April 7, 2017

Economists ― medics or barber surgeons?

Comment on Simon Wren-Lewis on ‘Economists as medics’

Blog-Reference and Blog-Reference

When economists are told that economics does not satisfy the scientific standards of material and formal consistency they invariably fall back on J. S. Mill’s slogan of economics as ‘inexact and separate science’.#1 This, of course, is merely one of economists’ numerous unacceptable excuses.#2 There is NO such thing as an inexact and separate science. There is only science and non-science respectively cargo cult science.

Feynman defined cargo cult science as follows: “They’re doing everything right. The form is perfect. ... But it doesn’t work. ... So I call these things cargo cult science, because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential.”

What is missing among economists is a proper understanding of what science is all about. Wren-Lewis’s comparison of economics with medicine is the paradigmatic defense of a cargo cult scientist. To be sure, the representative economist can by NO stretch of the imagination be compared to a present-day medic. The present-day economist compares to the medieval barber surgeon who, more often than not, killed his patients with bloodletting and toxic medicine.

Because economists lack the true theory their economic policy guidance has NO sound scientific foundation since Adam Smith/Karl Marx. Ultimately, economists bear the responsibility for mass unemployment and the social devastation that comes with it.#3

Wren-Lewis argues: “ The science for economists is microeconomic theory, now enriched by behavioural economics.” The fact of the matter is that microeconomic theory is based on a behavioral axiom set that contains three NONENTITIES. Nothing of scientific value will ever come from provable false axiomatic foundations.#4

Economics needs a paradigm shift from false Walrasian microfoundations and false Keynesian macrofoundations to true macrofoundations.

Like most economists, Wren-Lewis suffers from the social science delusion. The subject matter of economics is NOT individual or social behavior but the behavior of the economic system. Economics is NOT a social science but a system science.

Accordingly, the Case/Deaton study about the mortality rates of the US white population is the proper business of sociology and cannot be taken as an example for good economics.

Until this day, economists have NOT gotten the foundational concepts of their subject matter, i.e. profit and income, right. This is like medieval medicine before the blood circuit was properly understood.

Wren-Lewis’s conclusion is beside the point: “No one says that medicine has failed us, and we need to find fresh voices. No one will say that ‘mainstream medicine’ is in crisis, and we need to look at alternatives. They do not say that because it would be stupid to do so.”

Indeed, this IS stupid in relation to modern medicine which is applied science but NOT in relation to modern economics which is a cargo cult science. The four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the pivotal economic concept profit wrong. It is stupid, indeed, to defend this indefensible proto-scientific rubbish.

Egmont Kakarot-Handtke

#1 Hausman, D. M. (1992). The Inexact and Separate Science of Economics. Cambridge: Cambridge University Press.
#2 See ‘Failed economics: The losers’ long list of lame excuses
#3 See cross-references Employment
#4 See ‘Economists’ three-layered scientific incompetence

Related 'Educating economists? Yes, but where is the scientific stuff?' and 'The economist as standup comedian' and 'New economic thinking = old political fake'