March 26, 2016

Economics: neither craft nor science

Comment on ‘Economics is more a craft than a science — The Washington Post’


Science was already well established when Adam Smith declared that economics, too, is a science. Economics defends this claim until this day (viz. Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel) but has never delivered anything fitting the description of science.

Economics is a failed science and the ultimate cause is the proven scientific incompetence of economists. Since Adam Smith economists have not grasped what science is all about — despite the fact that it is unambiguously defined (Klant, 1994, p. 31).

According to scientific criteria Walrasianism, Keynesianism, Marxianism, and Austrianism is logically inconsistent or empirically inconsistent or both.

Always when economics is in open crisis five reactions are to be observed: (i) self-delusional denial, (ii) back pedaling and relativization, e.g. ‘economics is not a Science with a capital S’ (Solow)*, (iii) admission of the most noticeable flaws with the reassurance that ‘our best brains’ are already working on them, (iv) clueless actionism and innovation showbiz (v) hand-waving in the media.

This is what is known since J. S. Mill: “Science is a collection of truths; art, a body of rules, or directions for conduct. The language of science is, This is, or, This is not; This does, or does not, happen. The language of art is, Do this; Avoid that. Science takes cognizance of a phenomenon, and endeavours to discover its law; art proposes to itself an end, and looks out for means to effect it.” (1874, V.8)

Now, it is pretty obvious that when economics has no scientific truths, then art, craft, or economic policy advice has no sound foundation whatsoever. “In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum, 1991, p. 30)

Economists do not have the true theory, their economic policy proposals are plucked out of thin air. Economics does not belong to science but to circus maximus.

Egmont Kakarot-Handtke

Klant, J. J. (1994). The Nature of Economic Thought. Aldershot, Brookfield, VT: Edward Elgar.
Mill, J. S. (1874). Essays on Some Unsettled Questions of Political Economy. On the Definition of Political Economy; and on the Method of Investigation Proper To It. Library of Economics and Liberty. URL
Stigum, B. P. (1991). Toward a Formal Science of Economics: The Axiomatic Method in Economics and Econometrics. Cambridge, MA: MIT Press.

* See ‘Why economics is a failed science ― 24 excuses and 1 explanation