From Adam Smith/Karl Marx to the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel” economics claims to be a science but it never was. Actually, economics is political agenda-pushing that abuses the prestige of science.
There are political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.
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.
Economists have NOT figured out to this day how the economy works. Walrasianism, Keynesianism, Marxianism, Austrianism are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational economic concept of profit wrong.
There is NO true, i.e. materially and formally consistent, economic theory. The fact is, therefore, that economic policy guidance never has had sound scientific foundations since Adam Smith. Economics has never been more than ‘educated common sense’ or ‘personal opinion’. So, the political concepts of Liberalism, Socialism, Keynesianism, Neoliberalism are hanging in midair and have no valid economic foundations.
Orthodox economics claims that the market economy is a self-regulating system that produces optimal outcomes. This assertion, though, has NEVER been proven. Worse, Keynes’ question: “... is the existing economic system in any significant sense self-adjusting.” has to be answered in the negative.#1
Keynes spotted the problems of Orthodoxy and he was right in initiating a Paradigm Shift, i.e. of moving from microfoundations to macrofoundations. But due to his scientific incompetence, he messed things badly up.#2, #3 The lack of scientific legitimacy, though, did not stop him from political agenda pushing.#4
Because both the microfoundations approach and the macrofoundations approach are axiomatically false, roughly 90 percent of the content of peer-reviewed journals is scientifically worthless.
Strictly speaking, economists cannot provide scientific input for the great political debates about how society and the economy should be organized. The historical fact is that economists’ policy advice tends, more often than not, to make matters worse.#5 Economics is a scientific failure and economists have never been anything else than blind agenda pushers/useful political idiots. This holds for the whole spectrum from right to left.
To get these stupid and corrupt folks out is the precondition for economics to eventually become a science.#6
#1 Could we, please, all focus on the key question of economics?
#2 Where economics went wrong (II)
#3 From false microfoundations to true macrofoundations
#4 Legitimacy lost
#5 As Napoleon said: don’t listen to economists
Related 'The end of political economics (I)' and 'Economics: A pointless left-right wrestling show' and 'MMT vs Neoliberalism: Just another clown show fight' and 'Why is 0!=1? And why is I≠S? And why economics teaching is rotten' and 'Let's bury economics now'. For details of the big picture see cross-references Political Economics/Stupidity/Corruption and cross-references Failed/Fake Scientists.
You say: “If you thought you could refute Austrian School analysis, you would.”
Yes, give me the Austrian Profit Theory and I will refute it.
This is Austrian Profit Theory: “The ultimate source from which entrepreneurial profit and losses are derived is the uncertainty of the future constellation of demand and supply.” (von Mises, 2007, p. 293)
The axiomatically correct macroeconomic Profit Law is given as Q≡Yd+(I−S)+(G−T)+(X−M). All variables are measurable, the Profit Law is testable.
Austrians never understood what profit is. Austrianism is scientifically as dead as a doornail and has never been anything else than political blather/agenda-pushing.#1
#1 See also
► Hayek ― agenda pusher or scientist?
► Hayek and other informationally retarded proto-economists
► Forget Hayek
► Austrian idiocy ― the case of Hayek
► Why Hayek was not a scientist
► Hayek was not an economist
► Hayek: mad, bad, or just another incompetent economist?
► Hayek, or, How economists miss their subject matter since 200+ years
► Pareto-efficiency, Hayek’s marvel, and the invisible executor
► Austrian blather
You say: “Austrian School (Hayekian) price and information theory has nothing to do with Walras and it certainly does not suggest that humans have ‘full relevant knowledge’ about anything.”
That, of course, is correct. The Walrasian axioms HC1/HC5 are different from the action axiom: “The action-axiom is the basis of praxeology in the Austrian School, and it is the proposition that all specimens of the species Homo sapiens, the Homo agens, purposely utilize means over a period of time in order to achieve desired ends.”
The common denominator of Walrasianism and Austrianism, though, consists of two lethal methodological blunders. Both approaches are (i) subjective-behavioral, and (ii), microfounded. Because of this, both approaches crash against the wall of the Fallacy of Composition, that is, all propositions about the economy as a whole are false.#1 This holds, in particular, for the NEVER proven proposition that the market economy is a stable self-regulating system. Just the opposite is provably true.
Worse, both approaches do not get the foundational concept of profit right. To say that an economist who has no clue about the foundational concept of his subject matter is an imbecile moron is NOT an insult but a correct diagnosis.
Scientific methodology tells one that if the foundational concepts are false the whole analytical superstructure is false. Austrianism has a scientific content of zero, that is, it NEVER has been anything else than unadulterated brain-dead political agenda pushing.
Behavioral microfoundations constitute the methodological common denominator of Walrasianism and Austrianism which, in turn, constitute the building blocks of Neoliberalism.
Neoliberalism has zero scientific content. It holds always and everywhere: political economics is proto-scientific garbage. What has to be done is to expel all these stupid/corrupt agenda pushers from the sciences and to abolish the public-relations fraud called “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”. The first who gets the posthumous dishonorable discharge from the sciences is Hayek.
#1 Austrian blather