November 8, 2018

Economics should never be a substitute for thinking

Comment on Lars Syll on ‘Econometrics: The Keynes―Tinbergen controversy’

Blog-Reference and Blog-Reference

Lars Syll’s fatal blunder consists of maintaining that economics is a social science while, in fact, it is a systems science.#1 And while there is, of course, no such things as a behavioral law there are systemic laws.

Walrasian economics is based on behavioral axioms.#2 Because these axioms are provably false the whole theoretical superstructure of mainstream economics is false. Therefore, it comes as no surprise that econometrics does not yield valid results. This, though, does not support the conclusion that the statistical methods/tools of econometrics are worthless but confirms the long-known fact that economic theory in all variants from Walrasianism, Keynesianism, Marxianism, to Austrianism is worthless.

Economists did not figure out the systemic laws to this day. In fact, they are too stupid for the elementary mathematics that underlies macroeconomics.

Keynes’ scientific incompetence can be exactly located in the GT: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63)

Keynes got macroeconomic profit wrong: “His Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson et al.)

Let this sink in: the economist Keynes NEVER understood the foundational concept of his subject matter. Because profit is ill-defined the complete theoretical superstructure of Keynesianism is false. Keynesian policy guidance NEVER had valid scientific foundations.

The elementary version of the axiomatically correct macroeconomic Profit Law, which is measurable with the precision of two decimal places, reads Qm≡I−Sm with Qm as monetary profit and Sm as monetary saving. And this means that since Keynes/Hicks ALL I=S/IS-LM models are false.#3 Macroeconomics is proto-scientific garbage. Microeconomics is even worse.

Lars Syll summarizes Keynes’ critique of Tinbergen’s econometrics in great detail. Keynes argues: “The fallacy, of which ignorance of organic unity is a particular instance, may perhaps be mathematically represented thus: suppose f(x) is the goodness of x and f(y) is the goodness of y. It is then assumed that the goodness of x and y together is f(x) + f(y) when it is clearly f(x + y) and only in special cases will it be true that f(x + y) = f(x) + f(y).”

This, of course, is pure idiocy because goodness is a NONENTITY just like utility or equilibrium. The example proves that Keynes had no idea of what economics is all about. He never understood the foundational concept of profit and he was obviously too stupid for the elementary mathematics that underlies macroeconomics.

Trivially true: “Econometric modelling should never be a substitute for thinking.” and, because there is, to begin with, no substitute for thinking,  this applies also to Keynesianism. Nobody, except cargo cult scientists, can take seriously what Keynes has said about probability or econometrics or, for that matter, about profit or employment theory.#4

After 80+ years of storytelling/blather, Keynesians, Post-Keynesians, Anti-Keynesians, New Keynesians, MMTers, heterodox and pluralist retards, Lars Syll and the rest of stupid/ corrupt political agenda pushers together with all their peer-reviewed articles/textbooks/blog-posts have finally to be flushed down the scientific toilet.

Egmont Kakarot-Handtke

#1 Economics is NOT a social science
#2 Where economics went wrong
#3 Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It
#4 Go! ― test the Profit and Employment Law


LINKS on Lars Syll's  'P-values are no substitute for thinking' on Nov 26


Scientists do NOT manipulate research with P-value only the stupid/corrupt agenda pushers of orthodox and heterodox economics.

► Stop beating mainstream economics ― it is long dead
► The stupidity of Heterodoxy is the life insurance of Orthodoxy
► How Heterodoxy became the venue for science’s scum
► Lars Syll, fake scientist