December 31, 2015

Conceptual blunder

Comment on Merijn Knibbe on ‘Clarence Ayres on the economic concept of capital’


Ayres noted back in 1944 “Certainly the concept of capital is not altogether responsible for this general confusion.”

Indeed, it is no other than the representative economist who is entirely responsible for his own confusion (2013). In this context, it is important to realize that the confusion does not start with capital but much, much earlier, that is, it in effect starts already with the elementary concepts of income and profit. And it is pretty obvious that any theoretical superstructure can be shaky at best if it is built on conceptual sand.

Criticizing Orthodoxy for the age-old conceptual blunder, however, backfires because it leads to the question of why Heterodoxy has not taken advantage of the situation and come forward with a consistent set of concepts in all this time?

The enduring general conceptual confusion among economists of all stripes is a strong indicator of what Feyerabend has called a ‘failure of reason’ (2004, p. 72), or what the man in the street might simply call stupidity.

Egmont Kakarot-Handtke

Feyerabend, P. K. (2004). Problems of Empiricism. Cambridge: Cambridge University Press.
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

Related 'Economics as fool’s paradise'