June 8, 2017

Soapbox economics

Comment on Lars Syll on ‘Labour’s manifesto — not continued austerity — is what the UK needs’


In the political sphere, we have freedom of speech, so everybody can climb on a soapbox and make an economic policy proposal: “A sure sign of a crisis is the prevalence of cranks. It is characteristic of a crisis in theory that cranks get a hearing from the public which orthodoxy is failing to satisfy. In the thirties, we had Major Douglas, and social credit ― it can all be done with a fountain pen ― and Warren and Pearson who convinced President Roosevelt that raising the dollar price of gold would raise the price of everything else and bring the slump to an end. The cranks are to be preferred to the orthodox because they see that there is a problem. Nowadays we have plenty of cranks taking up the problems that the economists overlook.” (Joan Robinson)

Everybody can climb on a soapbox and make an economic policy proposal EXCEPT an economist because: “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)

The problem is that economists do NOT have the true theory. The four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and ALL got profit wrong.

Economics claims to be a science but is NOT. Economists claim to know how the economy works but do NOT. From this follows that economic policy guidance with regard to monetary, fiscal and employment policy has NO sound scientific foundation. This applies to orthodox and heterodox economics and this applies to the whole issue of austerity.#1

Egmont Kakarot-Handtke

#1 For details of the big picture see
► Austerity and the idiocy of political economists
► Austerity and the utter scientific ignorance of economists
► Austerity and the total disconnect between economic policy and science
► The general theory of scientific incompetence
► Economic policy guidance out of the scientific kindergarten
► Economics as poultry entrails reading
► Post Keynesianism, too, is proto-scientific rubbish