Comment on Asad Zaman on ‘The Keynesian Revolution and the Monetarist Counter-Revolution’
Blog-Reference
Economics consists since Adam Smith of political and theoretical economics. It is, though, pretty obvious that the political sphere is ontologically different from the scientific sphere, and because of this, it is of utmost importance to separate the two. Yet, it is an outstanding characteristic of the representative economist to persistently flip-flop between them.
This lack of focus guarantees all-around confusion in both the scientific and the political spheres. Because of this, the representative economist has become the very epitome of the confused confuser (2013). This mental state materializes in four sects: Walrasians, Keynesians, Marxians, Austrians. So, every student of economics is faced with the scientific Ur-question: “There are always many different opinions and conventions concerning any one problem or subject-matter... This shows that they are not all true. For if they conflict, then at best only one of them can be true.” (Popper, 1994, p. 39)
The fact of the matter is that none is true. As a consequence, economic policy advice since Adam Smith has no sound scientific foundation. Yet: “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)
Walrasianism, Keynesianism, Marxianism, Austrianism are PROVABLY false and consist of nothing more than educated common sense and personal opinion. Economics is a scientific failure, there is no valid theoretical economics but only political economics, which is agenda-pushing and propaganda.
This point gets entirely lost in actual political discussions because the criterion for political economics is whether or not it fits an agenda and NOT whether the underlying theory is true or false. As soon as political economics dominates the very task of the theoretical economist — to explain how the monetary economy works — is forgotten and the well-defined scientific standards of material and formal consistency are ignored.
This happened to Asad Zaman. His focus is not on whether a theory is true (= materially and formally consistent) or false but on propaganda strategies: “We must study the strategies used by the Monetarists to shut up their opponents since they have proven eminently successful. These strategies are the subject matter of the Alkire-Ritchie paper on WINNING IDEAS, cited in the post.” (See post of Jun 7)
Both, orthodox and heterodox economists have to be reminded of what science implies and why politics and science have to be strictly separated: “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.” (Mill, 2006, p. 950)
The history of political economics can be summarized as a perpetual violation of scientific standards and as an abject failure. Not one of the political economists and agenda pushers from Smith, Ricardo, Marx to Keynes, Hayek, Friedman, Krugman, or Varoufakis will in the final assessment be accepted as scientists.
Politics and science are ontologically different. Because of this, an analog to the Pauli Exclusion Principle* strictly applies, that is, one person cannot be both a politician and a scientist. The economist who sees and uses economic theory as a means to promote an agenda is outside of science. This is the very first principle of methodology and it holds since the ancient Greeks in the genuine sciences. However, it has yet to take root in the so-called social sciences, first and foremost in economics.
Both, the Keynesian Revolution and the Monetarist Counter-Revolution were scientific non-events.
Egmont Kakarot-Handtke
References
Kakarot-Handtke, E. (2013). Confused Confusers: How to Stop Thinking Like an Economist and Start Thinking Like a Scientist. SSRN Working Paper Series, 2207598: 1–16. URL
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, Vol. 8 of Collected Works of John Stuart Mill. Indianapolis: Liberty Fund.
Popper, K. R. (1994). The Myth of the Framework. In Defence of Science and Rationality. London, New York: Routledge.
Stigum, B. P. (1991). Toward a Formal Science of Economics: The Axiomatic Method in Economics and Econometrics. Cambridge: MIT Press.
* Wikipedia