August 21, 2018

The biggest scientific mistake of the last centuries, and it has much to do with academic economists

Comment on Simon Wren-Lewis on ‘The biggest economic policy mistake of the last decade, and it had nothing to do with academic economists’

Blog-Reference and Blog-Reference and Blog-Reference on Aug 22

Simon Wren-Lewis argues: “I think this lack of influence that academic economics can have is not understood by many. It often suits some heterodox economists to pretend otherwise. Economists can be influential, but only when politicians want to listen, or the media is prepared to confront them with academic knowledge.”

Economists have it always in BOTH ways. Keynes famously argued: “Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.”

In economics, everything and the exact opposite has already been said sometime, somewhere, by somebody. Self-contradiction is NOT a disadvantage. Just the opposite. If some major economic event happens, there is always somebody who ‘saw it coming’ or ‘who got it right but, unfortunately, was ignored’. The discussion about austerity is NOT different.

Simon Wren-Lewis tells the story of how he, Paul Krugman, Brad DeLong, and others have successfully taken down the arguments for austerity: “As far as us Keynesians were concerned, the intellectual battles were won by the end of 2012 if not before.”

This gives us the Iron Rule of Political Economics: If economic shit happens then it was NEVER the fault of economists but of politicians who do not understand economics and always listen to the incompetent economists and ignore the competent economists.” The truth is just the opposite: “Late in life, moreover, he [Napoleon] claimed that he had always believed that if an empire were made of granite the ideas of economists if listened to, would suffice to reduce it to dust.” (Viner)

This is why intelligent heads of state do not listen to economists but only employ them as useful idiots.

The point is this: “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)

Now, this is the current state of economics: 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, economists have NOT achieved anything of scientific value. They nonetheless hold up the claim to be scientists and experts.

The key to understanding economics is that there are TWO economixes: political and theoretical economics. Theoretical economics (= science) had been hijacked from the very beginning by the agenda pushers of political economics. Economics claims to be a science but is NOT. Economists claim to know how the economy works but do NOT. From this follows that economic policy guidance from Smith/Marx onward NEVER has had sound scientific foundations. This applies also to the issue of austerity.#1, #2, #3

Neither Simon Wren-Lewis nor Paul Krugman nor Brad DeLong nor the rest knows how the economy works yet all have very strong opinions on what the politicians should do. Economists have entirely forgotten that agenda pushing is NOT AT ALL their business: “A scientific observer or reasoner, merely as such, is not an adviser for practice. His part is only to show that certain consequences follow from certain causes, and that to obtain certain ends, certain means are the most effectual. Whether the ends themselves are such as ought to be pursued, and if so, in what cases and to how great a length, it is no part of his business as a cultivator of science to decide, and science alone will never qualify him for the decision.” (J. S. Mill)

All the more so, because economists messed up science.#4 After 200+ years of political agenda pushing, economics is one of the most embarrassing failures in the history of modern science.

Egmont Kakarot-Handtke

#1 Austerity and the idiocy of political economists
#2 Austerity and the utter scientific ignorance of economists
#3 Austerity and the total disconnect between economic policy and science
#4 For details of the big picture see cross-references Failed/Fake Scientists

Related Ch. 13 in Sovereign Economics The indelible scientific disgrace of economics.

REPLY to Tom Hickey on Aug 23

You say: “All of us have a world view. World views differ, perhaps slightly but perhaps a great deal. We affiliate based on shared world views. If one beings to groups that don’t share a common world view. this creates some double binds and cognitive dissonance, or role-playing, These world views are ‘programed’ into the brain functioning. At the social level this results in group think and conflict within and among groups.”

Wow. And you found this out by stressing your two brain cells? Take notice that the difference between doxa = opinion and episteme = knowledge has been settled by the Greek philosophers more than 2300 years ago.

The guiding principle for establishing knowledge is the distinction between true and false: “There are always many different opinions and conventions concerning any one problem or subject-matter (such as the gods). This shows that they are not all true. For if they conflict, then at best only one of them can be true. Thus it appears that Parmenides … was the first to distinguish clearly between truth or reality on the one hand, and convention or conventional opinion (hearsay, plausible myth) on the other …” (Popper)

To deny the true/false demarcation means to kick oneself out of science. And this is exactly what you are doing.

It is rather trivial to state that there are a lot of different opinions around. Genuine philosophers went well beyond this triviality: “That the settlement of opinion is the sole end of inquiry is a very important proposition.” (Peirce)

In brief, Walrasianism, Keynesianism, MMT, Marxianism, Austrianism, Pluralism, Eclecticism is mere opinion and will find its final resting place at the Flat-Earth-Cemetery together with your silly anything-goes philosophy.

You say: “All of us have a world view”. What you call a “world view” is qualitatively not different from a bacillus fart. The representative orthodox and heterodox economist does NOT have a valid world view but is scientifically incompetent/corrupt. The proof is all over the econblogosphere including the Mike Norman Economics blog.#1, #2, #3

#1 The scientific self-elimination of Heterodoxy
#2 MMT, Bill Mitchell, and the lack of basic scientific integrity
#3 You don’t see what you don’t see: censorship in the econblogosphere

REPLY to Tom Hickey on Aug 23

You say: “Right, and most people today are completely unaware of this. They have been captured by ‘science’ that is really pseudoscience.”

Worse, they have been captured by ‘philosophy’ that is really pseudophilosophy. After the sciences and mathematics have left philosophy behind it is only a shadow of its former self and practically indistinguishable from journalism/propaganda/agenda-pushing.

The anything-goes philosopher Tom Hickey is a sad example of the political sellout of philosophy.

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