The state of economics is this: there are political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, and the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.
The state of economics is this: theoretical economics (= science) had been hijacked from the very beginning by political economics (= agenda pushers). Political economics has produced NOTHING of scientific value since Adam Smith. As a result of the utter scientific incompetence of political economists, economics is a failed science.
The state of economics is this: economics needs a Paradigm Shift because the major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the pivotal economic concept of profit wrong: “... suppose they did reject all theories that were empirically falsified ... Nothing would be left standing; there would be no economics.” (Hands)
Economics is indefensible but economists either do not realize it, do not admit it, excuse it,#1, or have no idea how to get out of the mess: “… most economists neither seek alternative theories nor believe that they can be found.” (Hausman)
Accordingly, economists defend the status quo and thereby ― knowingly or unknowingly does not matter ― actually violate scientific standards. As Morgenstern reminded his colleagues already in the 1940s: “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.”
Economists simply ignore formal or empirical refutation and carry on “as if nothing had happened.” The major approaches agree on one ― methodologically incorrect but politically convenient ― point: the pluralism of false theories. What is in dispute between the orthodox majority and the heterodox minority is merely the partitioning of the academic trough/curriculum between the schools.
Economics is axiomatically false, that is, it is beyond repair. Accordingly, there is no progress at all in orthodox economics for 150+ years only the senseless multiplication of silly models which are based on the maximization-and-equilibrium axiom set.
Feynman called economics a cargo cult science and characterized it thus: “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 is 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)
Because economists lack the true theory their policy guidance never had sound scientific foundations. For 200+ years, economics is model bricolage, soapbox blather, inconclusive debate, or agenda pushing. More often than not, economic policy advice worsens the situation.
Paul Romer reminded Lucas and the DSGE crowd that by clinging to their intransparent mathiness they violate Feynman Integrity.#2 The absurdity of Romer’s convoluted argument is that not only DSGE but ALL of the economics, including his own, violates Feynman Integrity.
What Feynman had to say about cargo cult science was this: “So we really ought to look into theories that don’t work, and science that isn’t science.” With regard to economics, this means that nothing less than a Paradigm Shift will do.
In very practical terms, this means the promotion of fundamentally new approaches (non-Walrasian, non-Keynesian, non-Marxian, non-Austrian) and the elimination of the falsified approaches (Walrasian, Keynesian, Marxian, Austrian) and all their pseudo-innovative variants. What can be observed in the econblogosphere is the very opposite.
The loudspeakers of the profession play the scratch-my-back-and-I-scratch-yours recommendation and reputation game peppered occasionally with a piece of tangential critique. This Zombie wrestling is what the public sees and enjoys. What the public does not see is that the loudspeakers of the profession actively push/censor/purge/retrofit their blogs in order to perpetuate the status quo of the pluralism of provably false theories.
The result is that the public regularly sees a Top 10 list of the most popular blogs/bloggers but never a Top 10 list of the worst violators of Feynman Integrity‡.
#1 Failed economics: The losers’ long list of lame excuses
#2 Paul Romer ‘Feynman Integrity’
Related 'Macro imbeciles' and 'IS-LM ― a crash course for EconoPhysicists' and 'Economics, Plato’s Cave and the Silver Blaze Case' and 'Economics ― worse than fake' and 'When fake scientists call out on fake politicians' and 'Pre-truth and post-truth in economics' and 'Humpty Dumpty is back again' and 'Economics: a hereditary mental disease with scientific incompetence as father and political fraud as mother' and 'Economists: Incompetent? Stupid? Corrupt?' and 'Needed: The Worst of the Worst of economics blogs' and 'Economists, stupid or corrupt or both?' and 'The real problem with the economics Nobel'.