#Economics#AllYouNeedToKnow
— AXEC (@EgmontHandtke) November 8, 2025
“Last month, the Committee finally acknowledged that ideas, not capital, made the modern world.” (Deirdre McCloskey)
The EconNobel has become one of the biggest PR disasters of all time. It has nothing at all to do with science.
Although it claims… pic.twitter.com/kc3yFxQmhM
Showing posts with label Religion. Show all posts
Showing posts with label Religion. Show all posts
November 8, 2025
Occasional X: Scrap the EconNobel (XLIX)
Occasional X: Clueless economists / Science (CCXVIII)
#Economics#AllYouNeedToKnow
— AXEC (@EgmontHandtke) November 8, 2025
“The solutions offered by economists were no less delusory than those of the theologians that they displaced.” (Joan Robinson)
Religion and economics indeed have a common denominator. It consists of the triad storytelling/ entertainment/…
March 6, 2025
Occasional X: Religion, science, fake science, economics (II)
#Economics#AllYouNeedToKnow
— AXEC (@EgmontHandtke) March 6, 2025
Since the founding fathers, economists have had to make a profession of faith in Free Trade. ⇓
Reminder: Economics claims to be science but is NOT. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives)… pic.twitter.com/zHoLjH6Qvb
December 10, 2021
Occasional Tweets: How to respect the separation between religion and science
#Economics#FailedScience#FakeScience#Economists#StupidOrCorruptOrBoth
— E.K-H (@AXECorg) December 10, 2021
The Supreme Being handed over these Twelve Economics Commandmentshttps://t.co/NxykTJpvx6
For more about religion see AXECquery.
July 16, 2021
Occasional Tweets: Religion, science, fake science, economics (I)
#Econ#Economics is about how the #Economy works and NOT about the Latin Mass. #Economists are too stupid for the elementary #Algebra of #MacroEconomics. Bc of this, they get the foundational concept of #Profit wrong. Bc of this, economics is proto-scientific garbage. pic.twitter.com/LBBq14c5z0
— E.K-H (@AXECorg) July 16, 2021
Economics / Religion
- If religion is opium of the people, economics is crack of the people
- Fake religion, fake science, fake news, and false complaints
- Economics is not science, not religion, but proto-scientific garbage
- No religion, merely incompetence
- The Supreme Being handed over these Twelve Economics Commandments
- Economists: Jacks-of-all-trades ― except economics
For more about economics imperialism see AXECorg.
December 28, 2019
Economic narratives are for the scientific garbage dump
Comment on Maria Popova on ‘How Kepler Invented Science Fiction and Defended His Mother in a Witchcraft Trial While Revolutionizing Our Understanding of the Universe’*
Own post, Twitter-Reference
To recall, science is about true/false and nothing else. Strictly speaking, it is NOT the task of science to convince the “scientifically illiterate public.” The acceptance of a theory depends alone on the proof of material/formal consistency and NOT on the approval of the general public or the number of followers on Twitter. Storytelling, on the other hand, has been the tool of religious/political fraudsters since they put down their fake accounts of creation and evolution/history in their so-called holy books. To put the scientist Kepler at one level with religious/political impostors is an absolute disgrace.
“In 1609, Johannes Kepler finished the first work of genuine science fiction — that is, imaginative storytelling in which sensical science is a major plot device. Somnium, or The Dream, is the fictional account of a young astronomer who voyages to the Moon. Rich in both scientific ingenuity and symbolic play, it is at once a masterwork of the literary imagination and an invaluable scientific document, all the more impressive for the fact that it was written before Galileo pointed the first spyglass at the sky and before Kepler himself had ever looked through a telescope. Kepler knew what we habitually forget — that the locus of possibility expands when the unimaginable is imagined and then made real through systematic effort.”
To call Somnium a piece of “imaginative storytelling” is tempting but utterly misleading. Somnium is an example of a thought experiment. And Kepler drives home the crucial point of the exercise: “Everyone says it is plain that the stars go around the earth while the Earth remains still. I say that it is plain to the eyes of the lunar people that our Earth, which is their Volva, goes around while their moon is still. If it be said that the lunatic perceptions of my moon-dwellers are deceived, I retort with equal justice that the terrestrial senses of the Earth-dwellers are devoid of reason.”
So, the use of the thought experiment is to clarify a feature of the real world. It is a consistent abstraction that gets closer to reality. A narrative, on the other hand, is an inconsistent fantasy that leads away from reality. This is what science fiction does. It is therefore misleading to call Kepler an inventor of science fiction or a storyteller.
“Like any currency of value, the human imagination is a coin with two inseparable sides. It is our faculty of fancy that fills the disquieting gaps of the unknown with the tranquilizing certitudes of myth and superstition, that points to magic and witchcraft when common sense and reason fail to unveil causality. But that selfsame faculty is also what leads us to rise above accepted facts, above the limits of the possible established by custom and convention, and reach for new summits of previously unimagined truth. Which way the coin flips depends on the degree of courage, determined by some incalculable combination of nature, culture, and character.”
Right, there is progressive use of abstraction and regressive use. The latter is characteristic of economics. Economic storytelling is not applied to enlighten the general public but to deceive it. The deeper reason is that economics is not a science but for 200+ years now political agenda pushing in the mantle of science. Economics suffers since the founding fathers from the Fallacy of Insufficient Abstraction.
“By the time of Astronomia nova, Kepler had ample mathematical evidence affirming Copernicus’s theory. But he realized something crucial and abiding about human psychology: The scientific proof was too complex, too cumbersome, too abstract to persuade even his peers, much less the scientifically illiterate public; it wasn’t data that would dismantle their celestial parochialism, but storytelling.”
It is just the opposite in economics. There is much storytelling but neither mathematical nor empirical evidence for any of the major approaches, i.e. for Walrasianism, Keynesianism, Marxianism, Austrianism, or MMT. Narrative economics is proto-scientific garbage.
For more details see
Egmont Kakarot-Handtke
* brainpickings
Related 'How economists became the scientific laughing stock' and 'Econogenics: economists pose a hazard to their fellow citizens' and 'Economics is a science? You must be joking!' and 'The economist as stand-up comedian' and 'Economics: The greatest scientific fraud in modern times' and 'Macroeconomics: Economists are too stupid for science' and 'Links on the Economics Nobel'.
Own post, Twitter-Reference
To recall, science is about true/false and nothing else. Strictly speaking, it is NOT the task of science to convince the “scientifically illiterate public.” The acceptance of a theory depends alone on the proof of material/formal consistency and NOT on the approval of the general public or the number of followers on Twitter. Storytelling, on the other hand, has been the tool of religious/political fraudsters since they put down their fake accounts of creation and evolution/history in their so-called holy books. To put the scientist Kepler at one level with religious/political impostors is an absolute disgrace.
“In 1609, Johannes Kepler finished the first work of genuine science fiction — that is, imaginative storytelling in which sensical science is a major plot device. Somnium, or The Dream, is the fictional account of a young astronomer who voyages to the Moon. Rich in both scientific ingenuity and symbolic play, it is at once a masterwork of the literary imagination and an invaluable scientific document, all the more impressive for the fact that it was written before Galileo pointed the first spyglass at the sky and before Kepler himself had ever looked through a telescope. Kepler knew what we habitually forget — that the locus of possibility expands when the unimaginable is imagined and then made real through systematic effort.”
To call Somnium a piece of “imaginative storytelling” is tempting but utterly misleading. Somnium is an example of a thought experiment. And Kepler drives home the crucial point of the exercise: “Everyone says it is plain that the stars go around the earth while the Earth remains still. I say that it is plain to the eyes of the lunar people that our Earth, which is their Volva, goes around while their moon is still. If it be said that the lunatic perceptions of my moon-dwellers are deceived, I retort with equal justice that the terrestrial senses of the Earth-dwellers are devoid of reason.”
So, the use of the thought experiment is to clarify a feature of the real world. It is a consistent abstraction that gets closer to reality. A narrative, on the other hand, is an inconsistent fantasy that leads away from reality. This is what science fiction does. It is therefore misleading to call Kepler an inventor of science fiction or a storyteller.
“Like any currency of value, the human imagination is a coin with two inseparable sides. It is our faculty of fancy that fills the disquieting gaps of the unknown with the tranquilizing certitudes of myth and superstition, that points to magic and witchcraft when common sense and reason fail to unveil causality. But that selfsame faculty is also what leads us to rise above accepted facts, above the limits of the possible established by custom and convention, and reach for new summits of previously unimagined truth. Which way the coin flips depends on the degree of courage, determined by some incalculable combination of nature, culture, and character.”
Right, there is progressive use of abstraction and regressive use. The latter is characteristic of economics. Economic storytelling is not applied to enlighten the general public but to deceive it. The deeper reason is that economics is not a science but for 200+ years now political agenda pushing in the mantle of science. Economics suffers since the founding fathers from the Fallacy of Insufficient Abstraction.
“By the time of Astronomia nova, Kepler had ample mathematical evidence affirming Copernicus’s theory. But he realized something crucial and abiding about human psychology: The scientific proof was too complex, too cumbersome, too abstract to persuade even his peers, much less the scientifically illiterate public; it wasn’t data that would dismantle their celestial parochialism, but storytelling.”
It is just the opposite in economics. There is much storytelling but neither mathematical nor empirical evidence for any of the major approaches, i.e. for Walrasianism, Keynesianism, Marxianism, Austrianism, or MMT. Narrative economics is proto-scientific garbage.
For more details see
- Narrative economics and the imperatives of the sitcom
- Economics: stories, narratives, and disinformation
- How the representative economist gets it wrong big-time
- Economics as storytelling and entertainment for the masses
- Economics is not science, not religion, but proto-scientific garbage
- If religion is opium of the people, economics is crack of the people
- Media-fake-farce-fraud-storytelling-macro
- The economist as storyteller
- Circus Maximus: Economics as entertainment, personality gossip, virtue signaling, and lifestyle promotion
- The apocalypse of stupidity
- Economics ― the science that never was
- How to spot economics trolls
- Cross-references Scientific Incompetence
Egmont Kakarot-Handtke
* brainpickings
Related 'How economists became the scientific laughing stock' and 'Econogenics: economists pose a hazard to their fellow citizens' and 'Economics is a science? You must be joking!' and 'The economist as stand-up comedian' and 'Economics: The greatest scientific fraud in modern times' and 'Macroeconomics: Economists are too stupid for science' and 'Links on the Economics Nobel'.
***
 |
May 13, 2019
Links on Asad Zaman’s ‘Defining Islamic Economics’
Blog-Reference*
There is NO such thing as Islamic, Christian, Buddhist, etcetera economics. Economics defines itself as a science and is therefore fundamentally different from religious beliefs/political ideologies. Science deals with knowledge. Non-scientists know NOTHING. Political/religious economists are NOT scientists but stupid/corrupt storytellers.
“There are always many different opinions and conventions concerning any one problem or subject-matter (such as the gods). This shows that they are not all true. For if they conflict, then at best only one of them can be true. Thus it appears that Parmenides ... was the first to distinguish clearly between truth or reality on the one hand, and convention or conventional opinion (hearsay, plausible myth) on the other ...” (Popper)
To this day, though, economics is NOT a science but political/religious agenda pushing in a scientific/social bluff package. Economics claims to be a science but has not yet managed to live up to the ideal. Strictly speaking, economics is a fraud.
For details see:
► The Supreme Being handed over these Twelve Economics Commandments
► If religion is opium of the people, economics is crack of the people
► Economics is not science, not religion, but proto-scientific garbage
► Confounding Is and Ought: the economist as moralist
► Beware of the moralizing economist
► Knowledge vs. Belief
► What is so great about cargo cult science? or, How economists learned to stop worrying about failure
► Fake religion, fake science, fake news, and false complaints
► Scientists and science actors
► Throw them out! Orthodox and heterodox economists are unfit for science
Egmont Kakarot-Handtke
* An Islamic WorldView
Related 'Economics a science? Surely you're joking, Mr. Cochrane' and 'Economics ― nothing but claptrap, twaddle, drivel, slip-slop, wish-wash, waffle, and proto-scientific garbage' and 'Economics: Science or cheap talk?' and 'Pre-truth and post-truth in economics' and 'Refutation of Asad Zaman’s heterodox methodology: all arguments you ever need' and 'Zamanomics' and 'Economics: The greatest scientific fraud in modern times' and 'The inexorable Paradigm Shift in economics'. For details of the big picture see cross-references Political Economics/Stupidity/Corruption.
There is NO such thing as Islamic, Christian, Buddhist, etcetera economics. Economics defines itself as a science and is therefore fundamentally different from religious beliefs/political ideologies. Science deals with knowledge. Non-scientists know NOTHING. Political/religious economists are NOT scientists but stupid/corrupt storytellers.
“There are always many different opinions and conventions concerning any one problem or subject-matter (such as the gods). This shows that they are not all true. For if they conflict, then at best only one of them can be true. Thus it appears that Parmenides ... was the first to distinguish clearly between truth or reality on the one hand, and convention or conventional opinion (hearsay, plausible myth) on the other ...” (Popper)
To this day, though, economics is NOT a science but political/religious agenda pushing in a scientific/social bluff package. Economics claims to be a science but has not yet managed to live up to the ideal. Strictly speaking, economics is a fraud.
For details see:
► The Supreme Being handed over these Twelve Economics Commandments
► If religion is opium of the people, economics is crack of the people
► Economics is not science, not religion, but proto-scientific garbage
► Confounding Is and Ought: the economist as moralist
► Beware of the moralizing economist
► Knowledge vs. Belief
► What is so great about cargo cult science? or, How economists learned to stop worrying about failure
► Fake religion, fake science, fake news, and false complaints
► Scientists and science actors
► Throw them out! Orthodox and heterodox economists are unfit for science
Egmont Kakarot-Handtke
* An Islamic WorldView
Related 'Economics a science? Surely you're joking, Mr. Cochrane' and 'Economics ― nothing but claptrap, twaddle, drivel, slip-slop, wish-wash, waffle, and proto-scientific garbage' and 'Economics: Science or cheap talk?' and 'Pre-truth and post-truth in economics' and 'Refutation of Asad Zaman’s heterodox methodology: all arguments you ever need' and 'Zamanomics' and 'Economics: The greatest scientific fraud in modern times' and 'The inexorable Paradigm Shift in economics'. For details of the big picture see cross-references Political Economics/Stupidity/Corruption.
January 31, 2019
If religion is the opium of the people, then economics is the crack of the people
Comment on Barkley Rosser on ‘Robert H. Nelson Dies: Religion And Economics’
Blog-Reference
Barkley Rosser summarizes: “A basic theme in all of his [Nelson’s] books is that economics is a form of secular religion that posits a material salvation in some distant future as a result of economic growth and redistribution, a material heaven on earth.”
As Simon Wren-Lewis once observed: “Narratives are a way people can try to understand things they know little about, and most people know little about economics or politics.”
This is an accurate observation. Where knowledge is lacking, a story fills the void. Media of all types have always been in the business of storytelling, entertainment, and agenda-pushing. This goes from the so-called Holy Books to Rome’s Circus Maximus to Hollywood to Paul Krugman’s NYT blather, and to supply-demand-equilibrium textbooks.
Religion and economics indeed have a common denominator. It consists of the triad storytelling/ entertainment/ agenda-pushing.
It may have been the case that religion initially had a genuine spiritual content and an indispensable social function at the interface to the unknown and unknowable. But at some point in history, the priesthood took over, and religion became psychological conditioning and social agenda pushing. With secularization, economists in part took over where the priesthood lost ground.
Religion is about NONENTITIES and belief, science is about REALITY and knowledge. The communicative format of religion is the emotionally charged narrative; the format of science is the materially/formally consistent theory.
Economics is storytelling since the founding fathers. Adam Smith was NOT a scientist: “… he had no such ambitions; in fact, he disliked whatever went beyond plain common sense. He never moved above the heads of even the dullest readers. He led them on gently, encouraging them by trivialities and homely observations, making them feel comfortable all along.” (Schumpeter)
All appearances to the contrary, economics is NOT a science but political agenda pushing. The formats of popular propaganda are the narrative, the talk show, and the shouting match in the political Circus Maximus. For a narrative, there is NO need to satisfy the scientific criteria of material/formal consistency. Basically, a narrative emotionally re-enacts a deep-seated archetype. The three great economic narratives are the story of the Schlauraffen Land of Plenty and Freedom, the story of the Alchemist who transmutes dirt into gold, and the story of the struggle of Capitalists vs Workers.
Economics is a failed science. All attempts to make economics a science remained on the surface. The major approaches — Walrasianism, Keynesianism, Marxianism, Austrianism, MMT — are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got profit ― the foundational concept of the subject matter ― wrong.
With the pluralism of provably false theories, economists have not achieved anything of scientific value but have produced a lot of proto-scientific garbage, vacuous propaganda, breath-taking rhetorical stunts, and brain-dead ideological debates about the material/ moral superiority of Capitalism or Communism.
After 200+ years, the reality content of economics is not significantly higher than that of any religion. The Invisible Hand of supply-demand-equilibrium has always been a NONENTITY just like the innumerable fictions of the priesthoods since time immemorial. Needless to emphasize that Barkley Rosser is part of the degeneration of what was intended as a scientific community to what has now become a coterie of ideological drug dealers.#1
Egmont Kakarot-Handtke
#1 References
• Economics as storytelling and entertainment for the masses
• Economics is not a science, not a religion, but proto-scientific garbage
• Knowledge vs. Belief
• Passionate belief is no substitute for knowledge
• Agenda-pushers and hijackers vs scientists
• Confounding Is and Ought: the economist as moralist
• Separation of politics and economics
• Economics: ‘a tale told by an idiot ... signifying nothing’
• Storytelling vs Theory = Politics vs Science
• The economist as storyteller
• Narrative economics and the imperatives of the sitcom
• Economics: stories, narratives, and disinformation
• Media-fake-farce-fraud-storytelling-macro
• How to save the economy from storytelling economists
• The end of storytelling
• Politics, storytelling, and science
• Economics — from storytelling to science
• Fake religion, fake science, fake news, and false complaints
Related 'The Supreme Being handed over these Twelve Economics Commandments' and 'Circus Maximus: Economics as entertainment, personality gossip, virtue signaling, and lifestyle promotion'.
You say: “You really do need to face up to the fact that there is a scientific economics …”
Microeconomic supply-demand-equilibrium is axiomatically predicated on equilibrium. Equilibrium is a NONENTITY. General Equilibrium with the summum bonum of overall welfare, which is realized by the Invisible Hand, is a NONENTITY. Call it superstition, magical thinking, hallucination, religion, deception, but do NOT call it science.
Macroeconomics is false since Keynes wrote down I=S. The equality/equilibrium of I and S is a NONENTITY. Economists are too stupid for the elementary algebra that underlies macroeconomics. #1
The defective Walrasian microfoundations and the defective Keynesian macrofoundations do NOT fit together. Every economics textbook is an instance of glaring inconsistency. #2
And then there is Barkley Rosser, who maintains with the applause or tacit approval of his academic colleagues that his summary of MbS’s role in the Khashoggi affair: “He is guilty guilty guuilty” is a valid piece of legitimate political economics.
Robert Nelson’s comparison of economics with religion is a distraction at best and deception at worst. The provable fact of the matter is that economics is a failed/fake science. #3
#1 “But economics is not pure mathematics or logic” No, it is pure blather
#2 The father of modern economics and his imbecile kids
#3 There is NO such thing as “smart, honest, honorable economists”
You said: “You really do need to face up to the fact that there is a scientific economics …”
I said: “The provable fact of the matter is that economics is a failed/fake science.”
On Twitter is some news about the AEA for you.
Blog-Reference
Barkley Rosser summarizes: “A basic theme in all of his [Nelson’s] books is that economics is a form of secular religion that posits a material salvation in some distant future as a result of economic growth and redistribution, a material heaven on earth.”
As Simon Wren-Lewis once observed: “Narratives are a way people can try to understand things they know little about, and most people know little about economics or politics.”
This is an accurate observation. Where knowledge is lacking, a story fills the void. Media of all types have always been in the business of storytelling, entertainment, and agenda-pushing. This goes from the so-called Holy Books to Rome’s Circus Maximus to Hollywood to Paul Krugman’s NYT blather, and to supply-demand-equilibrium textbooks.
Religion and economics indeed have a common denominator. It consists of the triad storytelling/ entertainment/ agenda-pushing.
It may have been the case that religion initially had a genuine spiritual content and an indispensable social function at the interface to the unknown and unknowable. But at some point in history, the priesthood took over, and religion became psychological conditioning and social agenda pushing. With secularization, economists in part took over where the priesthood lost ground.
Religion is about NONENTITIES and belief, science is about REALITY and knowledge. The communicative format of religion is the emotionally charged narrative; the format of science is the materially/formally consistent theory.
Economics is storytelling since the founding fathers. Adam Smith was NOT a scientist: “… he had no such ambitions; in fact, he disliked whatever went beyond plain common sense. He never moved above the heads of even the dullest readers. He led them on gently, encouraging them by trivialities and homely observations, making them feel comfortable all along.” (Schumpeter)
All appearances to the contrary, economics is NOT a science but political agenda pushing. The formats of popular propaganda are the narrative, the talk show, and the shouting match in the political Circus Maximus. For a narrative, there is NO need to satisfy the scientific criteria of material/formal consistency. Basically, a narrative emotionally re-enacts a deep-seated archetype. The three great economic narratives are the story of the Schlauraffen Land of Plenty and Freedom, the story of the Alchemist who transmutes dirt into gold, and the story of the struggle of Capitalists vs Workers.
Economics is a failed science. All attempts to make economics a science remained on the surface. The major approaches — Walrasianism, Keynesianism, Marxianism, Austrianism, MMT — are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got profit ― the foundational concept of the subject matter ― wrong.
With the pluralism of provably false theories, economists have not achieved anything of scientific value but have produced a lot of proto-scientific garbage, vacuous propaganda, breath-taking rhetorical stunts, and brain-dead ideological debates about the material/ moral superiority of Capitalism or Communism.
After 200+ years, the reality content of economics is not significantly higher than that of any religion. The Invisible Hand of supply-demand-equilibrium has always been a NONENTITY just like the innumerable fictions of the priesthoods since time immemorial. Needless to emphasize that Barkley Rosser is part of the degeneration of what was intended as a scientific community to what has now become a coterie of ideological drug dealers.#1
Egmont Kakarot-Handtke
#1 References
• Economics as storytelling and entertainment for the masses
• Economics is not a science, not a religion, but proto-scientific garbage
• Knowledge vs. Belief
• Passionate belief is no substitute for knowledge
• Agenda-pushers and hijackers vs scientists
• Confounding Is and Ought: the economist as moralist
• Separation of politics and economics
• Economics: ‘a tale told by an idiot ... signifying nothing’
• Storytelling vs Theory = Politics vs Science
• The economist as storyteller
• Narrative economics and the imperatives of the sitcom
• Economics: stories, narratives, and disinformation
• Media-fake-farce-fraud-storytelling-macro
• How to save the economy from storytelling economists
• The end of storytelling
• Politics, storytelling, and science
• Economics — from storytelling to science
• Fake religion, fake science, fake news, and false complaints
Related 'The Supreme Being handed over these Twelve Economics Commandments' and 'Circus Maximus: Economics as entertainment, personality gossip, virtue signaling, and lifestyle promotion'.
***
REPLY to Barkley Rosser on Feb 1You say: “You really do need to face up to the fact that there is a scientific economics …”
Microeconomic supply-demand-equilibrium is axiomatically predicated on equilibrium. Equilibrium is a NONENTITY. General Equilibrium with the summum bonum of overall welfare, which is realized by the Invisible Hand, is a NONENTITY. Call it superstition, magical thinking, hallucination, religion, deception, but do NOT call it science.
Macroeconomics is false since Keynes wrote down I=S. The equality/equilibrium of I and S is a NONENTITY. Economists are too stupid for the elementary algebra that underlies macroeconomics. #1
The defective Walrasian microfoundations and the defective Keynesian macrofoundations do NOT fit together. Every economics textbook is an instance of glaring inconsistency. #2
And then there is Barkley Rosser, who maintains with the applause or tacit approval of his academic colleagues that his summary of MbS’s role in the Khashoggi affair: “He is guilty guilty guuilty” is a valid piece of legitimate political economics.
Robert Nelson’s comparison of economics with religion is a distraction at best and deception at worst. The provable fact of the matter is that economics is a failed/fake science. #3
#1 “But economics is not pure mathematics or logic” No, it is pure blather
#2 The father of modern economics and his imbecile kids
#3 There is NO such thing as “smart, honest, honorable economists”
***
REPLY to Barkley Rosser on Feb 12You said: “You really do need to face up to the fact that there is a scientific economics …”
I said: “The provable fact of the matter is that economics is a failed/fake science.”
On Twitter is some news about the AEA for you.
January 9, 2018
Economics for believers
Comment on Andrew Anderson on Daniel José Camacho on ‘The deficit doesn’t matter: thinking morally about the economy with Stephanie Kelton’
Blog-Reference and Blog-Reference on Mar 29 adapted to context
Egmont Kakarot-Handtke
#1 The strict separation of the scientific realm and the political realm is necessary because politics always and everywhere corrupts science. This point has been made abundantly clear by J. S. Mill: “A scientific observer or reasoner, merely as such, is not an adviser for practice. His part is only to show that certain consequences follow from certain causes, and that to obtain certain ends, certain means are the most effectual. Whether the ends themselves are such as ought to be pursued, and if so, in what cases and to how great a length, it is no part of his business as a cultivator of science to decide, and science alone will never qualify him for the decision.” For details see Throw them out! Orthodox and heterodox economists are unfit for science and The end of political economics
#2 If it isn’t macro-axiomatized, it isn’t economics
#3 Economics is not a science, not a religion, but proto-scientific garbage
Related 'MMT and grassroots movements' and 'The irrelevance of populism for economics' and 'The Supreme Being handed over these Twelve Economics Commandments'
Blog-Reference and Blog-Reference on Mar 29 adapted to context
The Lord spoke out of the bush and handed over these
Twelve Economics Commandments:
1. Never cite the Bible or other religious texts in an economic argument.
2. Maintain the strict separation of science and religion under all circumstances.
3. Maintain the strict separation of science and politics under all circumstances.#1
4. Do not dabble in Psychology, Sociology, Anthropology, History, Political Science, Social Philosophy, or any other of the so-called social sciences.
5. Do not believe: prove.
6. Figure out how the actual economic system works and communicate your results in the format of a materially/formally consistent theory.
7. Absolutely refrain from storytelling, metaphors, analogies, narratives, gossip, insinuation, second-guessing, filibuster, propaganda, disinformation, and other rhetorical means.
8. Do not apply Methodological Individualism/Microfoundations.#2
9. Do not moralize. The subject matter of economics is IS not OUGHT. How the Good Society can be realized has to be determined in the political sphere. See 3.
10. Be, first of all, aware that there are knowledge and opinion, science and non-science, scientific standards/ethics, and anything-goes, true and false with nothing in-between. The ethics of science is objectivity, i.e. material and formal consistency. The objective of economics is the true theory.
11. Rest assured that those who violate scientific standards/ethics go to hell and will be tortured in all eternity with the senseless blather of Walrasianism, Keynesianism, Marxianism, Austrianism, and Pluralism.#3
12. Make no mistake: alone scientists will go to heaven. As you can easily imagine, the Lord will NOT share eternity with morons, imbeciles, agenda-pushers, blatherers, believers, and fake scientists.
Egmont Kakarot-Handtke
#1 The strict separation of the scientific realm and the political realm is necessary because politics always and everywhere corrupts science. This point has been made abundantly clear by J. S. Mill: “A scientific observer or reasoner, merely as such, is not an adviser for practice. His part is only to show that certain consequences follow from certain causes, and that to obtain certain ends, certain means are the most effectual. Whether the ends themselves are such as ought to be pursued, and if so, in what cases and to how great a length, it is no part of his business as a cultivator of science to decide, and science alone will never qualify him for the decision.” For details see Throw them out! Orthodox and heterodox economists are unfit for science and The end of political economics
#2 If it isn’t macro-axiomatized, it isn’t economics
#3 Economics is not a science, not a religion, but proto-scientific garbage
Related 'MMT and grassroots movements' and 'The irrelevance of populism for economics' and 'The Supreme Being handed over these Twelve Economics Commandments'
July 11, 2017
Economics is not science, not religion, but proto-scientific garbage
Comment on John Rapley, TheGuardian, on ‘How economics became a religion’
Article-Reference and Blog-Reference on Jul 12 and Blog-Reference and Blog-Reference on Jul 13 and Blog-Reference on Jul 19
Economists tell the world each year in no uncertain terms that economics is science by awarding this prize “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”. The claim is provably false. So, is it true that economics is some kind of worldly religion with economists as a priesthood, as John Rapley claims? No, economics is neither a science nor a religion but a cargo cult science. Failed scientists are something different from priests. What they have in common, though, is that they are both storytellers in the political Circus Maximus.
Since Adam Smith/Karl Marx economists are in a state of incorrigible self-deception: “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.” (Feynman)#1
The fact is, there is no such thing as economics. There are TWO economixes: 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 have to be strictly adhered to.
Theoretical economics consists of the main approaches Walrasianism, Keynesianism, Marxianism, and Austrianism which are mutually contradictory, axiomatically false, materially/formally inconsistent, and which got the foundational economic concept of profit wrong. What we actually have is the pluralism of provably false theories. This means that economic policy guidance since the iconic storytellers Adam Smith/Karl Marx has never had valid scientific foundations.
Theoretical economics is scientifically worthless. But this does not matter much as long as it is politically useful. And this is always the case because economics is a rummage table of opinions.
The fact is that economists simply do not know how the economy works. This is not a big issue as long as the economy keeps random-walking on the broad green carpet of acceptable or tolerable performance. It becomes an issue once the economy has landed in the ditch.
This, then, is the favorable moment to reposition economics. The claim to be a science goes down the drain: “The hubris in economics came not from a moral failing among economists, but from a false conviction: the belief that theirs was a science. It neither is nor can be one, and has always operated more like a church. You just have to look at its history to realise that.” (Rapley)
Suddenly, after 150+ years, everybody becomes aware that the whole analytical superstructure of economics had been built upon false premises: “For starters, it rests on a set of premises about the world, not as it is, but as economists would like it to be. Just as any religious service includes a profession of faith, membership in the priesthood of economics entails certain core convictions about human nature.” (Rapley)
What, then, are these premises? Orthodox economics is based upon the Walrasian axiom set = microfoundations: “HC1 economic agents have preferences over outcomes; HC2 agents individually optimize subject to constraints; HC3 agent choice is manifest in interrelated markets; HC4 agents have full relevant knowledge; HC5 observable outcomes are coordinated, and must be discussed with reference to equilibrium states.” (Weintraub)
Obviously, this axiom set contains three NONENTITIES: (i) constrained optimization (HC2), (ii) rational expectations (HC4), (iii) equilibrium (HC5). Every theory/model that contains a nonentity is A PRIORI false. However, this is the authoritative definition of economics: “It is a touchstone of accepted economics that all explanations must run in terms of the actions and reactions of individuals. Our behavior in judging economic research, in peer review of papers and research, and in promotions, includes the criterion that in principle the behavior we explain and the policies we propose are explicable in terms of individuals, …” (Arrow)
The first thing to notice is that economics is ill-defined. Economics is not at all about Human Nature/motives/behavior/action ― this is the subject matter of psychology, sociology, anthropology, and so on ― but about the nature/behavior of the economic system.#2 Methodologically, behavioral economics is the wrong approach because NO way leads from understanding human behavior to understanding how the actual economy works.
The major approaches are axiomatically false and materially/formally inconsistent. What we actually have is the pluralism of false theories/models. Needless to emphasize that the pluralism of provably false theories is scientifically unacceptable.
Economics is NOT a science and neither orthodox nor heterodox economists are scientists. They have never been anything else than substandard thinkers, storytellers, and agenda pushers. Because the axiomatic foundations of both microeconomics and macroeconomics are false, all modern economics textbooks are false. This has nothing to do with religion or an economics priesthood but with manifest scientific incompetence.
Egmont Kakarot-Handtke
#1 What is so great about cargo cult science? or, How economists learned to stop worrying about failure
#2 If it isn’t macro-axiomatized, it isn’t economics
Related 'All models are false because all economists are stupid' and 'Economics between science and magic' and 'Economics between physics and psychiatry' and 'Economists and the destructive power of stupidity' and 'If religion is opium of the people, economics is crack of the people' and 'Fake religion, fake science, fake news, and false complaints'. For details of the big picture see cross-references Incompetence and cross-references Paradigm Shift.
Article-Reference and Blog-Reference on Jul 12 and Blog-Reference and Blog-Reference on Jul 13 and Blog-Reference on Jul 19
Economists tell the world each year in no uncertain terms that economics is science by awarding this prize “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”. The claim is provably false. So, is it true that economics is some kind of worldly religion with economists as a priesthood, as John Rapley claims? No, economics is neither a science nor a religion but a cargo cult science. Failed scientists are something different from priests. What they have in common, though, is that they are both storytellers in the political Circus Maximus.
Since Adam Smith/Karl Marx economists are in a state of incorrigible self-deception: “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.” (Feynman)#1
The fact is, there is no such thing as economics. There are TWO economixes: 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 have to be strictly adhered to.
Theoretical economics consists of the main approaches Walrasianism, Keynesianism, Marxianism, and Austrianism which are mutually contradictory, axiomatically false, materially/formally inconsistent, and which got the foundational economic concept of profit wrong. What we actually have is the pluralism of provably false theories. This means that economic policy guidance since the iconic storytellers Adam Smith/Karl Marx has never had valid scientific foundations.
Theoretical economics is scientifically worthless. But this does not matter much as long as it is politically useful. And this is always the case because economics is a rummage table of opinions.
The fact is that economists simply do not know how the economy works. This is not a big issue as long as the economy keeps random-walking on the broad green carpet of acceptable or tolerable performance. It becomes an issue once the economy has landed in the ditch.
This, then, is the favorable moment to reposition economics. The claim to be a science goes down the drain: “The hubris in economics came not from a moral failing among economists, but from a false conviction: the belief that theirs was a science. It neither is nor can be one, and has always operated more like a church. You just have to look at its history to realise that.” (Rapley)
Suddenly, after 150+ years, everybody becomes aware that the whole analytical superstructure of economics had been built upon false premises: “For starters, it rests on a set of premises about the world, not as it is, but as economists would like it to be. Just as any religious service includes a profession of faith, membership in the priesthood of economics entails certain core convictions about human nature.” (Rapley)
What, then, are these premises? Orthodox economics is based upon the Walrasian axiom set = microfoundations: “HC1 economic agents have preferences over outcomes; HC2 agents individually optimize subject to constraints; HC3 agent choice is manifest in interrelated markets; HC4 agents have full relevant knowledge; HC5 observable outcomes are coordinated, and must be discussed with reference to equilibrium states.” (Weintraub)
Obviously, this axiom set contains three NONENTITIES: (i) constrained optimization (HC2), (ii) rational expectations (HC4), (iii) equilibrium (HC5). Every theory/model that contains a nonentity is A PRIORI false. However, this is the authoritative definition of economics: “It is a touchstone of accepted economics that all explanations must run in terms of the actions and reactions of individuals. Our behavior in judging economic research, in peer review of papers and research, and in promotions, includes the criterion that in principle the behavior we explain and the policies we propose are explicable in terms of individuals, …” (Arrow)
The first thing to notice is that economics is ill-defined. Economics is not at all about Human Nature/motives/behavior/action ― this is the subject matter of psychology, sociology, anthropology, and so on ― but about the nature/behavior of the economic system.#2 Methodologically, behavioral economics is the wrong approach because NO way leads from understanding human behavior to understanding how the actual economy works.
The major approaches are axiomatically false and materially/formally inconsistent. What we actually have is the pluralism of false theories/models. Needless to emphasize that the pluralism of provably false theories is scientifically unacceptable.
Economics is NOT a science and neither orthodox nor heterodox economists are scientists. They have never been anything else than substandard thinkers, storytellers, and agenda pushers. Because the axiomatic foundations of both microeconomics and macroeconomics are false, all modern economics textbooks are false. This has nothing to do with religion or an economics priesthood but with manifest scientific incompetence.
Egmont Kakarot-Handtke
#1 What is so great about cargo cult science? or, How economists learned to stop worrying about failure
#2 If it isn’t macro-axiomatized, it isn’t economics
Related 'All models are false because all economists are stupid' and 'Economics between science and magic' and 'Economics between physics and psychiatry' and 'Economists and the destructive power of stupidity' and 'If religion is opium of the people, economics is crack of the people' and 'Fake religion, fake science, fake news, and false complaints'. For details of the big picture see cross-references Incompetence and cross-references Paradigm Shift.
September 20, 2016
Scientists and science actors
Comment on Lars Syll on ‘Chicago drivel — a sure way to get a ‘Nobel prize’ in economics’
Blog-Reference and Blog-Reference
Personal experience makes only a tiny part of what every human knows about the world/ universe and other humans, the greater part stems from myth/religion/philosophy/ science. Myth/religion/philosophy is storytelling and does not satisfy the scientific criteria of logical and empirical consistency. Storytelling is easy, to establish consistency is hard. From the history of the last 5000 years, we know that stories sell well, the absurder the better. The average person prefers belief/opinion (= doxa) to knowledge (= episteme) and thinks more about natural/supernatural persons/personifications and less about the universe and its sub-systems. Because of this, nearly 100 percent of human communication consists of gossip.
A case in point is economics. What Thomas Sargent tells his students boils down to: (i) humans respond to incentives, (ii) one cannot always get what one wants, (iii) in equilibrium economic agents are satisfied, (iv) sometimes people/governments keep their promises, sometimes not, (v) people try to get more out of the social pot than they put in, (vi) it is difficult/impossible to know other peoples’ motives/preferences and to forecast their actions. (See intro)
This is folk psychology and folk sociology — PsySoc for short. The economist Sargent tells his students how humans work but not how the economy works. The main reason is that Sargent and his fellow economists at Chicago, Berkeley, Harvard, and elsewhere do not know how the economy works.
This would not be a big issue, after all, people talk most of the time about NONENTITIES and things they know nothing about. To believe in standard economics is in no way different from the belief in the myths of ancient goat herders. The real trouble with economics begins here: “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.
The keyword is science[s]. Why not simply “Bank of Sweden Prize in Economics”? The original title clearly communicates the claim that economics is a science. This claim is as old as Adam Smith/Karl Marx. But economists never lived up to the claim.
Science is well-defined by the criteria of formal and material consistency: “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, 1994)
Neither orthodox nor heterodox economics satisfies the criteria of formal and material consistency. Worse, economists violate scientific standards since the founding fathers. There is no exception: Walrasian, Keynesian, Marxian, or Austrian economics is provably inconsistent.
There are political economics and theoretical economics. The founding fathers were straightforward people and called themselves political economists, that is, they left no doubt that their main business was agenda pushing. Economists never got out of political economics. In other words, theoretical economics (= science) ultimately could not emancipate itself from political economics (= agenda-pushing). And this is how economics became one of the most embarrassing failures in the history of scientific thought.
Economics is not a science, but what Feynman famously called a cargo cult science. Accordingly, economists are not scientists but science actors. The difference is this: “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, 1997, p. 1)
Not only the Chicago version but economics in all its orthodox and heterodox variants is unacceptable proto-scientific garbage. The first thing to do is to rename the most prestigious economics prize into “Bank of Sweden Oscar for the best science actor/actress.”
Egmont Kakarot-Handtke
References
Haack, S. (1997). Science, Scientism, and Anti-Science in the Age of Preposterism. Skeptical Inquirer, 21(6): 1–7. URL
Related 'Feeble minds, shaky assumptions, and the inevitable failure of economics' and 'How to get out of the Econ 101 PsySoc woods' and 'Economics is NOT a science of behavior' and 'From PsySoc to SysHum' and 'The happy end of the social science delusion' and 'The Science-of-Man fallacy' and 'PsySoc — the scourge of economics' and 'A farewell to PsySoc economics'.
Your argument adds nothing to the discussion but distracts from the main point. The question is: Is the theory/model true or false. The character of the author, his CV, and what his motives might be is ultimately irrelevant. Science is about proof and not about personality or credibility.
“Remember: occasionally, it may be an interesting question to ask why a man says what he says; but whatever the answer, it does not tell us anything about whether what he says is true or false.” (Schumpeter)#1
Chicago economics is provably false. The same holds for Cambridge economics. It is irrelevant whether Cambridge is regarded as politically more leftist and Chicago more rightist. The point is that both Chicago and Cambridge produce proto-scientific garbage.
#1 See also the first 60 seconds of Feynman on Scientific Method on YouTube
Blog-Reference and Blog-Reference
Personal experience makes only a tiny part of what every human knows about the world/ universe and other humans, the greater part stems from myth/religion/philosophy/ science. Myth/religion/philosophy is storytelling and does not satisfy the scientific criteria of logical and empirical consistency. Storytelling is easy, to establish consistency is hard. From the history of the last 5000 years, we know that stories sell well, the absurder the better. The average person prefers belief/opinion (= doxa) to knowledge (= episteme) and thinks more about natural/supernatural persons/personifications and less about the universe and its sub-systems. Because of this, nearly 100 percent of human communication consists of gossip.
A case in point is economics. What Thomas Sargent tells his students boils down to: (i) humans respond to incentives, (ii) one cannot always get what one wants, (iii) in equilibrium economic agents are satisfied, (iv) sometimes people/governments keep their promises, sometimes not, (v) people try to get more out of the social pot than they put in, (vi) it is difficult/impossible to know other peoples’ motives/preferences and to forecast their actions. (See intro)
This is folk psychology and folk sociology — PsySoc for short. The economist Sargent tells his students how humans work but not how the economy works. The main reason is that Sargent and his fellow economists at Chicago, Berkeley, Harvard, and elsewhere do not know how the economy works.
This would not be a big issue, after all, people talk most of the time about NONENTITIES and things they know nothing about. To believe in standard economics is in no way different from the belief in the myths of ancient goat herders. The real trouble with economics begins here: “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.
The keyword is science[s]. Why not simply “Bank of Sweden Prize in Economics”? The original title clearly communicates the claim that economics is a science. This claim is as old as Adam Smith/Karl Marx. But economists never lived up to the claim.
Science is well-defined by the criteria of formal and material consistency: “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, 1994)
Neither orthodox nor heterodox economics satisfies the criteria of formal and material consistency. Worse, economists violate scientific standards since the founding fathers. There is no exception: Walrasian, Keynesian, Marxian, or Austrian economics is provably inconsistent.
There are political economics and theoretical economics. The founding fathers were straightforward people and called themselves political economists, that is, they left no doubt that their main business was agenda pushing. Economists never got out of political economics. In other words, theoretical economics (= science) ultimately could not emancipate itself from political economics (= agenda-pushing). And this is how economics became one of the most embarrassing failures in the history of scientific thought.
Economics is not a science, but what Feynman famously called a cargo cult science. Accordingly, economists are not scientists but science actors. The difference is this: “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, 1997, p. 1)
Not only the Chicago version but economics in all its orthodox and heterodox variants is unacceptable proto-scientific garbage. The first thing to do is to rename the most prestigious economics prize into “Bank of Sweden Oscar for the best science actor/actress.”
Egmont Kakarot-Handtke
References
Haack, S. (1997). Science, Scientism, and Anti-Science in the Age of Preposterism. Skeptical Inquirer, 21(6): 1–7. URL
Related 'Feeble minds, shaky assumptions, and the inevitable failure of economics' and 'How to get out of the Econ 101 PsySoc woods' and 'Economics is NOT a science of behavior' and 'From PsySoc to SysHum' and 'The happy end of the social science delusion' and 'The Science-of-Man fallacy' and 'PsySoc — the scourge of economics' and 'A farewell to PsySoc economics'.
***
REPLY to Peter on Sep 21Your argument adds nothing to the discussion but distracts from the main point. The question is: Is the theory/model true or false. The character of the author, his CV, and what his motives might be is ultimately irrelevant. Science is about proof and not about personality or credibility.
“Remember: occasionally, it may be an interesting question to ask why a man says what he says; but whatever the answer, it does not tell us anything about whether what he says is true or false.” (Schumpeter)#1
Chicago economics is provably false. The same holds for Cambridge economics. It is irrelevant whether Cambridge is regarded as politically more leftist and Chicago more rightist. The point is that both Chicago and Cambridge produce proto-scientific garbage.
#1 See also the first 60 seconds of Feynman on Scientific Method on YouTube
October 10, 2015
Passionate belief is no substitute for knowledge
Comment on Asad Zaman on ‘The rise and fall of logical positivism’
Blog-Reference
With regard to econometrics, I agree with you that Orthodoxy messed the whole thing up. #1 This is bad enough; however, it is only a secondary effect. The root cause is that Orthodoxy as a whole is unacceptable as a scientific theory because it is based on NONENTITIES. Roughly speaking, if one starts with utility, constrained optimization, equilibrium, etc., and then goes on to test for the equilibrium price, one is bound to fail — not because the statistical methods are defective but because the hypothesis to be tested has no real-world content.
Empirical verification/falsification plays a decisive role in demarcation, which in turn is the central issue of science since the ancient Greeks introduced the distinction between opinion and knowledge.
“There are always many different opinions and conventions concerning any one problem or subject-matter (such as the gods). This shows that they are not all true. For if they conflict, then at best only one of them can be true. Thus it appears that Parmenides ... was the first to distinguish clearly between truth or reality on the one hand, and convention or conventional opinion (hearsay, plausible myth) on the other ...” (Popper, 1994, 39-40)
For more than 2000 years, it has been known that science is about knowledge and that religion is about belief. Obviously, you cannot get your head around this fundamental point: “These debates often get clouded by strong emotional attachments to science or religion — both sides having passionate believers.” (your post of 10 October)
There is, to begin with, no place for passionate believers in science. All great scientists pleaded for the utmost degree of objectivity, and that meant keeping belief, #2 passion, and other human-all-too-human failings out of the discourse. Science is about true/false, and that is that. “Like Planck, Einstein viewed the human element of any physical theory as essentially arbitrary, something that should be purged on realization of the final true theory.” (Mirowski, 2004, p. 159)
Heterodoxy has a choice: it either drowns in beliefs, opinions, emotions, wish-wash, ad hominem argument, and anything goes (= political economics) or it eventually establishes material and formal consistency (= theoretical economics). #3
Egmont Kakarot-Handtke
References
Mirowski, P. (2004). The Effortless Economy of Science? Durham, London: Duke University Press.
Popper, K. R. (1994). The Myth of the Framework. In Defence of Science and Rationality. London, New York: Routledge.
#1 Redefining economics
#2 “The animistic fallacy is the informal fallacy of arguing that an event or situation necessarily arose because someone intentionally acted to cause it. While it could be that someone set out to effect a specific goal, the fallacy appears in an argument that states this must be the case. The name of the fallacy comes from the animistic belief that changes in the physical world are the work of conscious spirits.” (Wikipedia)
#3 For a start, see cross-references New curriculum
Related 'Demarcation works, but it takes longer in economics'
Blog-Reference
With regard to econometrics, I agree with you that Orthodoxy messed the whole thing up. #1 This is bad enough; however, it is only a secondary effect. The root cause is that Orthodoxy as a whole is unacceptable as a scientific theory because it is based on NONENTITIES. Roughly speaking, if one starts with utility, constrained optimization, equilibrium, etc., and then goes on to test for the equilibrium price, one is bound to fail — not because the statistical methods are defective but because the hypothesis to be tested has no real-world content.
Empirical verification/falsification plays a decisive role in demarcation, which in turn is the central issue of science since the ancient Greeks introduced the distinction between opinion and knowledge.
“There are always many different opinions and conventions concerning any one problem or subject-matter (such as the gods). This shows that they are not all true. For if they conflict, then at best only one of them can be true. Thus it appears that Parmenides ... was the first to distinguish clearly between truth or reality on the one hand, and convention or conventional opinion (hearsay, plausible myth) on the other ...” (Popper, 1994, 39-40)
For more than 2000 years, it has been known that science is about knowledge and that religion is about belief. Obviously, you cannot get your head around this fundamental point: “These debates often get clouded by strong emotional attachments to science or religion — both sides having passionate believers.” (your post of 10 October)
There is, to begin with, no place for passionate believers in science. All great scientists pleaded for the utmost degree of objectivity, and that meant keeping belief, #2 passion, and other human-all-too-human failings out of the discourse. Science is about true/false, and that is that. “Like Planck, Einstein viewed the human element of any physical theory as essentially arbitrary, something that should be purged on realization of the final true theory.” (Mirowski, 2004, p. 159)
Heterodoxy has a choice: it either drowns in beliefs, opinions, emotions, wish-wash, ad hominem argument, and anything goes (= political economics) or it eventually establishes material and formal consistency (= theoretical economics). #3
Egmont Kakarot-Handtke
References
Mirowski, P. (2004). The Effortless Economy of Science? Durham, London: Duke University Press.
Popper, K. R. (1994). The Myth of the Framework. In Defence of Science and Rationality. London, New York: Routledge.
#1 Redefining economics
#2 “The animistic fallacy is the informal fallacy of arguing that an event or situation necessarily arose because someone intentionally acted to cause it. While it could be that someone set out to effect a specific goal, the fallacy appears in an argument that states this must be the case. The name of the fallacy comes from the animistic belief that changes in the physical world are the work of conscious spirits.” (Wikipedia)
#3 For a start, see cross-references New curriculum
Related 'Demarcation works, but it takes longer in economics'
September 7, 2015
Confounding Is and Ought: the economist as moralist
Comment on Robert Reich on ‘What Happened to the Moral Center of American Capitalism?’
Blog-Reference
What is the proper job of the economist qua scientist? “A scientific observer or reasoner, merely as such, is not an adviser for practice. His part is only to show that certain consequences follow from certain causes, and that to obtain certain ends, certain means are the most effectual. Whether the ends themselves are such as ought to be pursued, and if so, in what cases and to how great a length, it is no part of his business as a cultivator of science to decide, and science alone will never qualify him for the decision.” (Mill, 2006, p. 950)
The economist qua scientist brings knowledge to the table, not his personal opinion. It is the legitimate political institution that determines the political ends. This is the Ought-part, science is concerned exclusively with the Is-part of reality. The Is/Ought difference is reasonably clear since Hume but, beginning with Adam Smith, it has been mostly ignored by economists.
However, for science this difference is fundamental. Moralizing and scientific discourse are strictly antithetical. Economists never got the point. “Economists think of themselves as scientists, but ... they are more like theologians.” (Nelson, 2006, p. xv)
Economics is a failed science because moralists always outnumbered genuine enquirers. “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, 1997, p. 1)
The economist who moralizes and politicizes is out of science. As Keen put it: “Even some of the most committed economists have conceded that, if economics is to become less of a religion and more of a science, then the foundations of economics should be torn down and replaced.” (2011, p. 35)
A moralizing economist is a living proof that scientific ethics, which consists of never trespassing the demarcation line between Is and Ought, is desperately lacking.
Egmont Kakarot-Handtke
References
Haack, S. (1997). Science, Scientism, and Anti-Science in the Age of Preposterism. Skeptical Inquirer, 21(6): 1–7. URL
Keen, S. (2011). Debunking Economics. London, New York: Zed Books, rev. edition.
Mill, J. S. (2006). A System of Logic Ratiocinative and Inductive. Being a Connected View of the Principles of Evidence and the Methods of Scientific Investigation, volume 8 of Collected Works of John Stuart Mill. Indianapolis: Liberty Fund.
Nelson, R. H. (2006). Economics as Religion: From Samuelson to Chicago and Beyond. Pennsylvania: Pennsylvania State University Press.
Related 'Scientific suicide in the revolving door' and 'When fake scientists call out on fake politicians' and 'Economics and corruption' and 'FakeNews, FakeScience: economics in the information age' and 'How economists murdered the economy and got away with it' and 'Krugman and the scientific implosion of economics' and 'On economists’ stupidity' and 'Economists’ proto-scientific shell games'
“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, 1991)
It is widely known that economists still lack the true theory and from this follows de facto that it is beyond their means to offer scientifically valid advice. Strictly speaking, scientific ethics is not yet an issue for economists because economics has not risen above the proto-scientific level.
The idea, for example, that Hayek gave Mrs. Thatcher scientific advice is of unsurpassable silliness. Things have not improved since then.
Blog-Reference
What is the proper job of the economist qua scientist? “A scientific observer or reasoner, merely as such, is not an adviser for practice. His part is only to show that certain consequences follow from certain causes, and that to obtain certain ends, certain means are the most effectual. Whether the ends themselves are such as ought to be pursued, and if so, in what cases and to how great a length, it is no part of his business as a cultivator of science to decide, and science alone will never qualify him for the decision.” (Mill, 2006, p. 950)
The economist qua scientist brings knowledge to the table, not his personal opinion. It is the legitimate political institution that determines the political ends. This is the Ought-part, science is concerned exclusively with the Is-part of reality. The Is/Ought difference is reasonably clear since Hume but, beginning with Adam Smith, it has been mostly ignored by economists.
However, for science this difference is fundamental. Moralizing and scientific discourse are strictly antithetical. Economists never got the point. “Economists think of themselves as scientists, but ... they are more like theologians.” (Nelson, 2006, p. xv)
Economics is a failed science because moralists always outnumbered genuine enquirers. “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, 1997, p. 1)
The economist who moralizes and politicizes is out of science. As Keen put it: “Even some of the most committed economists have conceded that, if economics is to become less of a religion and more of a science, then the foundations of economics should be torn down and replaced.” (2011, p. 35)
A moralizing economist is a living proof that scientific ethics, which consists of never trespassing the demarcation line between Is and Ought, is desperately lacking.
Egmont Kakarot-Handtke
References
Haack, S. (1997). Science, Scientism, and Anti-Science in the Age of Preposterism. Skeptical Inquirer, 21(6): 1–7. URL
Keen, S. (2011). Debunking Economics. London, New York: Zed Books, rev. edition.
Mill, J. S. (2006). A System of Logic Ratiocinative and Inductive. Being a Connected View of the Principles of Evidence and the Methods of Scientific Investigation, volume 8 of Collected Works of John Stuart Mill. Indianapolis: Liberty Fund.
Nelson, R. H. (2006). Economics as Religion: From Samuelson to Chicago and Beyond. Pennsylvania: Pennsylvania State University Press.
Related 'Scientific suicide in the revolving door' and 'When fake scientists call out on fake politicians' and 'Economics and corruption' and 'FakeNews, FakeScience: economics in the information age' and 'How economists murdered the economy and got away with it' and 'Krugman and the scientific implosion of economics' and 'On economists’ stupidity' and 'Economists’ proto-scientific shell games'
***
ICYMI (DrDick, September 7)“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, 1991)
It is widely known that economists still lack the true theory and from this follows de facto that it is beyond their means to offer scientifically valid advice. Strictly speaking, scientific ethics is not yet an issue for economists because economics has not risen above the proto-scientific level.
The idea, for example, that Hayek gave Mrs. Thatcher scientific advice is of unsurpassable silliness. Things have not improved since then.
July 18, 2015
Knowledge vs Belief
Comment on Asad Zaman on ‘The marginalisation of morality’
Blog-Reference
This blog [RWER] distinguishes itself from all the rest by its title Real-World Economics Review Blog. The keyword is economics. Now, everybody understands that (i) the economy is but one aspect of the real world, and (ii) that economics is the science that tries to find out how the economy works. Hence, economics is restricted with respect to its subject matter and committed to the scientific method.
Since its beginnings, economics has overstepped its narrow limits. The simple reason is that authors, teachers, ideologues, and politicians have consistently tried to instrumentalize economics for other purposes. This gave us political economics in the widest sense, whereby the term political embraces all belief systems, including, of course, religions (Nelson, 2006).
To the extent that theoretical economics has been hijacked by political economics, it has to regain its full independence. That part of economics that has been political from Smith, to Marx, to Hayek, to Keynes, and on to the actual orthodox and heterodox activists has to be clearly separated from science and eventually thrown out.
Theoretical economics is about the world economy. It is not about the Greek, European, or US economy. And it is certainly not at all about the problems of the American educational system. It is the task of American citizens to organize the education of their children. And no economist has any legitimacy in telling anybody how this could or should be done.
Most belief systems are expansionary and rely on the time-tested experience that the best way to propagate belief is to hijack the educational system, including, of course, the universities.
Now, science is about knowledge, and this is the exact opposite of belief. Science restricts itself to things that can be known, and belief systems second-guess things that cannot be known. Science has its own moral standard that is not derived from any belief system. What is most important, though, is that humanity has learned in the course of history that morality is a fundamental human trait that comes before religion or politics. Non-religious people have moral standards that are, on average, higher than those of religious people, who have, again on average, unthinkingly adapted to their rather specific cultural environments.
We may agree with Assad Zaman that morality is at a low ebb in the USA and the world at large. We certainly do not agree that this is due to a lack of religious education.
As economists, we have a problem that has nothing at all to do with morals and belief systems. It is a fact that the scientific level of economics is at a low ebb in the USA and the world at large. As a result, we have no economic theory that satisfies the scientific standards of material and formal consistency. And here moral comes in again. By propagating refuted or irrefutable theories or belief systems, the representative economist violates scientific ethics.
To do some sociology about the deplorable state of American universities is not real-world economics. It is the proper task of Heterodox economics to emancipate economics from all belief systems and to make it a real science that, after 200+ years of groping in the dark, eventually finds out how the actual economy works. #1
Egmont Kakarot-Handtke
References
Nelson, R. H. (2006). Economics as Religion: From Samuelson to Chicago and Beyond. Pennsylvania: Pennsylvania State University Press.
#1 For a start, see the belief-free New Curriculum.
Blog-Reference
This blog [RWER] distinguishes itself from all the rest by its title Real-World Economics Review Blog. The keyword is economics. Now, everybody understands that (i) the economy is but one aspect of the real world, and (ii) that economics is the science that tries to find out how the economy works. Hence, economics is restricted with respect to its subject matter and committed to the scientific method.
Since its beginnings, economics has overstepped its narrow limits. The simple reason is that authors, teachers, ideologues, and politicians have consistently tried to instrumentalize economics for other purposes. This gave us political economics in the widest sense, whereby the term political embraces all belief systems, including, of course, religions (Nelson, 2006).
To the extent that theoretical economics has been hijacked by political economics, it has to regain its full independence. That part of economics that has been political from Smith, to Marx, to Hayek, to Keynes, and on to the actual orthodox and heterodox activists has to be clearly separated from science and eventually thrown out.
Theoretical economics is about the world economy. It is not about the Greek, European, or US economy. And it is certainly not at all about the problems of the American educational system. It is the task of American citizens to organize the education of their children. And no economist has any legitimacy in telling anybody how this could or should be done.
Most belief systems are expansionary and rely on the time-tested experience that the best way to propagate belief is to hijack the educational system, including, of course, the universities.
Now, science is about knowledge, and this is the exact opposite of belief. Science restricts itself to things that can be known, and belief systems second-guess things that cannot be known. Science has its own moral standard that is not derived from any belief system. What is most important, though, is that humanity has learned in the course of history that morality is a fundamental human trait that comes before religion or politics. Non-religious people have moral standards that are, on average, higher than those of religious people, who have, again on average, unthinkingly adapted to their rather specific cultural environments.
We may agree with Assad Zaman that morality is at a low ebb in the USA and the world at large. We certainly do not agree that this is due to a lack of religious education.
As economists, we have a problem that has nothing at all to do with morals and belief systems. It is a fact that the scientific level of economics is at a low ebb in the USA and the world at large. As a result, we have no economic theory that satisfies the scientific standards of material and formal consistency. And here moral comes in again. By propagating refuted or irrefutable theories or belief systems, the representative economist violates scientific ethics.
To do some sociology about the deplorable state of American universities is not real-world economics. It is the proper task of Heterodox economics to emancipate economics from all belief systems and to make it a real science that, after 200+ years of groping in the dark, eventually finds out how the actual economy works. #1
Egmont Kakarot-Handtke
References
Nelson, R. H. (2006). Economics as Religion: From Samuelson to Chicago and Beyond. Pennsylvania: Pennsylvania State University Press.
#1 For a start, see the belief-free New Curriculum.
January 27, 2015
No religion, merely incompetence
Comment on Lars Syll on 'NAIRU — more religion than science'
Blog-Reference
The discussion about NAIRU has always been vacuous because employment is given by the testable formula GraphicAXEC07
For the scientifically valid derivation, see (2014) or (2012).
Egmont Kakarot-Handtke
References
Kakarot-Handtke, E. (2012). Keynes’s Employment Function and the Gratuitous
Phillips Curve Disaster. SSRN Working Paper Series, 2130421: 1–19. URL
Kakarot-Handtke, E. (2014). The Three Fatal Mistakes of Yesterday Economics: Profit, I=S, Employment. SSRN Working Paper Series, 2489792: 1–13. URL
Blog-Reference
The discussion about NAIRU has always been vacuous because employment is given by the testable formula GraphicAXEC07
For the scientifically valid derivation, see (2014) or (2012).
Egmont Kakarot-Handtke
References
Kakarot-Handtke, E. (2012). Keynes’s Employment Function and the Gratuitous
Phillips Curve Disaster. SSRN Working Paper Series, 2130421: 1–19. URL
Kakarot-Handtke, E. (2014). The Three Fatal Mistakes of Yesterday Economics: Profit, I=S, Employment. SSRN Working Paper Series, 2489792: 1–13. URL
December 31, 2014
Agenda pushers and hijackers vs scientists
Comment on Peter Radford on 'DSGE is a plutocratic tool'
Blog-Reference
It is trivial but worth repeating: political economics and theoretical economics are different things. The goal of political economics is to push an agenda, and the goal of theoretical economics is to explain how the economy works. The core problem of economics as a science is, of course, that by its very nature, it is closely entangled with politics. The biggest threat to theoretical economics is that it gets hijacked by those with a political agenda. It does not matter whether this agenda is good or bad in preset moral terms. Science is committed to its own criteria, or it ceases to be science.
But are we not all inescapably involved in the struggle between good and evil? Politics, religion, and philosophy say so. But even if this were true, this would be no justification to hijack science or to let it be hijacked. What has to be recognized is that science is about true/false and not about good/evil. This distinction is part of the demarcation problem, which is the fundamental problem of methodology (Popper, 1980, p. 34). Since the ancient Greeks, the first act of science was to throw out politics, religion, and philosophy.
Because there are theoretical and political economics, there are two types of inquirers.
“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, 1997, p. 1)
Let us make no mistake: politics is legitimate, and influencing public opinion is legitimate, yet all this has nothing to do with science.
“Apologetics may be a laudable objective. Its practical importance is unquestioned. People need to be shown that the institutions of their own society are good, those of others bad. But there is no place for apologetics in science. Scientific economics inquires only into the How and Why, not into the Good or Bad, of what is. From the scientific point of view, preoccupation with Good and Bad is worse than useless since it not only fails to illumine anything but keeps the lightbeam of inquiry from being turned in directions where answers to significant questions can be found.” (Murad, 1953, p. 2)
The classical economists started openly as agenda pushers. They had only different agendas.
Smith: “But in the introduction to Book IV, we read that Political Economy ‘proposes to enrich both the people and the sovereign,’ and it is this definition which expresses both what Smith wanted above everything and what interested his readers more than anything else.” (Schumpeter, 1994, p. 186)
Mill: “... John Stuart Mill wrote ..., that in the years around 1830 his circle (the so-called Philosophical Radicals) had adopted the following programme: they wanted to achieve an improvement in human society by ‘securing full employment at high wages to the whole labouring population’.” (Popper, 1994, p. 188)
The rest: “The old-fashioned political economist adored, as alone capable of redeeming the human race, the glorious principle of individual greed, although, as this principle requires for its action hypocrisy and fraud, he generally threw in some dash of inconsistent concessions to virtue, as a sop to the vulgar Cerberus.” (Peirce, 1931, 1.75)
Marx and Keynes, too, were noteworthy agenda pushers. The same holds for Hayek and Friedman. All these economists used economics for political purposes. This is unacceptable. It does not matter what the respective agenda is ― each attempt to instrumentalize science is unacceptable.
Since Adam Smith, all economists are committed to science as they understand it: “Now there is simply no doubt that whatever was the source of inspiration for Jevons, Menger, and Walras, all three invoked whatever physics they knew to lend prestige to their theoretical innovations. ... Adam Smith, Ricardo, James Mill and McCulloch had been just as eager in earlier days to invoke the name of Newton to legitimize their theoretical claims.” (Blaug, 1989, p. 1226)
What exactly does the commitment to science entail? “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, 1994, p. 31)
Therefore, the core question of theoretical economics is not who benefits from a theory. The core question is how the actual economy works. As a consequence, the decisive argument against DSGE is not that it benefits the Plutocrats but that it does not meet the criteria of material and formal consistency. DSGE is simply proto-scientific garbage.
Egmont Kakarot-Handtke
References
Blaug, M. (1989). Review. Economic Journal, 99(398): 1225–1226. URL
Haack, S. (1997). Science, Scientism, and Anti-Science in the Age of Preposterism. Skeptical Inquirer, 21(6): 1–7. URL → URL
Klant, J. J. (1994). The Nature of Economic Thought. Aldershot, Brookfield: Edward Elgar.
Murad, A. (1953). Questions for Profit Theory. American Journal of Economics and Sociology, 13(1): 1–14. URL
Peirce, C. S. (1931). Collected Papers of Charles Sanders Peirce, Vol. I. Cambridge: Harvard University Press. URL
Popper, K. R. (1980). The Logic of Scientific Discovery. London, Melbourne, Sydney: Hutchison, 10th edition.
Popper, K. R. (1994). The Myth of the Framework. In Defence of Science and Rationality, Chapter Science: Problems, Aims, Responsibilities, 82–111. London, New York: Routledge.
Schumpeter, J. A. (1994). History of Economic Analysis. New York: Oxford University Press.
Blog-Reference
It is trivial but worth repeating: political economics and theoretical economics are different things. The goal of political economics is to push an agenda, and the goal of theoretical economics is to explain how the economy works. The core problem of economics as a science is, of course, that by its very nature, it is closely entangled with politics. The biggest threat to theoretical economics is that it gets hijacked by those with a political agenda. It does not matter whether this agenda is good or bad in preset moral terms. Science is committed to its own criteria, or it ceases to be science.
But are we not all inescapably involved in the struggle between good and evil? Politics, religion, and philosophy say so. But even if this were true, this would be no justification to hijack science or to let it be hijacked. What has to be recognized is that science is about true/false and not about good/evil. This distinction is part of the demarcation problem, which is the fundamental problem of methodology (Popper, 1980, p. 34). Since the ancient Greeks, the first act of science was to throw out politics, religion, and philosophy.
Because there are theoretical and political economics, there are two types of inquirers.
“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, 1997, p. 1)
Let us make no mistake: politics is legitimate, and influencing public opinion is legitimate, yet all this has nothing to do with science.
“Apologetics may be a laudable objective. Its practical importance is unquestioned. People need to be shown that the institutions of their own society are good, those of others bad. But there is no place for apologetics in science. Scientific economics inquires only into the How and Why, not into the Good or Bad, of what is. From the scientific point of view, preoccupation with Good and Bad is worse than useless since it not only fails to illumine anything but keeps the lightbeam of inquiry from being turned in directions where answers to significant questions can be found.” (Murad, 1953, p. 2)
The classical economists started openly as agenda pushers. They had only different agendas.
Smith: “But in the introduction to Book IV, we read that Political Economy ‘proposes to enrich both the people and the sovereign,’ and it is this definition which expresses both what Smith wanted above everything and what interested his readers more than anything else.” (Schumpeter, 1994, p. 186)
Mill: “... John Stuart Mill wrote ..., that in the years around 1830 his circle (the so-called Philosophical Radicals) had adopted the following programme: they wanted to achieve an improvement in human society by ‘securing full employment at high wages to the whole labouring population’.” (Popper, 1994, p. 188)
The rest: “The old-fashioned political economist adored, as alone capable of redeeming the human race, the glorious principle of individual greed, although, as this principle requires for its action hypocrisy and fraud, he generally threw in some dash of inconsistent concessions to virtue, as a sop to the vulgar Cerberus.” (Peirce, 1931, 1.75)
Marx and Keynes, too, were noteworthy agenda pushers. The same holds for Hayek and Friedman. All these economists used economics for political purposes. This is unacceptable. It does not matter what the respective agenda is ― each attempt to instrumentalize science is unacceptable.
Since Adam Smith, all economists are committed to science as they understand it: “Now there is simply no doubt that whatever was the source of inspiration for Jevons, Menger, and Walras, all three invoked whatever physics they knew to lend prestige to their theoretical innovations. ... Adam Smith, Ricardo, James Mill and McCulloch had been just as eager in earlier days to invoke the name of Newton to legitimize their theoretical claims.” (Blaug, 1989, p. 1226)
What exactly does the commitment to science entail? “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, 1994, p. 31)
Therefore, the core question of theoretical economics is not who benefits from a theory. The core question is how the actual economy works. As a consequence, the decisive argument against DSGE is not that it benefits the Plutocrats but that it does not meet the criteria of material and formal consistency. DSGE is simply proto-scientific garbage.
Egmont Kakarot-Handtke
References
Blaug, M. (1989). Review. Economic Journal, 99(398): 1225–1226. URL
Haack, S. (1997). Science, Scientism, and Anti-Science in the Age of Preposterism. Skeptical Inquirer, 21(6): 1–7. URL → URL
Klant, J. J. (1994). The Nature of Economic Thought. Aldershot, Brookfield: Edward Elgar.
Murad, A. (1953). Questions for Profit Theory. American Journal of Economics and Sociology, 13(1): 1–14. URL
Peirce, C. S. (1931). Collected Papers of Charles Sanders Peirce, Vol. I. Cambridge: Harvard University Press. URL
Popper, K. R. (1980). The Logic of Scientific Discovery. London, Melbourne, Sydney: Hutchison, 10th edition.
Popper, K. R. (1994). The Myth of the Framework. In Defence of Science and Rationality, Chapter Science: Problems, Aims, Responsibilities, 82–111. London, New York: Routledge.
Schumpeter, J. A. (1994). History of Economic Analysis. New York: Oxford University Press.
***
Graphic AXEC166
Graphic AXEC108l
***
Institute for Political Economy, Aug 15, 2023
Paul Craig Roberts, Money Is Destroying Science and Scholarship
Moral incompetence or scientific incompetence?
Comment on Editor on 'University economics departments must share the blame'
Blog-Reference
Hugh Goodacre blames academic economics for its indirect or even direct justification of the financial sector's culture of ruthless money-making. And he gives weight to his argument by quoting Krugman stating that 'the economist is a maximizing-minimizing kind of guy.'
It is simply naive to suggest that people in the financial sector (i) need a justification for money-making, and (ii) that they need academic economics for that purpose.
History shows that for any ruthless person in whatever walk of life Darwinism delivers a far stronger justification than the extremum principle. Economics has copied this principle simply from physics and physics ultimately had it from religion.
“Already Maupertuis considered his minimum principle as proof that the world, where among many virtual movements the one leading to maximum effect with minimum effort is realized, is the ‘best of all worlds and work of a purposeful creator. Euler made a similar remark: ‘Since the construction of the whole world is the most eminent and since it originated from the wisest creator, nothing is found in the world which would not show a maximum or minimum characteristic.’ ...” (von Bertalanffy, 1969, p. 75)
Nobody blames physics or religion for the latest financial crisis.
The extremum principle is an almost instinctive and tautological way of explanation: “Throughout its history, the idea of some ‘Fundamental Assumption’, some basic ‘Economic Principle’ about human conduct, from which much or most of economics can ultimately be deduced, has been deeply rooted in the procedure of economic theory. Some such notion is still, in many quarters, dominant at the present time. For example, it has recently been stated that the task of economics is ‘to display the structure and working of the economic cosmos as an outgrowth of the maximum principle’.” (Hutchison, 1937, p. 636)
When Krugman states that 'the economist is a maximizing-minimizing kind of guy' he affirms the trivial fact that he has studied economics and that he thinks that he has understood what economics is all about. And here the problem begins.
Let us make it short: No way leads from a behavioral assumption (optimization or otherwise) to the understanding of how the economy works (2014). The crucial point is that standard economics is based on behavioral axioms (McKenzie, 2008) and this is not a solid enough foundation: “. . . if we wish to place economic science upon a solid basis, we must make it completely independent of psychological assumptions and philosophical hypotheses.” (Slutzky, quoted in Mirowski, 1995, p. 362)
Economists owe the world the true economic theory, that is, a theory that satisfies the scientific standards of material and formal consistency and that explains how the economy works.
Economists have not delivered. That economics is not yet science is the only fact that university departments justly can be blamed for.
Egmont Kakarot-Handtke
References
Hutchison, T. W. (1937). Expectation and Rational Conduct. Zeitschrift für Nationalökonomie / Journal of Economics, 8(5): 636–653. URL
Kakarot-Handtke, E. (2014). The Three Fatal Mistakes of Yesterday Economics: Profit, I=S, Employment. SSRN Working Paper Series, 2489792: 1–13. URL
McKenzie, L. W. (2008). General Equilibrium. In S. N. Durlauf, and L. E. Blume (Eds.), The New Palgrave Dictionary of Economics Online, 1–18. Palgrave Macmillan, 2nd edition. URL
Mirowski, P. (1995). More Heat than Light. Cambridge: Cambridge University Press.
von Bertalanffy, L. (1969). General Systems Theory. New York: Braziller.
Blog-Reference
Hugh Goodacre blames academic economics for its indirect or even direct justification of the financial sector's culture of ruthless money-making. And he gives weight to his argument by quoting Krugman stating that 'the economist is a maximizing-minimizing kind of guy.'
It is simply naive to suggest that people in the financial sector (i) need a justification for money-making, and (ii) that they need academic economics for that purpose.
History shows that for any ruthless person in whatever walk of life Darwinism delivers a far stronger justification than the extremum principle. Economics has copied this principle simply from physics and physics ultimately had it from religion.
“Already Maupertuis considered his minimum principle as proof that the world, where among many virtual movements the one leading to maximum effect with minimum effort is realized, is the ‘best of all worlds and work of a purposeful creator. Euler made a similar remark: ‘Since the construction of the whole world is the most eminent and since it originated from the wisest creator, nothing is found in the world which would not show a maximum or minimum characteristic.’ ...” (von Bertalanffy, 1969, p. 75)
Nobody blames physics or religion for the latest financial crisis.
The extremum principle is an almost instinctive and tautological way of explanation: “Throughout its history, the idea of some ‘Fundamental Assumption’, some basic ‘Economic Principle’ about human conduct, from which much or most of economics can ultimately be deduced, has been deeply rooted in the procedure of economic theory. Some such notion is still, in many quarters, dominant at the present time. For example, it has recently been stated that the task of economics is ‘to display the structure and working of the economic cosmos as an outgrowth of the maximum principle’.” (Hutchison, 1937, p. 636)
When Krugman states that 'the economist is a maximizing-minimizing kind of guy' he affirms the trivial fact that he has studied economics and that he thinks that he has understood what economics is all about. And here the problem begins.
Let us make it short: No way leads from a behavioral assumption (optimization or otherwise) to the understanding of how the economy works (2014). The crucial point is that standard economics is based on behavioral axioms (McKenzie, 2008) and this is not a solid enough foundation: “. . . if we wish to place economic science upon a solid basis, we must make it completely independent of psychological assumptions and philosophical hypotheses.” (Slutzky, quoted in Mirowski, 1995, p. 362)
Economists owe the world the true economic theory, that is, a theory that satisfies the scientific standards of material and formal consistency and that explains how the economy works.
Economists have not delivered. That economics is not yet science is the only fact that university departments justly can be blamed for.
Egmont Kakarot-Handtke
References
Hutchison, T. W. (1937). Expectation and Rational Conduct. Zeitschrift für Nationalökonomie / Journal of Economics, 8(5): 636–653. URL
Kakarot-Handtke, E. (2014). The Three Fatal Mistakes of Yesterday Economics: Profit, I=S, Employment. SSRN Working Paper Series, 2489792: 1–13. URL
McKenzie, L. W. (2008). General Equilibrium. In S. N. Durlauf, and L. E. Blume (Eds.), The New Palgrave Dictionary of Economics Online, 1–18. Palgrave Macmillan, 2nd edition. URL
Mirowski, P. (1995). More Heat than Light. Cambridge: Cambridge University Press.
von Bertalanffy, L. (1969). General Systems Theory. New York: Braziller.
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