Blog-Reference and Blog-Reference
When proven to be a fake scientist without any understanding of the foundational economic concept of profit, Barkley Rosser answers: “But then, after all these denunciations, when we finally come to the grand presentation of his one and only true theory of profit, it turns out to be, as I said above, a minor accounting variation on Keynesian income and product accounts, a variation well known and long accounted for by the relevant economists who have a need to deal with this minor variation (all about retained earnings! the ultimate meaning of all economics!). It is a giant nothingburger involving no paradigm shift or anything at all of any serious interest to anybody.”
The surrealism of the matter is that the economist Barkley Rosser comments on Capitalism and Socialism and has no idea about what profit is. The fact is that he spent his academic life with behavioral economics which is not more than a mix of sociology/psychology/ anthropology for cargo cult scientists. Barkley Rosser never understood that economics is NOT a social science but a systems science.
Here are the facts. Economics is a scientific failure.#1 What first of all has to be done is the paradigm shift from microfoundations to macrofoundations.#2 From the correct axiomatic foundations then follows the macroeconomic Profit Law with increasing complexity:#3
- Qm≡−Sm in the elementary production-consumption economy,
- Qm≡I−Sm in the elementary investment economy (note I is NEVER equal Sm),
- Qm≡(G−T)+I−Sm in the investment economy with government deficit/surplus,
- Qm≡Yd+(X−M)+(G−T)+I−Sm in the open economy with distributed profit.
Written as sectoral balances this gives (X−M)+(G−T)+(I−Sm)−(Qm−Yd)=0. The axiomatically correct sectoral balances equation compares to the false equation (X−M)+(G−T)+(I−Sm)=0 which goes back to Keynes and constitutes to this day the explicit formal foundation of Post-Keynesianism and MMT.#4
The Profit Law says in the most elementary version that profit for the economy as a whole is equal to dissaving, that is, it has NOTHING at all to do with exploitation, greed, constrained optimization or any other psycho-social factors.#5 The comprehensive Profit Law consists exclusively of measurable variables, therefore, macroeconomic profit can be objectively determined with the precision of two decimal places.
The Profit Law holds for the monetary economy, no matter at which historical stage the economy actually is, and it is independent of the given legal order, in particular absolutely independent of the definition of property rights. In other words, the Profit Law holds for capitalist USA, communist Soviet Union, socialist/mixed Russia, and state/social China.
Because economists NEVER understood profit and have NEVER figured out the correct macroeconomic Profit Law, society is plagued for 200+ years with a brain-dead political discussion about Capitalism and Socialism and economic policy guidance that has NO sound scientific foundation.
For the welfare of society, failed/fake economists are worse than the Four Horsemen.
#1 Economics: 200+ years of scientific incompetence and fraud
#2 True macrofoundations: the reset of economics
#3 Rethinking the Profit Law
#4 Rectification of MMT macro accounting
#5 Capitalism, poverty, exploitation, and cross-over exploitation
Immediately preceding Note on ‘Duncan Foley On Socialist Alternatives to Capitalism’.
Related 'Profit: after 200+ years still elusive' and 'Economists understand neither Capitalism nor Socialism'.
- How Keynes got macro wrong and Allais got it right
- Keynes’s Missing Axioms
- The Common Error of Common Sense: An Essential Rectification of the Accounting Approach
- Why Post Keynesianism Is Not Yet a Science
- For the full-spectrum refutation of Keynesianism/Post-Keynesianism/MMT see cross-references Keynesianism