May 1, 2021
Orthodoxy is refuted ― but MMT also
Comment on Bill Mitchell on ‘The Cambridge Controversy ― a fundamental refutation of orthodox economic theory’ *
It goes without saying that what Paul Krugman says about the CCC and Joan Robinson is abysmally stupid. In Bill Mitchell's words: “Paul Krugman is either a liar or didn’t really get the point, or both.”#1 The fact that he is still a member of good standing of academic economics tells one all about the subzero level of scientific competence/ethics of the profession. In Bill Mitchell's words: “The import though is clear ― orthodox economics, which is still taught on a daily basis in our universities and which people like Krugman use to make money by writing textbooks about is based on a series of myths that cannot be sustained, both logically, in terms of their own internal consistency, and, in relation to saying anything about the real world we live in.”
Neoclassical economists do not understand profit and by consequence distribution. Bill Mitchell argues that Karl Marx did: “The major insight provided by Marx’s theory of surplus-value was that capitalist profits are sourced in the production of surplus-value. In turn, surplus-value is produced by unpaid labour and so under capitalism workers remain exploited (as they were under previous modes of production).” The fact is, that Marx, too, got profit wrong.#2
From this, one may infer that Bill Mitchell and the MMTers have no idea about what profit is. And this, too, is a provable fact.#3
Conclusion: Walrasianism, Keynesianism, Marxianism, Austrianism, MMT are mutually contradictory, axiomatically false, materially/formally inconsistent, and ALL got profit wrong. What passes as economics (“economic sciences” according to the EconNobel) is the pluralism of idiotism.#4
Because the foundational concept of economics ― profit ― is ill-defined and not understood to this day, economic policy guidance has NEVER had sound scientific foundations but has always been brain-dead agenda pushing. In their scientific incompetence, economists have always been a hazard to their fellow citizens. If humanity has made some progress it was NOT because of economists but despite them.
#3 For those who want to check the refutation of MMT in greater detail here are the relevant references:
#4 For the reset of economics and the correct macroeconomic Profit Law see Profit
Related 'The CCC ― a monument of economists’ utter scientific incompetence' and 'One entirely sufficient reason for the shutdown of economics'. For details of the big picture see cross-references Failed/Fake Scientists.