March 16, 2017

Economics ― from attention and reputation management to science

Comment on David Glasner on ‘Samuelson Rules the Seas’


David Glasner starts his post as follows: “I think Nick Rowe is a great economist; I really do. And on top of that, he recently has shown himself to be a very brave economist, fearlessly claiming to have shown that Paul Samuelson’s classic 1980 takedown … of David Hume’s classic 1752 articulation of the price-specie-flow mechanism … was all wrong. Although I am a great admirer of Paul Samuelson, I am far from believing that he was error-free. But I would be very cautious about attributing an error in pure economic theory to Samuelson.”

What is wrong with this? First of all, it is a matter of indifference whether David Glasner thinks that Nick Rowe or Paul Samuelson are great economists and which one of them is greater. This Top-Ten shop talk may be appropriate in sports and entertainment but is entirely misplaced in science. The only thing we want to know about a scientist is whether her/his contribution fits the criteria of material and formal consistency and therefore can be accepted to the corpus of science.

The question whether Archimedes or Euclid or Copernicus or Galileo or Newton or Schrödinger or Poincaré or Hilbert has been the greater scientist is pointless because the very characteristic of a creative achievement is that it is unique and incomparable.

So, the real question is what Nick Rowe and Paul Samuelson contributed to science. The answer is NOTHING.

Nick Rowe fools around with silly models and has not even grasped that IS-LM is logically defective.#1

Samuelson messed up economics back in 1947 with his textbook but his intellectual heirs did not realize it until this very day. In effect, Samuelson established economics as cargo cult science.#2

In Samuelson’s synthesis the defective Walrasian microfoundations and the defective Keynesian macrofoundations were cobbled together.#3 Samuelson’s textbook consisted of two halves: micro and macro. Needless to emphasize that the whole thing was inconsistent.

Science is committed to material and formal consistency. Samuelson’s textbook had arguably the lowermost scientific content of all textbooks ever written. Standard supply-demand-equilibrium will forever stand out as the silliest model in the history of sciences.

And this is what we have today. There is Orthodoxy with behavioral microfoundations and Keynesianism with structural/systemic macrofoundations. Both these formal foundations are still conceptually and logically defective and incompatible.#4

By comparing the relative merits of what he introduces as great thinkers David Glasner obscures the fact that neither Rowe nor Samuelson deserves the title of a scientist. In effect, David Glasner reinforces the false impression among the general public that economics is a science while it has never been anything else than a cargo cult science. The hazard of proto-scientific economics is that well-meant cheer leading unwittingly turns into a public support for scientific impostors.

Science is about true/false and NOTHING else.

Egmont Kakarot-Handtke

#1 See ‘Nick Rowe: Bury me at the end of coal-pit
#2 See Wikipedia
#3 See ‘The father of modern economics and his imbecile kids
#4 See ‘Where economics went wrong