Peter Radford remembers the good times: “There was a time when it [economics] attempted to explore reality, when it included lumpy and vague concepts, when it allowed for collective action, and when it related to experience: how different from today’s pseudoscientific axiomatically self-determining oddity.”
Peter Radford’s prototype of an economist is Adam Smith, “We’ve been chasing his tail, and his tale, ever since.” Joseph Schumpeter characterized Adam Smith accurately as the founder of soapbox economics: “… in fact 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.”
And then the high times of plain common sense, storytelling, and straightforward agenda-pushing ended: “Where do the wheels start to come off? The early writers, those we call the ‘classical theorists’ talked about economics very differently from the way we do today. We lost a lot when the change occurred. Frankly, I blame the ‘marginalists’ but that’s just me.”
Not exactly. Keynes has to be credited for realizing that the economics of Jevons/Walras/ Menger/Marshall was false at its core and that nothing less than a Paradigm Shift was needed: “The [neo-]classical theorists resemble Euclidean geometers in a non-Euclidean world who, discovering that in experience straight lines apparently parallel often meet, rebuke the lines for not keeping straight ― as the only remedy for the unfortunate collisions which are occurring. Yet, in truth, there is no remedy except to throw over the axiom of parallels and to work out a non-Euclidean geometry. Something similar is required to-day in economics.”
After Keynes, every economist who still does not see the necessity of a Paradigm Shift is a moron. One loudspeaker of this prevailing majority is Krugman who debunks himself with “… most of what I and many others do is sorta-kinda neoclassical because it takes the maximization-and-equilibrium world as a starting point.”
The fact is that maximization-and-equilibrium economics has already been dead in the cradle 150+ years ago.
Keynes, though, messed up the shift from microfoundations to macrofoundations. His lethal blunder can be exactly located in the GT: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63) This syllogism is conceptually and logically defective because Keynes never came to grips with profit. (Tómasson et al.) Because profit is ill-defined, the whole analytical superstructure of Keynesianism is false.#1
As a genuine soapbox economist, Keynes never rose above the proto-scientific level: “In the early thirties he [Keynes] confessed to Roy Harrod that he was ‘returning to an age-long tradition of common sense’.” (Coates)
Because Marx#2, the Post Keynesians#3, and the Austrians, too, never got the foundational concept of profit right, the present state of economics is this: Walrasianism, Keynesianism, Marxianism, Austrianism, MMT is axiomatically false, materially/formally inconsistent, and all approaches are mutually contradictory.
The history of economic non-thought boils down to a case study of scientific incompetence and soapbox blather. What we have today is the indefensible pluralism of provably false theories.#4 Economists still lack true theory#5. But: “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)
With a little educated common sense and much personal opinion, both orthodox and heterodox economists were never more than useful political idiots and clowns in the Circus Maximus.#6
#1 Keynes’s Missing Axioms
#2 Proﬁt for Marxists
#3 Why Post Keynesianism Is Not Yet a Science
#4 Heterodoxy, too, is proto-scientific garbage
#5 Yes, economics is a bogus science
#6 Economists: scientists or political clowns?
Related 'Why J. S. Mill had no friendly word for the bigots and votaries of common sense' and 'The bigots of common sense' and 'Misled by ordinary intuition and common sense' and 'Economics ― nothing but claptrap, twaddle, drivel, slip-slop, wish-wash, waffle, and proto-scientific garbage' and 'How the intelligent non-economist can refute every economist hands down' and 'Why is economics a total scientific failure?'.
Twitter May 3, 2021 History of economic thought