April 27, 2017

What genuine scientists believe about economics

Comment on Jason Smith on ‘Falsehoods scientists believe about economics’

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When directly confronted with economics, genuine scientists immediately realize that economists are lost in the woods:

“Walras approached Poincaré for his approval. ... But Poincaré was devoutly committed to applied mathematics and did not fail to notice that utility is a nonmeasurable magnitude. ... He also wondered about the premises of Walras’s mathematics: It might be reasonable, as a first approximation, to regard men as completely self-interested, but the assumption of perfect foreknowledge ‘perhaps requires a certain reserve’.” (Porter)

“What is now taught as standard economic theory will eventually disappear, no trace of it will remain in the universities or boardrooms because it simply doesn’t work: were it engineering, the bridge would collapse.” (McCauley)

But, as a rule, genuine scientists are focused on their own field and simply believe what every layperson believes: “Economics is a scientific field like any other that speaks in the public sphere using theories that are empirically grounded and responds to changes in the data, …” (Jason Smith)

Science is well-defined since 2000+ years: “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)

Economists have simply NOT gotten this vital point. Fact is that the four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, and materially/formally inconsistent.

Economics is what the genuine scientist Feynman called a cargo cult science. And this means: “So we really ought to look into theories that don’t work, and science that isn’t science.” Axiomatically false is the death sentence for an approach, that is, it is beyond repair and needs to be fully replaced by a new paradigm. Economists, though, do not feel any urge for a paradigm shift: “… most economists neither seek alternative theories nor believe that they can be found.” (Hausman)

So, economists put lipstick on the dead pig and decorate their pathetic models with the latest gadget from the physics department.* What they are in fact doing is to violate the basic principle of falsification to which all genuine scientists strictly adhere: “In economics we should strive to proceed, wherever we can, exactly according to the standards of the other, more advanced, sciences, where it is not possible, once an issue has been decided, to continue to write about it as if nothing had happened.” (Morgenstern)

What genuine scientists know for sure about economics is that ― after 200+ years ― it is still at the proto-scientific stage: “Economics is simply still a million miles away from the state in which an advanced science is …”. (von Neumann)

Egmont Kakarot-Handtke

* See ‘Toolism! A Critique of EconoPhysics


Related 'Hayek and other informationally retarded proto-economists'

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  1. This comment will be deleted because the author failed to understand that the post above was a joke.

    There is also nothing wrong with not directly measurable quantities in science (the quantum wavefunction is a good example).