January 9, 2017

Economics as poultry entrails reading

Comment on Bill Mitchell on ‘Austerity is the problem for Britain not Brexit’

Blog-Reference and Blog-Reference on Jan 10

It is, first of all, of utmost importance to distinguish between political and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics the scientific standards of material and formal consistency are observed.

Theoretical economics has to be judged according to the criteria true/false and NOTHING else. According to the well-defined criteria of material and formal consistency MMT is provable false.#1 Because of this, Bill Mitchell’s policy guidance has NO sound scientific foundation. It is nothing more than political economics or soap box agenda pushing.

The very characteristic of political economics is to argue with predictions. Predictive programming, as psychologists call it, is very popular since the prophets of the Bible but most economists do not seem to know that scientists ― as a matter of principle ― refrain from predicting the future.#2

Political economics has produced NOTHING of scientific value in the last 200+ years. The current state of economics is that of a cargo cult or fake science.#3 This applies also to MMT. Bill Mitchell’s Brexit/Austerity argument is not different from the poultry entrails reading of the old Roman haruspex.

Egmont Kakarot-Handtke

#1 See ‘The final implosion of MMT
#2 See ‘Scientists do not predict
#3 See ‘Americans believe crazy things, yet they are outdone by economists