January 26, 2015

Substandard thinkers

Comment on Lars Syll on 'Who is bullshiting who here?'


Lars Syll writes: “Sorry, but what Krugman and Mankiw do is economics. They’re leading economists, and if you don’t like what they do, fine, but that just means there’s some aspect of economics that you don’t like. It’s silly to restrict “economics” to just the stuff you like.”

First of all, one has to distinguish between theoretical and political economics. The goal of political economics is to push an agenda, and the goal of theoretical economics is to explain how the actual economy works. In political economics anything goes; in theoretical economics, scientific standards are observed.

The core problem of economics is that the representative economist never could get out of the intellectual swamp of political economics. This is why economics is a failed science.

To say that what Krugman and Mankiw do is economics is at once true and false. It is like saying Ptolemy did astronomy. In a way, he did but only until it was found out that his epicycles were just figments of the imagination.

Krugman never realized that IS-LM is a figment of the imagination and ― worse ― that it is logically defective (2014). He obviously lacks scientific acumen. The problem is not that Krugman's economics is politically unpopular in some quarters, the problem is that it is cargo cult science.

It is a minor irritation that Krugman or Mankiw is “parading as economics.” The real embarrassment is that political economics is parading as science.

It is silly to restrict economics to what economists think is economics. Economists are in a state of manifest self-delusion (2013). As Joan Robinson said about the stuff that parades as economics: Scrap the lot and start again.

Egmont Kakarot-Handtke

Kakarot-Handtke, E. (2013). Confused Confusers: How to Stop Thinking Like an Economist and Start Thinking Like a Scientist. SSRN Working Paper Series, 2207598: 1–16. URL
Kakarot-Handtke, E. (2014). Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It. SSRN Working Paper Series, 2392856: 1–19. URL