July 14, 2018

And the answer is NCND ― economics after 200+ years of Glomarization

Comment on Lars Syll on ‘What are axiomatizations good for?’


Gilboa, Postlewaite, Samuelson, Schmeidler ask: “What have these axiomatizations done for us lately?” Wrong question, of course. The right question economists have to ask themselves is: what have WE done for the proper axiomatization of economics lately.

Fact is, to begin with, that economic methodologists do not understand to this day what axiomatization is all about. Lars Syll even maintains that is a kind of mental body-building: “Studying mathematics and logic is interesting and fun. It sharpens the mind.”

It is not at all a surprise, therefore, that economics is a failed science. Walrasianism, Keynesianism, Marxianism, Austrianism is mutually contradictory, axiomatically false, and materially/formally inconsistent. As a result, economic policy guidance has NO sound scientific foundations since Adam Smith/Karl Marx.

This pluralism of provably false theories is pretty strange. How could it happen that economics is still at the proto-scientific level while science has made such incredible advances? The answer is that economics had been captured from the very beginning by political agenda pushers. Agenda-pushers, though, have no truck with science except for building Potemkin facades.

Science is binary true/false and NOTHING in between. Non-science is the swamp between true and false where “nothing is clear and everything is possible” (Keynes). Vagueness/ inconclusiveness is what Popper called an immunizing stratagem because: “Another thing I must point out is that you cannot prove a vague theory wrong.” (Feynman) While scientifically this is a bad thing, politically it is a good thing.

Because economists are not scientists but swamp creatures they see to it that no analysis and no debate ever leave the swamp. This is achieved by the tried and tested method of Glomarization.#1 For example, to the central question Does a General Economic Equilibrium exists? the answer is: “We can neither confirm nor deny the existence of a General Equilibrium.” And so on with NCND for any other question.#2, #3, #4

Accordingly, if a clear-cut refutation occasionally happens it is simply filibustered away: “In economics we should strive to proceed, wherever we can, exactly according to the standards of the other, more advanced, sciences, where it is not possible, once an issue has been decided, to continue to write about it as if nothing had happened.” (Morgenstern)

Glomarization is the communicative modus operandi in the political sphere. Science is the exact opposite of the political swamp. Science aims at a clear-cut true/false answer with truth well-defined as material and formal consistency. The methodological tool to achieve this is the axiomatic-deductive method. As Aristotle put it 2000+ years ago: “When the premises are certain, true, and primary, and the conclusion formally follows from them, this is demonstration, and produces scientific knowledge of a thing.” This is why axiomatization is of overriding importance.

Neither orthodox nor heterodox economists know how to apply the axiomatic-deductive method correctly.#5 This is why their economic policy proposals have no sound scientific foundation. To the question What have economists ever done for their fellow citizens? the clear-cut answer is nothing but vacuous political blather.

Egmont Kakarot-Handtke

#1 Wikipedia, Glomar response
#2 How the representative economist gets it wrong big-time
#3 Economic recommendations out of the swamp between true and false
#4 Failed economics: The losers’ long list of lame excuses
#5 For details of the big picture see cross-references Axiomatization

Related 'Clueless about money and profit' and 'Keynesianism ― the economists’ senile dementia' and 'Buridan’s ass economics' and 'Knowledge is attainable ― even in economics' and 'Failed critique of failed economics' and 'Stop knowing nothing, start knowing something' and 'The scientific self-elimination of Heterodoxy' and 'Prophets of Preemptive Vanitizations' and 'Economics as fool’s paradise' and 'A heap of proto-scientific rubbish' and 'Truth by definition? The Profit Theory is axiomatically false for 200+ years' and 'Real-World Economics: The sanctuary of stupidity and corruption' and 'The inexorable paradigm shift in economics'.

Wikimedia AXEC121i

REPLY to John Vertegaal on Jul 15

You say: “Lars and Asad, great minds but still groping after all these years… All reasoning starts from assumptions, but in order to be valid in the real world, those assumptions require empirical confirmation. All economists, as far as I know, assume that the present is complete and we live within our economy. Hence, they come up with assumed points of departure like the accounting identity: Y=C+I, blissfully unaware that accounting itself is based on unprovable assumptions.”

Scientific analysis starts with premises and these have to be clearly stated. This is the minimum requirement.#1 Otherwise, things end after a few steps in confusion and blather. This happened with economics in general and this happens every day in the econblogosphere.

The current state of economics is that neither Orthodoxy nor Heterodoxy nor Lars Syll nor Asad Zaman nor Craig nor Dave Marsay nor the rest has gotten the foundational concepts profit and income right.#2

Economists are swampies. Economics is a failed science. All microfounded (Walrasian) and macrofounded (Keynesian) models are provably false. Economists do not know how the economy works. Economics is a cargo cult science. The “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel” is a fraud.

“The moral of the story is simply this: it takes a new theory, and not just the destructive exposure of assumptions or the collection of new facts, to beat an old theory.” (Blaug) Economics needs a paradigm shift and the expulsion of the scientifically incompetent or the “throng of superfluous economists” as Joan Robinson called them.#3


REPLY to Asad Zaman on Jul 16

Since Adam Smith/Karl Marx economics claims to be a science but is NOT. Theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers). Political economics has produced NOTHING of scientific value in the last 200+ years.#1

Fact is that economics is a failed science and that Heterodoxy has been complicit in the failure.#2 Whether this outcome was unintended/intended by individual economists does not matter. What counts is the collective effect which is the perfect Glomarization of economics. There is not one policy proposal drawn from employment theory to monetary theory that embodies valid scientific knowledge about how the economy works, it is just opinion: “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. For every opinion, there is an equally plausible counter-opinion and that is Glomarization ― hailed as pluralism and anything goes.#3

The political beauty of Glomarization is that it is paralyzing and therefore secures the status quo. Hayek, for one, instrumentalized this effect by arguing that just because of the lack of knowledge of economists and politicians about how the economy works there is NO such thing as economic policy. For this epistemological reason, everything has to be left to the market as an information processor and knowledge producer.

To say economics needs a paradigm shift is to say that traditional Heterodoxy, too, has to be buried at the Flat-Earth-Cemetery.#4 This applies also to Asad Zaman who has been refuted on all methodological counts.#5

By denying that, in principle, axiomatization produces logical consistency and that state-of-art econometrics produces material consistency, heterodox methodologists in effect prevent scientific progress and indirectly support the political status quo.


REPLY to davetaylor1, Prof Dr James Beckman, Germany on Aug 2

davetaylor1 argues: “According to my dictionary the word ‘axiom’ can refer either to a self-evident truth or a universally accepted principle. Economists seem to be assuming the first of these and forgetting about the importance of the second, as exemplified in the ways of denoting sounds and numbers.”

And Prof Dr James Beckman, Germany asks: “Self-evident to whom?”

This shows only that both heterodox blatherers have NO idea what axiomatization is all about. “Self-evidence” is NOT a criterion of axioms, this has always been popular BS.

Note that Newton under the title of Axiomata Sive Leges Motu states (in modern language): “In an inertial frame of reference, an object either remains at rest or continues to move at a constant velocity, unless acted upon by a force.”

This is NOT self-evident but an abstraction/idealization of observable motion on earth where an object does NOT move at a constant velocity.

All this is long known among people with more than two brain cells: “We may, therefore, agree with Ernst Mach, who very wisely pointed out that the law of inertia could hardly be ‘obvious’ or ‘self-evident’ since throughout most of recorded history men believed in a quite different law and would have denied the Cartesian-Newtonian inertial principle.” (Cohen, 1977)

The point of axiomatization is to clearly state the premises. As long as this is not done, any analysis and discussion produce only proto-scientific garbage. Heterodox economists have never stated their axioms and this is why Heterodoxy has never produced anything of scientific value.#1, #2, #3

#2 For details of the big picture see cross-references Axiomatization


REPLY to davetaylor1, John Vertegaal, Craig on Aug 10

The elementary production-consumption economy is for a start defined by three macroeconomic axioms (Yw=WL, O=RL, C=PX), two conditions (X=O, C=Yw) and two definitions (Qm≡C−Yw, Sm≡Yw−C).#1

#1 For details of the big picture see cross-references Axiomatization