January 28, 2016

End of a storyteller

Comment on Lars Syll on ‘Krugman — a Vichy Left coward?’

Blog-Reference and Blog-Reference

Krugman is accused of supporting “political figures he likes, notably Hillary Clinton.” What could possibly be wrong with that? Nothing, of course, except that Krugman is an economist. What is indeed wrong, is that economics is a science and as a scientist, Krugman has no political mandate. Most people do not get the point because they think science is just another sitcom format.

Long before the hijacking of economics by morons, J. S. Mill, the economist and methodologist, was well aware that there is a categorical difference between politics and science: “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 ....” (Mill, 2006, p. 950)

In no uncertain terms, Mill told his fellow economists: politics and science have to be separated and there is no revolving door between the two. The first thing to notice is that this message was obviously wasted on Krugman.

To speak of economics tout court is always misleading because there is political and theoretical economics and there are storytelling and something like the true theory. The crucial distinction is:
(i) The goal of political economics is to push an agenda, the goal of theoretical economics is to explain how the actual economy works.
(ii) In political economics anything goes; in theoretical economics, scientific standards are observed. The standards are well-defined as material and formal consistency.

Theoretical economics has to be judged according to the criteria true/false and nothing else. The criteria of political economics are good/bad or like/dislike. Political economics has produced nothing of scientific value in the last 200 years.

Accordingly, Krugman has to be criticized for having made the wrong choice between political economics (= agenda-pushing and storytelling) and theoretical economics (= science) and for trespassing the line between the two. He has to be criticized for being an incompetent scientist (2014) and thrown out of the scientific community. Being outside of science, he can no longer be criticized for preferring one politician above the other.

Political economics is when one lousy scientist calls the other lousy scientist a Vichy Left coward. In order to make economics a science, one has to get rid of all this garbage.

Egmont Kakarot-Handtke

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
Mill, J. S. (2006). A System of Logic Ratiocinative and Inductive. Being a Connected View of the Principles of Evidence and the Methods of Scientific Investigation, volume 8 of Collected Works of John Stuart Mill. Indianapolis: Liberty Fund.

REPLY to anne

The proper task of economics is to develop the true theory. Whatever the political goals are, without the true theory economic policy is pointless, i.e. ineffective or even counter-productive. The separation of politics and economics implies that the overarching economic goals are determined in the political sphere according to agreed-upon rules. The economist qua economist is not legitimized to determine the overarching economic goals.

There is neither a political nor moral justification for an economist to give economic policy advice without sound scientific foundations. Economists owe society the true theory, not less, not more. As long as they do not have the true theory, the political sects of Walrasians, Keynesians, Marxians, and Austrians better shut up.

Krugman's policy proposals have no sound scientific foundations. His models are provably false. Economists should simply resist the temptation to say what ought to be. It suffices to say what is, i.e. how the economy works.