Blog-Reference and Blog-Reference on Jul 27 adapted to context and Blog-Reference
The common methodological blunder of orthodox and heterodox economists and the ultimate reason why economics is one of the worst scientific failures of all times consists of defining economics as a social science.
While it is trivially true that human behavior plays an important role in how an economy develops, this is NOT the subject matter of economics but of psychology, sociology, anthropology, history, political science, social philosophy, biology/evolution theory etcetera.
Imagine a passenger plane flying at high speed at high altitudes. Now, one can ask two entirely different questions about this phenomenon, i.e. (i) behavioral, or (ii), physical.
• Behavioral questions relate to the motives of travel, social status e.g. 1st/2nd class, feelings/fear of flying/claustrophobia/euphoria, satisfaction with comfort/service/ entertainment, trust in pilots/crew/airline, uncertainty about value-for-money, etcetera.
• Physical questions relate to the laws of aerodynamics, thermodynamics, material stability of the craft, weather conditions, navigation, remaining fuel supply, etcetera.
The theory of flight abstracts from the concrete human beings and leaves all Human Nature issues to so-called social scientists, that is, to people who can endlessly waffle about utility/happiness but will NEVER get a plane or anything else off the ground.
Analogous for the subject matter of economics. Economics has to focus on the systemic aspects of the economy, in other words, economics is NOT a social science but a systems science.
Unfortunately, economics took the wrong turn at the very beginning because it defined itself as Political Economy. Politics, though, is the very antithesis of science.#1
The most important scientific contribution an economist can make is to reveal how the actual economy works. This contribution takes the form of the true theory with truth well-defined as material and formal consistency.
The crucial step on the way to the true theory is to move from the naive description of reality to abstraction: “Since, therefore, it is vain to hope that truth can be arrived at, either in Political Economy or in any other department of the social science, while we look at the facts in the concrete, clothed in all the complexity with which nature has surrounded them, and endeavour to elicit a general law by a process of induction from a comparison of details; there remains no other method than the à priori one, or that of ‘abstract speculation’.” (J. S. Mill)
Needless to emphasize that abstraction can go badly wrong. By getting stuck with Human Nature/motives/behavior/action economists committed the Fallacy of Insufficient Abstraction. And this is why economics is a failed science.#2
Economists got lost in the woods with folk-psychological and folk-sociological blather about utility/happiness and can to this very day NOT tell what profit is and how the price- and profit mechanism works. Walrasianism, Keynesianism, Marxianism, Austrianism is proto-scientific garbage but the former editor of the Review of Behavioral Economics, the Cargo Cult Scientist Barkley Rosser, has not got it and will never get it.
Happiness is a new bluff package for economists to sell their proto-scientific garbage. After all, nobody can argue against happiness.
Egmont Kakarot-Handtke
#1 Yes, orthodox economics is poor science, but can Heterodoxy raise hope?
#2 Economics: 200+ years of scientific incompetence and fraud
Related 'Economists: Jacks-of-all-trades ― except economics' and 'The Science-of-Man fallacy' and 'How incompetent are economic methodologists? Very!' and 'The problem with economics as a discipline' and 'Economics ― the science that never was' and 'MMTers are false Progressives and false Friends-of-the-People'. For details of the big picture see cross-references NOT a Science of Behavior.
***
Wikimedia AXEC140
***
REPLY to Barkley Rosser on Apr 11
You say: “Profit is an important topic in economics, and a few economists … have agreed with you that it is the most important topic. But the vast majority do not, including me.”
The vast majority of economists including you is scientifically behind the curve just as badly as any Flat-Earther ever was.
Take Keynes as an example. Here is the proof from the General Theory: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63)
This two-liner is conceptually and logically defective because Keynes never came to grips with profit. “His Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson et al.)
The economist Keynes had NO idea what profit is. Neither had those who came before him or after him, including Barkley Rosser.
How absurd is this? What are economists waiting for? That psychologist will eventually tell them what profit is while economists tell psychologists in turn what happiness is?
Profit theory is provably false, distribution theory is false, employment theory is false, the theory of money is false, growth theory is false yet Barkley Rosser is blathering about happiness, Yusuf on the cross, the lone nut hypothesis of the JFK and MLK assassinations, and the reproductive behavior of the House of Sa'ud.
It is obvious that the vast majority of economists including Barkley Rosser most clearly failed theme#1 and has now happily arrived at the bottom of the proto-scientific shithole.#2
***
REPLY to Barkley Rosser on Apr 12
The underlying philosophy of economics is Utilitarianism/Darwinism/Malthusianism and it has not changed in the last 200+ years.
What is the bottom-line of the new field of Happiness Economics? You sum it up: “… of course wealthier and higher-income people tend to live longer than those less so. They also tend to be happier on average than others within their societies when asked.”
This is what already Malthus told the world and he left no doubt that the premature death of the poor=unfit is a good=natural thing. The progress in economics consists in the main of applying the methods of modern marketing and in repackaging Malthus’ dismal message as Happiness economics.
Economics never rose above the level of poor philosophy and proto-scientific garbage.
***
REPLY to Barkley Rosser on Apr 13
You say “You missed the really important part, which is that he [Malthus] may have been the first economist to note that income and happiness may not be perfectly correlated, even if on average higher-income people are happier at a given point in time in a given society.”
As always, it’s you who badly misses the point. The economist Malthus was by no means the first to note the correlation between wealth/happiness respectively the mirror correlation poverty/premature death but he became notorious as the chief proponent of “‘positive checks’, which lead to premature death: disease, starvation, war, …” (Wikipedia)
‘Positive checks’ by the four blunt tools, also known as the Horsemen War, Famine, Pestilence and Disease, were later-on supplemented by the more subtle tools of medicine and economics. It is not an accident that the economist Keynes was Director of the British Eugenics Society 1937-1944. Economics and Social Darwinism were always joined at the hip. Malthus’ claim to originality derives from the fact that he was the first economist to recommend premature death as a solution to economic problems.
Happiness economics is the botoxed version of the foundational creed of Political Economy: Better a healthy, happy, long-lived exploiter than a sick, unhappy, short-lived exploitee.
Guess what, Barkley Rosser, people came up with this trivial philosophy some thousand years before some silly economists gathered to celebrate “The Retirement Of The Field’s Founder” and to peer-applaud their asinine drivel.
***
REPLY to Tom Hickey on Jul 28
Happiness is the subject matter of psychology/sociology/philosophy. How the monetary economy works is the subject matter of economics. Economists, though, do not even know what profit is. People who are so incompetent that they have thoroughly messed up their own discipline are ill-qualified to say something about psychological/sociological/philosophical matters.
You say: “In contemporary terms, ‘living the good life’ means living a life of plenty. For Socrates, Plato and Aristotle ‘living the good life’ meant living a life characterized by human excellence. Thus, the fundamental question was, What does it mean to live a good life in a good society. Marx observed that a society in which capitalism is the mode of production profit is the driver rather than the pursuit of human excellence.”
Take notice that Marx, too, never figured out what profit is.#1 As collateral damage, he messed up the concepts of exploitation and class.#2, #3 As a result, the fake philosopher#4 Marx never had anything worthwhile to say about how the economy works.
That the fake economist Karl Marx is repeatedly advertised by the fake philosopher Tom Hickey is an act of deliberate disinformation and NOT a contribution to the advancement of economics as a science. It is simply the perpetuation of economics as propaganda.
A Good Life in a Good Society presupposes, first of all, that philosophers, economists, and all other cargo cult scientists and agenda pushers are thrown out of science.
