Blog-Reference and Blog-Reference on Apr 5

Heterodox economists say that orthodox economics is false and they are right. However, many arguments against Orthodoxy are simply way beside the point. And here a cognitive snag comes in: the random critique of a silly person is not only ineffective but de facto STRENGTHENS the criticized position.

False orthodox economics survives for 150+ years BECAUSE of silly heterodox critique. This fact did not escape Hahn: “The enemies, on the other hand, have proved curiously ineffective and they have very often aimed their arrows at the wrong targets. Indeed if it is the case that today

*General Equilibrium Theory*is in some disarray, this is largely due to the work of

*General Equilibrium*theorists, and not to any successful assault from outside.”

Two recent examples confirm Hahn’s observation.

John Edensor Littlewood comes forward with this revelation: “Mathematics (by which I shall mean pure mathematics) has no grip on the real world; if probability is to deal with the real world it must contain elements outside mathematics ; the meaning of ‘probability’ must relate to the real world, and there must be one or more ‘primitive’ propositions about the real world, from which we can then proceed deductively (i.e. mathematically).” (See intro)

Yes, but this is only news for economists, NOT for genuine scientists: “In the most fruitful applications of mathematics to the physical world, some nonmathematical axioms also enter. The Newtonian system of mathematical mechanics depends as much on the Newtonian laws of motion and gravitation as it does on the axioms of mathematics.” (Kline)

Lars Syll comes forward with this revelation: “Randomness obviously is a fact of the real world. Probability, on the other hand, attaches (if at all) to the world via intellectually constructed models, and a fortiori is only a fact of a probability generating (nomological) machine or a well constructed experimental arrangement or ‘chance set-up.’”

Yes, but this is what everybody is told in the first hour of every statistics course. The formulas of statistics apply only to genuine random samples. And this is why students are told how to use random number tables and other tools in order to draw proper random samples.

Orthodoxy has NOT to be rejected because many economists are too stupid to apply statistics or mathematics properly. This is a problem that can be fixed with better education or competent peer review. Yet, if the problem is fixed Orthodoxy still has to be rejected because it is axiomatically false.

Heterodoxy complains about one rotten apple after another but never arrives at the idea that the apples are rotten because the roots of the tree are rotten. The only way to get rid of rotten apples is to fell the tree and plant a new one. In methodology this operation is called a paradigm shift. THIS is the proper task of Heterodoxy.

The critique of methodological blunder is the task of referees and NOT a substitute for the necessary paradigm shift. Silly heterodox critique has hitherto effectively prevented a paradigm shift. This is why we have the pluralism of false theories in economics.*

Egmont Kakarot-Handtke

* For details see cross-references Failed Heterodoxy