June 30, 2016

Why should people trust failed scientists?

Comment on Luigi Zingales on ‘The Real Lesson From Brexit’

Blog-Reference

You say: “In sum, we need to create the conditions to undermine this mistrust of experts. This is the most important lesson from Brexit.”

Economics is about how the monetary economy works. Currently, economics consists of Walrasianism, Keynesianism, Marxianism, Austrianism and these main approaches contradict one another. So they cannot all be true. In fact, they are ALL false. So, economics is a failed science. Economists cannot explain how the monetary economy works. The representative economist cannot even tell what profit is,* so he lacks the key for the understanding of the market economy.

All that society gets from the failed science of economics is folk psychology and folk sociology, second-guessing the central bank and government, confused and scientifically unfounded economic policy advice, and brain-dead propaganda.

Yet, economists communicate each year loud and clear that economics is a science by awarding the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.

This is a manifest contradiction that has to be resolved as soon as possible.

Economists lack the true theory. More than 200 years ago, economics started as Political Economy. It tried to become a science but failed. Walrasianism, Keynesianism, Marxianism, Austrianism is PROVABLE false and does not deserve any trust at all.

Egmont Kakarot-Handtke

* See on SSRN ‘How the Intelligent Non-Economist Can Refute Every Economist Hands Down’.

Related 'People have no faith in economics anymore? Do the Sexit now!'

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REPLY to Ron Waller

You say: “This assumes there was a point in time when economists tried to be scientists. It does not exist.”

Utterly false. There were even several points in time where economics tried to become scientists.

See first J. S. Mill: “In the definition which we have attempted to frame of the science of Political Economy, we have characterized it as essentially an abstract science, and its method as the method à priori. Such is undoubtedly its character as it has been understood and taught by all its most distinguished teachers." (1874, V.46)

And later Jevons’ switch from Political Economy to economics: “Irving Fisher described Jevons’ book A General Mathematical Theory of Political Economy as the start of the mathematical method in economics. It made the case that economics as a science concerned with quantities is necessarily mathematical.” (Wikipedia)

See finally Walras: “To state a theory is one thing; to prove it is another. I know that in economics so-called proofs which are actually nothing more than gratuitous assertions are doled out and find acceptance again and again. And precisely for this reason, I submit that economics will not attain the status of a science until economists are compelled to demonstrate that which they have hitherto been content, in the main, mainly to assert.” (Walras, 2010, p. 427)

Until this day, the key assertion that the existing economic system is self-adjusting has not been proved.* The core of economics, General Equilibrium Theory, is the worst scientific failure since Ptolemy’s Geo-centrism. As Feynman put it: “So we really ought to look into theories that don’t work, and science that isn’t science.” (1974, p. 11)

Luigi Zingales’ call for more trust in economic experts is beyond ridiculous. It is just the other way round, economists have to be expelled from the scientific community because of continous violation of well-defined scientific standards.

References
Feynman, R. P. (1974). Cargo Cult Science. Engineering and Science, 37(7): 10–13. URL
Mill, J. S. (1874). Essays on Some Unsettled Questions of Political Economy. On the Definition of Political Economy; and on the Method of Investigation Proper To It. Library of Economics and Liberty. URL
Walras, L. (2010). Elements of Pure Economics. London, New York, NY: Routledge.

* See ‘Could we, please, all focus on the key question of economics?’.