June 15, 2019

Economic policy and the skirmishes of failed/fake scientists

Comment on Simon Wren-Lewis on ‘Bill Mitchell’s fantasy about Labour’s fiscal rule’


The status of economics is this: There is 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 monetary economy works. (ii) In political economics anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.

Political economics is mere opinion, theoretical economics is knowledge: “In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum)

And that is the problem: economists do not have the true theory. Because of this, economic policy guidance NEVER had sound scientific foundations. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational economic concept of profit wrong.

The macroeconomic models that underlie the argumentation of both Simon Wren-Lewis and Bill Mitchell are provably false.#1, #2, #3 This, in turn, means that the whole debate about the relative merits of monetary and fiscal policy is pointless from the scientific standpoint.#4 However, scientific irrelevance does NOT mean political ineffectiveness.

Both Simon Wren-Lewis and Bill Mitchell are not so much scientists as political agenda pushers.#5 What is currently at the top of the agenda of political economists is NOT AT ALL Labour’s Fiscal Rule but the possibility that Jeremy Corbyn becomes the next PM.

What Simon Wren-Lewis fails to address is the economic fact that because of the macroeconomic Profit Law it holds Public Deficit = Private Profit.#6 Therefore, the MMT policy of deficit-spending/money-creation is clearly in the interest of the Oligarchy.#7 MMTers are fake Progressives.

Whether both Simon Wren-Lewis and Bill Mitchell do not know the macroeconomic Profit Law or whether both intentionally mislead the representatives and members of the Labour Party is at anybody’s guess.

Egmont Kakarot-Handtke

#1 Macroeconomics: Economists are too stupid for science
#2 MMT sucks
#3 The canonical macroeconomic model
#4 Against the mainstream! Against MMT!
#5 Economics as a cover for agenda pushing
#6 Are economics professors really that incompetent? Yes!
#7 MMT’s true program

Related 'MMT: A new myth for WeThePeople' and 'Controlled demolition of MMT ― an exercise in elementary logic' and 'Thinking about economic policy for future PM Corbyn' and 'Deficit-spending, public debt, and macroeconomic profit/loss' and 'Mission impossible: economists join WeThePeople' and 'The biggest scientific mistake of the last centuries, and it has much to do with academic economists' and 'The economist as useful political idiot' and 'How MMT fools the ninety-nine-percenters' and 'Political economics: Who hijacks British Labour?' and 'Macro ignorance: Why Simon Wren-Lewis does not come to grips with the plain MMT-fraud'.


Jul 20