More than a hundred years ago ... “Walras approached Poincaré for his approval. ... But Poincaré was devoutly committed to applied mathematics and did not fail to notice that utility is a nonmeasurable magnitude. ... He also wondered about the premises of Walras’s mathematics: It might be reasonable, as a first approximation, to regard men as completely self-interested, but the assumption of perfect foreknowledge ‘perhaps requires a certain reserve.’” (Porter, 1994, p. 154)
This was in the old days. But certainly, economics has made tremendous progress. Or has it?
“An economic theory or model that doesn’t pass the real world smell-test is just silly nonsense that doesn’t deserve our attention and therefore belongs in the dustbin. Rational expectations immediately comes to mind.” (see intro)
It was green-cheese assumptionism then, but today it is even worse. Everybody has the greatest peer-reviewed scientific aberration since Geo-centrism before his very eyes. A big chance for Heterodoxy to turn things around one would think. But no. Heterodoxy is quite content with reiterating Poincaré and propagating its own brand of assumptionism.
The profit theory of Keynes, Kalecki, or Keen, for example, is as far away from reality as any mainstream profit theory (2014; 2011; 2013), “... surely, therefore, they fail to capture the essence of a capitalist market economy.” (Obrinsky, 1981, p. 495)
Economists owe the world the true economic theory, that is, a theory that satisfies the scientific standards of material and formal consistency and that explains how the economy works.
Since Poincaré wondered about the premises of Walras’ mathematics a Paradigm Shift is overdue. But no promising alternative has emerged until now.
“... the omnipresence of a certain point of view is not a sign of excellence or an indication that the truth or part of the truth has at last been found. It is, rather, the indication of a failure of reason to find suitable alternatives which might be used to transcend an accidental intermediate stage of our knowledge.” (Feyerabend, 2004, p. 72)
After more than a hundred years, the talk of nonsense economics becomes nonsensical.
Feyerabend, P. K. (2004). Problems of Empiricism. Cambridge: Cambridge University Press.
Kakarot-Handtke, E. (2011). What is Wrong With Heterodox Economics? Kalecki’s Profit Theory as an Example. SSRN Working Paper Series, 1845803: 1–9. URL
Kakarot-Handtke, E. (2013). Debunking Squared. SSRN Working Paper Series, 2357902: 1–5. URL
Kakarot-Handtke, E. (2014). The Three Fatal Mistakes of Yesterday Economics: Profit, I=S, Employment. SSRN Working Paper Series, 2489792: 1–13. URL
Obrinsky, M. (1981). The Profit Prophets. Journal of Post Keynesian Economics, 3(4): 491–502. URL
Porter, T. M. (1994). Rigor and Practicality: Rival Ideals of Quantification in Nineteenth-Century Economics. In P. Mirowski (Ed.), Natural Images in Economic Thought, 128–170. Cambridge: Cambridge University Press.
For details of the big picture see Meta-References.