Blog-Reference and Blog-Reference Jan 5 adapted to context
Every layperson who is confronted with the statement: Mr. A has been murdered and you are the murderer, understands immediately the concept of scientific truth. Truth is (i) a binary concept, i.e. there is only true/false with NOTHING in between, and (ii), truth is objective, that is provable in principle, and (iii), that it is worth every effort to find out the truth even if we cannot be absolutely sure that we will be successful. As Popper put it: “Although nowadays we have given up the idea of absolutely certain knowledge, we have not by any means given up the idea of the search for truth.”
Admitting that there is no absolute certain knowledge is perfectly compatible with the assertion that the Law of the Lever represents certain knowledge. In fact, science is defined as the body of certain knowledge. Scientific truth has two inseparable methodological components: material and formal consistency. This, of, course, holds also for economics: “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)
Economists do not have the true theory. Economics is not a science but what Feynman called a cargo cult science. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/ formally inconsistent, and all got profit ― the foundational concept of the subject matter ― wrong. With the pluralism of provably false theories economics sits squarely at the proto-scientific level.
So, since Adam Smith/Karl Marx, economic policy guidance NEVER has had sound scientific foundations. Economics is one of the most embarrassing scientific failures of all time and the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel” is either an absurd self-delusion or a deliberate deception of the general public.
While genuine scientists have no problem with the idea of certain knowledge, fake scientists desperately try to keep things in the swamp between true and false where ‘nothing is clear and everything is possible’ (Keynes). Vagueness, vacuous wish-wash, and inconclusiveness are components of the survival strategy of incompetent scientists because “… you cannot prove a vague theory wrong.” (Feynman)
Accordingly, Dani Rodrik’s supreme methodological rule is “Good economists know that the correct answer to any question in economics is: it depends.” Genuine scientists know that this is NO answer at all but the evasive blather of fake scientists. Popper called this an immunizing stratagem and condemned it as a violation of the foundational principle of science.
Dani Rodrik, of course, maintains that evasion has some merits: “As even its harshest critics concede, neoliberalism is hard to pin down.” Yes, this exactly is the difference between the political agenda pusher and the scientist. The former subscribes methodologically to anything-goes the latter to provable material/formal consistency. Anything-goes is not only “hard to pin down” it is impossible to pin down and this makes it so dear to cargo cult scientists.
Dani Rodrik has not realized that economics is scientifically as dead as the flat earth theory. He defends the indefensible and tries to save economics by a spectacular operation, that is, by amputating the excrescence of neoliberalism from the healthy body of economic science: “A proper understanding of the economics that lies behind neoliberalism would allow us to identify ― and to reject ― ideology when it masquerades as economic science.”
This leads directly to the core question: “Are there universal truths in economics?”
Here is Dani Rodrik’s list of the universal principles that underlay economics: “efficiency, incentives, property rights, sound money, fiscal prudence.” These principles “… presume a capitalist economy ― one in which investment decisions are made by private individuals and firms ― but not much beyond that. They admit ― indeed they require ― a surprising variety of institutional arrangements.” This, in a nutshell, is what Dani Rodrik offers as the scientific truth economists have worked out in the last 200+ years.
Where economists fail, Dani Rodrik concedes, is at practical application: “Perhaps maps offer the best analogy. Just like economic models, maps are highly stylized representations of reality. … Economists tend to be very good at making maps, but not good enough at choosing the one most suited to the task at hand.”
The fact is that the representative economist in his utter scientific incompetence has not realized to this day that his maps = models are utter scientific garbage beginning with supply-demand-equilibrium and ending with DSGE respectively Post Keynesianism. More specifically
- economics is axiomatically false, that is, Walrasian microfoundations and Keynesian macrofoundations are materially/formally inconsistent,
- because the axioms are false the whole analytical superstructure is false,#1
- economists do to this day not know what profit is,#2
- economists do not understand how the economic system, i.e. the price and profit mechanism, works,
- economists fail to realize that the market economy is NOT self-adjusting but inherently unstable,#3
- economists fail to realize that because their economic policy prescriptions lack sound scientific foundations they regularly worsen the situation.#4
#1 10 steps to leave cargo cult economics behind for good
#2 The profit theory is false since Adam Smith
#3 The market economy is inherently unstable and economists never grasped it
#4 How economists murdered the economy and got away with it
#5 For details of the big picture see cross-references Failed/Fake scientists
Related 'New Economic Thinking, or, let’s put lipstick on the dead pig' and 'Failed economics: The losers’ long list of lame excuses' and 'Heterodoxy and Pluralism, too, are proto-scientific garbage' and 'How economists habitually mess it up' and 'The existence of economic laws and the nonexistence of behavioral laws' and 'The father of modern economics and his imbecile kids' and 'How to make economics a science' and 'Again and again: economists are incompetent scientists'.