Tim Worstall asks: “What is the bottom of our differing opinions on the worth of micro v macro? Microeconomics is how the world works. How do we humans respond to incentives? Macroeconomics at least attempts to describe how to manage an economy.”
This, at last, is the key question. And here is the answer.
Microeconomics is how “humans respond to incentives”. Human behavior, though, is NOT AT ALL the business of economics but of psychology/sociology. So, to begin with, economists got their subject matter wrong. Microfoundations are false because economics is NOT a science of behavior.#1
The fatal methodological blunder of the microfoundations approach is that NO way leads from the second-guessing of Human Nature/motives/behavior/action to the understanding of how the economic system works. ALL human-centered/behavioral approaches invariably crash against the methodological wall of the Fallacy of Composition.
Microeconomics is so popular because people like to gossip about the actions and motives of other people. To explain the world with the (ultimately unknowable) motives of (real or imagined) actors gives the illusion of understanding.
So, economics has to move from microfoundations to macrofoundations. Keynes started this Paradigm Shift but messed it up. More precisely, he got the foundational macroeconomic relations wrong: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (GT, p. 63) This is provably false for 80+ years.
So what we have got is false microfoundations and false macrofoundations and a (logically impossible) integration of the two in the textbooks. Economic textbooks are the worst proto-scientific garbage since Samuelson’s firstling of 1948.#2
However, every generation of economics students swallowed this stuff enthusiastically with some inconsequential reservations on minor points here and there.
So, both microeconomics and macroeconomics are provably false. There are NO economics only clueless blather and political agenda pushing.
The fortunate circumstance for economists is that in the political Circus Maximus nobody needs and wants sound scientific foundations. Among morons, science is a nuisance. So economics became one more proof that one can tell the general public virtually any BS. And economists became useful political idiots who decorate themselves every year with the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.
Note the madness that failed/fake scientists not only claim to do science but sciences.
So, clearly, what has to be done is to move economics from false Walrasian microfoundations and false Keynesian macrofoundations to true macrofoundations. Needless to emphasize that the bunch of retarded losers that did not get profit right in the past 200+ years cannot perform a Paradigm Shift. For them, it is time to say goodbye.#3
#1 Overreach: Economists have their fingers in every pie except real economics
#2 The father of modern economics and his imbecile kids
#3 The future of economics: why you will probably not be admitted to it, and why this is a good thing
Related 'Macroeconomics: Drain the scientific swamp' and '#DrainTheScientificSwamp' and 'Profit and the collective failure of economists' and 'Economics as fool’s paradise'. For details of the big picture see cross-references Failed/Fake Scientists and cross-references Political Economics/Stupidity/Corruption and cross-references Paradigm Shift.
Immediately preceding Economics: A pointless left-right wrestling show.