Blog-Reference and Blog-Reference on Feb 2
JKH comments: “‘But economics is not pure mathematics or logic.’ Not entirely true. Coherent thinking about money and banking in particular is founded on an understanding of elementary accounting, which is effect a type of algebra, featuring closure in logic. The General Theory is replete with the development of applicable accounting at the macro level.”
True. But the fact is that economists are too stupid for the elementary algebra that underlies macroeconomics.#1 Keynes is a case in point.
Keynes’ scientific incompetence can be exactly located in the GT: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63)
“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.)
Keynes, like his academic colleagues, NEVER understood what profit is and thus ended with I=S ― one of the greatest blunders in the history of modern science.
The correct macroeconomic relations are given by Q≡−S for the elementary production-consumption economy and Q≡I−S for the elementary investment economy with Q business sector’s monetary profit, S household sector’s monetary saving, and I business sector’s investment expenditures.#2 All variables are measurable with the precision of two decimal places and are as real as cash in the box or money in the bank.
Neither Keynesians nor Post Keynesians nor Anti-Keynesians nor orthodox economists nor heterodox economists understand to this day the elementary logic/mathematics of macroeconomics.#3 The whole bunch of scientifically incompetent economists has no idea about what the foundational magnitude ― profit ― of their subject matter is. To this day, economics is pure blather.
Because economists have NO grasp of logic/mathematics they have NO grasp on reality.
#1 Wikipedia and the promotion of economists’ idiotism (II)
#2 For details of the big picture see cross-references Accounting
#3 Profit and the collective failure of economists
Related 'Economics as storytelling and entertainment for the masses' and 'There is NO such thing as “smart, honest, honorable economists”' and 'Wikipedia, economics, scientific knowledge, or political agenda pushing?' For details of the big picture see cross-references Refutation of I=S and cross-references Failed/Fake Scientists and cross-references Math/Mathiness.