November 1, 2016

Heterodox economics and the problem of inferior and superior critique

Comment on Lars Syll on ‘Does economics — really — need models?’

Blog-Reference

Imagine a discussion between Ptolemy and Galileo. Ptolemy defends the Geo-centric theory. Galileo criticizes the theory and has Copernicus’s Helio-centric theory at the back of his mind, that is, he argues from a superior standpoint.

Ptolemy represents current Orthodoxy, Galileo represents current Heterodoxy which eventually becomes the new Orthodoxy.

Now we introduce a third character: Simplicio. He, too, criticizes Ptolemy’s theory and sees himself together with Galileo in the heterodox camp. Yet, Galileo is not happy about being part of this unintended joint venture because Simplicio argues that it is, of course, Helios who drives the sun chariot each day over the sky.

In relation to Orthodoxy there is always a superior and an inferior Heterodoxy. A parallel case is evolutionary biology vs. creationism or Big Bang theory vs. Genesis story.

In economics, the inferior critique of Orthodoxy argues against formalization, rigor, abstraction, models and pleads for theoryless perception, common sense and loose verbal reasoning. Keynes is still the patron saint of all common sensers in economics: “Formalization of even a part of what goes into our common sense understanding of society would be, as he said ‘prolix and complicated to the point of obscurity.’ Theories constructed with vague concepts paradoxically can maximize precision and economy.” (Coates, 2007, p. 8)

Keynes never understood what science is all about: “... it is precisely the task of science to supersede crude common-sense notions by critical analysis, and further that it is the unsatisfactory state of the foundations beneath the common-sense surface which is the most serious and crippling deficiency of contemporary economic science.” (Hutchison, 1960, p. 18)

The common sense critique of Orthodoxy is inferior Heterodoxy because it does not — as a matter of principle — contribute to a paradigm shift, that is, to the replacement of an obsolete Orthodoxy. Inferior Heterodoxy keeps a defunct Orthodoxy indefinitely in the Zombie state as the history of economic thought shows. Only superior Heterodoxy can do the paradigm shift.

Whoever argues “I do not see how theoretical models could provide significantly better knowledge than what is offered by practical knowledge and common sense” (see intro) paints a self-portrait of an incompetent scientist.*

To criticize Orthodoxy under the popular banner of common sense is the very characteristic of inferior Heterodoxy and has nothing in common with superior constructive Heterodoxy.**

Egmont Kakarot-Handtke

* For details of the big picture see cross-references Incompetence
** See  cross-references Paradigm shift