AXEC: New Foundations of Economics

October 31, 2026

Occasional X: Clueless economists / Price Mechanism (XX)

“Liberty is competition and incessant conflict, the mother of all progress, in which only the most capable can triumph, and the weakest, as in nature, are condemned to annihilation.” (Gustave Le Bon) Not true. Instead, profit may provide a strong incentive to corruption/organized crime. In the free-market economy, not the most 'capable' but the most corrupt survives. The proof is given in table AXEC221b ⇓. The elementary production-consumption economy is given with three macroeconomic axioms in lines 1, 4, 7. The business sector is split into two identical firms in lines 1-2, 4-5, 7-8. Under the initial conditions of market-clearing and budget-balancing, this yields the price P in line 16. The price is the dependent variable here. In the initial state, the price is equal to unit wage costs W/R, and equal for both firms. The workers get the whole product O. The profit Qm for both firms and the business sector as a whole is zero. Now, the wage rate W in firm 1 is lowered arbitrarily; otherwise, both firms are identical in every respect. As a result, the market price P decreases in line 12. The profit of firm 1 increases in line 19; firm 2 makes a loss in line 20. Total profit remains zero. The household sector as a whole still gets the whole product O, but the workers of firm 1 can buy less with their lower wage income; the workers of firm 2 can buy more with their unchanged wage rate W and a lower price P. The firm that somehow manages to pay less for the same labor input increases profit Qm. Firm 2 makes a loss and will go bankrupt if it does not also make a wage cut. As a result, firm 1 wins the race to the bottom. The workers of firm 1 cannot move to firm 2 because it no longer hires or doesn't exist any longer. This process of cross-over exploitation is inherent to capitalism and inevitably leads to higher concentration. If a firm can undercut minimum wage regulations, it can be said that the criminal firm wins and the honest firm loses. What remains in the long run is a degenerated/corrupted free-market economy. On closer inspection, economics is revealed as the story of intra-sectoral cross-over exploitation among firms and among households. Ultimately, the market is not primarily an allocation mechanism but a quasi-Darwinian selection mechanism that increases the survival chances of the corrupt and decreases them for the honest.
— AXEC (@EgmontHandtke) October 31, 2026

For more about the quasi-Darwinian process, see AXECquery.

Occasional X: The foul spirit of political economics (CDXX)

“Innovators and creative geniuses cannot be reared in schools. They are precisely the men who defy what the school has taught them.” (Ludwig von Mises) Innovators and creative geniuses are the most exploited group in the free-market system. Business has captured the real wealth creators. As a rule of thumb, not those who create and ultimately enhance the productivity of the economic system get eventually wealthy, but those who employ or sponsor them — or simply steal their ideas. The real creative genius Tesla died poor, with a charity from the firm he helped to create and prosper. In the end, the royalties go elsewhere. ‡ Innovators and creative geniuses cannot be presented as the heroes of the free-market system. They enhance the productivity of a firm, but the enhanced profits are taken by the firm's owners. That scientists/inventors work for firms is a historical accident and in NO way intrinsic to science. To the contrary. Genuine scientists, for example, are fed up with working under the direction of a management with entirely different incentives or constantly begging for funding from the oligarchy. Seen from the perspectives of merit and the freedom of science, this is as perverse as it gets — in any case for basic research. Time for a new business model ⇒ A rough business plan for science https://t.co/fvOOBCrRgV Toward the New Academy https://t.co/4lOOZdZkox ‡ Sources “In early 1891, George Westinghouse explained his financial difficulties to Tesla in stark terms, saying that, if he did not meet the demands of his lenders, he would no longer be in control of Westinghouse Electric and Tesla would have to 'deal with the bankers' to try to collect future royalties. The advantages of having Westinghouse continue to champion the motor probably seemed obvious to Tesla and he agreed to release the company from the royalty payment clause in the contract. Six years later Westinghouse purchased Tesla's patent for a lump sum payment of $216,000 as part of a patent-sharing agreement signed with General Electric ….” (Wikipedia) “At this time, Westinghouse Electric & Manufacturing Company began paying him $125 (equivalent to $3,010 in 2025) per month in addition to paying his rent. Accounts of how this came about vary. Several sources claim that Westinghouse was concerned, or possibly warned, about potential bad publicity arising from the impoverished conditions in which their former star inventor was living. The payment has been described as being couched as a 'consulting fee' to get around Tesla's aversion to accepting charity.” (Wikipedia) “J.P. Morgan stopped funding Nikola Tesla … around 1903–1904 because Tesla's project lacked a viable business model for making money.” (Google AI)
— AXEC (@EgmontHandtke) October 31, 2026

Occasional X: How it works (DXXIX)

“Earnings come from revenue, not debt. Debt pays for the capex that shows up later.” (Kyle Thompson) “You realize that someone's revenue is someone else's debt-funded expense?” (zerohedge) Neither Kyle Thompson nor zerohedge understands the relationship between revenue, profit, and debt; and, by logical consequence, how the economic system works. The free-market economy runs on profit. Macroeconomic profit is given by the axiomatically correct Profit Law Qm:=(I−Sm)+(G−T)+(X−M)+Yd. The Profit Law implies PublicDeficit=PrivateProfit Qm:=(G−T)>0, i.e., macroeconomic profit is (co-)produced by deficit-spending/money-creation, i.e., the growth of public debt. In free-market economies, public debt has increased with minor interruptions for over 200 years. Therefore, Qm:=(G−T)>0 has been a critical factor for Capitalism's survival. The free-market economy is temporarily saved from breakdown by the deficit-spending/money-creating duo of treasury/central bank, i.e., the State. This means that the premise of legacy economics, i.e., that the unfettered free-market economy is a self-adjusting, self-stabilizing, and self-optimizing system, is axiomatically false. This means that economics is failed/fake science. Economists are not scientists. They are mostly silly wafflers for a low-IQ audience. If they are good at disinfotainment, they are rewarded the EconNobel for 'economic sciences', which is the most prestigious fraud for the self-stabilisation of a failed/fake science. In essence, private/public deficit-spending is how the self-alimentation and self-preservation of WeTheOligarchy work. It has nothing to do with optimal allocation of resources, free people on free markets, or democratic consumer choices. The financial wealth of WeTheOligarchy has ultimately been printed by the central bank. It's roughly equal to the public debt of WeThePeople. By currently exploding the deficit, President Trump is exploding the number of millionaires/ trillionaies/ zillionaires until the smooth recycling of public debt by government bonds goes on and WeThePeople can be taxed for the interest that the State collects for WeTheOligarchy.
— AXEC (@EgmontHandtke) October 31, 2026

October 30, 2026

Occasional X: The futile attempt to recycle Kalecki (XVIII)

“Assessment: AXEC is partly right about accounting, but substantially overstates his conclusions. My rating: 4/10 for the economic argument as a whole. His emphasis on accounting consistency, profits and financial balances is valuable. However, his claim that Kalecki never understood profit is poorly supported, and his assertion that an economy must implode whenever aggregate monetary profit becomes negative is not established by his equation.” (James Young)‡ One of the unavoidable stomach-churners in economics is that scientifically incompetent folks pontificate about methodology. One of the dumbest phrases in economics is: That's an accounting identity, but economics is about human behavior. No, psychology and sociology are about human behavior; economics is about the economic system. Accounting relationships are systemic laws, and, best of all, they are testable. To be sure, utility maximization is not a testable proposition. Actually, it is much worse; for example, here are the neo-Walrasian axioms: “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) This behavioral axiom set consists of psycho-social hallucinations; its variables are NONENTITIES, and therefore its conclusions are not testable in principle. Equilibrium is the worst petitio principii of all. Every theory/model that contains the concept of equilibrium/disequilibrium is proto-scientific garbage. Economic methodology has been a scientific disaster from the Founding Fathers onward. Unfortunately, Keynes messed up the unavoidable Paradigm Shift from microfoundations to macrofoundations. See the graphic AXEC172a https://t.co/ynvCeZQGlx. Kalecki was somewhat better, but he, too, messed up profit and distributed profit. Profit is a balance, and distributed profit is a flow. Because of his methodological blunder, he got the concepts of income and saving wrong. In the elementary case, income is NOT the sum of wage income and profit, but of wage income and distributed profit. That's the first axiom in line 1. See also Kalecki got it wrong, Allais got it right https://t.co/MybEzLGDkg In table AXEC238a ⇓, the case of profit distribution is consistently dealt with. From the objective systemic axiom set in lines 1-3 follows that profit is equal to distributed profit, i.e., Qm:=Yd, if the expenditure ratio ρE of both wage income Yw and distributed profit Yd is 1 (line 15). In this case, the Capitalists reproduce their profit by fully spending their distributed profit on consumption. Thereby, they get a part of the real product O, without ever having contributed to its production. This is what Kalecki's famous punch line: they get what they spend, ultimately means. In principle, the Capitalists as a whole can make their profit as big as they want. Practically, they don't, because normally there is retained profit, and distributed profit is mostly saved. Luckily, there are other sources of profit Qm:=Yd+(I−Sm)+(G−T)+(X−M). Keynes and Kalecki are only special cases of the methodologically correct AXEC macrofoundations and, by implication, of the systemic Profit Law. Strictly speaking, Keynes, Kalecki and their followers were too stupid for the elementary math that underlies macroeconomic accounting. Note well that no behavioral economist ever arrived at the systemic Profit Law. Profit is the foundational variable of the subject matter. All behavioral profit explanations are provably false. Because profit is false, the whole of legacy economics is scientifically worthless. Against this backdrop, Kalecki was a real progress. ‡ It has been established in the working paper Mathematical Proof of the Breakdown of Capitalism https://t.co/2NkX9FRklW
— AXEC (@EgmontHandtke) October 30, 2026

Occasional X: The futile attempt to recycle Austrianism (CXXXIV)

“You haven’t exposed an Austrian deception. …First, Mises never claimed that markets operate like parliamentary democracies.” (Roaldcs) Already false: “The statement (“The market is a democracy. Capitalism is the consummation of the self-determination of consumers.”) is found in Ludwig von Mises's book Omnipotent Government: The Rise of the Total State and Total War (first published in 1944).” (Google AI) It is one of the tenets of Austrianism that a free-market economy and democracy are necessary complements. More precisely, the political concept of democracy is taken as the main selling proposition of an allegedly scientific theory. Logically, the free-market system should be justified as a superior economic system, not as the twin brother of freedom and democracy. Austrians have never done this. The Austrian approach has been proto-scientific garbage from the beginning. People buy the package, not the content. The package is shiny, the content is cheap crap. The Austrian package is freedom and democracy. Austrian economics is proto-scientific garbage. Austrian arguments have already been refuted one-by-one. For details, see the AXECquery The futile attempt to recycle Austrianism https://t.co/netz8fcVyf Austrians simply violate the foundational scientific principle: “In economics we should strive to proceed, wherever we can, exactly according to the standards of the other, more advanced, sciences, where it is not possible, once an issue has been decided, to continue to write about it as if nothing had happened.” (Morgenstern, 1941) Austrianism is the senseless repetition of long refuted arguments. It's a treadmill of stupidity. Their dumbest phrase is: That's only an accounting identity. Yes, accounting identities are systemic laws, and they are the logical precondition of testing. None of the behavioral hallucinations of Austrianism is testable. Austrians do not understand the difference between science and a quasi-religious Wahnsystem. Human-Nature economists in general, and Austrians in particular, are scientifically incompetent imbeciles and methodologically in the darkest woods. Economists never had a political mandate, as J. S. Mill already knew (AXEC166a ⇓).
— AXEC (@EgmontHandtke) October 30, 2026

Occasional X: The foul spirit of political economics (CDXIX)

“Austrian, more properly Mengerian economics, is perfect deduction from pure a priori first principles. So history, statistics, all empirical data, is irrelevant. Mengerianism is what must by true, not what merely happens, or any distracting reality.” (RFB) Methodologically, the Austrian Action Axiom is a tautology. Nobody can deny it, but nothing follows from it. Deduction does not work if the premises are false. Scientists have known this for more than 2400 years: “When the premises are certain, true, and primary and the conclusion formally follows from them, this is demonstration, and produces scientific knowledge of a thing.” Austrianism is proto-scientific garbage because of the behavioral premise. Economics is a genuine systems science, NOT a social science; i.e., it is NOT about Human Nature / motives / behavior / preferences / choice / incentives / values / actions / expectations, etc. Psycho-social economics has always been cargo cult science (Feynman's term). No way leads from the understanding of individual behavior to the understanding of the behavior of the economy as a whole. Mindreading homo oeconomicus, a.k.a. the economic agent, is (i) a futile exercise to begin with, and (ii) pointless because it runs with logical necessity into the Fallacy of Composition. Economics has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. Put simply: Human-Nature economists in general, and Austrians in particular, are scientifically incompetent imbeciles and methodologically in the darkest woods. The Mises Institute is not an independent think tank with a scientific mission, but a dependent propaganda tank with a political mission.
— AXEC (@EgmontHandtke) October 30, 2026

Occasional X: The futile attempt to recycle Kalecki (XVII)

“Kalecki's Theory of Economic Dynamics explains more about how firms actually set prices in a few chapters than the entire theory of subjective value and marginal utility.” (Mr.Keynes) Neither Mr.Keynes nor Michał Kalecki ever understood profit. That's the worst thing for an economist. For details, see Kalecki: the man who missed it by a hair's breadth https://t.co/JOlDMelY4C and Cross-references: Kalecki https://t.co/FemYl1aA8M The monetary economy in general, and the US economy, in particular, thrives on growing private/ public debt. If this growth stops, the economy implodes. Macroeconomic profit Qm is given by the axiomatically correct Profit Law Qm:=(I−Sm)+(G−T)+(X−M)+Yd. The minimum requirement for a free-market economy is that macroeconomic profit is greater than zero, i.e., Qm≥0. If Qm<0, recession/depression/breakdown results. Qm≥0 is the systemic existential precondition. This is easy to understand, but economists still don't get it. They can only think behaviorally, not systemically. PsySoc economics is proto-scientific garbage. The premise of mainstream economics, i.e., that the unfettered free-market economy is a self-adjusting, self-stabilizing, and self-optimizing system, is axiomatically false. This means that economics is a failed/fake science. Ultimately, this means that the representative economist is scientifically incompetent. Michał Kalecki took the first step, i.e., a valid critique. He never managed to advance to the Paradigm Shift. As Feynman put it: “The problem is not just to say that something might be wrong, but to replace it by something ― and that is not so easy.” To sell his outdated book on social media is a losing proposition.
— AXEC (@EgmontHandtke) October 30, 2026

Subscribe to: Posts (Atom)

Knowledge only — no opinion

Science does not explain everything, but non-science explains nothing.

Neither orthodox nor heterodox economics satisfies the scientific criteria of material and formal consistency.

Economists cannot explain how the economy works. The Profit Theory is false since Adam Smith. There is much opinion and little knowledge.

Opinion is the realm of political economics, knowledge is the realm of theoretical economics.

Political economics is scientifically worthless.

Theoretical economics is built upon clearly stated premises, i.e., upon a set of axioms.

Orthodoxy got the axiomatic foundations wrong and Heterodoxy has none at all.

Economics is a failed science. Economists are incompetent scientists.

Profit

Neither Classicals, nor Walrasians, nor Marshallians, nor Marxians, nor Keynesians, nor Institutionialists, nor Monetary Economists, nor MMTers, nor Austrians, nor Sraffaians, nor Evolutionists, nor Game theorists, nor EconoPhysicists, nor RBCers, nor New Keynesians, nor New Classicals ever came to grips with profit. Hence, they all fail to capture the essence of the market economy.

Because of this, economists have nothing to offer in the way of a scientifically founded economic policy guidance.

The hybrid science

As a first approximation, one can agree on the general characteristic that the economy is a complex system.

However, with the term system one usually associates a structure with components that are non-human. In order to stress the obvious fact that humans are an essential component of the economic system the market economy should be characterized more precisely as a complex hybrid human/system entity.

The scientific method is straightforwardly applicable to the sys-component but not to the hum-component. While it is clear that the economy always has to be treated as an indivisible whole, for good methodological reasons the analysis has to start with the objective system-component.

In gestalt-psychological terms the economic system is the foreground, individual behavior the background. Common sense wrongly insists that the hum-component must always be in the foreground. This fallacy compares to geo-centrism. The economic system has its own logic which is different from the behavioral logic of humans. The systemic logic is what Adam Smith called the Invisible Hand.

There are systemic laws but no behavioral laws. Systemic laws have the same methodological status as physical laws.

Neither Orthodoxy nor Heterodoxy can tell what the systemic laws of the actual monetary economy are.

Whether the outcome of the human/system-interaction is good or bad is a politcal question that lies outside of theoretical economics. Theoretical economics explains how the actual economy works - no less, no more.

Narrative vs.Theory

Psychological, sociological or behavioral assumptionism cannot yield anything other than a gossip model of the world. Second-guessing the agents is not economic analysis.

Science deals exclusively with propositions that can in principle be decided by objective means. The rest is opinion, faith, phantasy, motive speculation, allegation, hallucination, myth, paranoia, ink-blot association, psychology, philosophy, in one word: storytelling.

Storytelling is the original mode of communication in the social realm — except science.

Political economics is storytelling and, by default, the natural habitat of confused confusers. Walrasianism, Keynesianism, Marxianism, Austrianism are social narratives and not scientifically valid representations of reality.

"The truth is, most persons, not excepting professional economists, are satisfied with very hazy notions." (Fisher)

In marked contrast, theoretical economics lives up to the standards of material and formal consistency. A scientific theory is the best mental representation of reality that is humanly possible.

Theory starts with a set of objective and consistent axioms.

Paradigm Shift

"The problem is not just to say that something might be wrong, but to replace it by something — and that is not so easy." (Feynman)

"As will become evident, there is more agreement on the defects of orthodox theory than there is on what theory is to replace it: but all agreed that the point of the criticism is to clear the ground for construction." (Nell)

"The moral of the story is simply this: it takes a new theory, and not just the destructive exposure of assumptions or the collection of new facts, to beat an old theory." (Blaug)

"Is it not a fact, which stares at us from the histories of all sciences, that it is much more difficult for the human mind to forge the most elementary conceptual schemes than it is to elaborate the most complicated superstructure when those elements are well in hand?" (Schumpeter)

"The task of producing knowledge against the grain requires imagination." (Mirowski)

"A new idea is extremely difficult to think of. It takes a fantastic imagination." (Feynman)

"The scientific imagination dreams of explanations and laws." (Peirce)

"It is brilliance of imagination which makes the glory of science." (Evans)

"... we know little more now about ‘how the economy works,’ ... than we knew in 1790, after Adam Smith completed the last revision of The Wealth of Nations." (Clower)

Selftest and to watch for

You apply one of these items

• supply-demand-equilibrium,

• general equilibrium,

• marginal utility,

• well-behaved production functions,

• total income = value of output,

• total income = wages + profits,

• I=S,

• wage rate down - employment up,

• behavioral axioms?

Then you are out of science because of unnoticed material or formal inconsistency.

Every economist who uses the concept of equilibrium is scientifically incompetent because she/he failed to notice that equilibrium is an economic nonentity.

Practically this means: as soon as the word equilibrium appears in an economic text it can be thrown into the waste basket. The same holds for all other nonentities.

The vast majority of economists deals mainly with nonentities. This is why Walrasianism, Keynesianism, Marxianism, Austrianism is scientifically worthless.

Since Adam Smith, economic policy guidance has no sound scientific foundations.

To be replaced (1)

The core premises of Orthodoxy are uncertain and false and this fully explains the failure of the research program.

“As with any Lakatosian research program, the neo-Walrasian program is characterized by its hard core, heuristics, and protective belts. Without asserting that the following characterization is definitive, I have argued that the program is organized around the following propositions: 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)

The inescapable Paradigm Shift consists of the move from this obsolete hard core to the superior set of structural axioms.

To be replaced (2)

The fundamental equations of macroeconomics have been formulated by Keynes in two lines.

"Income = value of output = consumption + investment. Saving = income - consumption. Therefore saving = investment."

This elementary syllogism is demonstrably false. The demonstration consists in the proof that Keynes could not solve the Profit Puzzle. Neither did Post-Neo-New-Keynesians.

In the most general terms, the economics Paradigm Shift consists in switching from the behavior-centric bottom-up approach to the structure-centric top-down approach. This is comparable to the Copernican turn from geo-centrism to helio-centrism.

Consensus

Economics is a science without scientists. Because they are ignorant of the elementary difference between profit and income, the present generation of economists has not made and cannot make a significant contribution to the discussion about how the actual economy works.

Every orthodox or heterodox economist can convince himself/herself that their profit theory is defective.

Every non-economist can — by applying elementary logic — convince himself that conventional profit theories are false. See 'How the intelligent non-economist can refute every economist hands down'.

Because the profit theory is false the whole of conventional economic theory has to be rejected.

"What is now taught as standard economic theory will eventually disappear, no trace of it will remain in the universities or boardrooms because it simply doesn’t work: were it engineering, the bridge would collapse." (McCauley)

No scientist will ever accept Walrasianism, Keynesianism, Marxianism, or Austrianism. These approaches are logically and/or empirically refuted. This is the actual methodological state-of-art. Walrasians, Keynesians, Marxians, or Austrians are still at the proto-scientific stage. These approaches cannot be improved, only abandoned.

Economists are a public nuisance because they have an opinion on everything but knowledge of nothing.

About me

“Bottom line is that your profit law is just a definition you made up nobody else agrees with, nobody. You are all alone with your precious tautology.” Barkley Rosser

“In any event, your entire theory is based on you doing macro accounting in wacky fashion that nobody agrees with.” Brian Romanchuk

"Your stuff is at least original: it's quite cool after a couple of decades at this to see a fresh Economics. But real promises are not advanced: they were around for millennia until the Greeks obscured them with Metaphysics." Chris Cook

"No mate, they're you-blockers. You have all the personality traits of a crank, and the rest of them have tired of you. You could be 100% right, and you'd still die as your only follower." Steve Keen

"What you are doing fills is all with joy, your constructive critique is most welcome!"

Achim Truger,

German Council of Economic Experts,

in a failed attempt to be ironic

"200+ years of thought and yet you are the only one who gets it—or even understands your argument. Thank god we have you, pseudonymous Twitter user. Otherwise no one would know."

William Luther

Assistant Professor of Economics

in a failed attempt to be funny

"Egmonts profit law is the perfect equation that demonstrates this in action. Put the equation into a spreadsheet and then add government spending and watch how it flows into profits. Enter in some debt (-Sm) and watch too how that flows into profits. It can't go anywhere else."

Dean

About the rest of economics

Walrasianism, Keynesianism, Marxianism, Austrianism, MMT, Pluralism are mutually contradictory, axiomatically false, materially/ formally inconsistent. Economics is a failed science.

“There are three classes of people: those who see. Those who see when they are shown. Those who do not see.” Leonardo da Vinci

In economics, the overwhelming majority belongs to Class III. This explains why economics is after 200+ years still at the proto-scientific level.

The obvious task for every economist is to advance from cargo cult science and political agenda-pushing to science. This is absolutely beyond the means of Class III people.

For 200+ years now, economists are not scientists but agenda pushers, useful idiots, clowns in the political Circus Maximus.

Nopopop

This blog does not add to any popular/un- popular opinion.

This blog does not hand out advice about how to avoid taxes, to get rich on the stock market, to be successful in business, to increase the wealth of nations, to run an economy, to maximize welfare, to prevent national/global bankruptcy, to improve the institutional setup of society, to get out of national/global depression, nor about how to save humankind or any subgroup thereof.

This blog is about the true theory of the actual monetary economy.

"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)

Focus

Science is of primary interest and importance. Scientists are of secondary interest.

With regard to science, most people lose focus easily because of a natural preference for anecdotes and gossip over facts or subjectivity over objectivity.

Hence, Schumpeter once considered it necessary to remind his habitually disoriented fellow economists: “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.”

Science is about true/false and nothing else.

Disclaimer

Missing Blog-Reference links: AXEC does not guarantee that their comments can at any time be recovered from where they have been posted intitially because the availability depends on the publication policy of the blog owner which is implicitly accepted on entering a debate. See also: 'Economists: Incompetent? Stupid? Corrupt?'

Texts: Parts of arbitrary length of any of the author's texts is and will be used again by the author in papers, books, websites, blogs, and other media without explicit reference. The right to make corrections or minor textual improvements on reutilization is reserved. Therefore, it is always a good idea to double-check for the latest version.

Caution: Do not expect a corroboration of your political view. Neither a refutation. Political economics has been scientifically worthless since Adam Smith. Politics has to be separated from economics because it is categorically different from science. The best science can do and has always done is to prove beyond reasonable doubt that you have been objectively wrong or ignorant until now. Science goes beyond the naive common sense of today and becomes the sophisticated common sense of tomorrow.

See also Terms of Use and Legal at www.AXEC.org

Outlook

To recall, while political economics is storytelling, theoretical economics adheres to scientific standards.

The first task of theoretical economics is to get the axiomatic foundations right. This is what J. S. Mill called the opus magnum. Neither Orthodoxy nor Heterodoxy came up with a reasonable solution to this day. This explains the secular stagnation of economics.

There is no serious alternative to structural axiomatic economics. This is not a matter of opinion but of proof. The sole criteria are material and formal consistency.

All of economics has to be reconstructed from the ground up.

Major economic policy implication

The price mechanism does not work as standard economics hypothesizes. The axiom-based Employment Law states that overall employment increases if the average wage rate increases relative to average price and productivity. This gives one the lever to improve the employment situation all over the world and to fend off deflation without rising debt and without artificial capacity growth. To increase the average price relative to the average wage rate and productivity increases unemployment.

Right policy depends on 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)

Lacking the true theory, economists promote for more than 200 years opinion instead of knowledge.