August 1, 2015

Here it comes: the Sexit

Comment on Lars Syll on ‘Paul Romer on unscientific freshwater groupishness’

Blog-Reference and Blog-Reference

There is political economics and theoretical economics. In political economics, it suffices to tell a plausible story, in theoretical economics scientific standards are observed. Because economists since Adam Smith pursued these two hares simultaneously, coherence got eventually lost. As a result, economists never developed a theory about how the market economy works that satisfies the scientific criteria of material and formal consistency (Klant, 1994, p. 31).

Economics is a failed science. The whole of it. Therefore, Paul Romer is in for a second big surprise. Until now he thought: “As you would expect from an economist, the normative assertion in ‘X is wrong because it undermines the scientific method’ is based on what I thought would be a shared premise ...” (See intro)

Now he learns: “In conversations with economists who are sympathetic to the freshwater economists ... it has become clear that freshwater economists do not share this premise. What I did not anticipate was their assertion that economists do not follow the scientific method, so it is not realistic or relevant to make normative statements of the form ‘we ought to behave like scientists’.”

What is the difference between political and theoretical economics?
“A genuine inquirer aims to find out the truth of some question, whatever the color of that truth. ... A pseudo-inquirer seeks to make a case for the truth of some proposition(s) determined in advance. There are two kinds of pseudo-inquirer, the sham and the fake. A sham reasoner is concerned, not to find out how things really are, but to make a case for some immovably-held preconceived conviction. A fake reasoner is concerned, not to find out how things really are, but to advance himself by making a case for some proposition to the truth-value of which he is indifferent.” (Haack, 1997, p. 1)

The fact of the matter is that theoretical economics has from the very beginning been hijacked by the agenda pushers of political economics. Smith and Mill were agenda pushers against feudalism. Marx and Keynes were agenda pushers and so were Hayek and Friedman. However, all these economists insisted that they were doing science. This has changed now: “... the evidence ... suggests that freshwater economists differ sharply from other economists.”

The freshwater economists simply state the obvious, that is, that they are committed to politics and not to science. This marks the beginning of a voluntary scientific exit (Sexit for short). What Romer has not yet realized is that most saltwater economists have to leave through the same door.

Egmont Kakarot-Handtke

Haack, S. (1997). Science, Scientism, and Anti-Science in the Age of Preposterism.
Skeptical Inquirer, 21(6): 1–7. URL
Klant, J. J. (1994). The Nature of Economic Thought. Aldershot, Brookfield, VT: Edward Elgar.

Related ‘Separation of politics and economics’ and ‘Politics vs. Science’ and
The case for pure economics’.