July 6, 2015

A lesson for Heterodoxy

Comment on merijnknibbe on ‘In Greece, NO is the answer’


There have been two essentially different, although intertwined, issues (i) economics, austerity, default, euro/drachma, etcetera, and (ii) democracy, independence, honor, and the European identity of the Greek people.

No doubt, good answers have to be found for both issues. The problem is that humans are serial thinkers, that is, they can tackle only one problem at a time. Because of this, political economics is an approach that almost guarantees that both issues are botched up.

Yanis Varoufakis's task as a Greek finance minister and economist has been to solve the economic problem. What he has achieved is something else: “Our NO is a majestic, big YES to a democratic, rational Europe!” (Yanis Varoufakis on Twitter 7 July 2015)

This is the perfect moment to recall what the economist's task is: “A scientific observer or reasoner, merely as such, is not an adviser for practice. His part is only to show that certain consequences follow from certain causes, and that to obtain certain ends, certain means are the most effectual. Whether the ends themselves are such as ought to be pursued, and if so, in what cases and to how great a length, it is no part of his business as a cultivator of science to decide, and science alone will never qualify him for the decision.” (J. S. Mill)

Heterodoxy is at a crossroads and has to decide between becoming a political movement or a scientific endeavor with one and only one goal, that is, to replace Orthodoxy.

As Keynes put it: “If economists could manage to get themselves thought of as humble, competent people, on a level with dentists, that would be splendid!”

Seen from the perspective of science, political economics has always appeared as a rare mental disorder, that is, a constant flip-flop between two fundamentally different issues that frustrate the solution of either.

To recall, economics is a failed science.

Egmont Kakarot-Handtke