March 23, 2017

Heterodoxy’s chronic thinking incapacity

Comment on Lars Syll on ‘Analogue economies and reality’


Heterodox economists say that orthodox economics is false and they are right. Heterodox economists have written tomes about methodology. This, though, has not enabled them to work out a superior alternative to orthodox economics. This is a clear indication that Heterodoxy is methodologically just as deep in the wood as Orthodoxy.

This is obviously the case with Nancy Cartwright. She wonders: “How then do these analogue economies relate to the real economies that we are supposed to be theorizing about? … My overall suspicion is that the way deductivity is achieved in economic models may undermine the possibility to teach genuine truths about empirical reality.”

The problem of Nancy Cartwright and Lars Syll and the rest of Heterodoxy is that they do not understand how science or scientific thinking proceeds.

Peirce put it thus: “The object of reasoning is to find out, from the consideration of what we already know, something else which we do not know.” and “Inference, which is the machinery of logic, is the process by which one belief determines another belief, habit or action. A successful inference is one that leads from true premises to true conclusions.”

Because science tells us something about what has hitherto been unknown the new knowledge cannot come from naive empiricism (except in the case of expeditions).

A fine example of the application of deductivity is how Eratosthenes calculated the circumference of the earth. He applied geometry, which had been axiomatized by Euclid, and the known distance between Syene and Alexandria and his result “may have varied by 0.5 to 17 percent from the value accepted by modern astronomers, but it was certainly in the right range.”#1

It is pretty obvious that deductivity helps to achieve “genuine truths about empirical reality.” These truths cannot be achieved by naive empiricism, common sense, or naked-eye observation.

In an analogous way, physicists determined that the gravity of the moon is 1/6 of earth’s gravity. Physicists did not observe this value but deduced it from the theory of gravity or, more specifically, from the heliocentric model of the solar system.

The reason why deductivity has not worked in economics is simply that economics is based on false premises, more specifically, because both the Walrasian microfoundations and the Keynesian macrofoundations are false.

Heterodox methodologists do not know what already Aristotle knew: “When the premises are certain, true, and primary, and the conclusion formally follows from them, this is demonstration, and produces scientific knowledge of a thing.”

Because heterodox economists, too, are scientifically incompetent they never rose above the level of debunking, loose verbal reasoning, and “overall suspicion”. This is NOT the way to successfully replace failed orthodox economics.#2

Egmont Kakarot-Handtke

#1 Encyclopedia Britannica
#2 For details see cross-references Heterodoxy