April 26, 2016

The economist as storyteller (I)

Comment on Chris Dillow on ‘Why not full employment?’

Blog-Reference and Blog-Reference on Apr 26 and Blog-Reference on Apr 28 adapted to context

The average person dislikes an objective explanation (e.g. the thunderbolt is an electromagnetic phenomenon subject to physical laws) and likes a subjective explanation (e.g. Zeus threw the thunderbolt because he was angry/vengeful/authoritarian). The scientific explanation takes the form of a theory, and the non-scientific explanation takes the form of a narrative. Almost all societal communication consists of storytelling/blather/ wish-wash/truisms, and only a tiny part has scientific content.

Economics claims to be a science, yet it has never risen above the level of storytelling. Accordingly, the subjective explanation of unemployment (UE) takes the following forms.

Psychologism: the unemployed actually enjoy UE, are indifferent, have resigned, suffer. Darwinism: UE’s are unfit, unqualified, lack motivation, and are beyond help. Moral hazard: UE is the result of a wrong incentive structure or perverted rewards/punishments, UE’s game the system. Mind reading: leisure is rationally preferred by UE’s over working at the given wage. Moralizing: the UE’s deserve their fate. Blaming: UE is a self-inflicted blowback of irrational behavior, i.e. of sticky wages, strikes, and shirking. Historicism: today’s unemployment is the result of known adverse external shocks and identifiable wrongheaded measures of DEMs/REPs/FED/GOV since WWII. Sociologism: the UE’s do have not enough leverage for changes in their favor; they are brainwashed into acceptance of everything. UE is deliberately created by capitalists/oligarchs/one-percenters/government as a means of social control. UE’s are the losers in a rigged power-play.

Within this tiny intellectual box of folk psychology, folk sociology, folk history, and folk politics economic storytelling has taken place since Adam Smith: “He ... disliked whatever went beyond plain common sense. He never moved above the heads of even the dullest readers. He led them on gently, encouraging them by trivialities and homely observations, making them feel comfortable all along.” (Schumpeter)

The time travel fantasies about Harlem, Haight-Ashbury, Paris, or Surbiton above show that economics has stagnated since Adam Smith. Clearly, from retarded storytellers, no solution to any economic problem is ever to be expected.

While dabbling in the so-called social sciences, economists overlooked that economics is a systems science and that it is their task to explain how the actual monetary economy works. To this day, economists still need to understand what profit is. It should be evident that they will never find it out by second-guessing and interpreting and understanding human behavior. This is NOT how science works. What is currently discussed among economists as employment theory is sitcom garbage.

Storytelling is not prohibited, of course, and neither is the pluralism of any number of false theories, but there is no place for storytellers in the sciences. So, economists have to stop pretending to do science and have to be expelled from the sciences because of proven incompetence for more than 200 years.

Egmont Kakarot-Handtke

Related 'Why do workers not tar and feather economists?' and 'Economics, methodology, morals ― a creepy freak-show' and 'The economist as storyteller (II)' and 'Economics as storytelling and entertainment for the masses' and 'Narrative economics and the imperatives of the sitcom' and 'If religion is opium of the people, economics is crack of the people' and 'Economics: Stories, narratives, and disinformation' and 'Economic narratives are for the scientific garbage dump' and 'Media-fake-farce-fraud-storytelling-macro'.

For details about the axiomatically correct employment theory see cross-references Employment.

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