Comment on Noah Way on ‘Fed Chair Powell gets it wrong, just as did Bill Dudley’
Blog-Reference
There is 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.
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.
The ancient Greeks introduced the distinction between opinion (= doxa) and knowledge (= episteme). This distinction parallels the distinction between political economics and theoretical economics and it parallels the distinction between the pseudo and the genuine inquirer: “A genuine inquirer aims to find out the truth of some question, whatever the color of that truth. ... A pseudo-inquirer seeks to make a case for the truth of some proposition(s) determined in advance. There are two kinds of pseudo-inquirer, the sham, and the fake. A sham reasoner is concerned, not to find out how things really are, but to make a case for some immovably-held preconceived conviction. A fake reasoner is concerned, not to find out how things really are, but to advance himself by making a case for some proposition to the truth-value of which he is indifferent.” (Haack)
Political economists are sham and fake reasoners. Economists never rose above the level of political economics.#1 The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational concept of the subject matter ― profit ― wrong.
Economics is a failed science or, in Feynman’s description 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.”#2, #3, #4, #5
Cargo cult science is institutionally secured by a curriculum, textbooks#6, selection of teachers, financing, economic associations like the AEA, gatekeeping peer review, prestigious journals as career selectors, a recommendation and applause apparatus, False-Hero Memorials, and the establishment of authority vis-a-vis the general public through the economics Nobel Prize.#7 The purpose of this tightly interlocked apparatus is to foster the impression that economics is a science.
Fact is that economics is for 200+ years at the proto-scientific level and that economists simply recycle slightly modified variants of already refuted theories: “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.” (Morgenstern, 1941) The replacement of falsified theories by superior theories does not happen.
Thus the proto-scientific swamp of political economics and false microfoundations and false macrofoundations is perpetuated.#8 Whoever looks with a scientific mind into this mess will find propaganda, senseless blather, and corruption in a dimension that fits the description of the classic Augean stable. Whoever looks for genuine scientific knowledge will not find much.#9
This holds also for the latest swamp creature called MMT. It provides NO exception to the verdict that economists are either stupid or corrupt or both.#10
Egmont Kakarot-Handtke
#1 There is NO such thing as “smart, honest, honorable economists”
#2 Economics and scientific foolishness
#3 What is so great about cargo cult science? or, How economists learned to stop worrying about failure
#4 Fake religion, fake science, fake news, and false complaints
#5 Economics: A science without scientists
#6 The father of modern economics and his imbecile kids
#7 The real problem with the economics Nobel
#8 From false microfoundations to true macrofoundations (II)
#9 Still beyond the reach of economists: The Holy Grail of Science
#10 The half-truths and half-falsehoods of MMT
Related 'Dear idiots, time to get saving and investment straight (II)' and 'Dear idiots, government deficits do NOT cause inflation' and 'Dear idiots, Marx got profit and exploitation wrong' and 'Opinion, conversation, interpretation, blather: the economist’s major immunizing stratagems' and 'Wikipedia and the promotion of economists’ idiotism (II)' and 'Heterodoxy and Pluralism, too, are proto-scientific garbage'. For details of the big picture see cross-references Political Economics/Stupidity/Corruption and cross-references Failed/Fake Scientists.