March 14, 2016

Trump and the weaponizing of economics

Comment on Paul Krugman on 'Trump Is No Accident'


Science is about true/false and it is well-known how to arrive at a clear-cut decision between the two: “Research is in fact a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant)

Thus, science separates the gold of knowledge from the rubble of opinion. Vagueness/ undecidability is the very antithesis of science: “Another thing I must point out is that you cannot prove a vague theory wrong.” (Feynman) The very ambition of science is to get out of the cacklers’ paradise between true and false where “nothing is clear and everything is possible.” (Keynes)

Now, science does not operate undisturbed in a guarded retreat but in an open social landscape that is shaped by antagonistic political forces. Politics cannot do other than to try to draw the different sciences in different degrees into the battle, which means that science is weaponized. This happened to economics which started as Political Economy and, despite attempts to satisfy scientific standards, it never achieved the ideal state of the full independence of genuine science. So what we have today is political economics and theoretical economics, with the former dominating the latter. Political economics has produced nothing of scientific value since Adam Smith.

The goal of political economics is to stay in the realm between true/false where opinion thrives and to gain more ground there. The goal of theoretical economics is to focus on the development of the formally and materially consistent theory of how the monetary economy works. Economics is still at the proto-scientific level and hampered by ongoing massive distraction. The weapons of mass distraction are:

• To do away with the ‘regulative idea’ (Popper) of truth (= formal and material consistency) with the assertion that there are many truths in economics and that they can coexist under the rainbow banner of pluralism and eclecticism.
• Playing ‘with the net down’ (Blaug), i.e. softening scientific standards or ignoring/ denying them altogether.
• Folk psychology, i.e. second-guessing the scientifically inaccessible motives and intentions of economic agents (utility maximization, bounded rationality, animal spirits, rational expectations, etc).
• Folk sociology, i.e. second-guessing the scientifically inaccessible motives and intentions of real or fictional social subgroups (one-percenters, capitalists, workers, consumers, middle class, bankers, etc).
• Folk politics, i.e. second-guessing the scientifically inaccessible motives and intentions of actual or historical political actors of all forms and shapes from heads of state via legitimate/illegitimate institutions/organizations to the lone nut.

Political economics is the degenerate form of economics. Folk politics in turn is the degenerate form of political economics. Krugman is at the zero lower bound of economics.

Egmont Kakarot-Handtke

Related 'Economics and the weapons of mass distraction'.