another deplorable example, economists indulged their strong propensity to dabble in politics, to peddle political recipes, to offer themselves as philosophers of economic life, and in doing so neglected the duty of stating explicitly the value judgments that they introduced into their reasoning.” (1994, p. 19)

Agenda pushing is different from thinking. What political economists have delivered is pure scientific garbage. Obviously, the intellectual breakdown of economists long precedes the factual breakdown of the market economy. Let’s face the fact: both orthodox and heterodox economists are natural born scientific losers.

Egmont Kakarot-Handtke


References
Kakarot-Handtke, E. (2014). The Profit Theory is False Since Adam Smith. What About the True Distribution Theory? SSRN Working Paper Series, 2511741: 1–23. URL
Schumpeter, J. A. (1994). History of Economic Analysis. New York, NY: Oxford University Press.

Related 'Time to get rid of political economics' and 'Free the academy from economics' and 'The utter senselessness of political economics' and 'Political economics and intellectual corruption' and 'Hayek: mad, bad, or just another incompetent economist?'