Comment on Simon Wren-Lewis on ‘The politics of ignoring knowledge’
Blog-Reference
Simon Wren-Lewis muses about the psychology of the Brexit vote and then generalizes: “I do not think this ignorance and hubris is confined to the UK’s role in the world. It also extends to an attitude to knowledge of all kinds, and I suspect it is possible to date when this began to the revolutionary zeal of the right under Thatcher.”
This explanation implies that there is valuable scientific knowledge of economists that is thrown to the wind by ignorant politicians. This is not how economic policy works. There is, to begin with, NO such thing as valid economic knowledge, only a rummage table of opinions from which politicians pick one for giving the impression that their measures have the blessing of science. This is not different from selling toothpaste with the testimonial of a white-coated dentist.
Here is the snag: “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)
It is well-known that economists do not have the true theory. This is their scientific track record: provably false:
• profit theory, for 200+ years,
• Walrasian microfoundations (including equilibrium), for 150+ years,
• Keynesian macrofoundations (including I=S, IS-LM), for 80+ years.
ALL theories/models that contain profit, maximization-and-equilibrium, or I=S/IS-LM are a priori false and this is more than 90 percent of the content of peer-reviewed economic quality journals and 100 percent of textbooks of renowned authors since 1948, as well as 100 percent of what orthodox or heterodox or pluralistic economics professors teach beyond commonsensical trivialities.
It is, first of all, of utmost importance to distinguish between political and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.
Theoretical economics has to be judged according to the criteria true/false and NOTHING else. The history of political economics from Adam Smith to Keynes and Arrow can be summarized as an utter scientific failure. Economics never has had any truth-value, only political use-value.
Egmont Kakarot-Handtke
Related 'New Economic Thinking: the 10 crucial points' and 'Delusions of useful idiots' and 'Why Hayek was not a scientist' and 'Economics: Two centuries of scientific incompetence' and 'Heterodoxy, too, is proto-scientific garbage' and 'Nothing to choose between Orthodoxy and traditional Heterodoxy' and 'First Lecture in New Economic Thinking' and 'Lacking the Midas touch of science' and 'Economics is a scientific zombie waiting to be put down' and 'The non-existence of economics' and 'Economists and the destructive power of stupidity' and 'Your economics is refuted on all counts: here is the real thing'.
July 23, 2017
Why don’t you do what Joan Robinson told you to do?
Comment on Lars Syll on ‘When ignorance is bliss’
Blog-Reference and Blog-Reference on Jul 30
The geniality of Joan Robinson is engraved in everlasting granite with this verdict about economics: “Scrap the lot and start again.”
To her fellow economists, she referred to as a “throng of superfluous economists”. Indeed, this is their track record: provably false
• profit theory, for 200+ years,
• Walrasian microfoundations (including equilibrium), for 150+ years,
• Keynesian macrofoundations (including I=S, IS-LM), for 80+ years.
ALL theories/models that contain profit, maximization-and-equilibrium, or I=S/IS-LM are a priori false and this is more than 90 percent of the content of peer-reviewed economic quality journals and 100 percent of textbooks of renowned authors since 1948.
The student of economic theory is taught supply-demand-equilibrium. This is proto-scientific garbage, but “Before he ever does ask, he has become a professor, and so sloppy habits of thought are handed on from one generation to the next.” (Joan Robinson)
Thus, the propagation of silly orthodox economics goes on and on, and the silly heterodox critique, too, goes on and on, and 100 percent of what orthodox or heterodox or pluralistic muddle-headed economics professors teach is provably false.
Joan Robinson realized this and told the world. High time now to draw the logical consequence.#1
Egmont Kakarot-Handtke
#1 See also
► You are fired!
► Joan Robinson and the ‘throng of superfluous economists’
► Let’s do it
► A science without scientists
► Habermas, Albert, Robinson, Syll are right — now scrap the crap
► The overdue public clarification of economics’ actual scientific state
► Will economics ever become a science?
Graphic AXEC121i
Blog-Reference and Blog-Reference on Jul 30
The geniality of Joan Robinson is engraved in everlasting granite with this verdict about economics: “Scrap the lot and start again.”
To her fellow economists, she referred to as a “throng of superfluous economists”. Indeed, this is their track record: provably false
• profit theory, for 200+ years,
• Walrasian microfoundations (including equilibrium), for 150+ years,
• Keynesian macrofoundations (including I=S, IS-LM), for 80+ years.
ALL theories/models that contain profit, maximization-and-equilibrium, or I=S/IS-LM are a priori false and this is more than 90 percent of the content of peer-reviewed economic quality journals and 100 percent of textbooks of renowned authors since 1948.
The student of economic theory is taught supply-demand-equilibrium. This is proto-scientific garbage, but “Before he ever does ask, he has become a professor, and so sloppy habits of thought are handed on from one generation to the next.” (Joan Robinson)
Thus, the propagation of silly orthodox economics goes on and on, and the silly heterodox critique, too, goes on and on, and 100 percent of what orthodox or heterodox or pluralistic muddle-headed economics professors teach is provably false.
Joan Robinson realized this and told the world. High time now to draw the logical consequence.#1
Egmont Kakarot-Handtke
#1 See also
► You are fired!
► Joan Robinson and the ‘throng of superfluous economists’
► Let’s do it
► A science without scientists
► Habermas, Albert, Robinson, Syll are right — now scrap the crap
► The overdue public clarification of economics’ actual scientific state
► Will economics ever become a science?
***
July 21, 2017
Minimum wage ― a fatal error in economic reasoning
Comment on NYT on ‘Minimum Wage and Job Loss: One Alarming Seattle Study Is Not the Last Word’
Blog-Reference
Economics suffers from the fact that the subject matter is ill-defined. Economists think that they are doing economics while they bungle amateurishly in sociology and psychology. What economists overlook is that their subject matter is the structure and behavior of the economic system and that all questions about Human Nature/motives/behavior/action are NOT their business.
Economics is a systems science. Accordingly, the correct approach is not microfoundations but macrofoundations. The elementary version of the correct (objective, systemic, behavior-free, macrofounded) Employment Law is shown on Graphic AXEC62:
Blog-Reference
Economics suffers from the fact that the subject matter is ill-defined. Economists think that they are doing economics while they bungle amateurishly in sociology and psychology. What economists overlook is that their subject matter is the structure and behavior of the economic system and that all questions about Human Nature/motives/behavior/action are NOT their business.
Economics is a systems science. Accordingly, the correct approach is not microfoundations but macrofoundations. The elementary version of the correct (objective, systemic, behavior-free, macrofounded) Employment Law is shown on Graphic AXEC62:
From this equation follows:
(i) An increase in the expenditure ratio ρE leads to higher employment L (the Greek letter rho ρ stands for ratio).
(ii) Increasing investment expenditures I exert a positive influence on employment.
(iii) An increase in the factor cost ratio ρF≡W/PR leads to higher employment.
Items (i) and (ii) cover the familiar arguments about aggregate demand. The factor cost ratio ρF, as defined in (iii), embodies the macroeconomic price mechanism. The fact of the matter is that overall employment INCREASES if the AVERAGE wage rate W INCREASES relative to average price P and productivity R. This is the opposite of what microfounded economics teaches.
“We economists have all learned, and many of us teach, that the remedy for excess supply in any market is a reduction in price. If this is prevented by combinations in restraint of trade or by government regulations, then those impediments to competition should be removed. Applied to economy-wide unemployment, this doctrine places the blame on trade unions and governments, not on any failure of competitive markets.” (Tobin)
“If the price of bananas is kept too high in relation to the price required to balance supply and demand, there will be a surplus of bananas. If the price of bananas is below the market-clearing price, there will be a shortage. The same applies to labour. If the price ― i.e., the wage ― is too high, there will be a surplus of workers, i.e., unemployment. If it is kept too low, there will be a shortage of workers … Workers do sell their services just as banana producers sell their bananas.” (Brittain)
The banana theory of the labor market is just that: bananas. The lethal methodological blunder of microfounded employment theory consists of the Fallacy of Composition, i.e., the illegitimate transfer of truths that hold for one firm/market onto the economy as a whole.
False theory leads to false policy guidance. Scientifically incompetent economists bear the intellectual responsibility for the social devastation of mass unemployment. #1
Egmont Kakarot-Handtke
#1 For details of the big picture, see cross-references Employment.
Related 'The minimum wage debate: a showpiece of economists’ hereditary idiocy' and 'How economists murdered the economy and got away with it'
(i) An increase in the expenditure ratio ρE leads to higher employment L (the Greek letter rho ρ stands for ratio).
(ii) Increasing investment expenditures I exert a positive influence on employment.
(iii) An increase in the factor cost ratio ρF≡W/PR leads to higher employment.
Items (i) and (ii) cover the familiar arguments about aggregate demand. The factor cost ratio ρF, as defined in (iii), embodies the macroeconomic price mechanism. The fact of the matter is that overall employment INCREASES if the AVERAGE wage rate W INCREASES relative to average price P and productivity R. This is the opposite of what microfounded economics teaches.
“We economists have all learned, and many of us teach, that the remedy for excess supply in any market is a reduction in price. If this is prevented by combinations in restraint of trade or by government regulations, then those impediments to competition should be removed. Applied to economy-wide unemployment, this doctrine places the blame on trade unions and governments, not on any failure of competitive markets.” (Tobin)
“If the price of bananas is kept too high in relation to the price required to balance supply and demand, there will be a surplus of bananas. If the price of bananas is below the market-clearing price, there will be a shortage. The same applies to labour. If the price ― i.e., the wage ― is too high, there will be a surplus of workers, i.e., unemployment. If it is kept too low, there will be a shortage of workers … Workers do sell their services just as banana producers sell their bananas.” (Brittain)
The banana theory of the labor market is just that: bananas. The lethal methodological blunder of microfounded employment theory consists of the Fallacy of Composition, i.e., the illegitimate transfer of truths that hold for one firm/market onto the economy as a whole.
False theory leads to false policy guidance. Scientifically incompetent economists bear the intellectual responsibility for the social devastation of mass unemployment. #1
Egmont Kakarot-Handtke
#1 For details of the big picture, see cross-references Employment.
Related 'The minimum wage debate: a showpiece of economists’ hereditary idiocy' and 'How economists murdered the economy and got away with it'
July 20, 2017
Economics: math-adorned incoherent blather
Comment on Jason Smith on ‘What mathematical theory is for’
Blog-Reference
Jason Smith asserts: “The primary purpose of mathematical theory is to provide equations that illustrate relationships between sets of numerical data.”
This is a bit shallow and does not reach the level of Wikipedia: “Mathematics is the study of topics such as quantity (numbers), structure, space, and change. … Rigorous arguments first appeared in Greek mathematics, most notably in Euclid’s Elements. Since the pioneering work of Giuseppe Peano, David Hilbert, and others on axiomatic systems in the late 19th century, it has become customary to view mathematical research as establishing truth by rigorous deduction from appropriately chosen axioms and definitions.”#1
Why mathematics is so admirably appropriate to the objects of reality is not fully understood: “I find it quite amazing that it is possible to predict what will happen by mathematics, which is simply following rules which really have nothing to do with what is going on in the original thing.” (Feynman) see also (Wigner) and (Velupillai)
How does this relate to economics? Walrasian economics, too, is axiomatized, the hardcore premises are verbally given as follows: “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)
It should be pretty obvious that the Walrasian axiom set contains THREE NONENTITIES: (i) constrained optimization (HC2), (ii) rational expectations (HC4), (iii) equilibrium (HC5). Every model that contains a nonentity is A PRIORI false. And this is why mathematics does not work in economics and why economics is a failed science, or what Feynman famously called a cargo cult science.
In practical terms, it follows immediately: as soon as the word equilibrium/disequilibrium appears in an economic paper or textbook, it can be thrown into the wastebasket. The same holds for all other nonentities. Note well that this also holds for Jason Smith’s information equilibrium.
The decisive insight for the role of mathematics in economics is: “If it isn’t macro-axiomatized, it isn’t economics.”
The natural math of economics is the elementary math of accounting. This is the formalism to start with and NOT SS-function-DD-function-solution.#2 The problem with economists is that they grab a piece of math from the math department and apply it without a deeper understanding.
The cargo cultic methodologist Jason Smith asserts: “A big step in using math to understand the world is when you’ve collected several different empirically successful models into a single paradigm or framework. That’s what Newton did in the seventeenth century. He collected Kepler’s, Galileo’s, and others’ empirical successes into a framework we call Newtonian mechanics.”
And how does Newtonian mechanics start? Yes, with the axioms of motion, see Axiomata Sive Leges Motus at the very beginning of Principia. #3
Physicists got the axioms right, and this is why math works; economists messed up the axioms (first and foremost with HC5, i.e., equilibrium), and this is why the representative economist became a scientific laughing stock. The economist-turned-physicist Jason Smith is no exception.#4
Egmont Kakarot-Handtke
#1 Wikipedia Mathematics
#2 Macro for dummies
#3 Wikipedia Newton’s laws of motion
#4 You are fired!
For details of the bigger picture, see cross-references Math/Mathiness
You say: “Physics envy again. … Changing the framework in physics doesn’t fundamentally alter the behaviour of the elements studied ― even in quantum physics. It does in social sciences and economics ― because they involve people with brains and emotions that change their mind.”
This is not a case of physics envy but of social science delusion. Economics is a systems science, i.e., about the structure/behavior of the economy, and NOT a social science, i.e., about Human Nature/motives/behavior action. This is the subject matter of psychology, sociology, political science, etcetera.
Economists are simply at the wrong party and have not realized it since the founding fathers.
Standard economics is based on behavioral axioms (constrained optimization, rational expectations, equilibrium) and mathematics simply does NOT work with nonentities. The calculation that when three angels and four angels dance on a pinpoint then the total is seven angels is not applied arithmetic but brain-dead crap.
It is well-known among mathematicians, but not among economists, that not all mathematical structures incorporate “certain aspect of empirical reality”, which means that there is a “... whole crop of monster-structures, entirely without application.” (Bourbaki)
Standard economics, i.e., supply-demand-equilibrium, is such a monster-structure, entirely without application. This is NOT the fault of mathematics but of abysmally incompetent economists. Count Jason Smith and yourself among them.*
* Incompetence — the original sin in economics
You quote: “Newton’s law of gravity hasn’t changed for eons, Derman said, but human behavior in markets changes all the time, wreaking havoc on even the best models made by scientists.”
WOW, what a revelation! Guess what, this has been known to scientists of all ages except, of course, to retarded economists: “The bifurcation of motion into two fundamentally different types, one for natural motions of non-living objects and another for acts of human volition … is obviously related to the issue of free will, and demonstrates the strong tendency of scientists in all ages to exempt human behavior from the natural laws of physics, and to regard motions resulting from human actions as original, in the sense that they need not be attributed to other motions.” (Brown)#1
Economists, in their ignorance, built economics on a set of BEHAVIORAL axioms with utility maximization at the core. This was 150+ years ago, and neither has Orthodoxy abandoned this proto-scientific rubbish nor has Heterodoxy come forward with something better. Economics has never risen above the level of folk psychology and folk sociology and second-guessing other people’s expectations.
Of course, there is NO such thing as a behavioral law or regularity or stable functional relationship, never was, never will be. Being axiomatically false, economics has to be abandoned and fully replaced.
There is no use in criticizing Walrasianism, Keynesianism, Marxianism, Austrianism. It is ALL proto-scientific sitcom blather. The only question is how to replace these failed approaches as fast as possible.
The first step to a Paradigm Shift is to understand that economics is not a so-called social science like psychology/sociology, and not a natural science like physics, but a systems science. The economist’s proper task is to look for objective systemic laws and to empirically verify/falsify them. Science is about the invariants beneath changes on the surface and not a commonsensical description of what happens here and now. There are NO BEHAVIORAL laws, but there are SYSTEMIC laws, and they are as objective, certain, mathematically exact, and eternal as physical laws.#2
#1 The existence of economic laws and the nonexistence of behavioral laws
#2 New Economic Thinking: the 10 crucial points
Everybody can climb on a soapbox and make an economic proposal ― except an economist. In the political realm, anything goes, and no qualification is needed, only an emotionally backed opinion and some rhetorical talent. An economist, on the other hand, is supposed to be a scientist and to know what he is speaking about, that is, to know how the economy works.
Economists who have no scientific knowledge are at the same level as political cranks and these morons thrive when the economy is sluggish or worse: “A sure sign of a crisis is the prevalence of cranks. It is characteristic of a crisis in theory that cranks get a hearing from the public which orthodoxy is failing to satisfy. In the thirties we had Major Douglas, and social credit — it can all be done with a fountain pen — and Warren and Pearson who convinced President Roosevelt that raising the dollar price of gold would raise the price of everything else and bring the slump to an end. The cranks are to be preferred to the orthodox because they see that there is a problem. Nowadays we have plenty of cranks taking up the problems that the economists overlook.” (Joan Robinson)
The difference between a crank and an economist is NOT in the political orientation but in the necessity that the proposal of the economist must have a valid theoretical foundation. That is, the economist must have the true theory: “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)
Now, scientific truth is defined by material and formal consistency, and the problem of economics is that we know for sure that economics is false: the four main approaches — Walrasianism, Keynesianism, Marxianism, Austrianism — are materially and logically inconsistent.
So, people like Krugman have to be opposed NOT because they are liberal or conservative but because they are scientific fraudsters: they speak in the name of economic science, but there is NO such thing as economic science.
How is scientific knowledge established? “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)
And this is the point where math comes in. Math is simply the best available means to establish logical cohesion. And here, in turn, is where the problem of economists with math comes in: as natural-born muddleheads and cranks, they abhor nothing more than logic. The fact is that economists do not even get the elementary mathematics of accounting right.#1 Where things become comical is when these folks cover their stupidity by posing as philosophers.
#1 Macro for dummies
The curriculum at British schools is the business of the British people. Likewise for the US. No economist has to tell these or other countries how to organize their education and what to teach. The business of economists is to figure out how the economy = world economy works. The fact is that economists are failed/fake scientists. They do not even know the elementary mathematics of accounting, which, if anything, is the minimum condition of doing economics.*
Economists are a public nuisance because they have an opinion on everything but knowledge of nothing.
* See also ‘A new curriculum for swampies?’
Jason Smith is NOT a random physicist but a random blatherer. Take notice that his proto-scientific drivel has been debunked in all dimensions:
Economics: math-adorned incoherent blather
Feynman Integrity, fake science, and the econblogosphere
True macrofoundations: the reset of economics
Macro imbeciles
IS-LM ― a crash course for EconoPhysicists
What genuine scientists believe about economics
Hayek and other informationally retarded proto-economists
Economics between cargo cult, farce, and fraud
The key to macro and Keen's debt-employment model
Blog-Reference
Jason Smith asserts: “The primary purpose of mathematical theory is to provide equations that illustrate relationships between sets of numerical data.”
This is a bit shallow and does not reach the level of Wikipedia: “Mathematics is the study of topics such as quantity (numbers), structure, space, and change. … Rigorous arguments first appeared in Greek mathematics, most notably in Euclid’s Elements. Since the pioneering work of Giuseppe Peano, David Hilbert, and others on axiomatic systems in the late 19th century, it has become customary to view mathematical research as establishing truth by rigorous deduction from appropriately chosen axioms and definitions.”#1
Why mathematics is so admirably appropriate to the objects of reality is not fully understood: “I find it quite amazing that it is possible to predict what will happen by mathematics, which is simply following rules which really have nothing to do with what is going on in the original thing.” (Feynman) see also (Wigner) and (Velupillai)
How does this relate to economics? Walrasian economics, too, is axiomatized, the hardcore premises are verbally given as follows: “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)
It should be pretty obvious that the Walrasian axiom set contains THREE NONENTITIES: (i) constrained optimization (HC2), (ii) rational expectations (HC4), (iii) equilibrium (HC5). Every model that contains a nonentity is A PRIORI false. And this is why mathematics does not work in economics and why economics is a failed science, or what Feynman famously called a cargo cult science.
In practical terms, it follows immediately: as soon as the word equilibrium/disequilibrium appears in an economic paper or textbook, it can be thrown into the wastebasket. The same holds for all other nonentities. Note well that this also holds for Jason Smith’s information equilibrium.
The decisive insight for the role of mathematics in economics is: “If it isn’t macro-axiomatized, it isn’t economics.”
The natural math of economics is the elementary math of accounting. This is the formalism to start with and NOT SS-function-DD-function-solution.#2 The problem with economists is that they grab a piece of math from the math department and apply it without a deeper understanding.
The cargo cultic methodologist Jason Smith asserts: “A big step in using math to understand the world is when you’ve collected several different empirically successful models into a single paradigm or framework. That’s what Newton did in the seventeenth century. He collected Kepler’s, Galileo’s, and others’ empirical successes into a framework we call Newtonian mechanics.”
And how does Newtonian mechanics start? Yes, with the axioms of motion, see Axiomata Sive Leges Motus at the very beginning of Principia. #3
Physicists got the axioms right, and this is why math works; economists messed up the axioms (first and foremost with HC5, i.e., equilibrium), and this is why the representative economist became a scientific laughing stock. The economist-turned-physicist Jason Smith is no exception.#4
Egmont Kakarot-Handtke
#1 Wikipedia Mathematics
#2 Macro for dummies
#3 Wikipedia Newton’s laws of motion
#4 You are fired!
For details of the bigger picture, see cross-references Math/Mathiness
***
REPLY to Neil Wilson on Jul 21You say: “Physics envy again. … Changing the framework in physics doesn’t fundamentally alter the behaviour of the elements studied ― even in quantum physics. It does in social sciences and economics ― because they involve people with brains and emotions that change their mind.”
This is not a case of physics envy but of social science delusion. Economics is a systems science, i.e., about the structure/behavior of the economy, and NOT a social science, i.e., about Human Nature/motives/behavior action. This is the subject matter of psychology, sociology, political science, etcetera.
Economists are simply at the wrong party and have not realized it since the founding fathers.
Standard economics is based on behavioral axioms (constrained optimization, rational expectations, equilibrium) and mathematics simply does NOT work with nonentities. The calculation that when three angels and four angels dance on a pinpoint then the total is seven angels is not applied arithmetic but brain-dead crap.
It is well-known among mathematicians, but not among economists, that not all mathematical structures incorporate “certain aspect of empirical reality”, which means that there is a “... whole crop of monster-structures, entirely without application.” (Bourbaki)
Standard economics, i.e., supply-demand-equilibrium, is such a monster-structure, entirely without application. This is NOT the fault of mathematics but of abysmally incompetent economists. Count Jason Smith and yourself among them.*
* Incompetence — the original sin in economics
***
REPLY to Neil Wilson on Jul 21You quote: “Newton’s law of gravity hasn’t changed for eons, Derman said, but human behavior in markets changes all the time, wreaking havoc on even the best models made by scientists.”
WOW, what a revelation! Guess what, this has been known to scientists of all ages except, of course, to retarded economists: “The bifurcation of motion into two fundamentally different types, one for natural motions of non-living objects and another for acts of human volition … is obviously related to the issue of free will, and demonstrates the strong tendency of scientists in all ages to exempt human behavior from the natural laws of physics, and to regard motions resulting from human actions as original, in the sense that they need not be attributed to other motions.” (Brown)#1
Economists, in their ignorance, built economics on a set of BEHAVIORAL axioms with utility maximization at the core. This was 150+ years ago, and neither has Orthodoxy abandoned this proto-scientific rubbish nor has Heterodoxy come forward with something better. Economics has never risen above the level of folk psychology and folk sociology and second-guessing other people’s expectations.
Of course, there is NO such thing as a behavioral law or regularity or stable functional relationship, never was, never will be. Being axiomatically false, economics has to be abandoned and fully replaced.
There is no use in criticizing Walrasianism, Keynesianism, Marxianism, Austrianism. It is ALL proto-scientific sitcom blather. The only question is how to replace these failed approaches as fast as possible.
The first step to a Paradigm Shift is to understand that economics is not a so-called social science like psychology/sociology, and not a natural science like physics, but a systems science. The economist’s proper task is to look for objective systemic laws and to empirically verify/falsify them. Science is about the invariants beneath changes on the surface and not a commonsensical description of what happens here and now. There are NO BEHAVIORAL laws, but there are SYSTEMIC laws, and they are as objective, certain, mathematically exact, and eternal as physical laws.#2
#1 The existence of economic laws and the nonexistence of behavioral laws
#2 New Economic Thinking: the 10 crucial points
***
REPLY to Matt Franko, Six, Tom Hickey on Jul 22Everybody can climb on a soapbox and make an economic proposal ― except an economist. In the political realm, anything goes, and no qualification is needed, only an emotionally backed opinion and some rhetorical talent. An economist, on the other hand, is supposed to be a scientist and to know what he is speaking about, that is, to know how the economy works.
Economists who have no scientific knowledge are at the same level as political cranks and these morons thrive when the economy is sluggish or worse: “A sure sign of a crisis is the prevalence of cranks. It is characteristic of a crisis in theory that cranks get a hearing from the public which orthodoxy is failing to satisfy. In the thirties we had Major Douglas, and social credit — it can all be done with a fountain pen — and Warren and Pearson who convinced President Roosevelt that raising the dollar price of gold would raise the price of everything else and bring the slump to an end. The cranks are to be preferred to the orthodox because they see that there is a problem. Nowadays we have plenty of cranks taking up the problems that the economists overlook.” (Joan Robinson)
The difference between a crank and an economist is NOT in the political orientation but in the necessity that the proposal of the economist must have a valid theoretical foundation. That is, the economist must have the true theory: “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)
Now, scientific truth is defined by material and formal consistency, and the problem of economics is that we know for sure that economics is false: the four main approaches — Walrasianism, Keynesianism, Marxianism, Austrianism — are materially and logically inconsistent.
So, people like Krugman have to be opposed NOT because they are liberal or conservative but because they are scientific fraudsters: they speak in the name of economic science, but there is NO such thing as economic science.
How is scientific knowledge established? “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)
And this is the point where math comes in. Math is simply the best available means to establish logical cohesion. And here, in turn, is where the problem of economists with math comes in: as natural-born muddleheads and cranks, they abhor nothing more than logic. The fact is that economists do not even get the elementary mathematics of accounting right.#1 Where things become comical is when these folks cover their stupidity by posing as philosophers.
#1 Macro for dummies
***
REPLY to Neil Wilson on Jul 22The curriculum at British schools is the business of the British people. Likewise for the US. No economist has to tell these or other countries how to organize their education and what to teach. The business of economists is to figure out how the economy = world economy works. The fact is that economists are failed/fake scientists. They do not even know the elementary mathematics of accounting, which, if anything, is the minimum condition of doing economics.*
Economists are a public nuisance because they have an opinion on everything but knowledge of nothing.
* See also ‘A new curriculum for swampies?’
***
NOTE NOTE NOTE on Cameron K. Murray’s ‘A random physicist takes on economics’ on Aug 28Jason Smith is NOT a random physicist but a random blatherer. Take notice that his proto-scientific drivel has been debunked in all dimensions:
Economics: math-adorned incoherent blather
Feynman Integrity, fake science, and the econblogosphere
True macrofoundations: the reset of economics
Macro imbeciles
IS-LM ― a crash course for EconoPhysicists
What genuine scientists believe about economics
Hayek and other informationally retarded proto-economists
Economics between cargo cult, farce, and fraud
The key to macro and Keen's debt-employment model
***
#PointOfProof
#PointOfProof
Intellectual deficit spending
Comment on Lars Syll on ‘The balanced budget paradox’
Blog-Reference and Blog-Reference on Jul 24
Lars Syll gives a vivid description of the utterly confused state economists are in for 200+ years: “The pros and cons of public debt have been put forward for as long as the phenomenon itself has existed, but it has, notwithstanding that, not been possible to reach anything close to consensus on the issue — at least not in a long time-horizon perspective. One has as a rule not even been able to agree on whether public debt is a problem, and if — when it is or how to best tackle it. Some of the more prominent reasons for this non-consensus are the complexity of the issue, the mingling of vested interests, ideology, psychological fears, the uncertainty of calculating ad estimating inter-generational effects, etc., etc.”
Lars Syll gives the catch-all reason for the failure of economists — complexity of issue#1 — and thus remains true to the custom of solidarity among fellow economists to avoid the real issue, which is general scientific incompetence.
It is not only the question of public debt which is stuck in the swamp where ‘nothing is clear and everything is possible’ (Keynes), it is ALL of the economics. The fact is that the four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the pivotal economic concept of profit wrong.
Isn’t it curious that in Lars Syll’s comprehensive discussion of public deficit spending and functional finance the word profit does not appear once? The simple reason is that the profit theory is false since Adam Smith, therefore profit either does not at all appear in the models or in misspecified form.
The problem is that economists in general and Lars Syll, in particular, do not understand the elementary mathematics of macroeconomic accounting.#2 Let us make matters short here. The balances of the business sector, the household sector, the government sector, and the rest of the world are interrelated as follows: Qm≡−Sm+I+Yd+(G−T)+(X−M). This boils down to Qm≡−Sm+(G−T) for I, Yd, X, M = 0.
So, there are two limiting cases: (i) If the household sector’s saving Sm goes up and the government’s deficit (G−T) goes up by the same amount the monetary profit of the business sector Qm remains unchanged. (ii) If the household sector’s saving Sm remains unchanged and the government’s deficit (G−T) goes up the profit of the business sector Qm goes up by the same amount.
So, the counterpart of an increased public deficit is either increased saving of the households or increased profits of the firms, or some combination of the two. Therefore, to say that the counterpart of an increased public deficit is an increased surplus of the ‘private sector’ obscures important real-world differences.
What is entirely missing in Lars Syll’s discussion of public debt is that public deficit spending is, first of all, a profit machine.#3 This is not different from private deficit spending. In the past decades the US households increased their debt, that is, they were dissaving. So, the private and public households ran deficits. From the formula above follows that this boosts profit Qm TWICE. And this is exactly what has been observed and criticized as a catastrophic deterioration of the income distribution.
The interrelation between changes in public debt and profit is obscured by lumping together the business sector and the household sector to the ‘private sector’ and repeating the abysmal idiocy: "We owe the debt to ourselves".
Egmont Kakarot-Handtke
#1 Failed economics: The losers’ long list of lame excuses
#2 Macro for dummies
#3 Keynesianism as ultimate profit machine
Related 'New Economic Thinking: the 10 crucial points' and 'You are fired!' and 'Austerity and the idiocy of political economists' and 'Replacing sand by granite' and 'First Lecture in New Economic Thinking' and 'Macrofounded labor market theory' and 'The minimum wage debate: a showpiece of economists’ hereditary idiocy'
Blog-Reference and Blog-Reference on Jul 24
Lars Syll gives a vivid description of the utterly confused state economists are in for 200+ years: “The pros and cons of public debt have been put forward for as long as the phenomenon itself has existed, but it has, notwithstanding that, not been possible to reach anything close to consensus on the issue — at least not in a long time-horizon perspective. One has as a rule not even been able to agree on whether public debt is a problem, and if — when it is or how to best tackle it. Some of the more prominent reasons for this non-consensus are the complexity of the issue, the mingling of vested interests, ideology, psychological fears, the uncertainty of calculating ad estimating inter-generational effects, etc., etc.”
Lars Syll gives the catch-all reason for the failure of economists — complexity of issue#1 — and thus remains true to the custom of solidarity among fellow economists to avoid the real issue, which is general scientific incompetence.
It is not only the question of public debt which is stuck in the swamp where ‘nothing is clear and everything is possible’ (Keynes), it is ALL of the economics. The fact is that the four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the pivotal economic concept of profit wrong.
Isn’t it curious that in Lars Syll’s comprehensive discussion of public deficit spending and functional finance the word profit does not appear once? The simple reason is that the profit theory is false since Adam Smith, therefore profit either does not at all appear in the models or in misspecified form.
The problem is that economists in general and Lars Syll, in particular, do not understand the elementary mathematics of macroeconomic accounting.#2 Let us make matters short here. The balances of the business sector, the household sector, the government sector, and the rest of the world are interrelated as follows: Qm≡−Sm+I+Yd+(G−T)+(X−M). This boils down to Qm≡−Sm+(G−T) for I, Yd, X, M = 0.
So, there are two limiting cases: (i) If the household sector’s saving Sm goes up and the government’s deficit (G−T) goes up by the same amount the monetary profit of the business sector Qm remains unchanged. (ii) If the household sector’s saving Sm remains unchanged and the government’s deficit (G−T) goes up the profit of the business sector Qm goes up by the same amount.
So, the counterpart of an increased public deficit is either increased saving of the households or increased profits of the firms, or some combination of the two. Therefore, to say that the counterpart of an increased public deficit is an increased surplus of the ‘private sector’ obscures important real-world differences.
What is entirely missing in Lars Syll’s discussion of public debt is that public deficit spending is, first of all, a profit machine.#3 This is not different from private deficit spending. In the past decades the US households increased their debt, that is, they were dissaving. So, the private and public households ran deficits. From the formula above follows that this boosts profit Qm TWICE. And this is exactly what has been observed and criticized as a catastrophic deterioration of the income distribution.
The interrelation between changes in public debt and profit is obscured by lumping together the business sector and the household sector to the ‘private sector’ and repeating the abysmal idiocy: "We owe the debt to ourselves".
Egmont Kakarot-Handtke
#1 Failed economics: The losers’ long list of lame excuses
#2 Macro for dummies
#3 Keynesianism as ultimate profit machine
Related 'New Economic Thinking: the 10 crucial points' and 'You are fired!' and 'Austerity and the idiocy of political economists' and 'Replacing sand by granite' and 'First Lecture in New Economic Thinking' and 'Macrofounded labor market theory' and 'The minimum wage debate: a showpiece of economists’ hereditary idiocy'
July 19, 2017
New Economic Thinking: The 10 crucial points
Comment on Bradford DeLong on ‘How to Think Like an Economist’
Blog-Reference and Blog-Reference and Blog-Reference on Jul 19 and Blog-Reference and Blog-Reference and Blog-Reference on Jul 20 adapted to context
Bradford DeLong gives a comprehensive overview of what he and the representative economist understand about economic thinking. #1 His post can be taken as an inventory of all that is wrong with economics. This, in turn, delivers the red thread for the systematic enumeration of necessary changes.
(i) The State of Economics
The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got the pivotal economic concept of profit wrong.
Provably false:
• profit theory, for 200+ years,
• Walrasian microfoundations (including equilibrium), for 150+ years,
• Keynesian macrofoundations (including I=S, IS-LM), for 80+ years. #2
This means that the textbooks from Samuelson (1948) to Mankiw and Rodrik are scientifically worthless. #3
(ii) Paradigm Shift
Economics is a failed science. The four main approaches are indefensible. The arguments of the representative economist about specific difficulties of his subject matter have to be taken for what they are: as excuses, more precisely, as thoroughly refuted excuses. #4
The fact that an approach is axiomatically false means that it cannot be improved but must be fully replaced.
(iii) Systems science
Bradford DeLong argues: “While economics is not a natural science, it is a science — a social science.” This is a popular misunderstanding. Economics is a systems science. Economics is about how the economy works and NOT about Human Nature/motives/ behavior/action. #5 These issues are left to psychology, sociology, anthropology, history, political science, social philosophy, biology/evolution theory etcetera.
(iv) Separation of Politics and Science
The question about the Good Society is a political question that has to be answered in the political realm and NOT in the scientific realm. Already J. S. Mill was quite explicit about the separation of politics and science. #6
(v) True macrofoundations
The fact is that the subject matter of economics is ill-defined or, in methodological terms, that economics is axiomatically false.
A paradigm shift means, in practical terms, that economics has to move from false Walrasian microfoundations and false Keynesian macrofoundations to true macrofoundations because if it isn’t macro-axiomatized, it isn’t economics. #7
(vi) Methodology
The failure of economics is mainly due to the Fallacy of Insufficient Abstraction. In other words, economists cannot rise above the level of storytelling. One storyline is that of supply-demand-equilibrium and the wonderful feats of the Invisible Hand; the other storyline is that of the struggle between the good guys = workers, and the bad guys = capitalists. Storytelling is scientific garbage, but people like it.
The economy is an abstraction. The correct abstraction to start with is what Keynes called the ‘monetary theory of production’. Scientific theories are defined by material/formal consistency.
The analysis proceeds top-down, that is it starts with macrofoundations, which are step by step differentiated; in other words, the analysis advances from the elementary to the complex.
There is no vague blather, no rhetoric, no metaphors, no Psychologism, no Sociologism, no second-guessing of human motives or expectations, no gossip, no sitcom talk, no narrative, and no storytelling. There is nothing but measurable variables, equations, and graphs. Because all variables are measurable, all conclusions are testable.
(vii) The elementary production-consumption economy
The objectively given and most elementary configuration of the (world-) economy consists of the household and the business sector, which in turn consists initially of one giant fully integrated firm. #8 The pure production-consumption economy is formally given by:
• Three macroeconomic axioms:
(A1) Yw=WL wage income Yw is equal to wage rate W times working hours. L,
(A2) O=RL output O is equal to productivity R times working hours L,
(A3) C=PX consumption expenditure C is equal to price P times quantity bought/sold X.
• Two initial conditions: market-clearing, i.e. X=O, and budget balancing, i.e., C=Yw.
• Two definitions: monetary saving of the household sector, Sm≡Yw−C, and monetary profit of the business sector, Qm≡C−Yw. It always holds Qm+Sm=0 or Qm≡−Sm.
(viii) The evolving economy
The axioms (A1) to (A3) refer to a period of predetermined length. The variables for one period and the next period are connected by rates of change (deterministic or random). The proper formal representation is not a set of equations but a simulation. The open-ended simulation is given with the Economics God Equation. #9
(ix) The market
It is a must to forget a whole bunch of NONENTITIES: utility, production function, supply function resp. SS-curve, demand function resp. DD-curve, equilibrium/disequilibrium. Supply-demand-equilibrium, the totem of micro/macro, is dead. Functions are fictions and therefore reduced to period elasticities.
The macroeconomic market is formally defined by the Law of Supply and Demand. #10
(x) Employment and real growth/decline
The pure production-consumption economy has, of course, to be expanded to the investment economy. This yields the Employment Law. #11This equation shows how employment/ unemployment depends on aggregate demand and the price- and profit mechanism, i.e., on the relative changes of wage rate, price, and productivity. The growth/decline of output and changes in the income distribution can be derived from the Employment Law. The stocks of inventory, money, and capital are consistently derived from the period flows as numerical integrals.
The Employment Law proves that the market economy is inherently unstable and shows the possible entry points for effective policy measures.
Egmont Kakarot-Handtke
#1 How to think like an economist (if, that is, you wish to …)
#2 Economics: 200+ years of scientific incompetence and fraud
#3 The father of modern economics and his imbecile kids
#4 Failed economics: The losers’ long list of lame excuses
#5 Economics is NOT about Human Nature but the economic system
#6 The end of political economics
#7 First Lecture in New Economic Thinking
#8 For the verbal description, see How the intelligent non-economist can refute every economist hands down
#9 Grapic AXEC25The Economics God Equation
#10 Graphic AXEC64 Law of Supply and Demand
#11 Graphic AXEC46 Employment Law/structural-systemic Phillips Curve
Related 'How economists habitually mess it up. For details of the big picture, see cross-references Paradigm Shift.
Blog-Reference and Blog-Reference and Blog-Reference on Jul 19 and Blog-Reference and Blog-Reference and Blog-Reference on Jul 20 adapted to context
Bradford DeLong gives a comprehensive overview of what he and the representative economist understand about economic thinking. #1 His post can be taken as an inventory of all that is wrong with economics. This, in turn, delivers the red thread for the systematic enumeration of necessary changes.
(i) The State of Economics
The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got the pivotal economic concept of profit wrong.
Provably false:
• profit theory, for 200+ years,
• Walrasian microfoundations (including equilibrium), for 150+ years,
• Keynesian macrofoundations (including I=S, IS-LM), for 80+ years. #2
This means that the textbooks from Samuelson (1948) to Mankiw and Rodrik are scientifically worthless. #3
(ii) Paradigm Shift
Economics is a failed science. The four main approaches are indefensible. The arguments of the representative economist about specific difficulties of his subject matter have to be taken for what they are: as excuses, more precisely, as thoroughly refuted excuses. #4
The fact that an approach is axiomatically false means that it cannot be improved but must be fully replaced.
(iii) Systems science
Bradford DeLong argues: “While economics is not a natural science, it is a science — a social science.” This is a popular misunderstanding. Economics is a systems science. Economics is about how the economy works and NOT about Human Nature/motives/ behavior/action. #5 These issues are left to psychology, sociology, anthropology, history, political science, social philosophy, biology/evolution theory etcetera.
(iv) Separation of Politics and Science
The question about the Good Society is a political question that has to be answered in the political realm and NOT in the scientific realm. Already J. S. Mill was quite explicit about the separation of politics and science. #6
(v) True macrofoundations
The fact is that the subject matter of economics is ill-defined or, in methodological terms, that economics is axiomatically false.
A paradigm shift means, in practical terms, that economics has to move from false Walrasian microfoundations and false Keynesian macrofoundations to true macrofoundations because if it isn’t macro-axiomatized, it isn’t economics. #7
(vi) Methodology
The failure of economics is mainly due to the Fallacy of Insufficient Abstraction. In other words, economists cannot rise above the level of storytelling. One storyline is that of supply-demand-equilibrium and the wonderful feats of the Invisible Hand; the other storyline is that of the struggle between the good guys = workers, and the bad guys = capitalists. Storytelling is scientific garbage, but people like it.
The economy is an abstraction. The correct abstraction to start with is what Keynes called the ‘monetary theory of production’. Scientific theories are defined by material/formal consistency.
The analysis proceeds top-down, that is it starts with macrofoundations, which are step by step differentiated; in other words, the analysis advances from the elementary to the complex.
There is no vague blather, no rhetoric, no metaphors, no Psychologism, no Sociologism, no second-guessing of human motives or expectations, no gossip, no sitcom talk, no narrative, and no storytelling. There is nothing but measurable variables, equations, and graphs. Because all variables are measurable, all conclusions are testable.
(vii) The elementary production-consumption economy
The objectively given and most elementary configuration of the (world-) economy consists of the household and the business sector, which in turn consists initially of one giant fully integrated firm. #8 The pure production-consumption economy is formally given by:
• Three macroeconomic axioms:
(A1) Yw=WL wage income Yw is equal to wage rate W times working hours. L,
(A2) O=RL output O is equal to productivity R times working hours L,
(A3) C=PX consumption expenditure C is equal to price P times quantity bought/sold X.
• Two initial conditions: market-clearing, i.e. X=O, and budget balancing, i.e., C=Yw.
• Two definitions: monetary saving of the household sector, Sm≡Yw−C, and monetary profit of the business sector, Qm≡C−Yw. It always holds Qm+Sm=0 or Qm≡−Sm.
(viii) The evolving economy
The axioms (A1) to (A3) refer to a period of predetermined length. The variables for one period and the next period are connected by rates of change (deterministic or random). The proper formal representation is not a set of equations but a simulation. The open-ended simulation is given with the Economics God Equation. #9
(ix) The market
It is a must to forget a whole bunch of NONENTITIES: utility, production function, supply function resp. SS-curve, demand function resp. DD-curve, equilibrium/disequilibrium. Supply-demand-equilibrium, the totem of micro/macro, is dead. Functions are fictions and therefore reduced to period elasticities.
The macroeconomic market is formally defined by the Law of Supply and Demand. #10
(x) Employment and real growth/decline
The pure production-consumption economy has, of course, to be expanded to the investment economy. This yields the Employment Law. #11This equation shows how employment/ unemployment depends on aggregate demand and the price- and profit mechanism, i.e., on the relative changes of wage rate, price, and productivity. The growth/decline of output and changes in the income distribution can be derived from the Employment Law. The stocks of inventory, money, and capital are consistently derived from the period flows as numerical integrals.
The Employment Law proves that the market economy is inherently unstable and shows the possible entry points for effective policy measures.
Egmont Kakarot-Handtke
#1 How to think like an economist (if, that is, you wish to …)
#2 Economics: 200+ years of scientific incompetence and fraud
#3 The father of modern economics and his imbecile kids
#4 Failed economics: The losers’ long list of lame excuses
#5 Economics is NOT about Human Nature but the economic system
#6 The end of political economics
#7 First Lecture in New Economic Thinking
#8 For the verbal description, see How the intelligent non-economist can refute every economist hands down
#9 Grapic AXEC25The Economics God Equation
#10 Graphic AXEC64 Law of Supply and Demand
#11 Graphic AXEC46 Employment Law/structural-systemic Phillips Curve
Related 'How economists habitually mess it up. For details of the big picture, see cross-references Paradigm Shift.
July 18, 2017
On econblogosphere bias
Comment on Chris Dillow on ‘On BBC bias’
Blog-Reference and Blog-Reference
Chris Dillow is concerned: “One fact tells us this ― that the public are horribly wrong about many basic facts. Of course, this isn’t wholly or even mainly the BBC’s fault. But such massive ignorance should alert us to the possibility that the country’s most powerful broadcaster isn’t fulfilling its purpose of informing its viewers and listeners.”
That the public is horribly wrong about many basic economic facts, though, is mainly the fault of economists. The first fact where the public is horribly wrong is to think that economics is a science. Economists communicate this every year to the public with immense fanfare with the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.
The fact is that there is no such thing as ‘Economic Sciences’. Theoretical economics consists of the major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― which are mutually contradictory, axiomatically false, materially/formally inconsistent, and which got the foundational economic concept profit wrong. What we actually have is the pluralism of provably false theories ― a rummage table where everybody can grab a convenient opinion.
Theoretical economics is scientifically unacceptable. And political economics is just this for 200+ years: politics. This is faithfully reflected in the econblogosphere. Since the founding fathers, economists violate the principle of the separation of science and politics. Economics is what Feynman famously called a cargo cult science and neither right-wing nor left-wing economic policy guidance has a sound scientific foundation since Adam Smith/ Karl Marx.
So, is the economics blogosphere fulfilling its purpose of informing the general public about economic matters? Or is it full of proto-scientific crap, incompetent blather, disinformation? Are all comments published as they come or are some made to vanish into nirvana? Are some threads edited ex-post? Does attention and reputation management happen? Is the BBC biased? You bet. Is the econblogosphere biased? You bet. Does Chris Dillow make comments disappear?#1
The paradox of communication is: the information you get is not the one you need, and the information you need is not the one you get. It is much like Sherlock Holmes’ ‘curious incident of the dog in the night-time’.#2
Egmont Kakarot-Handtke
#1 Zero-sum capitalism
#2 Economics, Plato’s Cave and the Silver Blaze Case
Related 'Needed: The Worst of the Worst of economics blogs'. For details of the big picture see cross-references Political Economics.
Blog-Reference and Blog-Reference
Chris Dillow is concerned: “One fact tells us this ― that the public are horribly wrong about many basic facts. Of course, this isn’t wholly or even mainly the BBC’s fault. But such massive ignorance should alert us to the possibility that the country’s most powerful broadcaster isn’t fulfilling its purpose of informing its viewers and listeners.”
That the public is horribly wrong about many basic economic facts, though, is mainly the fault of economists. The first fact where the public is horribly wrong is to think that economics is a science. Economists communicate this every year to the public with immense fanfare with the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.
The fact is that there is no such thing as ‘Economic Sciences’. Theoretical economics consists of the major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― which are mutually contradictory, axiomatically false, materially/formally inconsistent, and which got the foundational economic concept profit wrong. What we actually have is the pluralism of provably false theories ― a rummage table where everybody can grab a convenient opinion.
Theoretical economics is scientifically unacceptable. And political economics is just this for 200+ years: politics. This is faithfully reflected in the econblogosphere. Since the founding fathers, economists violate the principle of the separation of science and politics. Economics is what Feynman famously called a cargo cult science and neither right-wing nor left-wing economic policy guidance has a sound scientific foundation since Adam Smith/ Karl Marx.
So, is the economics blogosphere fulfilling its purpose of informing the general public about economic matters? Or is it full of proto-scientific crap, incompetent blather, disinformation? Are all comments published as they come or are some made to vanish into nirvana? Are some threads edited ex-post? Does attention and reputation management happen? Is the BBC biased? You bet. Is the econblogosphere biased? You bet. Does Chris Dillow make comments disappear?#1
The paradox of communication is: the information you get is not the one you need, and the information you need is not the one you get. It is much like Sherlock Holmes’ ‘curious incident of the dog in the night-time’.#2
Egmont Kakarot-Handtke
#1 Zero-sum capitalism
#2 Economics, Plato’s Cave and the Silver Blaze Case
Related 'Needed: The Worst of the Worst of economics blogs'. For details of the big picture see cross-references Political Economics.
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