May 9, 2017

Economics’ lack of scientific legitimacy

Comment on Peter Dorman on ‘Against the Subjective Theory of Knowledge’


Anonymous paraphrases: “The legitimacy of power in the US, the country of the Nobel economists, historically depended on claims to expertise, and the economists had offered a pole of legitimacy based on ‘scientific’ economics.”

The scientific legitimacy of economics is a figment of the imagination since the founding fathers.

In the beginning, there was Political Economy. J. S. Mill defined it clearly as a science: “The science which traces the laws of such of the phenomena of society as arise from the combined operations of mankind for the production of wealth, in so far as those phenomena are not modified by the pursuit of any other object.”

Marx, too, did it: “The real science of modern economy does not begin, until theoretical analysis passes from the process of circulation to the process of production.”

Jevons, too, did it and even re-branded the discipline: “Among minor alterations, I may mention the substitution for the name Political Economy of the single convenient term Economics. I cannot help thinking that it would be well to discard, as quickly as possible, the old troublesome double-worded name of our Science.”

Robbins, too, did it: “Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.”

The Bank of Sweden, too, did it: “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.

Why not simply “Bank of Sweden Prize in Economics”? The original title conspicuously overemphasizes the claim that economics is a science.

Science is well-defined by the criteria of formal and material consistency: “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)

Fact is: the four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, and materially/formally inconsistent.

The claim of economics to be a science has always been subjective wishful thinking with no counterpart in objective reality; accordingly, it is as legitimate as the claim of any banana republic to be a proper state.

Egmont Kakarot-Handtke

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