November 26, 2017

Dear philosophers, economics is a systems science

Comment on Lars Syll’s ‘La discipline économique et le mirage de la ‘vraie science’’


Frédéric Lordon maintains: “Car l’économie a été soumise comme aucune autre science sociale au démon de la tentation galiléenne: n’est-elle pas par excellence science social du quantitatif et science des rapports sociaux nombrés?”

Frédéric Lordon’s mistake is to unthinkingly subsume economics under the so-called social sciences. The subject matter of economics, though, is the structure and behavior of the economic system. To explain individual/social behavior is the task of Psychology, Sociology, Political Science, History, Biology/Evolution, Philosophy, etcetera.#1

With Political Economy, economics started on the wrong foot. Since Adam Smith/Karl Marx, economists NEVER understood what science is all about. Until this day, economics is what Feynman called a cargo cult science: “They’re doing everything right. The form is perfect. ... But it doesn’t work. ... So I call these things cargo cult science because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential.”

What is entirely missing among both orthodox and heterodox economists is scientific competence.#2 After more than 200 years economists have not even figured out what profit is, that is, they do not understand the pivotal phenomenon of their subject matter.#3 By consequence, neither right-wing nor left-wing economic policy guidance ever had sound scientific foundations.

The scientific incompetence of economists consists in the fact that it is beyond their means to realize that NO way leads from the second-guessing of Human Nature/motives/behavior/ action to the understanding of how the economic system works.#3 Analogously, NO way leads from the second-guessing of the motives, emotions, and ruminations of passengers/ crew to the understanding of how big metallic objects can fly. In other words, from psychology, NO way leads to the Laws of Aerodynamics.

The failure of economics had been programmed by the founding fathers with the definition of the subject matter as a social science: “The fundamental problem, therefore, of the social science, is to find the laws according to which any state of society produces the state which succeeds it and takes it place.” (J. S. Mill)

The social sciences cannot, for deeper methodological reasons, rise above the level of storytelling. And this is exactly what Walrasianism, Keynesianism, Marxianism, and Austrianism is. Neither approach satisfies the non-negotiable criteria of science, i.e., material and formal consistency.

In order to become a science, economics has to perform the Paradigm Shift, that is, it has to move from false Walrasian microfoundations and false Keynesian macrofoundations to true macrofoundations. Thereby, retarded epistemologists like Syll and Lordon are more a handicap than a help.

Egmont Kakarot-Handtke

#1 Economics is NOT a social science
#2 What is so great about cargo cult science? or, How economists learned to stop worrying about failure
#3 A brief history of soapbox economics

Related 'Throw them out! Orthodox and heterodox economists are unfit for science' and 'Economics for philosophers' and 'Bye, bye economic philosophers'.