Blog-Reference and Blog-Reference on Jan 23
1. When economists daydream they fancy that practical men/politicians/heads of state are the intellectual ‘slaves of some defunct economist’. Keynes’ closing sentence in the General Theory is a fine example of self-delusional grandiosity: ‘... it is ideas, not vested interests, which are dangerous for good or evil’.#1
2. The fact of the matter is that practical men/politicians/heads of state DO NOT listen to economists: “Late in life, moreover, he [Napoleon] claimed that he had always believed that if an empire were made of granite the ideas of economists if listened to, would suffice to reduce it to dust.” (Viner)
3. Practical men/politicians/heads of state do not take economists seriously but use them as testimonials for already decided policy measures in order to anoint them with some scientific prestige. This is NOT different from selling toothpaste with the testimonial of a man in a white lab coat.
4. In their self-delusion, economists get the causality wrong. Mrs. Thatcher did NOT intend for one moment to put Hayekian economics into practice but employed him as a ‘scientific’ legitimation for her union-crushing agenda. The same causality holds for FED chairs and their decorative staff of cutting-edge economists.
5. It is important to distinguish between political and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, and the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics, scientific standards are observed.
6. Economists never got out of political economics. In other words, theoretical economics (= science) ultimately could not emancipate itself from political economics (= agenda-pushing). And this is how economics became one of the most embarrassing scientific failures of all time.
7. Economics is NOT part of science but of Circus Maximus. Political economics has produced nothing of scientific value in the last 200+ years. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, and ALL got the foundational concepts of the subject matter ― profit and income ―wrong.
8. The point is this: “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) Economists do NOT have the true theory and this means that economic policy guidance has NEVER had sound scientific foundations.
9. In economics, everything and the exact opposite has already been said sometime, somewhere, by somebody. So it is very easy after every economic calamity to present somebody who ‘saw it coming’ and to shift the blame: “Economists have come up with clear proposals about how to avoid the crisis happening again. And these proposals have been pretty well ignored.” (SWL’s intro)#2
10. It is NOT a divisive attack on economics but a statement of fact that (i) economics is a failed science, (ii) both orthodox and heterodox economists are incompetent scientists, (iii) economic policy guidance never has had sound scientific foundations, (iv) economics is useless except for political agenda pushing or sitcom entertainment.
#1 References, further details, and proofs are given elsewhere, see blog and working papers
#2 Science does NOT predict the future
Related 'Failed economics: The losers’ long list of lame excuses' and 'The economist as useful political idiot' and 'Economists: Incompetent? Stupid? Corrupt?' and 'Mission accomplished: Economists as useful idiots of the Oligarchy'. For details of the big picture see cross-references Political Economics/Stupidity/Corruption.