Blog-Reference and Blog-Reference on May 1 adapted to context
A theory is the best mental representation of reality that is humanly possible. As Kant put it in 1793: “There is nothing as practical as a good theory.” A good theory is defined by material and formal consistency: “Research is, in fact, a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant) A theory is the embodiment of knowledge. Knowledge is the very opposite of opinion. Knowledge is valuable, opinion is worthless. Knowledge is the currency in the realm of science, opinion is the currency in the realm of politics. Both realms are disjunct. How does one eventually arrive at knowledge?: “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.” (Aristotle)
All this is known for more than 2300 years ― except among economists. Economists have talked volumes about methodology but reality is the final arbiter in science. The reality of economics is that it is a failed science, and from this follows that what economists preach and practice as methodology, i.e. the proverbial ‘thinking like an economist’,#1 is plain proto-scientific garbage. The fact is that the major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, and materially/formally inconsistent.
Heterodoxy is NOT methodologically superior to Orthodoxy it merely talks more about methodology.#2 The bottom line of Heterodox methodology is the pluralism of false theories, which, of course, is scientifically forever unacceptable.
The methodological blunder of Orthodoxy and Heterodoxy is basically the same. Both suffer from social science delusion. The fundamental methodological error/mistake has been codified by Arrow: “… all explanations must run in terms of the actions and reactions of individuals”. Heterodoxy replaces classes for individuals, and that’s it. What the representative economist fails to realize is that NO way leads from the understanding of Human-Nature/motives/interests/behavior/action/interaction to the understanding of how the economic system works.
The representative economist focuses on the wrong aspect of economic reality which is the result of human-system interaction. An example makes this clear.
Imagine someone is shown an airplane taking off for Paris. Now the person is asked to explain how it so happens that planes fly. The scientifically incompetent commonsenser explains that this flight takes place because the passengers have a variety of motives to go to Paris, and the crew and the pilot have theirs and that the airline wants to make big profits, and so on. This is how the Human-Nature explanation of psychology and sociology works. It is proto-scientific garbage but people are perfectly happy with it.
The competent scientist, in contradistinction, avoids all Human-Nature blah blah and explains flight by the interaction of a bunch of physical laws, e.g. aerodynamics, thermodynamics, gravity, and so on.
Methodologically, the lethal blunder of Orthodoxy consists of starting from behavioral axioms: “… most of what I and many others do is sorta-kinda neoclassical because it takes the maximization-and-equilibrium world as a starting point.” (Krugman)#4
The heterodox critique of Orthodoxy (unrealism, mathiness, ignorance of uncertainty/ reflexivity, etcetera) is not false but remains on the surface. There is only ONE effective critique of a false paradigm and this is a new paradigm. As long as Heterodoxy is unable to provide the new paradigm the orthodox zombie cannot be buried. In view of proven scientific incompetence, though, the way forward is to bury BOTH Orthodoxy and Heterodoxy.
#1 Confused Confusers: How to Stop Thinking Like an Economist and Start Thinking Like a Scientist
#2 Heterodoxy, too, is proto-scientific garbage
#3 Economics is NOT a social science
#4 The Krugman curse
Related 'True macrofoundations: the reset of economics' and '10 steps to leave cargo cult economics behind for good' and 'The end of political economics' and 'Microfoundations are dead for 150+ years: high time to move on' and 'Get it econ suckers: behavioral microfoundations ⇒ false, systemic macrofoundations ⇒ true'. For details of the big picture see cross-references Heterodoxy and cross-references Failed/Fake Scientists and cross-references Methodology and cross-references Paradigm Shift.