May 17, 2016

Econ 101: Dull teachers and dull students in the endless loop

Comment on Peter Dorman on ‘Issues with Econ 101 at Three Levels


Economics claims to be a science. This is a serious case of self-delusion. Science is well-defined: “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, 1994, p. 31). The fact of the matter is that neither Orthodoxy nor Heterodoxy satisfies the consistency requirements.

What we actually have is what Feynman famously characterized as cargo cult science, and from this follows: “So we really ought to look into theories that don’t work, and science that isn’t science.”

Boiled down to the essentials this is what standard economics is all about “most of what I and many others do is sorta-kinda neoclassical because it takes the maximization-and-equilibrium world as a starting point” (Krugman). Because these premises are false everything based upon them is scientific garbage. Wherefrom did Krugman and the other econ profs get the idea to take the maximization-and-equilibrium world as a starting point? It is from their former Econ 101 courses. Krugman & the others simply never realized that there is something deeply wrong with supply-demand-equilibrium and all that. So they in turn busily produce silly maximization-and-equilibrium models, give unfounded economic policy advice, and teach Econ 101. As a result, cargo cult science reproduces itself in an endless loop.

In order to get out of the loop, Econ 101 teachers in general, and Peter Dorman, in particular, have to clearly understand:
  • Economics is not social science,
  • methodological individualism is the wrong methodology,
  • no way leads from the understanding of human behavior/action to the understanding of the behavior of the market system,
  • the axioms of Walrasianism and Keynesianism are forever unacceptable,
  • the elementary economic concepts of profit and income have never been consistently defined.#1
Taken together, these deeply ingrained errors/mistakes/blunders explain why economics is a failed science.#2 The choice for the next Econ 101 generation is either to repeat the senseless maximization-and-equilibrium loop or to quit microfoundations and rebuild economics upon the correct macrofoundations.

Egmont Kakarot-Handtke

Klant, J. J. (1994). The Nature of Economic Thought. Aldershot, Brookfield: Edward Elgar.

#1 How the intelligent non-economist can refute every economist hands down
#2 Economists’ three-layered scientific incompetence

Related 'The real trouble with Econ 101' and 'Econ 101 — worse than useless'.

For details of the big picture see cross-references Econ 101/Old Curriculum/New Curriculum.

COMMENT on Thornton Hall on May 19

You say: “I really think if we could get the Phil department of any US university to spend one year reading the output of the Econ department we could improve the lives of billions of people quite dramatically.”

Econ 101 and the textbooks are PROVABLY false. Economists have achieved not much of scientific value since Adam Smith: “Thousands upon thousands of scholars, as well as thousands of statesmen and men of affairs, have contributed their efforts to the attempt to understand the course of events of the economic world. And today this field of investigation is being cultivated more extensively, than ever before. How is it, then, that in all these years, and with all the undoubted talent that has been lavished upon it, the subject of economics has advanced so little?” (Schoeffler, 1955)

Now it is well known that philosophers are scientifically even more incompetent than economists and you claim that with the help of the Phil department of any US university “we could improve the lives of billions of people quite dramatically.”

That is beyond ridiculous. The actual problem is to publicly and officially downgrade philosophers, economists, so-called social scientists, and other feeble thinkers and loudspeakers from science to proto-science.#1

#1 The future of economics: why you will probably not be admitted to it, and why this is a good thing.