September 9, 2016

Economists: No legitimacy whatever

Comment on David Ruccio on ‘Capitalism vs. Democracy’


David Ruccio resumes: “I have been arguing for some time on this blog that contemporary capitalism faces a profound legitimation crisis.”

There is a problem here because as an economist David Ruccio has NO legitimacy to speak on political matters. Economists do not understand this because there always has been political economics and theoretical economics. The founding fathers were straightforward people and called themselves political economists, that is, they left no doubt that their main business was agenda pushing.

It was already clear to the great economist and methodologist J. S. Mill, however, that it is fraudulent to use theoretical economics, which is committed to the well-defined scientific standards of true/false, as a fig leaf for political agenda pushing.

“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)

Political economists, who are rather stupid folks, never understood Mill’s straightforward application of scientific ethics to economics. A good example is Hayek who even volunteered as useful idiot for Thatcher who was in need of a scientific legitimation for her union crushing agenda.

Political economics produced nothing of scientific value in the last 200 years. This is blatantly at odds with the claim that economics is a science which in turn is as old as Adam Smith/Karl Marx. Economists always placed great emphasis on scientific legitimacy.

But things are in fact far worse. Not only do economists in their capacity as scientists have no legitimacy to speak on political matters, they do not even have the professional competence.

It is a provable fact that neither Walrasians, Keynesians, Marxians, nor Austrians have any clue about what profit is (2014). Now, an economist who does not understand the pivotal phenomenon of his subject matter cannot by any stretch of the imagination understand how the actual economy works.

“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)

Lacking the true theory, the representative economist does not even have the professional legitimacy to give economic policy advice. Economists are like quacks who do not know how the human body works.

When non-economists hear an economist speaking about capitalism and democracy they should immediately recall what political economics is all about: It isn’t science, it isn’t true, it is just another astounding rubbish from Econ 101.

Egmont Kakarot-Handtke

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
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.
Stigum, B. P. (1991). Toward a Formal Science of Economics: The Axiomatic Method in Economics and Econometrics. Cambridge, MA: MIT Press.

COMMENT on robert locke, Ken Zimmerman, Vladimir A. Masch, gracchibros

After you have answered all open questions about WW2 it seems that you are in the position to crack some really hard nuts:
― Did Mr. Oswald assassinate Mr. Kennedy?
― Did Jesus really exist?
― Should we save mankind? Why? How?

Since this is an economics blog it would also be fine to solve the perennial profit conundrum (Tómasson et al., 2010) ― but only if you can spare a few minutes from saving the world.

Tómasson, G., and Bezemer, D. J. (2010). What is the Source of Profit and Interest? A Classical Conundrum Reconsidered. MPRA Paper, 20557: 1–34. URL