Blog-Reference and Blog-Reference on Jul 16
Economics in its four incarnations ― Walrasianism, Keynesianism, Marxianism, Austrianism ― is one of the worst scientific scandals in human history and BOTH Orthodoxy and Heterodoxy are part of it.
Lars Syll argues: “Using formal mathematical modeling, mainstream economists sure can guarantee that the conclusions hold given the assumptions. However, the validity we get in abstract model worlds does not warrantly transfer to real world economies. Validity may be good, but it isn’t enough. From a realist perspective both relevance and soundness are sine qua non.”
This argument is a sure sign of imbecility given the fact that formal AND material consistency is the very definition of science for 2300+ years: “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)
Lars Syll’s new realist perspective is not new at all.
The fact is that neither Orthodoxy nor Heterodoxy has provided the true, i.e. materially AND formally consistent, economic theory until this very day. It is correct, of course, that “what we call ‘microfoundations’ are not like physical laws. Heck, they’re not even true.” (Krugman)
No, they are not, and BECAUSE the Walrasian axioms=microfoundations are provable false the whole of the analytical superstructure = the whole of standard economics is false.#1 Keynesian macrofoundations, too, are provable false.#2
So, the REAL news for economists is: If it isn’t macro-axiomatized, it isn’t economics. Needless to emphasize that the representative economist is mentally unfit for the new perspective.#3