March 10, 2016

Sick or false?

Comment on Asad Zaman on ‘Market Fundamentalism’


Popper clearly defined what the difference between science and politics is: “So the idea of truth (of an ‘absolute’ truth) plays a most important part in our discussion. It is our main regulative idea.” (1994, p. 161). On the other hand, the main regulative criterion in politics is good/bad. It is of utmost importance to keep these two realms strictly apart. By consequence, it is the proper task of the economist to develop the true economic theory and not to dabble in politics.

The original error/mistake/blunder of classical Political Economy consisted in drawing economics into the political fight between Liberalism/Communism/Fascism. Thus, economics became weaponized.

J. S. Mill had been very clear about the distinction between the positive and the normative: “A scientific observer or reasoner, merely as such, is not an adviser for practice. His part is only to show that certain consequences follow from certain causes, and that to obtain certain ends, certain means are the most effectual. Whether the ends themselves are such as ought to be pursued, and if so, in what cases and to how great a length, it is no part of his business as a cultivator of science to decide, and science alone will never qualify him for the decision.” (2006, p. 950)

Political economics has — predictably — produced nothing of scientific value. Keynesians are since more than 80 years in the dark. Walrasians are since more than 140 years in the dark. Marxians and Austrians are no better. The representative economist has not figured out since more than 200 years what profit is.* Scientifically, economists are a laughing stock.

However, it is absolutely false to argue against political economists by calling them psychopaths, monsters, and sociopaths. To recall, science is about true/false and not about mentally sick/healthy.

Popper again: “Accordingly, scientists, in their critical discussions, do not attack the arguments which might be used to establish, or even to support, the theory under examination. They attack the theory itself, qua solution of the problem it tries to solve.” (1994, p. 159)

The still unsolved problem of economics is: how does the monetary economy work? “In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum, 1991, p. 30)

Opinion is scientifically worthless and the true theory does not come from dabbling in politics or name calling.

Egmont Kakarot-Handtke

Mill, J. S. (2006). A System of Logic Ratiocinative and Inductive. Being a Connected View of the Principles of Evidence and the Methods of Scientific Investigation, volume 8 of Collected Works of John Stuart Mill. Indianapolis, IN: Liberty Fund.
Popper, K. R. (1994). The Myth of the Framework. In Defence of Science and Rationality., chapter Models, Instruments, and Truth, pages 154–184. London, New York, NY: Routledge.
Stigum, B. P. (1991). Toward a Formal Science of Economics: The Axiomatic Method in Economics and Econometrics. Cambridge, MA: MIT Press.

* For details see the posts ‘Why economics is a failed science: the 25 best explanations/ excuses’ and ‘Economists’ three-layered scientific incompetence’.