September 30, 2019

Homo oeconomicus: the never-ending folk-psychological shitshow

Comment on Jonathan Rowe on ‘Why Economics Is Really Psychology on Steroids’*

Blog-Reference

Jonathan Rowe has important news: “What is called ‘economics’ is really psychology on steroids. It starts with a model of human nature and extrapolates an entire scenario for how the world works from that. The model is homo economicus, the myopic protoganist of the economics texts. This hypothetical person has no social affinities, no lapses of judgment or hang-ups, no capacity even for thinking about anyone besides him or herself.” and “Today, psychologists can only roll their eyes at this naïve portrayal. People who have to deal with actual humans in market settings ― such as advertisers and corporate managers ― find it borderline irrelevant.”

This may be news for the retarded trolls of the econoblogosphere. Actually, it is worn off stuff for 200+ years.

• “No science has been criticized by its own servants as openly and constantly as economics. The motives of dissatisfaction are many, but the most important pertains to the fiction of homo oeconomicus.” (Georgescu-Roegen, 1971)

• “The reason for the Austrian failure seems to lie in a faulty conception of human nature … The hedonistic conception of man is that of a lightning calculator of pleasures and pains, who oscillates like a homogeneous globule of desire of happiness under the impulse of stimuli that shift him about the area but leave him intact …” (Veblen, 1898)

• “The science then proceeds to investigate the laws which govern these several operations, under the supposition that man is a being who is determined, by the necessity of his nature, to prefer a greater portion of wealth to a smaller in all cases, without any other exception than that constituted by the two counter-motives already specified. Not that any political economist was ever so absurd as to suppose that mankind are really thus constituted, but because this is the mode in which science must necessarily proceed. (Mill, 1874)

• “Political Economy, therefore, reasons from assumed premises ― from premises which might be totally without foundation in fact, and which are not pretended to be universally in accordance with it. The conclusions of Political Economy, consequently, like those of geometry, are only true, as the common phrase is, in the abstract; that is, they are only true under certain suppositions, in which none but general causes ― causes common to the whole class of cases under consideration ― are taken into the account.” (Mill, 1874)

The founding fathers were fully aware that their behavioral assumptions were NOT “realistic” from a psychological standpoint. Homo oeconomicus has always been justified with methodological considerations, i.e. as a necessary abstraction that serves as an analytical starting point.

Homo oeconomicus was meant to solve the starting problem: “What are the propositions which may reasonably be received without proof? That there must be some such propositions all are agreed, since there cannot be an infinite series of proof, a chain suspended from nothing. But to determine what these propositions are is the opus magnum of the more recondite mental philosophy.” (J. S. Mill)

Eventually, the starting point was defined with these hardcore propositions, a.k.a. neo-Walrasian axioms: “HC1 economic agents have preferences over outcomes; HC2 agents individually optimize subject to constraints; HC3 agent choice is manifest in interrelated markets; HC4 agents have full relevant knowledge; HC5 observable outcomes are coordinated, and must be discussed with reference to equilibrium states.” (Weintraub) This is the foundation of standard economics on which the analytical superstructure of General Equilibrium Theory rests.

The fault of the axiom set HC1 to HC5 is NOT that it is bad psychology but that it is bad science. Economics is NOT about human behavior but about the behavior of the economic system. Human Nature/motives/behavior/action is the subject matter of psychology, sociology, political science, anthropology, biology, etcetera. The subject matter of economics is the behavior of the economic system, which is an objective non-human entity. Because of this, economics has NOT to start from subjective-behavioral microfoundations but from objective-structural macrofoundations.#2, #3

The outstanding characteristic of the representative economist is that he dabbles for 200+ years now in all Human-Nature disciplines but has NO idea of how the economic system works. Because of this, economic policy guidance NEVER has had valid scientific foundations.

However: “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)

Economists do not have the true theory. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are axiomatically false. To this day, economics is not more than folk-psychological blather, proto-scientific garbage, and concealed political agenda-pushing. Economics is NOT psychology on steroids but rather scientific incompetence on steroids.

New Economic Thinking consists NOT of folk-psychological “realism” but of a Paradigm Shift from false Walrasian microfoundations and false Keynesian macrofoundations to true macrofoundations.

Egmont Kakarot-Handtke


* evonomics Why Economics Is Really Psychology on Steroids
#1 Economics is NOT about Human Nature but the economic system
#2 From false micro to true macro: the new economic paradigm
#3 For details of the big picture see cross-references Axiomatization

Related 'PsySoc — the scourge of economics' and 'What is so great about cargo cult science? or, How economists learned to stop worrying about failure' and 'The ethics of science is consistency ― economics is inconsistent' and 'Economics is NOT a social science' and 'Economics between physics and psychiatry' and 'How to get out of the Econ 101 PsySoc woods' and 'The happy end of the social science delusion'. For details of the big picture see cross-references Not a Science of Behavior and cross-references Methodology and Sovereign Economics.

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Wikimedia AXEC139d

September 29, 2019

Economics, math, pluralism, and corruption

Comment on Barkley Rosser on ‘Computable economics’

Blog-Reference and Blog-Reference

Barkley Rosser summarizes: “Regarding the Horgan piece on pluralistic math, he is not up on the deeper aspects of this, which have been around for a long time, ….” and “This actually has spilled over into economics with the group calling themselves ‘computable economists’ …, whose leader has long been Kumaraswamy Vela Velupillai. He and his followers think basic economics theorems should be proven using constructicist methods, …” and “This is certainly very esoteric theoretical stuff without obvious direct implications for current policy disputes. It is also true that even within the world of pure economic theory, it may well be that this constructivist computable program may simply lead to the theory being harder to do or prove.”

The simple fact of the matter is that science is about true/false but about 99 percent of any population are not scientists but live in the swamp between true/false where “nothing is clear and everything is possible.” (Keynes) This applies, in particular, to economists. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and ALL got the foundational concept of the subject matter ― profit ― wrong. What we actually have is the pluralism of provably false theories.

This, of course, is absolutely at odds with the very essence of science: “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)

Economists do not have the true theory to this day. Because of this, the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel” is plain fraud.

Economists, of course, do not admit that they are stupid or corrupt or both but simply try to redefine science: “The first distinction you draw is that the old paradigm (OPE) is anti-pluralist (as in classical physics), while the new paradigm (NPE) is pluralist (as in modern physics).” (Fullbrook)#1, #2, #3

In order to cover their scientific failure and to justify swampiness, economists love to cite stuff they do not understand like Heisenberg’s Uncertainty Principle, Gödel’s Incompleteness Theorems or the alleged pluralism of mathematics.#4

The point to grasp is that pluralism is a political principle that can be traced back to the Peace of Westphalia which ended the European wars of religion in 1648. The guiding idea is since then the peaceful coexistence of incompatible religious beliefs and the end of attempts to prove hallucinatory religious truths by victory in battle.

This laudable political principle, though, does not carry over to science where truth comes in the singular and NOT as pluralism of provably false theories. The very characteristic of science is to replace the pluralism of opinions with certain knowledge.#6 Scientific truth is well-defined: “Research is, in fact, a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant)

According to this criterion, economics is a failed science. Economists, of course, try to evade this conclusion. Since Adam Smith/Karl Marx they insist on doing science. What they have been doing, though, is political agenda-pushing in the cloak of science.

The dismal scientific fact of the “dismal science” is that economists are too stupid for the elementary algebra that underlies macroeconomics. Logical consistency, as it is embodied in the corpus of mathematics, has always been the weak point of economics.

This weakness did not escape mathematicians: “Walras approached Poincaré for his approval. ... But Poincaré was devoutly committed to applied mathematics and did not fail to notice that utility is a nonmeasurable magnitude. ... He also wondered about the premises of Walras’s mathematics: It might be reasonable, as a first approximation, to regard men as completely self-interested, but the assumption of perfect foreknowledge ‘perhaps requires a certain reserve’.” (Porter)

Later on, von Neumann started in earnest to rectify the formalism of Walrasian economics: “You know, Oskar, if those books are unearthed sometime a few hundred years hence, people will not believe they were written in our time. Rather, they will think that they are about contemporary with Newton, so primitive is their mathematics. Economics is simply still a million miles away from the state in which an advanced science is, such as physics.” (quoted in Ingrao et al.) The final result of von Neumann’s intervention was General Equilibrium Theory. Von Neumann and others rectified the mathematical formalism, however, they retained the Walrasian axioms (methodological individualism, constrained optimization, equilibrium, etcetera).#6

Moreover, GE has been established by an existence proof. The fixpoint theorem, though, does not tell the coordinates of equilibrium nor whether and how it can be reached. This is where the critique of Kumaraswamy Velupillai and the concept of computable economics kicks in. However, as the ToC of Computable Economics shows (e.g. Computable Rationality, Adaptive Behavior, Learning in a Computable Setting, etcetera), Velupillai sticks to the old Walrasian behavioral concepts. What Velupillai does NOT realize is that economics cannot be based on behavioral microfoundations.

Standard economics is false because it is based on false microeconomic axioms. Keynesian economics is false because it is based on false macroeconomic axioms. Velupillai’s shift from set theory to recursion theory is pointless because he makes the same mistake as von Neumann, i.e. he does not realize that economics is axiomatically defective. A computable equilibrium is pointless, to begin with because equilibrium is a petitio principii since Jevons/Walras/Menger.

What is straightforwardly computable in economics is, for example, profit. Curiously, the promoter of computable economics has never computed the key variable macroeconomic profit. Worse, he has not even realized that Keynesian macroeconomics is utter algebraic garbage.

Proof: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (Keynes, GT, p. 63) is false. Instead of I=S, Q≡I−S holds in the most elementary case with Q as macroeconomic profit.#7, #8

The balance of the business sector, i.e. macroeconomic profit, is computable, however, the champion of computable economics failed to this day to compute the pivotal variable of all of economics. The mathematical incompetence of economists is the ultimate reason why economics is nothing more than the forever unacceptable pluralism of false theories. This, in turn, means that economic policy guidance NEVER had sound scientific foundations.#9 Computable economics has NOT rectified this lethal defect and, given scientifically incompetent promoters like Kumaraswamy Velupillai, never will.

Egmont Kakarot-Handtke


#1 How Heterodoxy became the venue for science’s scum
#2 Failed economics: The losers’ long list of lame excuses
#3 A political stench is in the air
#4 Scientific American, Is Mathematics, like Science, Pluralistic? Mathematicians disagree over whether their fundamental assumptions, or axioms, are true
#5 “There are always many different opinions and conventions concerning any one problem or subject-matter... This shows that they are not all true. For if they conflict, then at best only one of them can be true. Thus it appears that Parmenides ... was the first to distinguish clearly between truth or reality on the one hand, and convention or conventional opinion (hearsay, plausible myth) on the other ...” (Popper)
#6 “But this [establishing the analytic mother-structure] required one very crucial maneuver that was nowhere stated explicitly: namely, that the model of Walrasian general equilibrium was the root structure from which all further work in economics would eventuate.” (Weintraub)
#7 How Keynes got macro wrong and Allais got it right
#8 Knowledge is attainable ― even in economics
#9 For details see cross-references Methodology

Related 'How economists shoot themselves non-stop in the methodological foot'

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REPLY to Barkley Rosser, anne on Oct 1

Since Sonnenschein/Mantel/Debreu it is generally known that General Equilibrium Theory = mainstream economics is a failed approach. This means (i) that economic policy guidance has NO valid scientific foundations, (ii) that economics needs a Paradigm Shift: “There is another alternative: to formulate a completely new research program and conceptual approach. As we have seen, this is often spoken of, but there is still no indication of what it might mean.” (Ingrao et al., 1990)

Obviously, there is to this very day ‘no indication of what it might mean’ to perform the indispensable Paradigm Shift.

In his formal rectification of Walrasian economics, von Neumann applied set theory. This was state-of-art with regard to mathematics but was not such a good idea with regard to economics: “Thus not all axiomatic theories need to be phrased in terms of set theory but much more conveniently and intelligibly rather in terms of some advanced mathematical structures.” (Schmiechen)

Therefore, Velupillai’s shift from set theory to recursion theory is certainly a promising move to get out of von Neumann’s set-theoretical dead end. The irony is that economists fail to this day already at the simple algebra of macroeconomic accounting.#1

The remark: “At the end of his life von Neumann eseentially sided with Velupillai in pointing to greater use of computers, …” shows that you are still deep in the woods. Computable economics is a methodological issue for economists, the greater use of computers is a practical issue for all walks of life.

Right policy depends on true theory. Because economic theory is axiomatically false, economic policy can only make matters worse.


#1 For details of the big picture see cross-references Accounting

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REPLY to Barkley Rosser, anne on Oct 2

Brouwer, Gödel, et al., and all the questions about the foundations of mathematics are irrelevant for economics. Economics needs only elementary algebra for a start. And neither Brouwer nor Gödel contested the validity of algebra. The fact of the matter is that the representative economist is too stupid for algebra.

Von Neumann’s lethal blunder was to adopt the concept of utility/preferences from Neoclassics (see The Notion of Utility, ToG, p. 15ff). For deeper methodological reasons, which have been given elsewhere, economics cannot be built upon the behavioral assumption of (cardinal/ordinal) utility maximization.

Von Neumann axiomatized game theory which is absolutely irrelevant for economics. Game theory deals with zero-sum games and “payouts” and it should be obvious to every economist that the economy is NOT a zero-sum game and that profit is NOT a “payout”. Macroeconomic profit is for 200+ years now greater than zero which tells one that von Neumann had NO idea what profit ― the foundational magnitude of economics ― is.

Neither has the applause-troll Barkley Rosser ― whose main business is the self-congratulation of failed economics, the erection of false-hero-memorials, the bestowal of fake Nobels, and the deception of the general public about the proto-scientific state of economics ― and the rest of scientifically incompetent economists. Fact is: the Profit Theory is false from Adam Smith to von Neumann to Barkley Rosser and this has NOTHING to do with constructive or intuitionist math.

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REPLY to Barkley Rosser, anne on Oct 3

Barkley Rosser claims “… but these days one cannot even get into a grad econ program without having a near perfect score on the quant GRE, at least in the US. Pretty much everybody going through econ grad school has a reasonably decent knowledge of algebra.”

EK-H claims: The representative economist is too stupid for the elementary algebra that underlies macroeconomics.

Proof: Keynes was a trained mathematician. He stated in his General Theory: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63) This is provably false. The mathematically correct relationship reads Q≡I−S with Q as macroeconomic profit.

After-Keynesians who have allegedly “a reasonably decent knowledge of algebra” did NOT spot Keynes’ blunder to this day. For example, Paul Krugman still applies IS-LM.

Conclusion: Mathematically trained economists are too stupid for the elementary algebra that underlies macroeconomics. Their utter scientific incompetence notwithstanding, they are awarded “Nobels”.

Political implication: Economics is mathematically flawed to this day. Economic policy guidance NEVER had valid scientific foundations. Economists (left-center-right does NOT matter) are either stupid or corrupt or both and a hazard to their fellow citizens.

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REPLY to Barkley Rosser, anne on Oct 4

Barkley Rosser re-frames the point at issue: “Most of what he [Mark Thoma] links to are things with policy implications. But occasionally he posts oddball stuff that he thinks has some intellectual interest that is not directly policy related. This was one of those links, about ‘pluralistic math,’ something not many people know anything about.”

Nothing could be further from the truth. Mathematics, like economics long before, is now also politically weaponized. To recall, Walrasian General Equilibrium Theory claims that the market economy is a spontaneous self-optimizing stable system. Walras knew quite well that in the Age of Science he had to prove this claim. He failed, and the mathematicians von Neumann/Wald kicked off the formal rectification which ended with Arrow/Debreu/ McKenzie/Nash’s existence theorem. This theorem amounts politically to the scientific legitimization of Capitalism. Arrow/Debreu et al. were on the payroll of the Cowles Commission which is named after its founder and funder the “businessman and economist Alfred Cowles” (Wikipedia).

As it became increasingly clear that GET is proto-scientific garbage and the existence proof had been a contract job on behalf of the Oligarchy, Walrasian economics had to give up its claim to scientific truth. Strictly speaking, it had to bury itself at the Flat-Earth-Cemetery#1 but instead, it remained firmly in academic place and merely performed an orderly withdrawal. This move comes under the euphemism of Pluralism or Anything-Goes. People love Pluralism because it gives them the license to choose their subjective truth and to ignore the taxing demand for material/formal consistency that defines science for 2300+ years. Pluralism/Anything-Goes is anti-scientific but has some political merits. Economists busily produce many “truths” and the Oligarchy picks the one that fits the actual circumstances best. Thus, academic economists add some scientific legitimacy to economic policy. For their valuable propaganda services, economists are rewarded with the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”. Pluralism is nothing but the methodological smoke screen of richly rewarded useful political idiots.

Remains one problem. Mathematics is binary true/false. Political creatures, though, thrive in the swampy zone of the excluded middle between true/false where “nothing is clear and everything is possible” (Keynes). Political agenda pushers try to keep everything open to interpretation and negotiation.#2 In the eyes of political agenda pushers, science/ mathematics with its insistence on consistency and proof is just a nuisance.

What Mark Thoma tells his fellow economists is NOT some oddball stuff about some remote “intellectual frisson” but that mathematics, too, is in the process of Pluralization. This is good news for all fake scientists and, contrary to the assertions of Barkley Rosser, it has enormous policy implications.

To replace the idea of scientific/mathematical truth with Pluralism is nothing else than the ultimate political corruption of science.


#1 “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)
#2 And the answer is NCND ― economics after 200+ years of Glomarization

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Wikimedia AXEC121i


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Enlightening external link to Miles Mathis’ Gödel’s Incompleteness Theorems. Among others: “I am not concerned that Russell was against the bomb or the war or anything else. Just as I am not concerned that Einstein was against the bomb or the war. I am concerned that mathematicians and physicists cannot do algebra.”

September 25, 2019

MMT/GND: Another case of bad people capturing a good cause

Comment on Nathan Tankus/Andrés Bernal/Raúl Carrillo on ‘The Green New Deal will be tremendously expensive. Every penny should go on the government’s tab.’*

Blog-Reference and Blog-Reference on Sep 26

It cannot be otherwise, bad people always and everywhere claim to promote the good cause. This is rather old stuff: “Everyone sees what you seem to be, few know what you really are; and those few do not dare take a stand against the general opinion.” (Machiavelli) This is why corruption comes in the cloak of philanthropy and ruin comes in the cloak of salvation. As a rule of thumb, public opinion is upside down: “Fair is foul, foul is fair.” (Shakespeare)

A new version of political deception is MMT’s promotion of environmental protection. The communicative fact of the matter is that nobody can argue against environmental protection just as nobody can argue against peace, freedom, wealth, love, solidarity, motherhood, equity, and the welfare of humankind.

The economic fact of the matter is that MMT is a program for the permanent enrichment of the Oligarchy. This is impossible to sell to the general public, therefore, MMT has to be repackaged as a program for the benefit of WeThePeople. Luckily, this is not very hard: “The vulgar crowd always is taken by appearances, and the world consists chiefly of the vulgar.” (Machiavelli)

Accordingly, Nathan Tankus/Andrés Bernal/Raúl Carrillo argue: “The Green New Deal is a vital way to address the social threat of climate change. Some GND advocates want to make the idea more palatable by relying on indirect financing like public-private partnerships or loans to private companies. While the ideas are designed to make the Green New Deal more politically palatable, indirect financing will also blunt the changes made by the GND. … Accordingly, people who truly want to see a GND in our time should fully embrace the power of the public purse.”

Economically, the “power of the public purse” works via the macroeconomic Profit Law which says Q≡Yd+(I−S)+(G−T)+(X−M) with Q as macroeconomic profit. The Law boils down to Public Deficit (G−T>0) = Private Profit Q which means that the Oligarchy’s financial wealth and public debt grow in lockstep. It is the very characteristic of the free-market economy that it is already for a long time on the life support of the state. Profit is produced mainly by the government through deficit-spending/money-creation. The Oligarchy, in turn, uses the opulent free lunches to corrupt what remains of the state’s legislative, executive, judiciary institutions, including academia.

As a matter of principle, any GND measure can be realized with a balanced budget. NO MMTer will ever propose that. The message of the MMT do-gooders is deficit-spending/ money-creation.

MMT is not only bad science and bad policy but MMTers are also bad people. How can we know this? Quite easy, Nathan Tankus/Andrés Bernal/Raúl Carrillo is an #EconBlocker.#1 Genuine scientist do NOT block their critics but try to refute them, yet for stupid/corrupt agenda pushers blocking/suppression is second nature.

Egmont Kakarot-Handtke


* Business Insider
#1 Economists/MMTers: agenda pushers, distractors, blockers, muters, censors

Related 'Fraud comes always in the cloak of charity, salvation, or threat of doom' and 'Is MMT good for WeThePeople or for the Oligarchy?' and 'Links on MMT-Progressives push Wall Street’s agenda' and 'No MMT illusions! YOU are going to pay for it' and 'How counterfeiters save America with an extra profit and make WeThePeople pay for it' and 'The half-truths and half-falsehoods of MMT' and 'MMTers are NOT Friends-of-the-People' and 'MMT: The fusion of Wall Street and Academia' and 'MMT and the Green New Deal: Where is the snag? (I)' and 'MMT and the Green New Deal: Where is the snag? (II)' and 'How MMT enlightens Washington' and 'Very busy these days: Wall Street’s agents' and 'How to spot economics trolls'.

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Cast of #EconBlockers

“Raúl Carrillo is the director of the Modern Money Network.

Andrés Bernal is a lecturer at CUNY Queens College Department of Urban Studies and an advisor to Rep. Alexandria Ocasio Cortez.

Nathan Tankus is a research fellow at the Clarke Business Law Institute's Program on the Law and Regulation of Financial Institutions and Markets at Cornell Law School and is the research director at the Modern Money Network.”

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REPLY to Andrew Anderson on Sep 26

With regard to the realization of environmental protection, you ask: “With or without increases in the money supply? If ‘with’ how do you propose to increase the money supply in an ethical manner?”

This is a secondary question. If you want to reduce CO2, for example, the first logical question to ask is who is the biggest polluter? The simple answer is the military. So, real Progressives would radically reduce the military and redirect its humongous budget to environmental-friendly measures. This budgetary/monetary neutrality, of course, is anathema for the deficit-spending/money-creating false Progressives of MMT.

MMT/GND deficit-spending/money-creation as environmental policy is fully in line with the ethics of the Pentagon and Wall Street. It is NOT for the benefit of WeThePeople.

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Mike Norman Economics Nov 14



Twitter May 16, 2021 A question of allocation



Twitter Aug 12, 2021 Climate and deficit
New Daily, Alan Kohler: The money for dealing with climate change will have to be printed


September 21, 2019

What’s wrong with DSGE models is the axiom set

Comment on David Glasner on ‘What’s Wrong with DSGE Models Is Not Representative Agency’

Blog-Reference

“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.” (Aristotle)

Standard microeconomics is based on these hardcore propositions, i.e. verbalized axioms: “HC1 economic agents have preferences over outcomes; HC2 agents individually optimize subject to constraints; HC3 agent choice is manifest in interrelated markets; HC4 agents have full relevant knowledge; HC5 observable outcomes are coordinated, and must be discussed with reference to equilibrium states.” (Weintraub)

Because this set of hardcore propositions is shock-full of NONENTITIES all models that are based upon it are proto-scientific garbage. The whole of Marginalism derives ultimately from the core behavioral assumption HC2, i.e. constrained optimization, which is a NONENTITY like the Tooth Fairy or the Easter Bunny. From the Walrasian axioms, the triad SS-function―DD-function―equilibrium is derived. All ends up eventually in General Equilibrium Theory.

Because the behavioral axioms are false the whole of mainstream economics is false. This includes DSGE because it is just a variant of HC1 to HC5. The common denominator is that the axioms are behavioral. For deeper methodological reasons, which have been discussed elsewhere, macroeconomics has to be based on objective, behavior/agency-free, systemic axioms.

This is the correct core of premises: (A0) The objectively given and most elementary systemic configuration of the economy consists of the household and the business sector which in turn consists initially of one giant fully integrated firm. (A1) Yw=WL wage income Yw is equal to wage rate W times working hours. L, (A2) O=RL output O is equal to productivity R times working hours L, (A3) C=PX consumption expenditure C is equal to price P times quantity bought/sold X.

These premises are “certain, true, and primary” and therefore satisfy all methodological requirements. The set is minimalistic, that is, Occam’s Razor has been applied and the set cannot be reduced further, only expanded. The set contains no NONENTITIES like maximization or equilibrium and no normative assertions. All variables are measurable with the precision of two decimal places. Testability is built into the premises.

The price P follows as the dependent variable under the conditions of budget-balancing, i.e. C=Yw, and market-clearing, i.e. X=O, as P=W/R. This is the most elementary form of the macroeconomic Law of Supply and Demand. Accordingly, the real wage is W/P=R. The graphical representation of the macro-economy is given on Wikimedia AXEC31.

Elementary production-consumption economy

The monetary saving/dissaving of the household sector is defined as S≡Yw−C. The monetary profit/loss of the business sector is defined as Q≡C−Yw. It always holds Q≡−S, in other words, the balances of the business and the household sector always add up to zero. This is the Fundamental Law of Macroeconomic Accounting.

The mirror image of household sector saving S is business sector loss (-Q). The mirror image of household sector dissaving (-S) is business sector profit Q. Q≡−S is the elementary version of the macroeconomic Profit Law.

Given the minimalist core propositions (A0) to (A3), one has to proceed top-down by successive DIFFERENTIATION of sectors and firms until one arrives at the individual agent. The bottom-up approach, also called microfoundations, is methodologically false because it is (i) behavioral, and (ii), runs with necessity into the Fallacy of Composition. (A0) to (A3) fully replaces HC1 to HC5.

Economics is in need of a Paradigm Shift from false Walrasian microfoundations and false Keynesian macrofoundations to “certain, true, and primary” macrofoundations. Or as the Financial Times has it “Time for a reset.”#1

Egmont Kakarot-Handtke


#1 Links on “Capitalism. Time for a reset.”

Related 'DSGE and profit―forget it! MMT and profit―forget it!' and 'The Ur-Blunder of economics and its rectification' and 'Economics: How to stop mental pollution and global dumbing' and 'The curious non-existence of profit in economics' and 'Where economics went wrong (II)' and 'The GDP-death-blow for the economics profession'. For details of the big picture see cross-references Axiomatization.

For more on DSGE see AXECquery

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Mike Norman Economics Sep 23

Source: Mike Norman Economics

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Wikimedia AXEC137b Axioms/Macrofoundations


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Twitter Feb 12  “The problem lies ... with its core axioms.”

Source: Twitter

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INET Mar 8, 2021  Servaas Storm, The Standard Economic Paradigm is Based on Bad Modeling

September 20, 2019

Links on “Capitalism. Time for a reset.”

Comment on the new FT campaign*

Blog-Reference and Blog-Reference

Right policy depends on true theory. The reset of economic policy presupposes the reset of economic theory because 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. Economics is a failed/fake/cargo-cult science to this day. The reset of economics requires a new set of axioms, i.e. the replacement of false Walrasian microfoundations and false Keynesian macrofoundations by true macrofoundations. Methodologically, this reset is called a Paradigm Shift. The FT is a bit late. The reset has already happened some time ago. See

 True macrofoundations: the reset of economics

For more details see:

► The real trouble with Capitalism: stupid/corrupt economists
► The dirty secret of Capitalism: Economists have NO idea how Capitalism works
► Economics: The greatest scientific fraud in modern times
► The only thing we can learn from economic models is what proto-scientific garbage looks like
► Macroeconomics: Economists are too stupid for science
► After 200+ years even economics becomes a science
► From false micro to true macro: the new economic Paradigm
► The new macroeconomic Paradigm
► The canonical macroeconomic model
► If it isn’t macro-axiomatized, it isn’t economics

Egmont Kakarot-Handtke


* Twitter, Laurie Mcfarlane, FT, The times they are a changin’
and campaign The Financial Times “The new agenda” by The Brooklyn Brothers

Related 'No future for Socialism and Capitalism' and 'Who is really a scientist?' and 'Profit and the Private-Property-Irrelevance Theorem' and 'MMTers make Capitalism work' and 'Economics: failure, fake, fraud' and 'Show first your economic axioms or get out of the discussion'.

***
REPLY to S400 on Sep 22

You say: “State planning in China. Seem to work much better than the USAs planning.”

The USA needs no planning because MMTers keep Capitalism going with deficit-spending/money-creation.

► MMTers make Capitalism work

***
Wikimedia AXEC121f


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#PointOfProof
Sep 20

September 19, 2019

The real trouble with Capitalism: stupid/corrupt economists

Comment on Chris Dillow on ‘The trouble with capitalism’*

Blog-Reference and Blog-Reference (Link)

Chris Dillow quotes Martin Wolf: “What we increasingly seem to have … is an unstable rentier capitalism, weakened competition, feeble productivity growth, high inequality and, not coincidentally, an increasingly degraded democracy.”

Chris Dillow then sets out to explain the trouble with Capitalism: “The Bank of England has given us a big clue here. It points out that the rising profit share (a strong sign of increased monopoly) is largely confined to the US. In the UK, the share of profits in GDP has flatlined in recent years. Few, however, would argue that UK capitalism is less dysfunctional than its US counterpart. This suggests that the problem with capitalism is not increased monopoly. So what is it? Here, I commend some brilliant work by Michael Roberts. Many of the faults Martin discusses have their origin in a declining rate of profit ― a decline which became acute in the 1970s but which was never wholly reversed.”

The whole intellectual/moral misery of economists is contained in this paragraph. Chris Dillow’s explanation starts with the “share of profits in GDP” and ends with the “rate of profit”. Not only are these entirely different things but macroeconomic profit is not defined, to begin with. The simple reason is that neither Chris Dillow nor Martin Wolf nor Michael Roberts knows what profit is.#1 This sad fate they share with Walrasians, Keynesians, Marxians, Austrians, and MMTers. The dirty secret of economics is that since Adam Smith/Karl Marx economists do not know what profit is.#2, #3 And this means that economics is proto-scientific garbage but economists have not realized it to this day.

To make matters short, the axiomatically correct macroeconomic Profit Law is given by Q≡Qm+Qn with Qm≡Yd+(I−Sm)+(G−T)+(X−M) Legend: Qm monetary profit/loss of the business sector, Yd distributed profit, I investment expenditure, Sm monetary saving/dissaving of the household sector, G government expenditures, T taxes, X exports, M imports. Total profit Q is the sum of monetary and nonmonetary profit/loss. Roughly speaking, monetary profit Qm is determined by the excess of business sector investment over household sector saving, the government’s deficit and the excess of exports over imports. All variables are measurable with the precision of two decimal places. The Profit Law is testable and this settles all questions and ends all blather.

In the elementary case of the production-consumption economy, the Profit Law reduces to Q≡−S, i.e. the mirror image of household sector saving S is business sector loss (-Q). The mirror image of household sector dissaving (-S) is business sector profit Q. The point to grasp is that profit for the business sector as a whole depends on the deficit-spending of the household sector and NOT on the behavior or achievements of Capitalists. Because capital is zero in the elementary production-consumption economy, the concept of a profit rate is senseless.#4

With regard to the State, the Profit Law boils down to Q≡(G−T), i.e. Public Deficit = Private Profit. Public deficit-spending/money-creation is a free lunch program for the Oligarchy. The fact is that the so-called free market economy is on the life support of the State and Wall Street is on the life support of the Central Bank. Macroeconomic profit is in the main produced by public deficits. Financial wealth grows in lockstep with public debt. The Oligarchy, in turn, uses the opulent free lunches to corrupt what remains of the State’s legislative, executive, and judiciary institutions.

Despite the fact that Chris Dillow neither understands what profit is nor how the economy works he ends up with an almost correct summary: “Sadly, though, one effect of capitalism’s crisis has been, as Martin says, to so degrade democracy as to take intelligent economic policy off the agenda.” The fact is, though, that there NEVER has been such a thing as an “intelligent economic policy” because the Profit Theory is false for 200+ years. And this is alone the fault of scientifically incompetent economists.

Egmont Kakarot-Handtke


* Stumbling and Mumbling and Financial Times, Martin Wolf
#1 Profit analysis ― another exercise in economic deception
#2 The dirty secret of Capitalism: Economists have NO idea how Capitalism works
#3 For details of the big picture see cross-references Profit
#4 There is NO such thing as a “labor share of income”

Related 'Links on “Capitalism. Time for a reset.”' and 'Econogenics in action' and 'Economists’ silly kindergarten games' and 'Macroeconomics: Economists are too stupid for science' and 'Econ 101: Economists flunk the intelligence test at the first hurdle' and 'Circus Maximus: Economics as entertainment, personality gossip, virtue signaling, and lifestyle promotion' and 'There is NO such thing as “smart, honest, honorable economists”' and 'The irrelevance of economics'.

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Wikimedia AXEC123e

September 17, 2019

The dirty secret of Capitalism: Capitalists have NO idea how Capitalism works

Comment on Nick Hanauer on ‘The dirty secret of capitalism ― and a new way forward’*

Blog-Reference

Tom Hickey summarizes: “Nick Hanauer says the mainstream economists have been captured by the oligarchs. He says how the evidence shows that a pure free market suppresses wages and employment so much that the demand falls off and a viscous circle sets in ― a lack of demand means underperforming companies, which means companies employ less people and pay them less, which generally decreases the demand for goods and services, and so on. Everyone loses, except the 0.1%, the oligarchs.”

Nick Hanauer introduces himself as a successful Capitalist and asks: “How do we manage to grab an ever-increasing share of the economic pie every year?” and “So, what is society to do?” His answer is “We need a new economics” because it is painfully obvious that “The fundamental assumptions that undergird neoliberal economic theory are just objectively false.” The apex of neoliberal falsity is the behavioral assumption of homo oeconomicus. However, the key to a prosperous, complex, and sustainable economy is cooperative behavior. The selfish and greedy behavior of homo oeconomicus is not good but sociopathic.#1

This is, of course, commonsensically true except that it is NOT economics. Economics is NOT about human behavior but about the behavior of the economic system. Human Nature/motives/behavior/action is the subject matter of psychology, sociology, anthropology, biology/evolution etcetera. The lethal blunder of economics is that it defines itself for 200+ years as a social science.#2, #3, #4

The methodological fact of the matter is: NO way leads from the second-guessing of Human Nature/motives/behavior/action to the understanding of how the economic system works. Behavioral microfoundations are the ultimate reason why economics is to this day proto-scientific garbage.

Nick Hanauer asserts: “Unless the laws of physics, the laws of economics are a choice. If we want a new economics all we have to do is chose to have it.” This, of course, is plain scientific incompetence. Profit for the economy as a whole, for example, does NOT depend on whether the one-percenters are sociopathic exploiters or cooperative and emphatic leaders.#5

The macroeconomic 4-sector Profit Law is objectively given by Q≡Yd+(I−S)+(G−T)+(X−M). In the moselementary case of the production-consumption economy, this reduces to Q≡−S, i.e. the mirror image of household sector saving S is business sector loss (−Q). The mirror image of household sector dissaving (−S) is business sector profit (+Q). The point to grasp is that profit for the business sector as a whole depends on the deficit spending of the household sector and NOT on the behavior or achievements of Capitalists. With regard to the state, the Profit Law boils down to Q=(G−T), i.e. Public Deficit = Private Profit. And this explains why Capitalists were able “to grab an ever-increasing share of the economic pie every year.”

Public deficit-spending/money-creation is a free lunch program for the Oligarchy. The fact is that the so-called free-market economy is on the life support of the state, and Wall Street is on the life support of the Central Bank. Macroeconomic profit is in the main produced by public deficits. Financial wealth grows in lockstep with public debt. The Oligarchy, in turn, uses the opulent free lunches to corrupt what remains of the state’s legislative, executive, and judiciary institutions.

Nick Hanauer is NOT a scientist but an agenda pusher for the Oligarchy like the rest of self-styled New Economic Thinkers.#6 What he tells the TED audience is that Neoliberalism is dead and that he and other enlightened Capitalists are working for a better social and economic order. The fact is that he has NO idea what profit is and how the economy works.

Egmont Kakarot-Handtke


* TED
#1 Actually, this is rather old stuff “No science has been criticized by its own servants as openly and constantly as economics. The motives of dissatisfaction are many, but the most important pertains to the fiction of homo oeconomicus.” (Georgescu-Roegen, 1971)
#2 Economics is NOT about Human Nature but the economic system
#3 Overreach: Economists have their fingers in every pie except real economics
#4 The happy end of the social science delusion
#5 Capitalism, poverty, exploitation, and cross-over exploitation
#6 CORE: more lipstick on the dead economics pig


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Wikimedia AXEC109i

September 13, 2019

Swabian housewife vs Wall Street loan shark

Comment on Bill Mitchell/Tom Hickey on ‘Germany to play smokes and mirrors again’*

Blog-Reference

The usual way to defraud people is to frame an issue emotionally and to moralize. That is exactly what Tom Hickey is doing: “The conservative mind equates financial debt with being guilty of moral failure, sin. In fact, in German the same term, Schuld, signifies both debt and guilt, as Michael Hudson so tirelessly points out. So this is conflation of finance and morality is a no-brainer there. … In conservative minds, this manifests as a black and white world in which savers that are virtuous, with the savers supposed funding the profligate borrowers.”

These conservative folks spoil the business of the progressive loan sharks and this is why they are ridiculed and smeared. For this purpose, MMTers have created the rhetorical bugaboo of the Swabian housewife. The Swabian housewife is too narrow-minded to understand that significant deficit-spending/money-creation is needed for everything between repairing the rotten infrastructure, stimulating the ailing economy, reducing unemployment, and fighting global warming.

As the master psychologist Tom Hickey diagnoses: “Deficit hysteria and debt phobia underlies the preference for fiscal austerity, which is often advertised as ‘expansionary fiscal austerity,’ a virtuous thing that stands in contrast to the ‘fiscal profligacy’ and ‘fiscal irresponsibility’ of the ‘degenerate’ liberal mindset.”

No, not at all, the smart Swabian housewife, as well as the sagacious Hamlet#1, have learned from history the four stages of borrowing gone wrong: (i) the lender presents himself as a friendly helper in a calamity, (ii) the lender exploits the borrower via the interest rate, (iii) arrears ― successive debt enslavement, (iv) final expropriation (euphemistically called privatization).

MMTers as promoters of Wall Street’s business interests tell everybody that all these negative effects do not apply to public deficit-spending and public debt of a sovereign state. And that is right, public debt is different from private debt insofar as it is more advantageous for the lender. As a rule, for WeThePeople as a whole, it is better to pay for urgent public spending immediately with taxes than to increase public debt. #2-#5

Deficit-spending/money-creation benefits the Oligarchy because it increases macroeconomic profit according to the Profit Law, i.e. Public Deficit = Private Profit. MMT is a free lunch program for the Oligarchy. Financial wealth and public debt grow in lockstep and the fabulous financial wealth in the USA is roughly equal to humongous public debt. The Profit Law explains how billionaires are able to accumulate that much money and why they can buy all the bonds the Treasury issues and cash in the ultra-safe interest that is reliably taxed from WeThePeople as long as the debt is rolled over which can be very long indeed. This Ponzi scheme creates an extremely skewed distribution of income and wealth and this works as long as public debt grows.

This is the task of MMTers, to propagate the permanent growth of public debt and to play down all negative effects. What still stands in the way of the "progressive" loan sharks and the takeover of Treasury/Central Bank by Wall Street is the smart Swabian housewife.

Egmont Kakarot-Handtke


* Bill Mitchell’s blog
#1 “Neither a borrower nor a lender be, for loan oft loses both itself and friend, and borrowing dulls the edge of husbandry.” (Shakespeare) Remember also the brouhaha about Mandeville’s The Fable of the Bees.
#2 How to pay for the war and to be bamboozled by economists
#3 Is MMT good for WeThePeople or for the Oligarchy?
#4 MMT’s true program
#5 MMT is ALWAYS a bad deal for the 99-percenters

Related 'Deficit cheerleaders ― the Oligarchy’s useful idiots' and 'Bill Mitchell’s dishonorable discharge from the sciences' and 'MMT: The new Center of the Universe of political fraud' and 'Stephanie Kelton sells children into debt slavery' and 'How MMT disgraces itself' and 'MMT: The communicative war on budget-balancers' and 'No MMT illusions! YOU are going to pay for it' and 'Links on Austerity' and 'Prophet Stephanie divines the seizure of the means of production of currency' and 'Keynes, Lerner, MMT, Trump, etc. and exploding profit' and 'MMT undermines democracy' and 'MMT Progressives: The knife in the back of WeThePeople'. For the full-spectrum refutation of MMT see cross-references MMT.

Note: It makes a difference whether the deficit is caused by consumptive or investive spending. The argument above refers to consumptive deficit-spending/money-creation.

***
REPLY to Matt Franko on Sep 14

You say: “Over here if you take a course in Finance or Accounting... if you get a question on a test to figure something out...if you instead start writing about f-ing Hamlet or some shit you will immediately fail..”

I wonder why you have not figured out that MMT macro accounting is mathematically defective. The proof has been given elsewhere. If you had more than two brain cells you would have realized that the MMT balances equation (I−S)+(G−T)+(X−M)=0 lacks the balance of the business sector which accountants call profit.#1, #2

MMTers do not get the basics of economics right and this, obviously, includes you. As Macbeth said about MMT: “… it is a tale told by an idiot, full of sound and fury, signifying nothing.”

Whatever diploma you have ― Art or Philosophy or Accounting does not matter ― it is not worth more than toilet paper.


#1 Correct macroeconomic accounting gives one the Profit Law as Q≡Yd+(I−S)+(G−T)+(X−M).
#2 For details of the big picture see cross-references Accounting


***

FT Feb 2 Swabian housewife makes up her mind



Twitter Oct 20, 2021

September 12, 2019

Is MMT Alt-Right? No, worse, it is fake science

Comment on Bill Mitchell/Tom Hickey on ‘On visiting Japan and engaging with conservative politicians’*

Blog-Reference

Tom Hickey maintains: “First, there is no such thing as bad publicity. It provides exposure anyway, and name recognition (‘brand identification’) is a good thing. Secondly, on the ‘first they ignore you’ metaphor, being attacked is a forward step that acts as confirmation that you are winning. I no longer link to most criticism of MMT, first, because it is stupid, and secondly, so as not give it exposure.”

This, obviously, is NOT the language of a scientist but of a propagandist, PR/Marketing professional, or social media troll. For a scientist, the question is always whether an assertion is provably true/false. For a political agenda pusher, the question is always how many followers/likes/clicks does an assertion generate. The truth-value of an assertion is not an issue for a propagandist.

The problem with economists is that they claim to do science but that they have never been anything else than clowns and useful idiots in the political Circus Maximus. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational economic concept of profit wrong. The newcomer MMT is no exception.

Accordingly, the economic discussion has zero scientific content but is a more or less open smear. Bill Mitchell complains: “The mainstream economists and those who profess to be ‘free marketeers’ bring out their big guns pretty quickly ― inflation and socialism/ Stalinism. … More recently, those who claim to be on the ‘progressive’ side of the debate have become more vociferous in their attacks, sensing, I suspect, that MMT have supplanted their relevance as the defenders of the anti-neoliberal wisdom. These characters resort to all sorts of snide-type attacks ranging from accusations of anti-Semitism (which I have covered previously), siding with Wall Street, ‘America-first corporatist sycophants’ …, giving succour to fascists and the Alt-Right, and that sort of stuff.”

Accordingly, the philosopher Tom Hickey as chief information manipulator of the Mike Norman Blog simply filters “that sort of stuff” out as “stupid criticism” of MMT. Not only this, under the label of “stupid criticism” MMTers conveniently suppresses valid scientific refutation of MMT.

MMTers claim (i) that MMT is scientifically superior to mainstream economics, (ii) that MMT policy is for the benefit of WeThePeople, (iii) that MMTers are the real Progressives.

The fact is that all three claims are false. Like their mainstream colleagues, MMTers are too stupid for the elementary math that underlies macroeconomics. Therefore, the whole analytical superstructure of MMT is just as scientifically worthless as that of mainstream economics.

Scientifically, MMT is dead but politically it is very much alive. The MMT policy of deficit-spending/money-creation clearly benefits the Oligarchy because of the macroeconomic Profit Law’s logical implication Public Deficit = Private Profit. MMTers either do not understand the Profit Law or ignore/suppress the proof of the falsity of their sectoral balances equation which lacks the all-important balance of the business sector, i.e. profit.#1 MMTers are just as stupid/corrupt as mainstream economists as censors/ suppressors/manipulators in the econoblogosphere (see #EconBlocker).

MMT is NOT Alt-Right or anything else of the usual silly smear. MMT is a relatively new political project that is driven under the mantel of Science and Progressiveness by scientifically incompetent/corrupt academics and promoted/sponsored by the Oligarchy.

It is NOT a lucky scientific event that: “Core MMT economists (and that means the original team plus those who came soon after but are prominent) are getting invitations to speak all around the world now as more and more people, organisations and government agencies are seeking to learn about MMT and its implications for them.” All this only proves that the Oligarchy has changed its marketing strategy. In personality terms, Paul Krugman’s worn-out “Conscience of a Liberal” is out and Stephanie Kelton’s “Birth of the People's Economy” is in.

In economics, the package ― or as Tom Hickey puts it the “brand identification” ― is currently changing but the product is the same since Adam Smith/Karl Marx: BS for WeThePeople.

Egmont Kakarot-Handtke


Bill Mitchell’s blog
#1 For the full-spectrum refutation of MMT see cross-references MMT

***
REPLY to Matt Franko on Sep 12

You ask: “Why would you seek to hold them accountable to the scientific methodology when they never said they are doing that in the first place?”

You are mistaken. Bill Mitchell and the others claim that MMT is an objective scientific lens: “MMT is not a regime that you ‘apply’ or ‘switch to’ or ‘introduce’. Rather, MMT is a lens which allows us to see the true (intrinsic) workings of the fiat monetary system. It helps us better understand the choices available to a currency-issuing government. It is not a regime but an accurate perspective on reality. It lifts the veil imposed by neo-liberal ideology and forces the real questions and choices out in the open. In that sense, MMT is neither right-wing nor left-wing ― liberal or non-liberal ― or whatever other description of value-systems that you care to deploy.” #1, #2

Because they claim to do science, MMTers have to be judged according to well-defined scientific criteria. The outcome is that they fail already at basic math.

The real progress is that in these days Wall Street sends Stephanie Kelton and Bill Mitchell to bring Japan up to speed while in the old days they sent Commodore Perry.

Japan, not to forget, is the living proof that the MMT policy of deficit-spending/money-creation works to never dreamt of levels of public debt. MMT’s message for Japan is to continue ― as they say on Wall Street ― doing God’s work.


#1 YouTube MMT Is A Lens, Not A Regime
#2 MMT is just plain good economics

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REPLY to Matt Franko on Sep 13

You invoke the methodological invective Model-Platonism. There is no need to go into the finer point of economic methodology here. The point is that economists fail already at the elementary level of putting 2 and 2 together. For details see

► Econ 101: Economists flunk the intelligence test at the first hurdle
► Economics: No method to the madness
► How incompetent are economic methodologists? Very!
► For details of the big picture see cross-references Methodology

September 8, 2019

Links on Karl Marx

Comment on Prabhat Patnaik/Tom Hickey on ‘Some comments about Marx’s epistemology’

Blog-Reference and Blog-Reference

The age-old problem with economists is that they are strong on opinion but weak on knowledge and that they suffer from mental incontinence, that is, the unstoppable urge to blather about every issue between heaven and earth, that is, from crime, addiction, psychology, sociology, philosophy, religion, sport, art, literature, ethics to their heroic fight for the welfare/freedom/survival of humanity. This is known as economics imperialism. The fact is, though, that economists have to this day NO idea how the economy works. Walrasianism, Keynesianism, Marxianism, Austrianism, MMT, Pluralism are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational economic concept of profit wrong. To this day, economists could not get their act together. Economists are scientifically incompetent and Marx/Marxians are NO exception. For details see:

► The economist as storyteller
► Karl Marx, fake scientist
► Profit for Marxists
► Marx, the moron
► Dear idiots, Marx got profit and exploitation wrong
► Here is the long-overdue scientific death certificate for Marx and Marxists
► Marx’s bicentennial ― nothing to discuss, nothing to celebrate
► 200 years in the dark ― how Marx got it wrong
► Capitalism, poverty, exploitation, and cross-over exploitation
► If we only had classes
► Socialism and scientific incompetence
► MMT and Marxism: A debate between proto-scientific zombies
► Marx and the curious coexistence of provably false economic theories
► Marxism is one of four instances of proto-scientific garbage

For more about Political Economics see AECquery.
For more about Karl Marx see AXECquery.

September 7, 2019

Is doing economics really depressing?

Comment on Barkley Rosser on ‘Is Doing Environmental Economics Especially Depressing?’

Blog-Reference

What exactly is environmental economics and why is it even more depressing than ordinary economics? In a previous post, Barkley Rosser told the world: “I have just learned via his New York Times obit that Marty Weitzman hanged himself, a suicide, reportedly depressed at his not gwtting the Nobel Prize and making a math error in an unpublished, circulates paper this spring. This is just too depressing.”#1

So, it was NOT so much environmental degradation that depressed Martin Weitzman but that he did not get the Nobel.#1 However, at this point, all is just speculation. Perhaps Martin Weitzman realized that economics is a failed/fake science and that he had taken an active part in the greatest scientific fraud of modern times. This, though, contradicts what his colleagues say about him: “Marty Weitzman was the pre-eminent environmental economist of the modern era, which is to say of all times,” (Nordhaus)*

In the NYT obituary, Martin Weitzman is quoted with: “Most everything we know tells us climate change is bad,” and “Most everything we don’t know tells us it’s probably much worse.” There is nothing of economics in this statement. In fact, many scientists and laypeople have come to this opinion long before Martin Weitzman.**

The age-old problem with economists is that they are strong on opinion but weak on knowledge and that they suffer from mental incontinence, that is, the unstoppable urge to blather about any issue between heaven and earth, that is, from crime, addiction, psychology, sociology, philosophy, religion, literature, ethics#2 to Mohammed bin Salman bin Abdulaziz al Sa'ud and the Khashoggi affair (“He is guilty guilty guuilty”).#3 The depressing fact for non-economists about economics is that economists have to this day NO idea of how the economy works. 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.

Economists have NO scientific knowledge about their own subject matter. They wonder whether the ecosystem will eventually break down but claim that the market economy is a self-optimizing stable equilibrium system. The fact is that the economic system will probably break down earlier than the ecosystem.#4 But no economist ever gets depressed about that.

Permanently growing public debt is an indicator that the system is broken. So-called free-market economies like the USA are on the full life support of the State. The Oligarchy is continuously fed by deficit-spending/money-creation. The Oligarchy’s financial wealth grows in lockstep with public debt. People are told that they have nothing to fear because the sovereign state cannot go bankrupt. The Oligarchy, in turn, uses the opulent free lunches to corrupt what remains of the state’s legislative, executive, and judiciary institutions.

Curiously, economists are neither depressed about the run-away economy nor about the proto-scientific state of their discipline. They simply declare themselves as the best scientists of all times and reward themselves with oligarchy-sponsored faux Nobels. On average, among all failed/fake scientists economists have the most fun. If economists are depressed the reason most probably lies elsewhere.

Egmont Kakarot-Handtke


* New York Times
** For example, Dane Wigington YouTube
#1 No False-Hero-Memorials
#2 Economists: Jacks-of-all-trades ― except economics
#3 Urgent: Taking politics out of economics
#4 What comes first: eco-self-destruction or oeco-self-destruction?