April 25, 2017

Economics and encephalomalacia

Comment on Barkley Rosser on ‘Turkey And The Trend To Authoritarianism’


Simon Wren-Lewis correctly observed:#1 “Narratives are a way people can try to understand things they know little about, and most people know little about economics or politics.”

This is an accurate observation ― and it is by no means new. The media have always been in the business of storytelling and it is well-known that this sooner or later leads to general encephalomalacia (softening of the brain).

What Simon Wren-Lewis tried to suggest in his post is that the media are the bad storytelling guys and that economists are the facts-only-truth-telling good guys.

Reality is quite different. It is NOT only the media that is in the business of storytelling but economics, too. But economists’ encephalomalacia is more reprehensible because economics claims to be a science and this means: “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)

And here is the snag: economists do not have the true theory. Economics claims to be a science, yet has never satisfied scientific standards. The four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, and materially/formally inconsistent.

Because of his lack of the true theory what the representative economist has to offer is educated common sense, his personal opinion, second-guessing the FED, and interpreting the President’s tweets.

Some economists have given up economics altogether and have regressed to psychological, sociological, political, and historical storytelling. Barkley Rosser has now set new standards with his completely beside-the-point narrative of voting patterns, the Sons of Liberty in Texas who fought for the freedom to own slaves, the convergence on ethnic core-based nationalism, Erdogan’s attempt to undo the secular Turkish state of Ataturk, and replace it with a neo-Ottoman Empire, and of the confusion that was caused by Trump congratulating Erdogan on his referendum.

Whatever this is, it is NOT economics.

The storytelling of scientifically failed economists like Barkley Rosser has become virtually indistinguishable from the blather of half-witted journalists.#2 This proves that economics has never gotten above the proto-scientific level since Adam Smith: “… he disliked whatever went beyond plain common sense. He never moved above the heads of even the dullest readers. He led them on gently, encouraging them by trivialities and homely observations, making them feel comfortable all along.” (Schumpeter)

For 200+ years economists are lousy scientists but good at brain softening.

Egmont Kakarot-Handtke

#1 Media-fake-farce-fraud-storytelling-macro
#2 ‘Politics, storytelling, and science’ and ‘Economics ― from attention and reputation management to science