December 3, 2016

The disutility of debunking NAIRU

Comment on Lars Syll on ‘NAIRU — a false hypothesis’


The current state of economics is this: Walrasian microfoundations are false for 150+ years and Keynesian macrofoundations are false for 80+ years.#1 By consequence employment theory, too, is false and this, of course, includes NAIRU.#2 What is urgently needed are the true macrofoundations and the true employment theory.

Because employment theory is false, economic policy guidance regularly worsens the situation, that is, economists bear the intellectual responsibility for unemployment, deflation, depression, stagnation.#3

Make no mistake, there is NO such thing as good guys and bad guys in economics. There is only scientific incompetence for 200+ years. Orthodox economics is false and Heterodoxy has never produced a valid replacement. The current debate about full employment/ NAIRU has no more substance than professional wrestling.

The true theory of the market economy is neither to be found in the Walrasian, nor the Keynesian, nor the Marxian, nor the Austrian school. The four major approaches are axiomatically false, that is, beyond repair. Joan Robinson summarized the situation in six words: “Scrap the lot and start again.” All else is a waste of time.

Egmont Kakarot-Handtke

#1 The Three Fatal Mistakes of Yesterday Economics: Profit, I=S, Employment
#2 NAIRU ― a folk psychological hallucination
The very serious blunders of very serious people
False theory makes wrong policy: economics as loose cannon
Naive arithmetic
#3 How economists murdered the economy and got away with it