Blog-Reference and Blog-Reference and Blog-Reference on Mar 11 and Blog-Reference on Mar 27 adapted to context
Mark Buchanan is harping on one of the most idiotic stereotypes ever, that is, that a theory is something that is detached from reality. It is just the opposite. The fact of the matter is that a materially/formally consistent theory is the best mental representation of reality that is humanly possible. The true theory incorporates knowledge and all the rest of human communication is mere opinion, belief, storytelling, wish-wash, gossip, sitcom blather, tautological triviality, commonsensical delusion, or disinformation.
The misleading idea that there could be a conflict between ‘theory and practice’ is very old and immensely popular among laypersons. So much so that Kant bothered to refute it in an essay, first published in 1793, with the title ‘On the Old Saw: That May Be Right in Theory But It Won’t Work in Practice.’ Kant exploded the silly saw with the famous punch-line “There is nothing as practical as a good theory.” So Mark Buchanan is 200+ years behind the curve.
It is absolutely irrelevant whether the economist Kenneth Arrow “was a model academic ― brilliant, creative, precise, unfailingly modest.” (See intro) What is alone relevant is whether his economic theory is true or false: “Research is in fact a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant)
The fact of the matter is that Arrow’s theory is materially and formally inconsistent. Therefore, his General Equilibrium Theory is forever scientifically unacceptable. It is what Feynman famously called cargo cult science. As methodologists know very well: “At long last, it can be said that the history of general theory from Walras to Arrow-Debreu has been a journey down a blind alley, and it is historians of economic thought who seem to have finally hammered down the nails in this coffin. … General theory is simply a research program that has run into the sands.” (Blaug)
Arrow’s General Equilibrium Theory is inapplicable NOT because it is a theory but because it is a FALSE theory, i.e. it is materially and formally inconsistent. Equilibrium economics has already been dead in the cradle 150+ years ago. The miracle of economics is that the representative economist has until this very day not realized that he is perpetuating proto-scientific garbage.
Mark Buchanan is right on one count: “This perversion isn’t Arrow’s fault.” It is the inevitable result of the utter scientific incompetence of economists since Adam Smith.
Egmont Kakarot-Handtke
Related 'Where economics went wrong' and 'There is no scientific elite in economics' and 'Economics between mathiness, dyscalculia and idiocy' and 'Schizonomics' and 'Modern macro moronism' and 'The methodological blunders of fake scientists' and 'How Arrow pushed economics over the cliff' and 'If it isn’t macro-axiomatized, it isn’t economics'
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REPLY to RC AKA Darryl, Ron on Mar 10You say: “There are few inviolable laws of human behavior. They say that nothing is certain except death and taxes.”
Take notice that economics is NOT about human behavior but the behavior of the economy. Economics is NOT a social science but a systems science.#1
The most annoying trait of the run-of-the-mill economist is that he dabbles in sociology, psychology, political science, social philosophy, history, theology, ethics, pedagogy, anthropology, biology, Darwinism/evolution theory, etcetera but has no idea of what profit is.
Because every economist could know from the Palgrave Dictionary that the profit theory is false (Desai, 2008) he can be defined as a moron who does not know what the pivotal phenomenon of his subject matter is#2 but keeps on blathering about every political/social issue that crosses his empty brain.
The great insight of behavioral economics after 200+ years: Nothing is certain except death and taxes.#3 True, but people do not need economists to figure this out.
#1 From Orthodoxy to Heterodoxy to Sysdoxy
#2 For details of the big picture see cross-references Scientific Incompetence
#3 For the elementary systemic laws see False and true economic laws