March 16, 2017

Humble pie economics: the next fake

Comment on Peter Dorman on ‘Where Should We Put Economic Empiricism on the Hubris-Humility Spectrum?’

Blog-Reference and Blog-Reference on Mar 17

Hubris/humility is the proper issue for psychologists. Economists, on the other hand, are supposed to figure out how the economy works. More, what is expected from economists is not storytelling about economic events or comments on economic policy or psychological self-reflection but the true theory: “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)

The sole criterion to judge economists is whether economic theory is scientifically true/false and not whether they are arrogant/humble or likable/unlikable or conservative/liberal or whatever the sitcom characteristic may be. Scientific truth is well-defined since 2000+ years as material and formal consistency.

From scientists knowledge is expected and NOT the humble confession that they know nothing because reality is complex and uncertain and unknowable.#1

Knowledge, though, is not what economists have to offer. Walrasianism, Keynesianism, Marxianism, Austrianism are axiomatically false. But make no mistake, economists are rather comfortable in their proto-scientific swamp where “nothing is clear and everything is possible” (Keynes) and where scientific incompetence reaffirms itself with phrases like there is no truth, empirical tests are always inconclusive, all models are false, and the self-deception that the pluralism of false theories is a proof of tolerance and not of failure.

The current wave of empiricism and humility is just another exercise in reputation management and another example for the cargo cultic crap which economists produce and consume since 200+ years.#2

Egmont Kakarot-Handtke

#1 See ‘Failed economics: The losers’ long list of lame excuses
#2 See ‘Where economics went wrong