May 3, 2017

Macro imbeciles

Comment on Jason Smith on ‘The reason for the proliferation of macro models?’


This is known since 2000+ years ― except among economists: “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)

Jason Smith quotes Noah Smith: “One thing I still notice about macro, including the papers Reis cites, is the continued proliferation of models. Almost every macro paper has a theory section. Because it takes more than one empirical paper to properly test a theory, this means that theories are being created in macro at a far greater rate than they can be tested.” And then he comments: “This is fascinating, as it’s completely unheard of in physics.”

In his full-blown naivité, Jason Smith has not realized that economics is what Feynman called a cargo cult science. As Hands remarked “… suppose they [the economists] did reject all theories that were empirically falsified … Nothing would be left standing; there would be no economics.”

Economists need no testing at all because the outcome is ALREADY KNOWN: it is either refutation or inconclusiveness. The reason is simple, ALL macro models are axiomatically false.

Because of this, Jason Smith’s proposal ― more testing ― is in the given context entirely beside the point. When the theory/model is known to be axiomatically false testing does NOT help, only the replacement of false axioms by true axioms helps.*

Obviously, the physicist and hobby economist Jason Smith has never heard that progress in physics has always come from paradigm shifts, e.g. from Geo-centrism to Helio-centrism. In Keynes's words: "Something similar is required to-day in economics.”

Egmont Kakarot-Handtke

* For details see 'If it isn’t macro-axiomatized, it isn’t economics' and 'From the pluralism of false models to the true economic theory' and 'The IS-LM macro imbeciles' and 'IS-LM ― a crash course for EconoPhysicists' and 'What is REALLY wrong with macro' and 'From false micro to true macro: the new economic paradigm

COMMENT on Ignacio on May 3

You simply do not get the interdependence of economic law and history straight. As Keynes used to say: “a little clear thinking or more lucidity can solve almost any problem” see ‘The Synthesis of Economic Law, Evolution, and History’.

REPLY to Ignacio on May 3

What you believe is irrelevant. Science is about knowledge, and when you know nothing you are out. It is as simple as that. And if economists as a collective know nothing they are out, too. And the first thing they have to do is to abolish the so-called Nobel which is explicitly titled “Bank of Sweden Prize in Economic SCIENCES in Memory of Alfred Nobel”.#1 Science is well-defined as material and formal consistency, so there is NO room for belief, opinion, storytelling and other wish-wash.

Bring scientific knowledge to the table#2 or hit the road.

#1 See ‘The real problem with the economics Nobel’ and ‘Heterodoxy’s scientific self-burial’ and ‘How to get rid of the silly Queen’ and ‘Failed critique of failed economics
#2 Here is the Law of Supply and Demand

REPLY to Tom Hickey on May 3

The most noise in economics comes from economists because they are too stupid to put 2 and 2 together.* 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. Economics is a failed science and economists are incompetent scientists.

* See ‘Review of the economics troops

REPLY to Ignacio on May 3

Bring yourself methodologically up to speed and replace Wikipedia’s outdated definition of Law with the more general notion of Invariance.#1 There is NO causality in E=mc2 but it is a Law.#2

#1 See ‘The Law of Economists’ Increasing Stupidity
#2 This is the causality-free First Economic Law

REPLY to Ignacio, Tom Hickey on May 3

When you have no scientific knowledge you have NOTHING whatsoever to contribute to economic policy: “If economics cannot aspire to any substantive knowledge of economic relationships, it cannot speak with authority about questions of economic policy.” (Blaug)*

So, take the remote control, sit down on the couch and watch sitcoms. This is the best every economist can do for the survival and welfare of humanity.

* See ‘Economists and politics: Will you kindly shut up!’ and ‘How economists shoot themselves non-stop in the methodological foot

Immediately following 'True macrofoundations: the reset of economics'