AXEC: New Foundations of Economics: Keynesianism: cross-references

November 30, 2015

Keynesianism: cross-references

Posts

In the grand scheme of things, Lord Keynes was only a small-time crook here
Your economics is refuted on all counts: here is the real thing here
Wikipedia, economics, scientific knowledge, or political agenda pushing? here
Keynes ― the poster boy for the weakness of the economist’s mind here
The real trouble with Capitalism: stupid/corrupt economists here
The end of Mankiw and his Phillips Curve here
Links on the Economics Nobel here
After 200+ years even economics becomes a science? here
Circus Maximus: Economics as entertainment, personality gossip, virtue signaling, and lifestyle promotion here
The worthlessness of Value Theory here
How incompetent are economic methodologists? Very! here
Links ‘Keynes: socialist, liberal, or conservative?’ here
The missing elephant of full employment policy here
Economics a science? Surely you are joking, Mr. Cochrane here
Economics: failure, fake, fraud here
Post-Keynesianism vs MMT: a Zombie debate here
Scientific ignorance is political strength here
Dear idiots, it is deficit spending that creates the distribution people complain about here
From Keynes’ fatal blunder to the true economic model here
Economics: The proto-scientific mob embroiled in just another gang war here
The retirement of a fake scientist and real agenda pusher here
Links on capital-T Truth, stupidity, corruption here
The clock runs down on economics here
Dear idiots, time to get saving and investment straight (II) here
What it takes to become a great economist here
Still beyond the reach of economists: The Holy Grail of Science here
Krugman vs MMT ― like the blind talking about colors here
“But economics is not pure mathematics or logic” No, it is pure blather here
What is wrong with MMT? and What is wrong with Brad DeLong? here
Ontological uncertainty is NOT the problem but economists’ ontological stupidity here
Economics: A failed/fake science for 200+ years here
#DrainTheScientificSwamp here
Keynes, Kalecki, MMT, and the accidental invention of the perpetual profit machine here
Economics should never be a substitute for thinking here
Oxford economics — still at the proto-scientific level here
Brian Romanchuk’s Post-Keynesian idiocy here
Dean Baker: progressive agenda pusher for the Oligarchy here
Heterodox economics: When stupidity becomes a public danger here
Economics as tireless production of proto-scientific garbage: inflation theory as an example here
Both mainstream economics and MMT are axiomatically false here
China does NOT need Keynesianism here
#DeleteKeynes #ExpelAllKeynesians here
Economics, too, is pre-truth here
How Keynesians, Lernerians, MMTers make the oligarchy great here
Hooray! The formalization issue is finally settled here
Profit and the Private-Property-Irrelevance Theorem here
Knowledge is attainable ― even in economics here
MMT vs Keynesianism: nothing to chose here
Capitalism, poverty, exploitation, and cross-over exploitation here
Forget Keynes here
Fiscal policy and the Humpty Dumpty Fallacy here
I is never equal S and even Nick Rowe will eventually grasp it here
Economists, stupid or corrupt or both? here
Keynes, Lerner, MMT, Trump and exploding profit here
Macro for retarded economists here
Keynes’ intellectual nonexistence here
Demand-led and wage-led growth here
Selling public debt with Ricardo’s tear gland rhetoric here
Freedom for fake scientists? here
A brief history of soapbox economics here
Full employment through the price mechanism here
MMT: Redistribution as wellness program here
Why is MMT so false? here
Setting the history of economic non-thought right here
The profit effect of a Job Guarantee here
National Accounting: scientific incompetence or political fraud? here
MMT: for the record here
Post-Keynesianism, too, is indefensible here
Economic methodology for the little guy here
The Death of Keynesianism here
MMT: NO sound scientific foundations here
Keynesians ― terminally stupid or worse? here
Loanable funds ― no hoax, just breathtaking stupidity here
How some MMTers got inflation wrong here
After-Keynesian zombie interbreeding here
Forget Friedman, forget Keynes here
Intellectual deficit spending here
You are fired! here
Keynesianism ― the economists’ senile dementia here
Textbooks and the mental cloning of dumb economists here
Just revealed: IS-LM is dead for 80+ years here
Post-Keynesianism, too, is proto-scientific rubbish here
Consensus, buddy consensus, scientific consensus, or what? here
First Lecture in New Economic Thinking here
Austerity and the total disconnect between economic policy and science here
IS-LM ― a crash course for EconoPhysicists here
Ricardian vice and Keynesian confusedness here
Media-fake-farce-fraud-storytelling-macro here
The Law of Economists’ Increasing Stupidity here
Redefining economics here
Review of the economics troops here
Keynes saw the problems but did not solve them here
Austerity and the idiocy of political economists here
Pants kicking is over, let’s do serious economics now here
Walras, Keynes, Samuelson, DSGE, IS-LM ― R.I.P. here
Windmill economics here
New IS-LM macro ― just another fake revolution here
Why not simply throw all economists under the bus? here
Why Bernie Sanders is unintentionally a godsend for the one-percenters here
Going beyond Wicksell, Keynes and MMT here
Macroeconomics without Keynes here
Economists: Incompetent? Stupid? Corrupt? here
Three sickening facts about Keynesianism here
Delusions of useful idiots here
Mass unemployment: The joint failure of orthodox and heterodox economics here
How the 99 percent can bring overall profit of the 1 percent legally down to zero in 2017 here
Strange noise in the graveyard of economics here
Economics: Poor philosophy, poor psychology, poor science here
Narrative economics and the imperatives of the sitcom here
Say hello to Lars Syll, Keynes’ last parrot here
A political stench is in the air here
The futile synthesis of neoclassical rubbish and Keynesian garbage here
Economists and their silly excuses here
The IS-LM macro imbeciles here
Keynesianism is broken: Get over it! here
Economic policy advice has never had sound scientific foundations here
The final smackdown of blah-blah-Keynesianism here
Macroeconomics ― dead since Keynes here
Macro for dummies (I) here
The monetary circuit and how economists got it wrong here
Nick Rowe: Bury me at the end of coal-pit here
Why economists know nothing here
Rethinking MMT here
Rethinking the Profit Law here
Rethinking deficit spending here
Who or what exactly did Keynes save? here
Keynes’ message for contemporaries here
A new curriculum for swampies? here
How to end the futile economics zombie ping-pong here
Political economics: a deadhead sitcom here
It is better to be precisely right than roughly wrong here
There is NO such thing as an economic expert here
The father of modern economics and his imbecile kids here
Unemployment is high because economics is false here
Tobin, the tragedy of After-Keynesians, and the indelible mark of incompetence here
Economics: the simple logic of failure here
From false micro to true macro: the new economic paradigm here
How economists murdered the economy and got away with it here
Scientific suicide in the revolving door here
The final implosion of MMT here
How the mainstream vanished in the gutter here
Not big news: political economics is a failure here
Orthodoxy vs. Heterodoxy: the squabbling of quacks here
Economics: a science without scientists here
Hobson got full employment policy almost right here
Economists have no brains here
Heterodoxy ― a new paradigm or just another political sect? here
Economics between science and magic here
The bigots of common sense here
A new episode of one of the worst blunders of economics here
Keynesian macrofoundations are defective here
Stuck with the economics prisoner’s dilemma here
NAIRU ― a folk psychological hallucination here
The Cambridge crap curriculum here
The very serious blunders of very serious people here
Note on saving and investment here
Feeble thinkers, feeble rethinkers: the perennial misery of economics here
Economics and scientific foolishness here
Just for the record: Economics is dead here
Prediction/Forecasting here
A brief rectification of employment theory here
The general theory of scientific incompetence here
Sticky prices or sticky brains? here
The choice between Friedmanian pest and Keynesian cholera here
The trouble with Naked Keynesianism here
How Keynes got macro wrong and Allais got it right here
From gossip to the correct employment theory here
All models are false because all economists are stupid here
Kick out the king and don’t forget the jesters here
Outside of science here
Unemployment ― the toughest challenge for economics students here
Scientists and science actors here
No future for axiomatically false economics here
Critique is good, refutation is better, paradigm shift is best here
From subjective weighing of motives to objective systemic properties here
Micro and macro inconsistency here
Soapbox economics here
Keynesianism: The triumph of blathering over thinking here
Clueless about money and profit here
Economists: No legitimacy whatever here
Putting the production function back on its feet here
Causa finita: the end of I=S/IS-LM here
False and true economic laws here
Krugman is not an economist here
Unemployment is the outcome of political economics here
Economists and the economy ― a nonstarter since 200 years here
Equilibrium is stone dead — and now? here
Turning the bananatization of economics around here
Sumner’s proto-scientific-garbage here
Demystifying employment theory and policy here
Post-Keynesianism, science, and universal idiocy here
The unfinished Keynes (III) here
Enough! Economists, retire now! here
What is dead certain in an uncertain world: economists’ abysmal incompetence here
The other half plus the hitherto missing true foundations of macroeconomics here
Not a question of simplicity but of stupidity here
How to get rid of the silly Queen here
Fatal defects of profit and market theory here
Politics is national, science is not here
Getting out of IS-LM = Getting out of despair here
Keynes, the methodologist here
Making tools work in economics here
The mad flip-floppers here
The tiny little problem with economics here
Could we, please, all focus on the key question of economics? here
What Keynes really meant but could not really prove here
The real trouble with Econ 101 here
Neo-Paleo-Stupidicism here
The great economic equations here
Keynesianism as ultimate profit machine here

Working papers

The Three Fatal Mistakes of Yesterday Economics: Profit, I=S, Employment here
The Truly General Theory of Employment: How Keynes Could Have Succeeded here
Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It here
Keynes’ Employment Function and the Gratuitous Phillips Curve Disaster here
Why Post Keynesianism Is Not Yet a Science here
Keynes’ Missing Axioms here

Textbook

Economists got macroeconomic profit wrong. Because of this foundational blunder, the whole of economics is proto-scientific garbage for 200+ years, see Ch. 13, The indelible scientific disgrace of economics, in Sovereign Economics, BoD.

Meta references

Knowledge only — no opinion

Science does not explain everything, but non-science explains nothing.

Neither orthodox nor heterodox economics satisfies the scientific criteria of material and formal consistency.

Economists cannot explain how the economy works. The Profit Theory is false since Adam Smith. There is much opinion and little knowledge.

Opinion is the realm of political economics, knowledge is the realm of theoretical economics.

Political economics is scientifically worthless.

Theoretical economics is built upon clearly stated premises, i.e., upon a set of axioms.

Orthodoxy got the axiomatic foundations wrong and Heterodoxy has none at all.

Economics is a failed science. Economists are incompetent scientists.

Profit

Neither Classicals, nor Walrasians, nor Marshallians, nor Marxians, nor Keynesians, nor Institutionialists, nor Monetary Economists, nor MMTers, nor Austrians, nor Sraffaians, nor Evolutionists, nor Game theorists, nor EconoPhysicists, nor RBCers, nor New Keynesians, nor New Classicals ever came to grips with profit. Hence, they all fail to capture the essence of the market economy.

Because of this, economists have nothing to offer in the way of a scientifically founded economic policy guidance.

The hybrid science

As a first approximation, one can agree on the general characteristic that the economy is a complex system.

However, with the term system one usually associates a structure with components that are non-human. In order to stress the obvious fact that humans are an essential component of the economic system the market economy should be characterized more precisely as a complex hybrid human/system entity.

The scientific method is straightforwardly applicable to the sys-component but not to the hum-component. While it is clear that the economy always has to be treated as an indivisible whole, for good methodological reasons the analysis has to start with the objective system-component.

In gestalt-psychological terms the economic system is the foreground, individual behavior the background. Common sense wrongly insists that the hum-component must always be in the foreground. This fallacy compares to geo-centrism. The economic system has its own logic which is different from the behavioral logic of humans. The systemic logic is what Adam Smith called the Invisible Hand.

There are systemic laws but no behavioral laws. Systemic laws have the same methodological status as physical laws.

Neither Orthodoxy nor Heterodoxy can tell what the systemic laws of the actual monetary economy are.

Whether the outcome of the human/system-interaction is good or bad is a politcal question that lies outside of theoretical economics. Theoretical economics explains how the actual economy works - no less, no more.

Narrative vs.Theory

Psychological, sociological or behavioral assumptionism cannot yield anything other than a gossip model of the world. Second-guessing the agents is not economic analysis.

Science deals exclusively with propositions that can in principle be decided by objective means. The rest is opinion, faith, phantasy, motive speculation, allegation, hallucination, myth, paranoia, ink-blot association, psychology, philosophy, in one word: storytelling.

Storytelling is the original mode of communication in the social realm — except science.

Political economics is storytelling and, by default, the natural habitat of confused confusers. Walrasianism, Keynesianism, Marxianism, Austrianism are social narratives and not scientifically valid representations of reality.

"The truth is, most persons, not excepting professional economists, are satisfied with very hazy notions." (Fisher)

In marked contrast, theoretical economics lives up to the standards of material and formal consistency. A scientific theory is the best mental representation of reality that is humanly possible.

Theory starts with a set of objective and consistent axioms.

Paradigm Shift

"The problem is not just to say that something might be wrong, but to replace it by something — and that is not so easy." (Feynman)

"As will become evident, there is more agreement on the defects of orthodox theory than there is on what theory is to replace it: but all agreed that the point of the criticism is to clear the ground for construction." (Nell)

"The moral of the story is simply this: it takes a new theory, and not just the destructive exposure of assumptions or the collection of new facts, to beat an old theory." (Blaug)

"Is it not a fact, which stares at us from the histories of all sciences, that it is much more difficult for the human mind to forge the most elementary conceptual schemes than it is to elaborate the most complicated superstructure when those elements are well in hand?" (Schumpeter)

"The task of producing knowledge against the grain requires imagination." (Mirowski)

"A new idea is extremely difficult to think of. It takes a fantastic imagination." (Feynman)

"The scientific imagination dreams of explanations and laws." (Peirce)

"It is brilliance of imagination which makes the glory of science." (Evans)

"... we know little more now about ‘how the economy works,’ ... than we knew in 1790, after Adam Smith completed the last revision of The Wealth of Nations." (Clower)

Selftest and to watch for

You apply one of these items

• supply-demand-equilibrium,

• general equilibrium,

• marginal utility,

• well-behaved production functions,

• total income = value of output,

• total income = wages + profits,

• I=S,

• wage rate down - employment up,

• behavioral axioms?

Then you are out of science because of unnoticed material or formal inconsistency.

Every economist who uses the concept of equilibrium is scientifically incompetent because she/he failed to notice that equilibrium is an economic nonentity.

Practically this means: as soon as the word equilibrium appears in an economic text it can be thrown into the waste basket. The same holds for all other nonentities.

The vast majority of economists deals mainly with nonentities. This is why Walrasianism, Keynesianism, Marxianism, Austrianism is scientifically worthless.

Since Adam Smith, economic policy guidance has no sound scientific foundations.

To be replaced (1)

The core premises of Orthodoxy are uncertain and false and this fully explains the failure of the research program.

“As with any Lakatosian research program, the neo-Walrasian program is characterized by its hard core, heuristics, and protective belts. Without asserting that the following characterization is definitive, I have argued that the program is organized around the following propositions: HC1 economic agents have preferences over outcomes; HC2 agents individually optimize subject to constraints; HC3 agent choice is manifest in interrelated markets; HC4 agents have full relevant knowledge; HC5 observable outcomes are coordinated, and must be discussed with reference to equilibrium states.” (Weintraub)

The inescapable Paradigm Shift consists of the move from this obsolete hard core to the superior set of structural axioms.

To be replaced (2)

The fundamental equations of macroeconomics have been formulated by Keynes in two lines.

"Income = value of output = consumption + investment. Saving = income - consumption. Therefore saving = investment."

This elementary syllogism is demonstrably false. The demonstration consists in the proof that Keynes could not solve the Profit Puzzle. Neither did Post-Neo-New-Keynesians.

In the most general terms, the economics Paradigm Shift consists in switching from the behavior-centric bottom-up approach to the structure-centric top-down approach. This is comparable to the Copernican turn from geo-centrism to helio-centrism.

Consensus

Economics is a science without scientists. Because they are ignorant of the elementary difference between profit and income, the present generation of economists has not made and cannot make a significant contribution to the discussion about how the actual economy works.

Every orthodox or heterodox economist can convince himself/herself that their profit theory is defective.

Every non-economist can — by applying elementary logic — convince himself that conventional profit theories are false. See 'How the intelligent non-economist can refute every economist hands down'.

Because the profit theory is false the whole of conventional economic theory has to be rejected.

"What is now taught as standard economic theory will eventually disappear, no trace of it will remain in the universities or boardrooms because it simply doesn’t work: were it engineering, the bridge would collapse." (McCauley)

No scientist will ever accept Walrasianism, Keynesianism, Marxianism, or Austrianism. These approaches are logically and/or empirically refuted. This is the actual methodological state-of-art. Walrasians, Keynesians, Marxians, or Austrians are still at the proto-scientific stage. These approaches cannot be improved, only abandoned.

Economists are a public nuisance because they have an opinion on everything but knowledge of nothing.

About me

“Bottom line is that your profit law is just a definition you made up nobody else agrees with, nobody. You are all alone with your precious tautology.” Barkley Rosser

“In any event, your entire theory is based on you doing macro accounting in wacky fashion that nobody agrees with.” Brian Romanchuk

"Your stuff is at least original: it's quite cool after a couple of decades at this to see a fresh Economics. But real promises are not advanced: they were around for millennia until the Greeks obscured them with Metaphysics." Chris Cook

"No mate, they're you-blockers. You have all the personality traits of a crank, and the rest of them have tired of you. You could be 100% right, and you'd still die as your only follower." Steve Keen

"What you are doing fills is all with joy, your constructive critique is most welcome!"

Achim Truger,

German Council of Economic Experts,

in a failed attempt to be ironic

"200+ years of thought and yet you are the only one who gets it—or even understands your argument. Thank god we have you, pseudonymous Twitter user. Otherwise no one would know."

William Luther

Assistant Professor of Economics

in a failed attempt to be funny

"Egmonts profit law is the perfect equation that demonstrates this in action. Put the equation into a spreadsheet and then add government spending and watch how it flows into profits. Enter in some debt (-Sm) and watch too how that flows into profits. It can't go anywhere else."

Dean

About the rest of economics

Walrasianism, Keynesianism, Marxianism, Austrianism, MMT, Pluralism are mutually contradictory, axiomatically false, materially/ formally inconsistent. Economics is a failed science.

“There are three classes of people: those who see. Those who see when they are shown. Those who do not see.” Leonardo da Vinci

In economics, the overwhelming majority belongs to Class III. This explains why economics is after 200+ years still at the proto-scientific level.

The obvious task for every economist is to advance from cargo cult science and political agenda-pushing to science. This is absolutely beyond the means of Class III people.

For 200+ years now, economists are not scientists but agenda pushers, useful idiots, clowns in the political Circus Maximus.

Nopopop

This blog does not add to any popular/un- popular opinion.

This blog does not hand out advice about how to avoid taxes, to get rich on the stock market, to be successful in business, to increase the wealth of nations, to run an economy, to maximize welfare, to prevent national/global bankruptcy, to improve the institutional setup of society, to get out of national/global depression, nor about how to save humankind or any subgroup thereof.

This blog is about the true theory of the actual monetary economy.

"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)

Focus

Science is of primary interest and importance. Scientists are of secondary interest.

With regard to science, most people lose focus easily because of a natural preference for anecdotes and gossip over facts or subjectivity over objectivity.

Hence, Schumpeter once considered it necessary to remind his habitually disoriented fellow economists: “Remember: occasionally, it may be an interesting question to ask why a man says what he says; but whatever the answer, it does not tell us anything about whether what he says is true or false.”

Science is about true/false and nothing else.

Disclaimer

Missing Blog-Reference links: AXEC does not guarantee that their comments can at any time be recovered from where they have been posted intitially because the availability depends on the publication policy of the blog owner which is implicitly accepted on entering a debate. See also: 'Economists: Incompetent? Stupid? Corrupt?'

Texts: Parts of arbitrary length of any of the author's texts is and will be used again by the author in papers, books, websites, blogs, and other media without explicit reference. The right to make corrections or minor textual improvements on reutilization is reserved. Therefore, it is always a good idea to double-check for the latest version.

Caution: Do not expect a corroboration of your political view. Neither a refutation. Political economics has been scientifically worthless since Adam Smith. Politics has to be separated from economics because it is categorically different from science. The best science can do and has always done is to prove beyond reasonable doubt that you have been objectively wrong or ignorant until now. Science goes beyond the naive common sense of today and becomes the sophisticated common sense of tomorrow.

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Outlook

To recall, while political economics is storytelling, theoretical economics adheres to scientific standards.

The first task of theoretical economics is to get the axiomatic foundations right. This is what J. S. Mill called the opus magnum. Neither Orthodoxy nor Heterodoxy came up with a reasonable solution to this day. This explains the secular stagnation of economics.

There is no serious alternative to structural axiomatic economics. This is not a matter of opinion but of proof. The sole criteria are material and formal consistency.

All of economics has to be reconstructed from the ground up.

Major economic policy implication

The price mechanism does not work as standard economics hypothesizes. The axiom-based Employment Law states that overall employment increases if the average wage rate increases relative to average price and productivity. This gives one the lever to improve the employment situation all over the world and to fend off deflation without rising debt and without artificial capacity growth. To increase the average price relative to the average wage rate and productivity increases unemployment.

Right policy depends on true theory.

“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)

Lacking the true theory, economists promote for more than 200 years opinion instead of knowledge.