AXEC: New Foundations of Economics: Axiomatization: cross-references

November 30, 2015

Axiomatization: cross-references

Posts

Your economics is refuted on all counts: here is the real thing here
Wikipedia, economics, scientific knowledge, or political agenda pushing? here
New Economic Thinking ― the definitive results here
Ending the pluralism of provably false economic theories with the long-overdue Paradigm Shift here
Marx and Marxists ― too stupid for the elementary algebra of profit here
Econogenics: economists pose a hazard to their fellow citizens here
Macroeconomics and the fake History of Economic Thought here
Criminals and the Monetary Order here
The state of MMT? Stone-dead! here
Homo oeconomicus: the never-ending folk-psychological shitshow here
Economics, math, pluralism, and corruption here
What’s wrong with DSGE models is the axiom set here
Links on “Capitalism. Time for a reset.” here
Economics: No method to the madness here
Economics ― not science, not ideology, just useful idiocy here
The apocalypse of stupidity here
After 200+ years even economics becomes a science here
The worthlessness of Value Theory here
The only thing we can learn from economic models is what proto-scientific garbage looks like here
How incompetent are economic methodologists? Very! here
The Palgrave Dictionary ― a comprehensive collection of false-hero memorials here
The Levy/Kalecki Profit Equation is false here
Economic policy and the skirmishes of failed/fake scientists here
Finally, the embarrassment of economics is over here
Economics ― nothing but claptrap, twaddle, drivel, slip-slop, wish-wash, waffle, and proto-scientific garbage here
Mad but true: 200+ years after Adam Smith economists still have no idea what profit is here
Econ 101: supply-demand-equilibrium is dead for 150+ years here
Economics: failure, fake, fraud here
Macroeconomics: Economists are too stupid for science here
Dear idiots, it is deficit spending that creates the distribution people complain about here
From Keynes’ fatal blunder to the true economic model here
The canonical macroeconomic model here
Economists: “a bevy of camp-following whores” here
To this day, economists have produced NOT ONE textbook that satisfies scientific standards here
The retirement of a fake scientist and real agenda pusher here
Basics of Value Theory here
Economics as storytelling and entertainment for the masses here
Both Austrianism and MMT is proto-scientific garbage here
Deficit-spending, public debt, and macroeconomic profit/loss here
Why is 0!=1? And why is I≠S? And why economics teaching is rotten here
Heterodoxy’s trouble with macro here
MMT sucks here
Links on James Petras’ ‘Big Business Strikes Back: The Class Struggle from Above’ here
Links on Lars P. Syll’s ‘Wren-Lewis insults medical science’ here
Reverse Alchemy: from scientific gold to political shit here
Wikipedia and the promotion of economists’ idiotism (II) here
The present non-existence of economics here
The inexorable paradigm shift in economics here
There is no soft science only soft brains here
Wikipedia and the promotion of economists’ idiotism (II) here
And the answer is NCND ― economics after 200+ years of Glomarization here
Truth by definition? The Profit Theory is axiomatically false for 200+ years here
The Theory of Value and the worthlessness of economics here
MMT: How mathematical incompetence helps the Kelton-Fraud here
The miracle cure of economists’ micro-macro schizo here
Hooray! The formalization issue is finally settled here
Profit: after 200+ years, economists are still in the woods here
Do first your macroeconomic homework! here
Nietzsche, entropy, full employment, and NO class war here
The demise of phony experts: macroeconomics is provably false here
Additional proof of MMT’s inconsistency here
Both orthodox and heterodox economists are cargo cult scientists here
Neoclassical growth theory: modeling gone nuts here
Macroeconomics: self-delusion and empty promises here
Infantile model bricolage, or, How many economists can dance on a non-existing pinpoint? here
Stop beating mainstream economics ― it is long dead here
New insight from Meta-Learning: delete economics here
Futile beatification and canonization of an economics Flat-Earther here
The objective value of money here
How MMT fools the ninety-nine-percenters here
Political economics: Who hijacks British Labour? here
Economies are culturally different but economic laws are universal here
Paul Krugman and economic poultry entrails reading here
Fiscal policy and the Humpty Dumpty Fallacy here
Heterodoxy ― an axiomatic failure just like Orthodoxy here
Ricardo and the invention of class war here
Ricardo, too, got profit theory wrong here
Economics: a comedy of errors full of intrigue and aberration here
Profit, income, and the Humpty Dumpty Fallacy here
From false microfoundations to true macrofoundations here
Is Nick Rowe stupid or corrupt or both? here
Rethinking macro here
Macro for retarded economists here
Microfoundations R.I.P. here
Again and again: economists are incompetent scientists here
False models and true incompetence here
Keynes’ intellectual nonexistence here
Yes, economics is a bogus science here
The profit theory is false since Adam Smith here
How to make economics a science here
Economics: stories, narratives, and disinformation here
How the representative economist gets it wrong big-time here
Joan Robinson and the early death of Behavioral Economics here
Proof of the inherent instability of the market economy here
10 steps to leave cargo cult economics behind for good here
Solving Mill’s starting problem here
The new macroeconomic paradigm here
CORE: more lipstick on the dead economics pig here
What makes economics a failed science? here
Economic methodology for the little guy here
The moralizing economist is not a good guy but a fake scientist here
In search of new economists here
Economics, philosophy, and mathematics here
After-Keynesian zombie interbreeding here
Economics: math-adorned incoherent blather here
New Economic Thinking: the 10 crucial points here
Don Lars and the axiomatic windmill here
We are not yet out of the wood; in fact, we are not yet in it here
Macrofounded labor market theory here
A new perspective on economics here
Economists: scientists or political clowns? here
Equilibrium and the violation of a fundamental principle of science here
Post Keynesianism, too, is proto-scientific rubbish here
First Lecture in New Economic Thinking here
The equilibrium of idiocy here
Math, Einstein, and the bottomless incompetence of economists here
True macrofoundations: the reset of economics here
Economics ― a doctor worse than the disease here
From the pluralism of false models to the true economic theory here
Review of the economics troops here
Economists ― medics or barber-surgeons? here
The fundamental problem of economics: scientific incompetence aka stupidity here
How economists shoot themselves non-stop in the methodological foot here
The thinking economist here
Economics between cargo cult, farce, and fraud here
How Arrow pushed economics over the cliff here
Note on Lars Syll on Axiomatization here
Economics between mathiness, dyscalculia, and idiocy here
Modern macro moronism here
NAIRU and the scientific incompetence of Orthodoxy and Heterodoxy here
The methodological blunders of fake scientists here
Walras, Keynes, Samuelson, DSGE, IS-LM ― R.I.P. here
Why you should NEVER use supply-demand-equilibrium here
If it isn’t macro-axiomatized, it isn’t economics here
Economics is a science? You must be joking! here
The key to macro and Keen's debt-employment model here
Why not simply throw all economists under the bus? here
Rectification and generalization of MMT here
Macro poultry entrails reading here
Ideology? Incompetence? Fake? Or all this together? here
Strange noise in the graveyard of economics here
How to finally hammer down the nails in the coffin of Monty Python economics here
The futile attempt to recycle Sraffa here
Economics: The pathetic story of two failures here
The IS-LM macro imbeciles here
Heterodoxy and the re-invention of science here
The monetary circuit and how economists got it wrong here
Methodology 101, economic filibuster, and the mother of all excuses here
The false foundations of economics here
Economics for philosophers here
How to end the futile economics zombie ping-pong here
The father of modern economics and his imbecile kids here
From false micro to true macro: the new economic paradigm here
How the mainstream vanished in the gutter here
New economic thinking ― false promises and hopes here
The road that turned out to be a blind alley here
It’s in the hardcore, stupid here
When proto-scientific Heterodoxy calls Orthodoxy pseudo-scientific here
A brief rectification of employment theory here
All models are false because all economists are stupid here
Kick out the king and don’t forget the jesters here
Outside of science here
No future for axiomatically false economics here
From subjective weighing of motives to objective systemic properties here
The trouble with economics prizes here
Micro and macro inconsistency here
The end of traditional Heterodoxy in the Malmö coal pit here
Economists and the economy ― a nonstarter since 200 years here
Post Keynesianism, science, and universal idiocy here
Feeble minds, shaky assumptions, and the inevitable failure of economics here
Enough! Economists, retire now! here
How to get rid of the silly Queen here
What’s wrong with Econ 101? Economists, of course! here
Fatal defects of profit and market theory here
Forget Chicago, and also Cambridge here
Getting out of IS-LM = Getting out of despair here
Keynes, the methodologist here
The scientific self-elimination of Heterodoxy here
End of confusion here
The tiny little problem with economics here
Methodological wrong-way drivers here
Cranks? What cranks? That’s economics! here
The real trouble with Econ 101 here
Neo-Paleo-Stupidicism here
The market economy is inherently unstable and economists never grasped it here
The problem with macro in two words here
The solemn burial of marginalism here
Where advanced Heterodoxy — represented by Steve Keen — took the wrong turn here
From microfoundations to macrofoundations here
Show first your economic axioms or get out of the discussion here
How to get out of the swamp of ignorance here
Vain hopes in the ruins of economics here
Economists’ three-layered scientific incompetence here
How to restart economics here
Axiomatics — the heterodox bugbear here
Addendum to ‘Musings on Whether We Consciously Know More or Less than What Is in Our Models’ here
Axiomatized nonentities and the failure of methodologists here
Switching into constructive gear here
The future of economics: why you will probably not be admitted to it, and why this is a good thing here
The existence of economic laws and the nonexistence of behavioral laws here
Towards the true economic theory here
The ur-blunder of economics and its rectification here
How Orthodoxy buffaloed Heterodoxy here
How to start off at the right foot here
Schumpeter's two axioms of discourse here
Warning: Einstein can be hazardous to heterodox methodology here
At the Robinson Line here
The intelligent layperson's guide through vacuonomics here
No license for drivel here
Yes, Orthodoxy is incoherent but, unfortunately, Heterodoxy also here
Replacing sand by granite here
United in the social science delusion here
From obscurity to enlightenment here
Total scientific Dadaism here
Prophets of Preemptive Vanitization here
Beauty or horseshit? here
Uncertain causes here
Axiomatic economics — total horseshit here
"The failure of economics is due to the use of the axiomatic method" here
Proper use of math in economics here
The axiomatic method is impeccable here

Modern macroeconomics — obscurantist axiomatics here
Is Economics a Science? Dogmatic Economics vs. Reflective Economics here
Rethinking Keynes' non-Euclidean theory of the economy here and here
What is neoclassical economics – a rejoinder here

Cross-references

Math/Mathiness here
Marshall's "Burn the mathematics" here
Methodology here
Paradigm Shift here

New Foundations
For the complete and consistent set of foundational equations — structural axioms and behavioral propensity function — see Wikimedia AXEC121f

Meta references

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.