May 2, 2017

Failed critique of failed economics

Comment on Lars Syll on ‘The spectacular failure of DSGE models’

Blog-Reference and Blog-Reference on May 8

Science is about knowledge. Who has no knowledge is asked to change from science to philosophy and join the ranks of those who seek applause for the faux humility of the exhibitionist ‘I know that I know nothing’.

In science, critique is essential but by NO MEANS enough: “The problem is not just to say that something might be wrong, but to replace it by something ― and that is not so easy.” (Feynman)

If the replacement does not increase knowledge the whole critical exercise amounts to not much more than sitcom blather.

The situation in economics is this: orthodox economics from Jevons/Walras/Menger to DSGE is provably false, that is, it does not satisfy the scientific criteria of material and formal consistency. However, traditional Heterodoxy has not managed in 150+ years to develop a superior alternative: “As will become evident, there is more agreement on the defects of orthodox theory than there is on what theory is to replace it: but all agreed that the point of the criticism is to clear the ground for construction.” (Nell)

In other words, not only DSGE is a failure but also the critique of DSGE is a failure: “… we may say that … the omnipresence of a certain point of view is not a sign of excellence or an indication that the truth or part of the truth has at last been found. It is, rather, the indication of a failure of reason to find suitable alternatives which might be used to transcend an accidental intermediate stage of our knowledge.” (Feyerabend)

More precisely, orthodox AND heterodox economics is brain-dead proto-scientific blather because it does not contribute to the growth of knowledge in any shape or form.#1

The mission of science has been defined by Hilbert: “We must not believe those, who today, with philosophical bearing and deliberative tone, prophesy the fall of culture and accept the ignorabimus. For us, there is no ignorabimus, and in my opinion none whatever in natural science. In opposition to the foolish ignorabimus our slogan shall be Wir müssen wissen — wir werden wissen. (We must know — we will know.)”#2

In economics, neither Orthodoxy nor traditional Heterodoxy knows anything.#3

Egmont Kakarot-Handtke

#1 The stupidity of Heterodoxy is the life insurance of Orthodoxy and How Heterodoxy became the venue for science’s scum
#2 Wikipedia
#3 For the replacement of traditional Heterodoxy by constructive Heterodoxy see cross-references Paradigm Shift

Related 'Complexity and stupidity' and 'Failed economics: The losers’ long list of lame excuses' and 'Economics ― a doctor worse than the disease'