April 10, 2016

From microfoundations to macrofoundations

Comment on Lars Syll on ‘New Keynesianism — an uncomfortable trade-off’

Blog-Reference and Blog-Reference and Blog-Reference on Apr 12

• Economics is a failed science. It consists actually of political and theoretical economics. Political economics is scientifically worthless.

• Psychology, sociology, behaviorism, political science, geopolitics, history, anthropology, evolutionary theory/Darwinism, institutionalism, law, ethics, criminology, or philosophy are NOT economics. The valid results of these independent disciplines are taken into economics by way of multidisciplinary cooperation if needed.

• Economics is NOT about human nature/behavior/action but about the evolution of the economic system as a whole.

• Partial analysis is of extremely limited value and in most cases runs directly into the fallacy of composition. Microfoundations have therefore to be replaced by macrofoundations.

• Macrofounded economics determines first of all the objective Profit Law because it is the key to all of economics. Who does not understand what profit is has no idea how the actual economy works. Objective economic laws are free of nonentities and enable conclusive testing.

• Walrasianism, Keynesianism, Marxianism, Austrianism — all four got profit wrong. These approaches are scientifically worthless.

• Economics has nothing to offer to other disciplines — in particular not to sociology and political science — because it has produced not much, if anything, of scientific value since Adam Smith. The representative economist cannot even tell the essential difference between income and profit.

• The ongoing paradigm shift consists in the replacement of the subjective-behavioral axioms of methodological individualism by objective-structural axioms, i.e. by macrofoundations.*

• People who have not realized in the old age that maximization-and-equilibrium is scientific garbage will not be admitted to the new age because of proven scientific incompetence.

• Scientific imperialism will put an end to economics as cargo cult science. “So we really ought to look into theories that don’t work, and science that isn’t science.” (Feynman)

Egmont Kakarot-Handtke


* See ‘Objective Principles of Economics’ and ‘Major Defects of the Market Economy

Related 'Toward the true economic axioms' and 'Finalizing the Keynesian Revolution' and 'The monstrous utility-supply-demand-equilibrium failure' and 'From Orthodoxy, to Heterodoxy, to Sysdoxy'

The macrofoundations axiom set which fully replaces the obsolete microfoundations is defined on the AXEC Project wedsite, see here.