The economist as storyteller (II)

Comment on Caitlin Johnstone on ‘Propaganda Is The Root Of All Our Problems’*

Blog-Reference

There is the infinite reality and there is the limited individual consciousness, and between the two is a medium. This epistemological condition has been captured by Plato in the Allegory of the Cave: “Plato has Socrates describe a group of people who have lived chained to the wall of a cave all of their lives, facing a blank wall. The people watch shadows projected on the wall from objects passing in front of a fire behind them, and give names to these shadows. The shadows are the prisoners’ reality. Socrates explains how the philosopher is like a prisoner who is freed from the cave and comes to understand that the shadows on the wall are not reality at all, for he can perceive the true form of reality rather than the manufactured reality that is the shadows seen by the prisoners. The inmates of this place do not even desire to leave their prison; for they know no better life.”#1

The situation has not fundamentally changed since the ancient Greeks. Newspapers, radio, TV, and social media only multiply the shadows on the blank wall. The situation is summarized with the graph AXEC153.#2

There are three relationships between reality and consciousness:
(i) Faithful mapping from A-reality to A'-consciousness.
(ii) Reduction of B-reality to zero, i.e., to conscious non-existence.
(iii) Blowing up NONENTITIES to predominant C'-consciousness.

Alternative (i) is what science/philosophy is supposed to achieve. Alternatives (ii) and (iii) constitute the prisoners’ manufactured reality. As physical force is applied in order to control the physical realm, communicative force is applied to control the mental realm. This communicative force is called propaganda, and it comes either under the religious, political, or entertainment cloak.#3 In the real world, both forces are of roughly equal importance. Professional storytellers (historians, priests, romancers, journalists, movie makers) tend to think that the ‘pen is mightier than the sword’: “As I never tire of saying, the real underlying currency in our world is not gold, nor bureaucratic fiat, nor even raw military might. The real underlying currency of our world is narrative, and the ability to control it.”

Maintaining narrative control is also the main business of the economist. #4, #5, #6, #7, #8

Scientific truth has two inseparable methodological components: material and formal consistency. This, of, course, holds also for economics: “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)

To this day, economists do not have the true theory. Economics has been a fake science since Adam Smith. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, etc, ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got profit ― the foundational concept of the subject matter ― wrong.

Economists have produced NOTHING of scientific value in the last 200+ years. This does not matter much, though, because, in the political Circus Maximus, there has always been a greater demand for storytellers, blatherers, trolls, actors, clowns, activists, and propagandists than for scientists. Scientific truth has never been a concern for religion, politics, and entertainment ― just the opposite. This is why human communication consists, for the greater part, approximately 99.9 percent of toxic mental garbage a.k.a. propaganda/disinformation/entertainment a.k.a. disinfotainment.

As failed scientists, economists easily get a second chance, for example, as exhibitionists of the Conscience of a Liberal in a propaganda outlet of the Oligarchy or as an Oligarchy-sponsored troll in the econblogosphere.

Time for a dishonorable discharge of these stupid/corrupt storytellers from the sciences.

Egmont Kakarot-Handtke


* Caitlin Johnstone
#1 Wikipedia Allegory of the Cave
#2 Graphic AXEC153 Allegory of the Cave
#3 “Propaganda is information that is not objective and is used primarily to influence an audience and further an agenda, often by presenting facts selectively to encourage a particular synthesis or perception, or using loaded language to produce an emotional rather than a rational response to the information that is presented. Propaganda is often associated with material prepared by governments, but activist groups, companies, religious organizations, and the media can also produce propaganda.
In the twentieth century, the term propaganda has often been associated with a manipulative approach, but propaganda historically was a neutral descriptive term.” (Wikipedia)
#4 Economics, Plato’s Cave and the Silver Blaze Case
#5 Economics: communication without content
#6 Opinion, conversation, interpretation, blather: the economist’s major immunizing stratagems
#7 MMT: How the Oligarchy communicates with WeThePeople
#8 Narrative economics and the imperatives of the sitcom

Related 'Are economics professors really that incompetent? Yes!' and 'Economics textbooks ― tombstones at the Flat-Earth-Cemetery' and 'Economics: The greatest scientific fraud in modern times' and 'Macroeconomics: Economists are too stupid for science' and 'Are economists natural-born scientific failures?' and 'Fact of life: your econ prof is scientifically incompetent' and 'Fake religion, fake science, fake news, and false complaints' and 'Dear idiots, MMTers are Wall Street’s agenda pushers' and '“We have sunk very low”' and 'FakeNews, FakeScience: economics in the information age' and 'Economics as storytelling and entertainment for the masses' and 'A brief history of soapbox economics' and 'If You Meet the Storyteller on the Road, Kill Him' and 'Economics: ‘a tale told by an idiot ... signifying nothing’ and 'The economist as stand-up comedian' and 'Economics: No method to the madness' and 'How to spot economics trolls' and 'Lock them up' and 'Circus Maximus: Economics as entertainment, personality gossip, virtue signaling, and lifestyle promotion'.

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This is what Plato said in The Republic about stories: “… which are now in use [but] must be discarded.”

“Of what tales are you speaking? he said. …
Those, I said, which are narrated by Homer and Hesiod, and the rest of the poets, who have ever been the great story-tellers of mankind.
But which stories do you mean, he said; and what fault do you find with them?
A fault which is most serious, I said; the fault of telling a lie, and, what is more, a bad lie.”

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AXEC139d

Are economics professors really that incompetent? Yes!

Comment on Lars Syll on ‘Wren-Lewis vs MMT’

Blog-Reference and Blog-Reference and Blog-Reference

With regard to the ongoing Neoliberalism vs MMT slapstick,#1 Lars Syll maintains: “In Wren-Lewis world we don’t need fiscal policy other than when interest rates hit their lower bound (ZLB). In normal times monetary policy suffices. … What Wren-Lewis and other mainstream economists have in mind when they argue this way, is nothing but a version of Say’s law, basically saying that savings have to equal investments and that if the state increases investments, then private investments have to come down (‘crowding out’). As an accounting identity, there is, of course, nothing to say about the law, but as such, it is also totally uninteresting from an economic point of view. What happens when ex-ante savings and investments differ, is that we basically get output adjustments. GDP changes and so makes saving and investments equal ex-post. And this, nota bene, says nothing at all about the success or failure of fiscal policies!”

There is NO such thing as an accounting identity of savings and investments. This erroneous notion is simply due to the fact that economists are too stupid for the elementary mathematics that underlies macroeconomics.#2, #3 Accordingly, neither the Swedish professor, nor Post Keynesians, nor New Keynesians, nor MMTers, nor Anti-Keynesians has spotted the blunder to this day.#4, #5

The scientific incompetence can be traced back to the General Theory: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63)

This syllogism is conceptually and logically defective because Keynes NEVER came to grips with profit: “His Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson et al.)

Let this sink in, the economist Keynes NEVER understood profit, i.e. the fundamental concept of economics. So, Keynes’ I=S is false and by consequence the multiplier and all I=S/IS-LM models. Instead, Q≡I−S is true with Q as macroeconomic profit. The ex-ante/ex-post blather is absolutely beside the point.

Because the profit theory is false the whole analytical superstructure of economics is false. Because economics is proto-scientific garbage, economic policy guidance of both Neoliberals and MMTers is nothing but brain-dead agenda-pushing.#6, #7

Egmont Kakarot-Handtke


#1 The not so funny MMT vs Neoliberalism slapstick
#2 Wikipedia and the promotion of economists’ idiotism (I)
#3 Wikipedia and the promotion of economists’ idiotism (II)
#4 Keynesians ― terminally stupid or worse?
#5 I is never equal S and even Nick Rowe will eventually grasp it
#6 MMT’s true program
#7 Economics as a cover for agenda pushing

Related 'Economics is a science? You must be joking!' and 'Macro ignorance: Why Simon Wren-Lewis does not come to grips with the plain MMT-fraud' and 'The economist as storyteller' and 'Economics: The greatest scientific fraud in modern times' and 'Wikipedia, economics, scientific knowledge, or political agenda pushing?' and 'The GDP-death-blow for the economics profession'. For details see cross-references Accounting and cross-references Refutation of I=S and cross-references Failed/Fake Scientists.

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AXEC144c

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#PointOfProof

Jun 14

before

after

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How to spot a competent teacher?

Economics is a failed science for 200+ years and until May 2020 economists have produced NOT ONE textbook that satisfies the scientific standards of formal/material consistency.

The competent teacher has Sovereign Economics on the Economics Reading List.

Amazon.de, BoD, Amazon.com

MMT’s true program

Comment on Bill Mitchell/Thomas Fazi on ‘Seize the Means of Production of Currency ― Part 2’

Blog-Reference and Blog-Reference

Bill Mitchell and Thomas Fazi tell the representatives of the Labour Party and the general public: “There is no MMT program! The ‘Labour’s own economic programme’ will be implemented, if they gain office, in the context of a monetary system that is best understood through the MMT lens and the principles outlined in ― Seize the Means of Production of Currency ― Part 1.”#1

The Labour Party’s representatives, though, are too stupid to live: “Trying to set up a comparison to show ‘Labour’s own economic programme’ is superior or more sensible demonstrates Meadway’s complete lack of understanding of what MMT is. It is such a basic error that he should disqualify himself from further discussion until he takes the time to understand this key difference between a ‘lens’ that allows for understanding and a policy program.”

And this is MMT’s true program in a nutshell: Serve the Oligarchy/Undermine the Labour Party.

Modern Monetary Theory ― or the lens as MMTers like to call it ― is refuted on all counts.#2 The macroeconomic Profit Law entails Public Deficit = Private Profit which means that the central MMT policy recommendation of deficit-spending/money-creation benefits the Oligarchy and certainly not the membership of the Labour Party. In other words, MMTers attempt “… to get citizens and workers to accept ― demand even ― policies that are not in their class interest.”

Accordingly, MMTers vehemently attack the two traditional economic planks of Labour: budget-balancing over the business cycle and taxing the rich.

Budget-balancing in any shape or form is anathema for MMT.

With regard to taxes, which are, according to MMT, not needed at all for funding government programs but only in the improbable case of inflation, Bill Mitchell and Thomas Fazi rhetorically ask: “Does this mean that we shouldn’t ‘tax the rich’? The present authors’ values indicate we are all for taxing the rich. But not to get their money. Rather, the rich should pay higher taxes in order to deprive them of their purchasing power, which translates into economic and political power. This is not a minor issue. Ultimately, fuelling the notion that we need the rich folk’s money to ‘[pay for] our schools and our caring services’, as the likes of Jeremy Corbyn and John McDonnell never tire of repeating, is a dangerous and misguided narrative for progressives to engage in. Not only because it fuels damaging myths about how the monetary system works, but also because it elevates the rich and high-income earners to an indispensable status that is unwarranted.

As Pavlina Tcherneva, from the Levy Economics Institute, notes in her excellent response to Doug Henwood’s rather loopy attack on MMT…: I would say that Henwood (like other “tax-the-rich-to-pay-for-progress” lefties) is tethered to the wealthy by an imaginary umbilical cord that holds his progressive agenda hostage to his oppressors. To me, this is the definition of self-induced paralysis. Time to cut the cord. MMT has a profound emancipatory power and the Left would do well to awaken to its potential. Progressives should come to terms with the fact that the incomes and taxes paid by the rich do not enhance the capacity of a currency-issuing government to provide first-class public services and infrastructure.”

Deficit-spending/money-creation and not taxing the rich are clearly in the interest of the Oligarchy. The policy guidance of MMT, whose proponents call themselves Progressives, is definitively NOT in the class interest of Labour members and voters.

If the general public finds all this perplexing, however, they should not blame MMTers: “If the reader finds all this perplexing, it is because for the past forty or so years policymakers and mainstream economists and commentators have peddled a series of false myths about how modern monetary systems work.”

The claim: “There is no MMT program!” is plain fraud. The true program of MMT is to brainwash WeThePeople. If anything, deficit-spending/money-creation, and not taxing the rich, and driving a wedge between Labour leadership and membership, are in the class interest of the Oligarchy. Bill Mitchell and Thomas Fazi are neither scientists nor Friends-of-the-People but useful idiots of the Oligarchy.

Egmont Kakarot-Handtke


#1 MMT: A new myth for WeThePeople
#2 For the full-spectrum refutation of MMT, see cross-references MMT

Related 'MMT: A Trojan Horse for Labour courtesy of the Oligarchy' and 'No MMT illusions! YOU are going to pay for it' and 'How MMT fools the ninety-nine-percenters' and 'How to pay for the war and to be bamboozled by economists' and 'Just one more day: How deficit-spending postpones the breakdown of Capitalism' and 'For MMT = For the Oligarchy' and 'Links on MMTers push Wall Street’s agenda' and 'The not so funny MMT vs Neoliberalism slapstick' and 'Economics has arrived at the bottom of the proto-scientific shithole' and 'MMT has an offer that Labour cannot refuse' and 'Some nasty MMT surprises behind the time horizon' and 'Prophet Stephanie divines the seizure of the means of production of currency' and 'State capture ― time to switch rhetoric' and 'MMT sucks'.

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Wikimedia AXEC142

G. L. S. Shackle: Not such a #GreatThinker

Comment on The British Academy on ‘Great Thinkers: John Kay FBA on G. L. S. Shackle FBA’*

Blog-Reference

“He [Shackle] also claimed the importance of Gunnar Myrdal’s analysis by which saving and investment are allowed to adjust ex ante to each other. However, the reference to ex ante and ex post analysis has become so usual in modern macroeconomics that the position of Keynes to not include it in his work, is currently considered as an oddity, if not a mistake. As Shackle put it: Myrdalian ex ante language would have saved the General Theory from describing the flow of investment and the flow of saving as identically, tautologically equal, and within the same discourse, treating their equality as a condition which may, or not, be fulfilled.”#1

Like his Post Keynesian colleagues, G. L. S. Shackle never spotted the lethal blunder in the General Theory. It is this: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63)

This syllogism is conceptually and logically defective because Keynes NEVER came to grips with profit: “His Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson et al.)

Let this sink in, the economist Keynes NEVER understood profit, i.e. the fundamental concept of economics. So, Keynes’ I=S is false and by consequence the multiplier and all I=S/IS-LM models. Instead, Q≡I−S is true with Q as macroeconomic profit.#2, #3

Keynes, Shackle, and the Post Keynesians were simply too stupid for the elementary algebra that underlies macroeconomics.

Egmont Kakarot-Handtke


* Link to TBA Tweet
#1 Wikipedia G. L. S. Shackle
#2 How Keynes got macro wrong and Allais got it right
#3 Links on Michael Roberts’ ‘Keynes: socialist, liberal or conservative?’

For details of the big picture see cross-references Refutation of I=S and cross-references Failed/Fake Scientists.

MMT: A new myth for WeThePeople

Comment on Bill Mitchell on ‘Seize the Means of Production of Currency ― Part 1’

Blog-Reference and Blog-Reference

Bill Mitchell accuses the former British Labour Party advisor James Meadway and indirectly the current Labour leadership of incompetence/foul play: “In doing so, Meadway demonstrates that he has not grasped (or refuses to grasp) the subtleties of MMT. In a political sense, his arguments repeat those that Chancellor Dennis Healey used when he lied to the British people in the mid-1970s about the Government running out of money. These falsehoods eased the path for Margaret Thatcher, created the space within Labour for the highly damaging Blairite years, and constrain the current British Labour leadership’s conception of what is possible in terms of economic policy formation.”

Bill Mitchell contrasts stupid/corrupt Labour policy with the superior scientific approach of MMT: “At the outset, it is important to note that MMT should not been seen as a regime that you ‘apply’ or ‘switch to’ or ‘introduce’. Rather, it is a lens which allows us to see the true (intrinsic) workings of the fiat monetary system.”

MMT pursues the noble goals of (i) myth-busting, and (ii), improving democracy: “An MMT understanding means that statements such as the ‘government cannot provide better services because it will run out of money’ are immediately known to be false. Such an understanding will change the questions we ask of our politicians and the range of acceptable answers that they will be able to give. In this sense, an MMT understanding enhances the quality of our democracies. MMT is agnostic about policy, bar its preference for an employment buffer rather than an unemployment buffer to discipline inflation.”

This, in a nutshell, is the MMT myth. The fact is that MMT theory is scientifically refuted on all counts#1 and MMT policy is actually NOT for the benefit of WeThePeople but for the benefit of the Oligarchy.#2

The core claims of MMT are provably false:

1. “It [the government] creates a demand for its otherwise worthless currency by requiring all tax liabilities to be extinguished in that currency.” FALSE! TRUE: The currency is created by the Central Bank as a means of transaction. The creation and value of money does NOT depend on the taxing power of the State.#3, #4

2. “The government spends its currency into existence through the purchase of goods and services from the non-government sector (so-called government spending) which provides the non-sector with the funds necessary to pay its tax obligations.” FALSE! TRUE: Spending on current output with newly created money is analogous to the spending of the counterfeiter.#5 The Central Bank’s creation of fiat money for the payment of the wage bill is the correct way of bringing money into the economy.

3. “The consequence of this logical ordering of events (spending to fund taxation) is that currency-issuing governments do not have to ‘fund’ their spending and can never run out of currency.” FALSE because of 1. and 2. TRUE: Unlimited spending is possible because of the government’s unlimited overdrafts at the Central Bank. Overdrafts are public debt that may be consolidated through bond issuance or not. Interest on the public debt redistributes income from WeThePeople to the Oligarchy as long as the debt is rolled over.

4. “In general, MMT uses the sectoral balances (or flow of funds) approach, which tells us that the government sector’s deficit (surplus) is always equal to the non-government sector’s surplus (deficit).” Indeed, but the MMT sectoral balances equation, i.e. (I−S)+(G−T)+(X−M)=0, is provably false. Because of this, the whole analytical superstructure of MMT is scientifically worthless.

As a result, Bill Mitchell’s policy conclusion is false: “… it follows that the only way private debt ― and the power of financial institutions over society ― can be brought under control without driving the economy into recession is for the government to run persistent and substantial fiscal deficits.”

Persistent and substantial fiscal deficits are persistent and substantial free lunches for the Oligarchy.#6 MMT policy guidance is, contrary to the social/environmental optic, ultimately to the detriment of WeThePeople and Democracy. MMTers are not competent scientists but useful idiots for the Oligarchy.

Egmont Kakarot-Handtke


#1 For the full-spectrum refutation of MMT see cross-references MMT
#2 MMT: A Trojan Horse for Labour courtesy of the Oligarchy
#3 The creation and value of money and near-monies
#4 MMT: fundamentally false
#5 How counterfeiters save America with an extra profit and make WeThePeople pay for it
#6 For MMT = For the Oligarchy

Related 'Controlled demolition of MMT ― an exercise in elementary logic' and 'Against the mainstream! Against MMT!' and 'How to pay for the war and to be bamboozled by economists' and 'Stephanie Kelton sells children into debt slavery'.

Economics textbooks ― tombstones at the Flat-Earth Cemetery

Links on Peter Dorman on ‘CORE and Periphery in the Reform of Econ 101’

Blog-Reference and Blog-Reference

“I often wonder whether other subjects suffer as much from textbook writers.” (Hahn, 1980)

► CORE: more lipstick on the dead economics pig
► To this day, economists have produced NOT ONE textbook that satisfies scientific standards
► Refuting MMT’s Macroeconomics Textbook
► Economists have no brain
► False on principle
► Where economics went wrong (II)
► The father of modern economics and his imbecile kids

► For details of the big picture see cross-references Econ 101/Old Curriculum/New Curriculum

Egmont Kakarot-Handtke

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REPLY to Owen Paine on Jun 13

You say “And yes the core text is a big step.”

NO. In the section ‘9.6 Wages, profits, and unemployment in the whole economy’ the determination of macroeconomic profit is provably false. The axiomatically correct macroeconomic Profit Law reads Q≡Yd+I−S+(G−T)+(X−M).

Because the foundational concept of economics, i.e. profit, is ill-defined the CORE textbook is scientifically worthless.#1

That the whole thing is not more than proto-scientific garbage, storytelling, gossip, and name-dropping may be gleaned from such references as

“Arguably the most famous scientific controversy of all time was between Sir Isaac Newton and Gottfried Leibniz over who invented calculus.

Newton first used calculus methods in a manuscript published in 1666. The methods were used in his book Mathematical Principles of Natural Philosophy, which was published in 1687. He completed his book on calculus, Method of Fluxions, in 1671, but did not publish it until 1736.

Newton’s supporters accused Leibniz of plagiarism in his work on calculus. By the time of his death, his reputation was in decline and he died in poverty. His reputation has subsequently been rebuilt by both mathematicians and philosophers.

Modern historians accept that Newton and Leibniz invented calculus independently, at about the same time. Therefore, to decide whom to name the calculus supplements after, we tossed a coin. Leibniz won.”

The fact is that modern historians have found out that Newton was a fraudster.#2

More exercises in the erection of False-Hero Memorials can be found in the section ‘Great economists’.#3

#1 CORE: more lipstick on the dead economics pig

#2 Kollerstrom, N. (2018). The Dark Side of Isaac Newton: Science’s Greatest Fraud? Pen and Sword Books.

#3 For details, see cross-references Failed/Fake Scientists

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AXEC106k

MMT: A Trojan Horse for Labour courtesy of the Oligarchy

Links on Dan McCurry's ‘Why Labour shouldn’t rule out Modern Monetary Theory’#1

Blog-Reference

Scientifically, MMT is refuted on all counts. Politically and economically, the MMT policy of deficit-spending/money-creation benefits the Oligarchy. Social/environmental programs are in real terms always paid for by WeThePeople themselves either through direct taxation or through stealth taxation via the market price. The social/progressive flag-waving of MMT is for the deception of WeThePeople.

► MMTers are NOT Friends-of-the-People
► Deficit-spending/money-creation is ALWAYS a bad deal for WeThePeople
► The economist as useful political idiot
► How Bill Mitchell stalks Jeremy Corbyn
► Mr. Corbyn and the perils of political economics
► Political economics: Who hijacks British Labour?
► MMT Progressives: stupid or corrupt or both?
► How MMT enlightens Washington
► MMT and grassroots movements
► Dear idiots, MMTers are Wall Street’s agenda pushers

Egmont Kakarot-Handtke


#1 LABOURLIST

Related 'Links on MMTers push Wall Street’s agenda' and 'Just one more day: How deficit-spending postpones the breakdown of Capitalism' and 'For MMT = For the Oligarchy' and 'Stephanie Kelton’s legendary Plain-Sight-Ink-Trick' and 'Bill Mitchell, MMT’s fake scientist' and 'Warren Mosler: scientific dilettante and political fraudster' and 'Bill Mitchell, MMT, Progressives: economists as Oligarchy hacks' and 'Mission accomplished: Economists as useful idiots of the Oligarchy' and 'MMT: Corbynism is dead, British Labour is next' and 'Links on Austerity'.