Blog-Reference and Blog-Reference
Tom Hickey cites Aquinas paraphrasing Aristotle: “‘A small mistake in the beginning is a big one in the end.’ Most economic theory stumbles out of the gate by getting this wrong.”
Or as Marx put it: “Beginnings are always difficult in all sciences.” or as Schumpeter said: “There is no more fertile source of error than apparently trivial premises.” or as Georgescu-Roegen put it: “In fact, the history of every science, including that of economics, teaches us that the elementary is the hotbed of the errors that count most.” or as Aristotle knew already: “When the premises are certain, true, and primary and the conclusion formally follows from them, this is demonstration, and produces scientific knowledge of a thing.”
Scientific knowledge is missing in economics. This is the actual state: The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the pivotal concept of the subject matter ― profit ― wrong.
Because the premises are false, economics is after 200+ years still not more than confused proto-scientific blather.#1
As Tom Hickey correctly observes: “There are many interpretations favorable to Marx among Marxist and Marxian economist. There is no agreed upon ‘standard’ interpretation of Marx that all Marxists and Marxians accept. Roberts’s view is one among many. In addition, Marx has been criticized widely by just about everyone other school of economics and member of a school sometime disagree over how Marx should be criticized. Pinning Marx down to a particular interpretation has proved impossible.” and “The same might be said of Keynes, as any other thinker, theory or school.”
In other words, economists sit over both ears in an intellectual swamp where “nothing is clear and everything is possible”. (Keynes) Whether this is by innate stupidity or educational design is an open question. Swampiness, wish-wash, inconclusiveness are what Popper called instances of an immunizing stratagem because: “Another thing I must point out is that you cannot prove a vague theory wrong.” (Feynman) This benefit got not lost on fake scientists.#3
Now, the fact of the matter is that economists have occasionally spelled out their premises clearly and in these cases, they have promptly been proven wrong. In these cases, though, economists simply trample over scientific standards: “In economics we should strive to proceed, wherever we can, exactly according to the standards of the other, more advanced, sciences, where it is not possible, once an issue has been decided, to continue to write about it as if nothing had happened.” (Morgenstern)
As a result, economists discuss the various approaches until they are blue in the face without ever taking notice that their stuff lacks sound scientific foundations. This is the case for Walrasianism, Keynesianism, Marxianism, Austrianism, and MMT which are all axiomatically false, i.e. based on provably false premises.
MMT, for example, is based on this false sectoral balances equation (I−S)+(G−T)+(X−M)=0. And here the methodological curse kicks in: “A small mistake in the beginning is a big one in the end.”
There is no need to study MMT in greater detail and to bother oneself with different interpretations. It is absolutely sufficient to prove that one premise/axiom is false.#4, #5 This collapses the whole verbal superstructure of interpretations and confused blather.
There is no use to waffle inconclusively about the 1001st interpretations of Marx or Keynes. The multiplicity of interpretations is proof enough that one is NOT dealing with a valid scientific theory but with political BS.#6
Marx and Keynes are refuted and Tom Hickey’s clarification of the relationship between the two is an exercise in futility. The right thing to do is to bury this proto-scientific garbage at the Flat-Earth-Cemetery and to move on.#7
#1 Confused Confusers: How to Stop Thinking Like an Economist and Start Thinking Like a Scientist
#2 John Hicks, fake scientist
#3 And the answer is NCND ― economics after 200+ years of Glomarization
#4 Where economics went wrong (II)
#5 The miracle cure of economists’ micro-macro schizo
#6 Why is economics a total scientific failure?
#7 From false micro to true macro: the new economic paradigm
Related 'Here is the long overdue scientific death certificate for Marx and Marxists' and 'There is NO such thing as “smart, honest, honorable economists”' and 'If religion is opium of the people, economics is crack of the people' and '“But economics is not pure mathematics or logic” No, it is pure blather' and 'Marshall and the Cambridge School of plain economic gibberish' and 'Proﬁt for Marxists' and 'The Profit Theory is False Since Adam Smith'.
You summarize: “You tell us we are wasting our time because economics is not scientific and rigorous.” and counter: “… it seems you also are just ‘one among many’”.
Take notice that there are some differences between blathering and scientific proof:
- Marx’s profit theory is provably false.#1
- Because the foundational concept profit is false, Marx’s whole analytical superstructure is false.#2
- Because the theory is defective, Marx’s policy guidance NEVER had sound scientific foundations.
- After-Marxians have not spotted Marx’s foundational blunder to this day.
- After-Marxians are scientifically incompetent. You, for example, do not realize that public deficit D is defined as public spending G minus taxes T, i.e. D=G−T. Now, it is the deficit D that reduces unemployment and NOT G. If G=T there is NO effect on employment no matter how big G is. This is why you cannot find any correlation.#3
- MMT, too, gets macroeconomic profit wrong. The MMT sectoral balances equation (I−S)+(G−T)+(X−M)=0 applies to a zero-profit economy. MMTers are simply too stupid for the elementary algebra that underlies macroeconomics.#4
Because both Marxianism and MMT are false, any discussion about and between these two goofy approaches is not more than a sitcom.
#1 Proﬁt for Marxists
#2 Ricardo and the invention of class war
#3 Essentials of Constructive Heterodoxy: Employment
#4 Wikipedia and the promotion of economists’ idiotism (II)
For the founding fathers, Political Economy was what is today called sociology. Economics started as a hodgepodge of sociology, history, folk psychology, and folk philosophy (a mixture of utilitarianism, Hegelianism, Malthusianism/Darwinism, Individualism/ Protestantism). The two issues ‘how society works’ and ‘how the economy works’ were not properly kept apart.
J. S. Mill defined Political Economy as a social science: “The fundamental problem, therefore, of the social science, is to find the laws according to which any state of society produces the state which succeeds it and takes its place.”
With regard to the subject matter, there is no difference between Mill and Marx: “My standpoint, from which the evolution of the economic formation of society is viewed as a process of natural history, …” (Marx)#1
Clearly, the blunder lies in the definition of economics as a social science.#2 Fact is that economics is a systems science that deals with how the monetary economy works. Sociology, on the other hand, is a so-called social science or a cargo cult science as Feynman so aptly characterized it.
The characteristic of the so-called social sciences is endless blather and interpretation and meta-communication and political agenda pushing. Economics as a systems science figures out what the systemic laws are. For example, the macroeconomic Profit Law is given by Q≡Yd+(I−S)+(G−T)+(X−M) and it consists of variables that are measurable with the precision of two decimal places. NO interpretation here!
From this equation follows, inter alia, that Keynes’ I=S is false which, in turn, means that all IS-LM models from Hicks to Krugman are false. NO interpretation here!
As far as economics deals with psychology/sociology it is fake science just like the so-called social sciences as a whole.
The ‘multiplicity of interpretations’ is the very characteristic of proto-, non-, anti-science and of post-modern anything-goes.#3
The true theory is well-defined by material and formal consistency. The ‘multiplicity of interpretations’ is the mark of idiocy.#4, #5
#1 Karl Marx, fake scientist
#2 For details of the big picture see cross-references Not a Science of Behavior
#3 If religion is opium of the people, economics is crack of the people
#4 Marshall and the Cambridge School of plain economic gibberish
#5 A brief history of soapbox economics
As I said, the ‘multiplicity of interpretations’ is the mark of idiocy. You confirm this conclusion with your incompetent comments. Marx got profit, exploitation and class wrong 200 years ago and After-Marxians are still behind the curve. For details see
► Capitalism, poverty, exploitation, and cross-over exploitation
► No exploitation, no classes
► If we only had classes
► Here is the long overdue scientific death certificate for Marx and Marxists
You say: “If you’ve read my own stuff for any length of time, you’re familiar with ideas like the savings-investment identity, and it’s no revelation that government deficits have to be financed either by debt creation or money creation, … But phrased in particular, and slightly misleading ways (like “The only way for the private sector to accumulate a surplus is for the government to run a deficit”), these rather boring accounting identities are used by MMT as tools that promise only benefits from currency-financed deficit spending.”
Then you go on: “The one-minute exposition begins with the basic accounting equation for national income and output:
GDP = Consumption + Investment + Government Spending + Exports – Imports
which is typically written as:
Adding and subtracting taxes T and rearranging gives:
This is the savings-investment identity, and is always true by definition.”
Take notice that there is NO such thing as a savings-investment identity and that the “rather boring accounting identities” are false because MMTers and the rest of economists, including you, are too stupid for the elementary algebra that underlies macroeconomics. #1, #2, #3
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, business sector’s I investment expenditures. Saving is NEVER equal to investment.
MMTers, Marxians, and you simply get macroeconomic profit wrong. Economists are incompetent scientists and this is “always true by definition”.
#1 Wikipedia and the promotion of economists’ idiotism (II)
#2 For details see cross-references Refutation of I=S
3# For the full-spectrum refutation of MMT see cross-references MMT