May 3, 2019

Economics: The greatest scientific fraud in modern times

Comment on Ikonoclast on ‘Mathematics and the constructions and emergent outcomes of socioeconomic phenomena’

Blog-Reference and Blog-Reference and Blog-Reference

Taking Isaac Newton and Adam Smith as roughly simultaneous reference points, no one can fail to notice that economics has in the last 200+ years not risen above the proto-scientific level.

Needless to emphasize that economists do not run out of arguments to explain their obvious scientific failure. This is the classic excuse: “Years ago I heard Mr. Cobden say at a League Meeting that ‘Political Economy was the highest study of the human mind, for that the physical sciences required by no means so hard an effort.’” (Bagehot, 1885)#1 In other words, physics and the natural sciences are kids’ stuff but economics is the real challenge. Taking this into account, economists are second to none.

Ikonoclast reiterates the old refrain of economics as “separate and inexact science” (J. S. Mill): “When we are dealing with physical phenomena, the fundamental laws of the cosmos are independent of human understanding or modelling of them. No matter what you or I or any human thinks of the Laws of Thermodynamics or even whether we are ignorant of them, the fundamental phenomena follow a course which can be well modeled by those laws when those laws are mathematicized to permit accurate descriptions and empirically verifiable predictions. However, when it comes to socioeconomic phenomena, what we think and believe enter into the constructions and emergent outcomes of socioeconomic phenomena themselves (along with fundamental law effects also entering into the constructions and outcomes). At this level, any theory of the system enters into the system as a compounding or complicating element. Thence meta-theory (theory of the impact of theories on the system) will also enter into the system.”

In short, complexity, reflexivity, emergence/novelty, and ontological uncertainty are the ultimate reasons why economists have not produced much, if anything, of scientific value.

This, of course, is plain methodological nonsense. The simple fact of the matter is that economists are scientifically incompetent. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational concept of the subject matter ― profit ― wrong. Economics is a mutual acceptance and stubborn repetition of provably false theories.#2, #3, #4 Economic policy guidance NEVER has had sound scientific foundations. Fidgetting with false theories in the public space, economists are a hazard to their fellow citizens.

Let us just pick macroeconomics as a pertinent example.#5 Keynes stated the formal foundations in the General Theory as follows: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63)

This mathematically simple syllogism (Y=C+I, S=Y−C) is conceptually and logically defective because Keynes never came to grips with profit. “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 concepts of his subject matter, i.e. profit and income.#6, #7

But it is worse: neither Keynesians nor Post-Keynesians nor New Keynesians nor Anti-Keynesians nor orthodox economists nor heterodox economists spotted Keynes’ blunder to this day.#8 Economists are simply too stupid for the elementary mathematics that underlies macroeconomics. Because the foundations are false the whole analytical superstructure of economics is proto-scientific garbage.

What economists do not understand to this day is that economics is NOT a social science and that they have to change the definition of their subject matter:
• Old definition, subjective-behavioral: Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.
• New definition, objective-systemic: Economics is the science that studies how the monetary economy works.

Since the founding fathers, economics claimed to be a science. It is NOT, it is what Feynman called a cargo cult science.#9 Economists are NOT scientists but merely useful political idiots.#10 The fact is that there is NO greater fraud in the history of modern science than economics.

Egmont Kakarot-Handtke

#1 Failed economics: The losers’ long list of lame excuses
#2 How the representative economist gets it wrong big-time
#3 Economic recommendations out of the swamp between true and false
#4 There is no soft science only soft brains
#5 Macroeconomics: Economists are too stupid for science
#6 The correct relationship reads in the elementary case Qm≡I−Sm with Qm as monetary profit.
#7 Except Allais see How Keynes got macro wrong and Allais got it right
#8 Marshall and the Cambridge School of plain economic gibberish
#9 The economics Cargo Cult Prize
#10 Throw them out! Orthodox and heterodox economists are unfit for science

Related 'Mad but true: 200+ years after Adam Smith economists still have no idea what profit is' and 'Just for the record: Economics is dead' and 'And the answer is NCND ― economics after 200+ years of Glomarization' and 'Economics: 200+ years of scientific incompetence and fraud' and 'From obscurity to enlightenment' and 'The zombie wars are over' and 'Crisis, cranks, and scientists' and 'Scientists do not predict' and 'Causality in economics' and 'Why economists have not been effective in economics' and 'Lacking the Midas touch of science' and 'Economists: just too stupid for counting' and 'When substandard thinkers dabble in science it is called economics' and 'A political stench is in the air' and 'Confused Confusers: How to Stop Thinking Like an Economist and Start Thinking Like a Scientist' and 'New economic thinking = old political fake' and 'The general theory of scientific incompetence' and 'A new curriculum for swampies?' and 'Real-World Economics: The sanctuary of stupidity and corruption' and 'Trust in economics as a science?' and 'Economists: scientists or political clowns?' and 'Knowledge is attainable ― even in economics' and 'Did economics fail? No! Yes, and everybody knows it!' and 'Econogenics in action' and 'How to make economics a science' and 'The inexorable Paradigm Shift in economics'. For details of the big picture see cross-references Failed/Fake Scientists and cross-references Paradigm Shift and cross-references Axiomatization.

May 4

REPLY to Anonymous on May 4

You ask me to make myself understandable: “I carefully read through the work and all that makes sense is the anger. At least try to be simple enough to be understandable apart from the anger.”

Here we go:

(i) Economics, i.e. Walrasianism, Keynesianism, Marxianism, Austrianism, is refuted on all counts.

(ii) Economists either do not realize the material/formal inconsistency of their approaches. In this case, they are stupid.

(iii) Or, economists know quite well that their approaches are scientifically worthless but promote them nonetheless for ulterior reasons. In this case, they are corrupt.

(iv) In either case, the claim that economics is a science and that economists are doing science is provably false.

(v) By consequence, the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel or the John Bates Clark Award does not reward genuine scientific achievements but attempts to deceive the general public about the dismal state of economics.

(vi) Barkley Rosser either has not realized the dismal state of economics or he is part of the False-Hero-Memorial scam.

(vii) Your attempt to nudge the point at issue from the scientific sphere of consistency/ proof/test to the psychological sphere of emotion/resentment proves that you are an incompetent scientist or in simple psychological terms an imbecile asshole.

(viii) You obviously do not know the difference between anger and militancy: “Truth on these subjects is militant, and can only establish itself by means of conflict.” (J. S. Mill, A System of Logic, Ratiocinative and Inductive, Kindle, Pos 71)

REPLY to Barkley Rosser on May 5

You say: “I am sorry, but I am not gong to bother ‘intepreting’ Egmont. He does seem to have lost it calling you an ‘asshole.’ He is not usually that offensive.”

Indeed, but you are:

......................................................................................................... said...

Anonymous Asshole,

Maybe you did not get it. If you start using a name, even if it is one that is made up, I shall stop "using profance language" in regard to you. As it is, I have already made it clear that I have nothing but utter contempt for people who lecture me on anything while identifying themselves as "Anonymous." Get it, asshole?

Oh, and few of my atudents come here, but those that do will probably accept how I am treating you. I do not speak this way in classes, where I do not deal with people lecturing me while hiding behind a veil of anonymity.

So now you can go and repeately fuck yourself until your bottom falls off. Have a nice day!

October 7, 2018 at 5:42 PM


REPLY to Anonymous on May 5

You say: “Right, I am surely too foolish and ignorant to understand your writing, other than the uncontrollable anger, so I will never bother to try again. (You are scary.) Bye, bye.”

What do you not understand?

(i) Barkley Rosser is a stupid/corrupt academic economist.

(ii) Barkley Rosser is not some unique lone nut exception but as representative economist part of a tight-knit institutional network of political economics (= agenda-pushing) that has overgrown and stifled theoretical economics (= science).

(iii) All this is common knowledge: “Veblen’s first job was at the University of Chicago, the university bought and paid for by John D. Rockefeller the classic robber baron, and leader of the leisure class. Rockefeller called the university ‘the best investment’ he ever made, since he intended to use it to advance the interests of his class and suppress opposition.”#1

(iv) What holds for Chicago can with some degree of confidence be generalized for the majority of Faculties of Business and Economics and the institutional superstructure from the ASSA Annual Meetings to the publishing houses.

(v) Accordingly, the purpose of economic journals and the peer-review process is not the promotion and dissemination of scientific knowledge as it is in the genuine sciences but attention/perception management, gatekeeping, and selection/promotion/positioning of future opinion leaders.

(vi) Prizes like the economics Nobel or the John Bates Clark Award are part and parcel of establishing scientific reputation and authority. These are tried and tested instruments of public relations/propaganda and have no scientific significance whatsoever.

(vii) Economics is a fake science beginning with economic textbooks#2 and ending with the faux Nobel.#3

(viii) Academic economics ― orthodox and heterodox, that is ― is beyond repair or reform or hope or rejuvenation, it can only be burnt to the ground like a termite-infested shack.

(ix) Needless to emphasize that (viii) is a metaphor for perplexed and clueless non-economists who have no chance of figuring out the actual state of economics and what the methodological term Paradigm Shift means in practice.

(x) Needless to emphasize that the current inhabitants of the rotten shack with the pretty scientific facade ― the retarded heirs of Adam Smith/Karl Marx ― are retired in a timely manner with all the academic honors.

There is nothing to fear for Barkley Rosser and trolls like you except perhaps that you will eventually be buried at the Flat-Earth-Cemetery in the section for political clowns.

#1 Veblen’s insights come back to haunt us
#2 To this day, economists have produced NOT ONE textbook that satisfies scientific standards
#3 The real problem with the economics Nobel

REPLY to Barkley Rosser on May 6

Just answer the simple scientific question which of the two macroeconomic sectoral balances equations is true, i.e. materially/formally consistent?
(a) (I−S)+(G−T)+(X−M)=0
(b) (I−S)+(G−T)+(X−M)−(Q−Yd)=0

REPLY to Barkley Rosser on May 7

You answer: “Depends on how you define and measure the variables, Egmont, obviously. And these variables have been defined and measured differently at different times by different entrities. So, they can both be true or not true depending.”

This is the Humpty Dumpty Fallacy,#1 the Pavlovian reflex of all swampies.#2 Popper called it immunizing stratagem.#3

Science is binary true/false with NOTHING in between. Non-science is the swamp between true and false where ‘nothing is clear and everything is possible’ (Keynes).#4 The swamp is the habitat of what Feynman called cargo cult scientists.#5

The correct answer to the question which of the two macroeconomic sectoral balances equations, i.e. (a) (I−S)+(G−T)+(X−M)=0 or (b) (I−S)+(G−T)+(X−M)−(Q−Yd)=0, is true is unequivocal and demonstrably (b). All variables in (a) and (b) are identical except for Q = macroeconomic profit and Yd = distributed profit. Eq. (a) lacks these two variables altogether and because of this, it is FALSE. This means, in turn, that both orthodox and heterodox macroeconomics is FALSE. So, economics is refuted on all counts.

As a professional economist at the age limit you have never known and still do not know the scientifically correct answer. It is pretty obvious that you have always been a fake scientist. This, though, was not a disadvantage, rather the opposite, because economics has always been a fake science.#6

Because economics is a fake science the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel is a fraud. Same for the John Bates Clark Award. Time to drain the swamp.#7

#1 Humpty Dumpty is back again
#2 And the answer is NCND ― economics after 200+ years of Glomarization
#3 Opinion, conversation, interpretation, blather: the economist’s major immunizing stratagems
#4 Lousy scientists
#5 What is so great about cargo cult science? or, How economists learned to stop worrying about failure
#6 Economics: The greatest scientific fraud in modern times
#7 Enough! Economists, retire now!

REPLY to Barkley Rosser on May 8

You say: “Yes, Egmont, we have seen you previously declare that taking account of retained earnings, what your petty equation does, is the most supremely important thing in economics. It is not remotely. It is an utterly trivial item that gets taken account of in current accounting practices.”

Yes, Barkley Rosser, distributed profits appear in National Accounting.#1 This, though, is NOT the point. So let us take distributed profits Yd out of the picture for a moment, i.e. Yd=0. Then, the all-decisive question reduces to:

Which of the two macroeconomic sectoral balances equations is true, i.e. materially/formally consistent?
(a) (I−S)+(G−T)+(X−M)=0
(b) (I−S)+(G−T)+(X−M)−Q=0

Let us go one step further and simplify by taking government and foreign trade out of the picture, i.e. G, T, X, M = 0.

Then we have
(a) (I−S)=0 or I=S,
(b) (I−S)−Q=0 or I−S=Q.

I=S is provably false since Keynes. So, all I=S/IS-LM models are false from Hicks onward to Krugman and beyond.#2, #3, #4

Economists have not realized this to this day. Neither the Nobel laureate Paul Krugman, nor the John Bates Clark Award winner Emi Nakamura, nor Lord Meghnad Desai, nor Professor Barkley Rosser, nor the rest of fake heroes.

Economics is proto-scientific garbage to this day because economists are too stupid for the elementary mathematics that underlies macroeconomics.

Time to give these scientifically incompetent folks a dishonorable discharge and to make economics, after 200+ years of capture by stupid/corrupt agenda pushers a.k.a. useful political idiots, a science worthy of the title.

#1 The Common Error of Common Sense: An Essential Rectification of the Accounting Approach
#2 Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It
#3 Wikipedia and the promotion of economists’ idiotism (II)
#4 Rectification of MMT macro accounting