AXEC: New Foundations of Economics: ASSA2020 has been a success ― sorta kinda

Comment on Rudi Bachmann on ‘When you pay $6.20 for a Diet Pepsi. #ASSA2020 insanity.’

Own post, Twitter-Reference

Once a year economists flock to the #ASSA/#AEA gathering to have fun, to congratulate themselves with all kinds of prizes, to socialize and to network, and to get their communicative marching orders for the new year. ASSA/AEA is the Central Committee of the profession and defines what mainstream means, what the criteria for inclusion/ exclusion are, and, by implication, what the qualifications for leadership positions are. These have been the main messages:

The location is perfect

The kids are happy

And there is the great econ family

Economists are by definition above-average in all respects but there is, of course, room for improvement at all levels.

MMT is not accepted by the mainstream.

As always, economists are divided about what the subject matter of economics is. Some folks still maintain that economics is a social science.

Ricardo Reis is right. Economics is the study of the economy. The core problem of economics is never mentioned among economists, i.e. that economics is NOT a science to this day. The major approaches — Walrasianism, Keynesianism, Marxianism, Austrianism, MMT — are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational economic concept profit wrong. Economics is a failed science or what Feynman called a cargo cult science. What economists have achieved in 200+ years is the pluralism of provably false theories. Obviously, they have NO idea what science is all about: “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) Economists do not have the true theory but many opinions. Because of this, their economic policy advice — left/center/right does NOT matter — NEVER had sound scientific foundations.

This, of course, has never disturbed economists. Accordingly, the official takeaway consisted of vacuous policy guidance.

This was the implicit message of ASSA2020: Larry Summers* is still a member of good standing and a highly visible representative of the American Economic Association AEA. Needless to emphasize that the members of the econ family did not get the point. No surprise here, after all, the representative economist is too stupid for the elementary algebra that underlies macroeconomics. Luckily, a brain is the last thing clowns and political agenda pushers in the political Circus Maximus need. Economics is NOT a science, economists are NOT scientists and the AEA is the proof.

Egmont Kakarot-Handtke

* Source Twitter