Blog-Reference and Blog-Reference on Sep 28
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.
Economics consists of the major approaches Walrasianism, Keynesianism, Marxianism, and Austrianism that are mutually contradictory, axiomatically false, materially/formally inconsistent, and got the foundational economic concept of profit wrong. To repeat, the representative economist does until this day NOT know ― what he is supposed to know because it is his and nobody else’s subject matter ― what profit is: “A satisfactory theory of profits is still elusive.” (Palgrave Dictionary, Desai, 2008)
Theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers). Political economics has produced NOTHING of scientific value in the last 200+ years. Economics is a failed science or what Feynman called a cargo cult science.
There is the political sphere and there is the scientific sphere. It is quite obvious that both are fundamentally different and because of this, it is of utmost importance to radically separate the two. The mixing of the two is the economists’ moral equivalent of the Fall of Man.
Politics is about the realization of the Good Society. This presupposes an idea of what the Good Society is and the practical capacity to make things happen. In very general terms, the political sphere is about values and action, and the crucial distinction is between good/bad or better/worse. Science is about knowledge and the crucial distinction is between true/false with truth unequivocally defined by material and formal consistency. To mix politics and science is to corrupt science.#1
Economics is meant to be a science and the economist has to satisfy scientific standards and NOTHING else. Scientific standards are well-defined since antiquity: “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)
Since Adam Smith/Karl Marx, economics is explicitly defined as science. The general public is year after year reminded of this fact with the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.#2 And every economist learned in Econ 101: “Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.” (Robbins)
Clearly, economics is for 200+ years a self-declared science. Clearly, the major approaches are materially and formally inconsistent. Clearly, there is a contradiction. Clearly, economists violate the ethics of science.
Economics needs a Paradigm Shift. In methodological parlance, the Walrasian microfoundations and the Keynesian macrofoundations have to be fully replaced with an entirely new set of axioms. Therefore, the one and only question is: How is it done? That much is clear, it is NOT done
(i) by endlessly kicking the dead horse of Orthodoxy without ever coming up with a valid alternative, so traditional Heterodoxy, too, is a scientific failure;
(ii) by blind empiricism and microeconomic case studies;
(iii) by adapting the underlying morality of current political economics instead of executing the final separation of politics and science.
The point to grasp is that economics is a systems science and all questions about Human Nature/motives/behavior/action are NOT the economist’s business but have to be left to psychology, sociology, anthropology, history, political science, biology, ethics, etcetera.
The representative supply-demand-equilibrium (S-D-E) economist is lost for science and can only continue with cargo cult science. For him, New Economic Thinking amounts to moral window dressing.#3
Both orthodox and heterodox economics is a continuation of cargo cult science.#4 Fresh moralizing is not a substitute for the urgently required New Economic Thinking. Moralizing is political economics and political economics is fake science.#5
Egmont Kakarot-Handtke
#1 The irrelevance of populism for economics
#2 The real problem with the economics Nobel
#3 CORE: more lipstick on the dead economics pig
#4 Economics is NOT about Human Nature but the economic system
#5 10 steps to leave cargo cult economics behind for good
Related 'Economics: 200+ years of scientific incompetence and fraud' and 'Economists: Time to say goodbye' and 'Opinion, conversation, interpretation, blather: the economist’s major immunizing stratagems'. Use also the labels Ethics and NET (New Economic Thinking) in the box below.
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