June 26, 2017

The end of political economics

Comment on Ravi Kanbur on ‘W. Arthur Lewis and the tradeoffs of economics and economists’

Blog-Reference and Blog-Reference on Jun 28 and Blog-Reference

There is no such thing as economics. There are TWO economixes: political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, 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.

Economics consists of four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― which are mutually contradictory, axiomatically false, materially/formally inconsistent, and which got the foundational economic concept profit wrong. What we actually have is the pluralism of provably false theories.

Theoretical economics is scientifically unacceptable. Because of this, economics has nothing to offer in the way of a scientifically well-founded advice: “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)

Fact is that neither Orthodoxy nor Heterodoxy has the true theory and that, by consequence, economic policy guidance of BOTH sides has NO sound scientific foundation. Economists should no longer pretend to do science but openly push their respective political agendas.

Even if economists had the true theory they would have NO political mandate. There is NO such thing as a trade-off between theoretical and political economics. It was John Stuart Mill who told economists that they must decide themselves between science and politics: “A scientific observer or reasoner, merely as such, is not an adviser for practice. His part is only to show that certain consequences follow from certain causes, and that to obtain certain ends, certain means are the most effectual. Whether the ends themselves are such as ought to be pursued, and if so, in what cases and to how great a length, it is no part of his business as a cultivator of science to decide, and science alone will never qualify him for the decision.”

Since the founding fathers, economists violate the principle of the separation of science and politics. Economics is what Feynman famously called a cargo cult science and neither right wing nor left wing economic policy guidance has a sound scientific foundation since Adam Smith/Karl Marx. Political economics has produced NOTHING of scientific value in the last 200+ years. It is high time that economics frees itself from the all-pervasive and all-corrupting grip of politics.

What Burke termed ‘one of the finest problems in legislation, namely, to determine what the State ought to take upon itself to direct by the public wisdom, and what it ought to leave, with as little interference as possible, to individual exertion’ is a POLITICAL question entirely OUTSIDE the sphere of economics. Economists have to step down from the political soap box which the founding fathers have illegitimately usurped 200+ year ago.

Egmont Kakarot-Handtke


Related 'Economics: 200+ years of scientific incompetence and fraud' and 'Economics between cargo cult, farce, and fraud'. For details of the bigger picture see cross-references Political economics and cross-references Incompetence

***
REPLY to Ken Zimmerman on Jul 5

You summarize: “Many, including Ely himself, originally nurtured visions of the AEA becoming a applied and social policy body, an American version of the German Verein für Socialpolitik, with a goal to influence the general public and politicians, and push for social and economic reform.”

You are making my point: “There are TWO economixes: political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, 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 economic societies (AEA, VfS, RES and so on) defined themselves as agenda pushers, that is, they opted themselves OUT of science. No surprise then that economists have produced NOTHING of scientific value since the founding fathers. Until this day economics lacks the true theory.

Worse: Walrasians, Keynesians, Marxians, Austrians have corrupted science by de facto accepting the pluralism of provably false theories.

Worst: Vis-a-vis the general public economists claim since Adam Smith/Karl Marx to do science.

Clarification: Economics is NOT a science and neither orthodox nor heterodox economists are scientists. They have never been anything else than brain-dead blatherers, gossipers, and agenda pushers.