Blog-Reference
“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)
The fact of the matter is that economists do NOT have the true theory. More precisely, economists do not know how the price and profit mechanism works. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got profit wrong.#1 With the pluralism of provably false theories economics sits squarely at the proto-scientific level.
The representative economist either does not realize it or cannot officially admit it. In this dire situation, the Pavlovian reaction is always and everywhere to muddy the waters and to retreat deeper into the swamp. Noah Smith is no exception, he rhetorically asks: “What the heck is a ‘science’?” and answers “No one knows.”
This is patently false. Science is ― since the ancient Greeks made the distinction between opinion (= doxa) and knowledge (= episteme) ― well-defined by material and formal 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)
The first question to Noah Smith: if no one knows what science is how does it come that we have a prize with the title “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.#2 And how does it come that economics is since Adam Smith/Karl Marx explicitly defined as science? And what does every economist learn in Econ 101?: “Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.” (Robbins)
The fact is that economics claims to be a science but is what Feynman called a cargo cult science: “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. Economics is a failed science because none of the major approaches satisfies the criteria of material and formal consistency. When this is pointed out economists immediately retract and fire their barrage of brain-dead excuses.#3 Noah Smith applies the same old defense maneuvers. Needless to emphasize that every single of these excuses has been refuted long ago.
Economists have found a way to deal with the problem of manifest failure: they simply ignore and violate scientific standards. Or, as Blaug put it, they are playing tennis with the net down. Morgenstern reminded his fellow economists back in 1941: “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.”
This is why Walrasianism is still around although it has already been dead in the cradle 150+ years ago. Standard economics has been based on provably false axioms but economists proudly cling to them until this day: “most of what I and many others do is sorta-kinda neoclassical because it takes the maximization-and-equilibrium world as a starting point.” (Krugman) Note in passing that maximization and equilibrium are NONENTITIES like angels or the Easter Bunny. Time for Krugman and the rest to end stubborn self-delusion: all equilibrium models are a priori false and this starts with textbook supply-demand-equilibrium.#4
Economics is a failed science because economists (i) are scientifically incompetent, and (ii), violate scientific standards/ethics on a daily basis. Since Adam Smith, economic policy guidance has never had sound scientific foundations. Both, orthodox and heterodox economists sell proto-scientific garbage in the bluff package of science.
In order to become a science, economics needs a Paradigm Shift.#5 Nothing less will do.
Egmont Kakarot-Handtke
#1 First Lecture in New Economic Thinking
#2 The real problem with the economics Nobel
#3 Failed economics: The losers’ long list of lame excuses
#4 The father of modern economics and his imbecile kids
#5 The identification problem and the dumping of the old guard
Related 'Yes, economics is a bogus science' and 'Media-fake-farce-fraud-storytelling-macro' and 'Schizonomics' and 'The miracle cure of economists’ micro-macro schizo'. For details of the big picture see cross-references Scientific Incompetence and cross-references Proto-Science/Cargo Cult Science/Science and cross-references Failed/Fake Scientists.
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REPLY to Jake Thompson on Jun 18You argue: “It’s certainly, by a long shot, the most scientific of the social sciences.”
Your lethal methodological blunders are:
(i) The underlying binary code of science is true/false with NOTHING in between. Because of this, economics is either a science or not. The statement, that economics is more scientific than X, is entirely devoid of meaning. (Just like the statement, Jake Thompson is by a long shot more innocent than Lee Harvey Oswald. Guilty/not guilty is also binary with NOTHING in between.)
(ii) Scientific truth is well-defined by material and formal consistency. It is not an easy task to establish scientific truth but from these practical difficulties cannot be concluded that it does not exist or that anything goes.
(iii) The major approaches ― Walrasianism, Keynesianism, Marxianism, and Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the pivotal economic concept of profit wrong.
Conclusion: Economics is NOT a science.
In order to rise above the proto-scientific level, economics needs a Paradigm Shift.#1 What failed economists first of all have to understand is that economics is NOT a social science but a systems science. To define economics as a social science has been the foundational blunder 200+ years ago. Being scientifically incompetent, though, economists will not understand this. It is Catch 22 and the representative economist is trapped in the scientific coal pit.#2
#1 For details see Redefining economics and cross-references Paradigm Shift
#2 “... but when the road ends at a coal-pit, he [the traveler] doesn’t need much judgment to know that he has gone wrong, and perhaps to find out what has led him astray.” (Hume) Obviously, you lack even this tiny quantity of judgment.
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REPLY to Anonymous on Jun 20You argue: “Some parts of Econ are a science (game theory and I’d argue basic macro in simple markets) while the rest is more of an art (everything else).”
You are trying to evade a clear-cut conclusion and your argument is way beside the point.
(i) Economics is either a science or not. That some parts of it are acceptable is irrelevant. Every false theory has acceptable parts. Even the flat earth theory has some content that is true. False theories are always partially and commonsensically true. This is exactly why they can survive.
(ii) Game theory is NOT economics because economics does not deal with human behavior but with the behavior of the economic system. Economics is a systems science and all Human Nature/behavior issues belong to psychology, sociology, anthropology, and so on. To define economics as a social science has been the foundational blunder 200+ years ago.
(iii) Basic macro is provably false.#1
(iv) To call economics an art is simply a euphemism.
The conclusion is inescapable: Economics is NOT a science.
#1 For details see Textbooks and the mental cloning of dumb economists and Why Post Keynesianism Is Not Yet a Science.
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REPLY to Anonymous on Jun 24You say: “Tell me your definition of science and we can debate this further.”
(i) Science is well-defined for 2300+ years. There is NO such thing as “my” or “your” definition. Because of this, there is NOTHING to debate.
(ii) Either one complies with the well-defined and well-known scientific standards or one is outside of science.
(iii) Economics is materially and formally inconsistent and therefore outside of science.#1
(iv) The definition of science has been given in the post above.#2 It seems that your attention span is less than that of a fruit fly.
(v) You say “I thought rational choice theory and behavioral economics was a thing.” Yes, this is the defining characteristic of the scientifically incompetent economist.#3
(vi) All of your arguments show that you are trying to play silly semantic games.
#1 “… suppose they [the economists] did reject all theories that were empirically falsified … Nothing would be left standing; there would be no economics.” (Hands)
#2 See here or here
#3 Confused Confusers: How to Stop Thinking Like an Economist and Start Thinking Like a Scientist