January 30, 2020

Economics: Not a pretty story

Comment on Bill Mitchell on ‘Be careful of what parades as academic research’*

Blog-Reference and Blog-Reference

Bill Mitchell directs attention to ugly facts and top names: “Remember the 2010 film ― Inside Job ― which documented how my profession had become corrupted by the financial services sector into producing, allegedly, independent research reports extolling the virtues of deregulation etc and not admitting they were being paid for by the beneficiaries of the propaganda masquerading as research. It shows how corruption runs deep in the economics profession to accompany the incompetence that mainstream macroeconomists display. Well, I have been following an unfolding story about how Uber has decided to draw on that corrupt tendency for their own gains. It is not a pretty story.” and “I will leave it to you to check if you are interested. 1. Top names in the field ― Judd Cramer, Alan B. Krueger, Jonathan V. Hall, Peter Cohen, Robert Hahn, Steven Levitt, Robert Metcalfe, 2. Top ranked journals ― NBER Working Papers, American Economic Review.”

By pointing at an individual case of wrongdoing Bill Mitchell draws the attention away from (i) that economics as a WHOLE is a scientific fraud since the founding fathers, and (ii), that he is part of it.

The general public and the representative economist have NO proper understanding of what economics is all about. For a start, it is of utmost importance to distinguish between political and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.

A closer look at the history of economic thought shows that theoretical economics (= science) had been hijacked from the very beginning by the agenda pushers of political economics. The founding fathers were quite outspoken about their agenda: “That Political Economy is a science which teaches, or professes to teach, in what manner a nation may be made rich. This notion of what constitutes the science, is in some degree countenanced by the title and arrangement which Adam Smith gave to his invaluable work. A systematic treatise on Political Economy, he chose to call an Inquiry into the Nature and Causes of the Wealth of Nations; …” (J. S. Mill)

Political economics has produced NOTHING of scientific value in the last 200+ years. The major approaches — Walrasianism, Keynesianism, Marxianism, Austrianism — are mutually contradictory, axiomatically false, and materially/formally inconsistent. Economics does NOT satisfy scientific standards to this day.#2

From this follows that economic policy guidance from Adam Smith/Karl Marx onward NEVER had sound scientific foundations. Left/center/right does NOT matter, ALL of the economics is proto-scientific garbage, or in other words, political propaganda in a scientific bluff package.

To point at individual wrongdoers obscures the fact that economics is failure/fake/fraud from Econ 101 to textbooks to the peer-review process of journals to the EconNobel.#3

This holds also for MMT#4 and Bill Mitchell#5. MMT claims that deficit-spending/money-creation is for the benefit of WeThePeople and the solution of almost all problems between unemployment and the survival of humanity. This is not the case, MMT is provably false as economic theory and MMT policy is ultimately for the benefit of the Oligarchy. The observable distribution of financial wealth is the result mainly of public deficit-spending. MMTers are not scientists but agenda pushers.

Bill Mitchell claims: “In fact, as a life-long educator, I clearly form the view that most of the distasteful things we read or hear from others are the result of ignorance and a lack of education. These things are clearly manipulated for ideological and political purposes by others but at the root of the problem is a lack of education. Education is the path to a more enlightened, tolerant and inclusive society. That is the driving principle I have always operated on. Which is why the relatively recent trend on social media that is variously called ― Cancel culture or Call-out culture ― is disturbing to say the least.”

True, but entirely beside the point. Bill Mitchell is NOT a teacher but a manipulator of public opinion. He is NOT a progressive fighter for WeThePeople but an agenda pusher for the Oligarchy. Like his academic colleagues, Bill Mitchell lacks the defining characteristic of a scientist: “A genuine inquirer aims to find out the truth of some question, whatever the color of that truth. ... A pseudo-inquirer seeks to make a case for the truth of some proposition(s) determined in advance. There are two kinds of pseudo-inquirer, the sham and the fake. A sham reasoner is concerned, not to find out how things really are, but to make a case for some immovably-held preconceived conviction. A fake reasoner is concerned, not to find out how things really are, but to advance himself by making a case for some proposition to the truth-value of which he is indifferent.” (Haack)#6

For economics in general and MMT, in particular, there is NO future. It holds: “Scrap the lot and start again.” (Joan Robinson)

Egmont Kakarot-Handtke

* Billy Blog
#1 For details of the big picture see cross-references Failed/Fake Scientists
#2 Failed economics: The losers’ long list of lame excuses
#3 Links on the Economics Nobel
#4 For the full-spectrum refutation of MMT see cross-references MMT
#5 Bill Mitchell’s dishonorable discharge from the sciences
#6 Circus Maximus: Economics as entertainment, personality gossip, virtue signaling, and lifestyle promotion

Related 'Economics, MMT, and the corruption of science' and '“Inhumane stupidity” ― bad economic policy as inevitable consequence of false economic theory' and 'The problem with economics as a discipline' and 'Trust in science? Yes, but economics is NOT a science' and 'Econogenics: economists pose a hazard to their fellow citizens' and 'False economic theory makes bad economic policy'. For details of the big picture see cross-references Political Economics/Stupidity/Corruption.