Occasional X: The foul spirit of political economics (CCCXCIV)

“Larry Summers taught core macro in my econ PhD program. He'd show a model, then explain why it was wrong. After class I said it was discouraging. He said 'It isn't easy to understand how the world works. '" (Miles Kimball) Larry Summers never understood profit, and by logical consequence, how the economic system works. He is the archetypal, scientifically incompetent representative economist. Economics has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. The minimum requirement in science is logical consistency. Economists never rose above confused blather. To finally become a science, economics needs a Paradigm Shift from false behavioral microfoundations and false Keynesian macrofoundations to true macrofoundations. Teaching economics these days has nothing to do with the growth of scientific knowledge (episteme) but is a reliable indicator of either stupidity or corruption or both (doxa).

— AXEC (@EgmontHandtke) October 17, 2026

Occasional X: The foul spirit of political economics (CCCXCIII)

“Nothing works in this model, which is nevertheless at the heart of mainstream macro: ❌ Phillips Curve (eq.1): rejected by the data, ❌ Euler Equation (eq.2): same. And yet, we continue to teach it (and use it!) as if nothing had happened.” (François Geerolf) This is the original scientific corruption of economics: “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, 1941) Economics has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. The minimum requirement in science is logical consistency. Economists never rose above confused blather. As far as it is formalized, economists apply the wrong math. However: “The problem is not just to say that something might be wrong, but to replace it by something ― and that is not so easy.” (Feynman) To finally become a science, economics needs a Paradigm Shift from false behavioral microfoundations and false Keynesian macrofoundations to true macrofoundations (⇓ AXEC121l). Teaching the Phillips Curve, the Euler Equation, or Demand-Supply-Equilibrium these  days is a sure sign of either stupidity or corruption or both. This type of nonentity economics is rewarded with the EconNobel, and this is why we have a closed circle of idiocy.

— AXEC (@EgmontHandtke) October 17, 2026

For more about the Phillips Curve, see AXECquery.

Occasional X: The foul spirit of political economics (CCCXCII)

“There is no more important function of a first course in economics than to make the student see that the whole problem of social management is a value problem.” (Frank Knight) Wrong. 'There is no more important function of a first course in economics than to make the student see that the whole history of economic thought is the history of scientific failure and that either he is a scientist and performs the inevitable Paradigm Shift or he joins the ranks of brain-dead academic parrots.' (AXEC) This is the original scientific corruption of economics: “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, 1941) Economics has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. The minimum requirement in science is logical consistency. Economists never rose above confused blather. To finally become a science, economics needs a Paradigm Shift from false behavioral microfoundations and false Keynesian macrofoundations to true macrofoundations.

— AXEC (@EgmontHandtke) October 17, 2026

Occasional X: The foul spirit of political economics (CCCXCI)

Link to Article; scroll  for the comments

 

Occasional X: The foul spirit of political economics (CCCXC)

“Now that the Nobel Committee has recognized Mike Woodford and Bob Hall (a tiny subset of the NK machine) perhaps we can move on. This is not to disparage Mike and Bob, both of whom are hugely deserving of a Nobel Prize … I simply would not have awarded it to them for NK economics.” (Roger Farmer) Economics is failed/fake science, and the EconNobel delivers the positive feedback loop. Therefore, economics cannot get out of the proto-scientific garbage trap. Microfoundations was dead from the start. It is the unassailable proof that the history of economic thought is the history of scientific failure. The Founding Fathers defined economics as a social science, and accordingly, it has been based on subjective/behavioral assumptions/axioms. This has been the methodological ur-mistake. For example, here are the 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) The methodological mistake is that economists put the behavioral assumption of constrained optimization and equilibrium into the premises. This is a petitio principii, but economists do not know what this means. Stupidity makes faithful worshippers: “And so — faithful to the theory's conceptual cornerstones and hoping against all hope that the unthinkable may still be achieved (i.e., a satisfactory theory of the price mechanism) — the tormented upholders of the validity of the paradigmatic core of economic equilibrium theory appear singularly reluctant to face the problem of comparing expectations and results and assessing the consistency of the theory.” (Ingrao et al., 1990, p. 346) Although microfoundations is methodologically a false concept, economists repeat it nonetheless: “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, 1941, pp. 369-370) The way forward is to reconstruct economics entirely without the concepts of constrained optimization, rational expectations, equilibrium, and other NONENTITIES. In methodology, this is called 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, p. 362) It means, first, that legacy economics goes down the scientific drain for good (⇓ AXEC136i). It means, second, to move forward and make the inevitable Paradigm Shift. Whoever claims that Mike Woodford and Bob Hall 'deserve' the EconNobel is either stupid or corrupt or both.

— AXEC (@EgmontHandtke) October 17, 2026

Occasional X: The foul spirit of political economics (CCCLXXXIX)

“MMT explains money in a fiat system for sovereign countries that issue their own currency. The explanation backed by BofE. That’s it.” (David Rogers) For the record: scientifically, MMT has long been refuted; see Cross-references: MMT https://t.co/XMHq0sZWU1 MMTers are not competent scientists. They are political agenda pushers for a low-IQ audience ( ⇓ AXEC152c). MMT is not part of science, but part of politics.

— AXEC (@EgmontHandtke) October 17, 2026

Occasional X: The foul spirit of political economics (CCCLXXXVIII)

“But I don’t think my job teaching principles was to teach my idiosyncratic tastes. In some sense I’m teaching the field that’s the job.” (Brian Albrecht) Yes, but the field is proto-scientific garbage, and Brian Albrecht has still not realized that economics has been Cargo Cult Science from the beginning. Economics has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. The minimum requirement in science is logical consistency. Economists never rose above confused blather. To finally become a science, economics needs a Paradigm Shift from false behavioral microfoundations and false Keynesian macrofoundations to true macrofoundations. Teaching principles these days is a sure sign of either stupidity or corruption or both.

— AXEC (@EgmontHandtke) October 16, 2026

Occasional X: Clueless economists / Science (CCCXCVII)

“Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice; all the rest being brought about by the natural course of things.” (Adam Smith, quoted by Econlib/Art Carden) Adam Smith was not an original thinker, not a scientist, not an economist; he was a populist moralizer (⇓ AXEC179a). Economics has been failed/fake science since the Founding Fathers. It has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. Economics is about how the economy works. It is a genuine systems science. Adam Smith made it a 'moral science'. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. The free-market economy runs on profit. Macroeconomic profit is given by the axiomatically correct Profit Law Qm≔(I−Sm)+(G−T)+(X−M)+Yd. The Law implies PublicDeficit-Is-PrivateProfit Qm≔(G−T)>0, i.e., macroeconomic profit is (co-)produced by deficit-spending/money-creation, i.e., the growth of public debt. In free-market economies, public debt has increased with minor interruptions for over 200 years. Therefore, Qm≔(G−T)>0 is a critical element of the economy's survival. The minimum requirement of a free-market economy is that macroeconomic profit is greater than zero, i.e., Qm≥0. If Qm<0, recession/depression/breakdown results. This is the main economic principle; all other explanations of how the economy works are secondary. Utility/profit maximization or free people on free markets or competition or hard work or innovation or the entrepreneur do not keep the economy above the zero-profit cutoff. Scientifically, it's rather simple: no macroeconomic profit, no economy. But economists are only look-alike scientists. They have never had enough brains to understand the objective, systemic facts, i.e., the existential preconditions. Free-market economies are continuously saved from breakdown by the deficit-spending/money-creating duo of Treasury/Central Bank, i.e., the State. This means that Adam Smith's premise that the unfettered free-market economy is a self-adjusting, self-stabilizing, and self-optimizing system is axiomatically false. Adam Smith lost the battle of ideas. Continuing to promote him is not science, but disinfotainment at best.

— AXEC (@EgmontHandtke) October 16, 2026

Occasional X: The foul spirit of political economics (CCCLXXXVII)

“A government which robs Peter to pay Paul can always count on the support of Paul.” (George Bernard Shaw) George Bernard Shaw did not understand much of economics. Like most authors, he was in the disinfotainment business. The proof is in the silly repetition of the taxes-are-theft slogan. The simplified national accounts below (AXEC213 ⇓) show two economies, one (0) without tax, and one (1) with tax. In (0), the workers spend their entire wage income from the business sector Yw on consumption goods Ec. The business sector makes neither profit nor loss. The workers get the whole product. In (1), the workers realized that they needed a state to guarantee property rights, for example. As a consequence, they reduce their consumption expenditures Ec, and 'buy' instead government services Et with taxes. The government, at this stage, is similar to the business sector; it produces public goods/services and pays wages Ywg. Assume for the moment a minimum number of public workers/employees and a perfect organization. There is neither waste nor corruption. The additional public workers/employees spend their entire income on consumption goods Ecg; thus, the total spending Ec remains unaltered. All sectoral balances are zero. The market-clearing price remains unaltered. The profit is zero. However big the state is, there is no inflation. The resources are distributed exactly according to the people's preferences. The household sector needs private and public goods/services. It 'buys' them both voluntarily. The form that the 'buying' of public goods/services takes is taxes. This has different reasons, but has to be regarded as specific to the state. The combination of private and public goods/services is preferable to private goods/services alone. Thus, the household sector is better off with the (minimum) state, and the tax spending, which is, in the final analysis, voluntary. If done correctly, the size of the budget is a matter of the household sector's preferences. Needless to emphasize that, if the state takes the tax money and fires rockets at another state instead of delivering the public good, this is not in accordance with people's preferences. Or if they take the tax money and channel it to their cronies via some NGO. Or if they take the tax money from WeThePeople and pay bond interest to WeTheOligarchy. The defamation of the state is justified insofar as legitimate and productive actions are corrupted. However, corruption is not specific to the government sector. It applies to the business sector as well. Perhaps it is even worse there. The ultimate moral problem is human corruption, not the state. In the world of political propaganda, George Bernard Shaw was one of the most dishonest writers. His contributions to the economic discussion have been nothing more than proto-scientific garbage.

— AXEC (@EgmontHandtke) October 16, 2026

Occasional X: The foul spirit of political economics (CCCLXXXVI)

“An honor to have IvanWerning at Northwestern theory presenting his important work with guido_lorenzoni on tâtonnement, a topic unwisely left for dead. Shows that returning to fundamental and thorny questions can be highly rewarding!” (Ben Golub) Legacy economics may be rewarding, but it's not science. Economics has been failed/fake science since the Founding Fathers. It has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. Actually, economics is about how the economy works. It is a genuine systems science. To finally become a science, economics needs a Paradigm Shift from false behavioral microfoundations and false Keynesian macrofoundations to true macrofoundations. The University of Chicago's economics department has never had much to do with advancing science but with pushing a political agenda. Chicago has always been the best example of what Feynman called Cargo Cult Science (⇓ AXEC140d). Presently, Ivan Werning and Ben Golub are living proof of failed/fake science.

— AXEC (@EgmontHandtke) October 16, 2026

Occasional X: The futile attempt to recycle Austrianism (CXXXIII)

“Carl Menger is truly one of the greatest economists of all time. His subjectivist theory of value and marginal utility was absorbed both (obviously) by the Austrian school, either in part (by Bohm-Bawerk, Von Wieser and Hayek), or in full (Lachmann), by the London School (Smart, Wicksteed, Robbins), and even mathematically (by his son Karl), his idea of “causal-genetic” analysis proceeded the idea of process analysis, and his work on money (Geld) was far ahead of his time. Truly was he (almost) without rival.” (Nikolai Rostov) Austrianism is failed/fake science to this day, but Nikolai Rostov is too incompetent to get it. He is part of a very large crowd. Economics has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. Actually, economics is about how the economy works. It is a systems science. The basic economic entity is NOT the exchange of goods between two people and has NOTHING to do with drowning or thirsting people valuing water, but with the elementary production-consumption economy, which is shown below (⇓ AXEC225e). For a start, the workers produce one good, which is later differentiated. The output per period is O, which depends on the labor input L and the productivity R. The workers get an income Yw, which depends on the labor input L and the wage rate W. For a start, the wage rate is equal for all. Differentiation comes later. The workers spend their entire income Ec=Yw, and buy the entire output X=O. Thus, the circle is closed, and there are no balances. The balances of profit, loss, saving, dissaving, change in inventory, etc., come later. The initial nominal and real closing is a double condition, which has NOTHING to do with the concept of equilibrium. These conditions are practically never met, and this is why nominal and real balances appear. The most important balance is the macroeconomic profit of the business sector. A balance is a difference of flows, i.e., a change of stock. Austrians never understood what macroeconomic profit was. This is scientifically disqualifying. As a first result, the real wage W/P is equal to the productivity R. There is no subjectivity in the real wage. The workers need the output for their survival; that's where the subjective value comes from, but they cannot get more than they produce. The price, as the dependent variable, is determined as P=W/R. This is how the many subjective values transform into the one objective market price. The market is the place where the immeasurable individual subjectivity is transformed into the measurable collective objectivity. The science of economics deals with the objective price, not with the subjective value, which is a completely arbitrary figment of the momentary psychological condition. One can endlessly speculate about subjective values and expectations and keep economics at the proto-scientific level, i.e., in the swamp where 'nothing is clear and everything is possible.' (Keynes) Carl von Menger never understood economics. Neither did his low-IQ followers. Austrianism is not science but political agenda pushing. It is failed science, but it is kept alive because of political sponsorship – not because of scientific merit. Austrian think tanks have not much to do with thinking, but more with the blubber of silly salespeople.

— AXEC (@EgmontHandtke) October 15, 2026

Occasional X: The foul spirit of political economics (CCCLXXXV)

“Had a great time back to back at the University of Chicago and Northwestern working on and presenting our Tâtonnement paper in two micro theory seminars. Not my typical venues. Fun and challenging.” (Ivan Werning) There is much fun in economics, but no science. Economics has been failed/fake science since the Founding Fathers. It has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. Actually, economics is about how the economy works. It is a genuine systems science. To finally become a science, economics needs a Paradigm Shift from false behavioral microfoundations and false Keynesian macrofoundations to true macrofoundations (⇓ AXEC121l) The University of Chicago's economics department had never had much to do with advancing science but with pushing a political agenda and having fun.

— AXEC (@EgmontHandtke) October 15, 2026

Occasional X: The futile attempt to recycle MMT (CCIX)

“In 50 years, Kelton's The Deficit Myth will be more widely read than Mises' Human Action, Hayek's Road to Serfdom, and Hazlitt's Economics in One Lesson combined.” (Mr.Keynes) Mises, Hayek, Hazlitt, and Kelton are scientifically stone dead. But living economists are too stupid to realize the inconsistencies. You can tell them anything, and they will repeat it: “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, 1941) Probably it's worse. Economists promote anything they are paid for. They are not scientists, but salespeople. You can get the MMT refutation free here: The Kelton Fraud https://t.co/tgovXGM6Ho Stephanie Kelton’s legendary Plain-Sight-Ink-Trick https://t.co/AfbJNmvmFc Cross-references: MMT https://t.co/XMHq0sZWU1 That this provably inconsistent theory is still on the so-called free-market-for-ideas tells one that economics is a corrupted science.

— AXEC (@EgmontHandtke) October 15, 2026

Occasional X: Economics still lacks correct macrofoundations (XXXIX)

“A new book that presents an alternative to mainstream economics, grounded in the principle of effective demand and the post-Keynesian perspective on money and finance.” (Nacho Álvarez) Keynes got macroeconomics axiomatically wrong. His scientifically incompetent followers never spotted the methodological defect. Post-Keynesian macrofoundations are not a real improvement of the legacy microeconomic approach. Both are axiomatically false; therefore, an integration is logically impossible. Keynes, too, misunderstood the concept of profit because he was too stupid for elementary algebra. ⇓ Consequently, he botched the long-overdue Paradigm Shift from microfoundations to macrofoundations. This initial blunder means that the entire field of economics (both micro and macro) is proto-scientific garbage. As a result, economics has never been more than silly blather for a low-IQ audience. The Post-Keynesian critique of mainstream economics is spot on, but their alternative is also scientifically worthless. To finally become a science, economics needs a Paradigm Shift from false behavioral microfoundations and false Keynesian macrofoundations to true macrofoundations.

— AXEC (@EgmontHandtke) October 15, 2026

Occasional X: Economics still lacks correct macrofoundations (XXXVIII)

“50 years of macroeconomics in a nutshell: Lucas: 'Your Keynesian models are full of ad hoc assumptions. We need proper microfoundations!'” (Khazbi Budunov) The problem with modern macro is that it is axiomatically false. Economics is failed/fake science. Microfoundations was dead from the start. The Founding Fathers defined economics as a social science, and accordingly, it has been based on subjective/behavioral assumptions/axioms. This has been the methodological ur-mistake. For example, here are the 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) The methodological mistake is that economists put the behavioral assumption of constrained optimization and equilibrium into the premises. This is a petitio principii, but economists do not know what this means. Stupidity makes faithful worshipers: “And so — faithful to the theory's conceptual cornerstones and hoping against all hope that the unthinkable may still be achieved (i.e., a satisfactory theory of the price mechanism) — the tormented upholders of the validity of the paradigmatic core of economic equilibrium theory appear singularly reluctant to face the problem of comparing expectations and results and assessing the consistency of the theory.” (Ingrao et al., 1990, p. 346) Although microfoundations is methodologically a false concept, economists repeat it nonetheless: “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, 1941, pp. 369-370) The way forward is to reconstruct economics entirely without the concepts of constrained optimization, rational expectations, equilibrium, and other NONENTITIES. In methodology, this is called 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, p. 362) It means, first, that legacy economics goes down the scientific drain for good. It means, second, to go forward and perform the Paradigm Shift (⇓ AXEC113i). It means, finally, to bury Lucas and his incompetent followers in the darkest corner of the Flat-Earth cemetery.

— AXEC (@EgmontHandtke) October 14, 2026

Occasional X: I=S ― the biggest idiocy in macroeconomics (X)

“Everything is a budget constraint or supply and demand, as in Principles of Micro.” (Brian Albrecht) The most important balance of economics —profit— is missing in Brian Albrecht's charts. This tells one that economists are too stupid for the elementary algebra that underlies macroeconomic accounting. Macroeconomic profit or loss Qm, i.e., the business sector's balance, is given by the axiomatically correct Profit Law Qm:=Yd+(I−Sm)+(G−T)+(X−M). This boils down to Qm:=(I−Sm) for the elementary case of a consumption-investment economy. Normally, I, the investment expenditures of the business sector, are greater than the saving Sm of the household sector. This is how profit comes into the world. In the case of I=Sm, macroeconomic profit is zero, and if I<Sm the economy breaks down. Microbrains like Brian Albrecht never understood the basics. The Principles of Micro are proto-scientific garbage. Let this sink in: economists still get the subject's foundational concept of profit wrong. They have been scientifically incompetent since Adam Smith. Economics is scientifically worthless to this day. For details, see Cross-references: Profit https://t.co/taznr3RMBt

— AXEC (@EgmontHandtke) October 14, 2026

Occasional X: Clueless economists / Science (CCCXCVI)

“The Nobel Prize is not an exact science.” (The Nobel Prize) Economics is failed/fake science, and the EconNobel delivers the positive feedback loop. Therefore, economics cannot get out of the proto-scientific garbage trap. Microfoundations was dead from the start. It is the unassailable proof that the history of economic thought is the history of scientific failure. The Founding Fathers defined economics as a social science, and accordingly, it has been based on subjective/behavioral assumptions/axioms. This has been the methodological ur-mistake. For example, here are the 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) The methodological mistake is that economists put the behavioral assumption of constrained optimization and equilibrium into the premises. This is a petitio principii, but economists do not know what this means. Stupidity makes faithful worshippers: “And so — faithful to the theory's conceptual cornerstones and hoping against all hope that the unthinkable may still be achieved (i.e., a satisfactory theory of the price mechanism) — the tormented upholders of the validity of the paradigmatic core of economic equilibrium theory appear singularly reluctant to face the problem of comparing expectations and results and assessing the consistency of the theory.” (Ingrao et al., 1990, p. 346) Although microfoundations is methodologically a false concept, economists repeat it nonetheless: “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, 1941, pp. 369-370) The way forward is to reconstruct economics entirely without the concepts of constrained optimization, rational expectations, equilibrium, and other NONENTITIES. In methodology, this is called 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, p. 362) It means, first, that legacy economics goes down the scientific drain for good. ⇓ It means, second, to move forward and make the inevitable Paradigm Shift.

— AXEC (@EgmontHandtke) October 14, 2026

Occasional X: The foul spirit of political economics (CCCLXXXIV)

“The Nobel Prize given to Mike Woodford and Bob Hall will re-trigger discussions about the so-called New Keynesian model. Some will hail it as an unambiguous success, building macro from micro foundations.” (Olivier Blanchard) Olivier Blanchard gets it methodologically wrong: it's not bottom-up, it's top-down; it's not individual-centric, it's system-centric. Economics has been failed/fake science since the Founding Fathers. It has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. Actually, economics is about how the economy works. It is a genuine systems science. To finally become a science, economics needs a Paradigm Shift from false behavioral microfoundations and false Keynesian macrofoundations to true macrofoundations. Legacy economics is what Feynman called Cargo Cult Science. The EconNobel positively reinforces failed/fake science. Olivier Blanchard is not only an incompetent scientist, but an #EconBlocker.

— AXEC (@EgmontHandtke) October 14, 2026

Occasional X: Economists are too stupid for macro accounting (X)

“There's a rote lesson among economists: Domestic savings are insufficient, so we run a current account deficit. Yet in an economy like Turkey's, causality often works in reverse. Let's look at the sectoral balances approach, epitomized by Wynne Godley: (S−I) = (G−T) − (M−X).” (Oktay Özden) The most important balance of economics —profit— is missing. This tells one that economists are too stupid for the elementary algebra that underlies macroeconomic accounting. Nothing has ever been dumber than the discussion 'identities vs equilibrium' or the slogan 'That's just an accounting identity'. Macroeconomic profit or loss Qm, i.e., the business sector's balance, is given by the axiomatically correct Profit Law Qm:=Yd+(I−Sm)+(G−T)+(X−M). This translates into the Balances Equation (I−Sm)+(G−T)+(X−M)−(Qm−Yd)=:0, i.e., all balances cancel out. All variables are measurable to two decimal places. Legend: Qm business sector's macroeconomic profit, Yd distributed profit, Sm household sector saving, G government expenditures, T taxes, X exports, M imports. Let this sink in: economists still get the subject's foundational concept of profit wrong. They have been scientifically incompetent since Adam Smith. Economics is scientifically worthless to this day. For details, see Cross-references: Accounting https://t.co/xNov0qlQQo

— AXEC (@EgmontHandtke) October 13, 2026

Occasional X: Time to get the axioms of economics right (IX)

“Yes, the new-Keynesian models, the DSGEs, or even the 'microfounded' models are hardly taught in macroeconomics at the undergraduate level. Policymakers don’t really reason with these models either, as Adam Posen himself admitted in 2017.” (François Geerol) Economics has been failed/fake science since the Founding Fathers. It has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. Actually, economics is about how the economy works. It is a genuine systems science. To finally become a science, economics needs a Paradigm Shift from false behavioral microfoundations and false Keynesian macrofoundations to true macrofoundations (⇓ AXEC121l) The EconNobel is a scientific fraud.

— AXEC (@EgmontHandtke) October 13, 2026

Occasional X: The foul spirit of political economics (CCCLXXXIII)

“Economic knowledge necessarily and inevitably leads to Capitalism. And it's not because all economists must be liberals, but because understanding the fundamental mechanisms of the economy forces one to question state interventionism” (Diego Angulo) Diego Angulo never understood profit and, by consequence, how the economic system works. That's self-defeating for an economist. The free-market economy runs on profit. Macroeconomic profit is given by the axiomatically correct Profit Law Qm:=(I−Sm)+(G−T)+(X−M)+Yd. The Profit Law implies PublicDeficit=PrivateProfit Qm:=(G−T)>0, i.e., macroeconomic profit is (co-)produced by deficit-spending/money-creation, i.e., the growth of public debt. In free-market economies, public debt has increased with minor interruptions for over 200 years. Therefore, Qm:=(G−T)>0 has been a critical factor for Capitalism's survival. The free-market economy is continuously saved from breakdown by the deficit-spending/money-creating duo of treasury/central bank, i.e., the State. This means that the premise of legacy economics, i.e., that the unfettered free-market economy is a self-adjusting, self-stabilizing, and self-optimizing system, is axiomatically false. This means that economics is failed/fake science. Economists are not scientists. They are mostly silly wafflers for a low-IQ audience. Diego Angulo is living proof. The free-market polity is an Oligarchy with parliament / treasury / central bank / capital markets / big business / three-letter agencies as integral parts. With the other determinants excluded for the moment, private financial wealth grows with public debt. Eventually, WeTheOligarchy owns the financial assets, and WeThePeople owe the public debt and are taxed for interest on government bonds as long as the debt is rolled over. Interest payments on the debt reduce their disposable income for an indefinite time. The government taxes WeThePeople on behalf of WeTheOligarchy. This profit/interest/tax triple-whopper produces wealth for WeTheOligarchy and debt and real-income reductions for WeThePeople. In addition to legitimate monetary operations, the central bank is well-positioned to carry out or support illicit operations that are economically equivalent to putting counterfeit money into circulation. The volume of illicit deficit-spending and money-creation, as well as the quantity of Dark Money in circulation, is not publicly known. Therefore, Profit and Distribution Theory has no empirical leg to stand on. The financial sub-sector, big business, and billionaires recycle some of their profits and financial wealth to control major public, private, and political institutions. Thus, they corrupt the polity. In essence, this is how the self-alimentation and self-preservation of WeTheOligarchy work. It has nothing to do with optimal allocation of resources, free markets, or free consumer choices.

— AXEC (@EgmontHandtke) October 13, 2026

Occasional X: Clueless economists / Money (CXLXVII)

“How Michael Woodford made modern macro relevant to central bankers.” (FT Economics) The problem with 'modern macro' is that it is axiomatically false. Therefore, central banking has no scientifically valid foundations. Economics is failed/fake science. Microfoundations was dead from the start. The Founding Fathers defined economics as a social science, and accordingly, it has been based on subjective/behavioral assumptions/axioms. This has been the methodological ur-mistake. For example, here are the 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) The methodological mistake is that economists put the behavioral assumption of constrained optimization and equilibrium into the premises. This is a petitio principii, but economists do not know what this means. Stupidity makes faithful worshipers: “And so — faithful to the theory's conceptual cornerstones and hoping against all hope that the unthinkable may still be achieved (i.e., a satisfactory theory of the price mechanism) — the tormented upholders of the validity of the paradigmatic core of economic equilibrium theory appear singularly reluctant to face the problem of comparing expectations and results and assessing the consistency of the theory.” (Ingrao et al, 1990, p. 346) Although microfoundations is methodologically a false concept, economists repeat it nonetheless: “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, 1941, pp. 369-370) The way forward is to reconstruct economics entirely without the concepts of constrained optimization, rational expectations, equilibrium, and other NONENTITIES. In methodology, this is called 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, p. 362) It means, first, that legacy economics goes down the scientific drain for good. It means, secondly, to go forward and perform the Paradigm Shift (⇓ AXEC113i) For the axiomatically correct approach to monetary theory, see the working paper ⇒ The Dark-Matter Theory of Fiat Money https://t.co/0QSqFFrVUX

— AXEC (@EgmontHandtke) October 13, 2026

Occasional X: Clueless economists / Science (CCCXCV)

“Just a personal addendum: Mike was my undergraduate thesis advisor at Princeton. This was a transformative experience. One of the crucial turning points in my life. So, I count myself as a Woodford student (part of the Woodford army, some might say :) ). Then I was fortunate enough to have Mike as a colleague at Columbia for 10 years. On a number of occasions, conversations with Mike were pivotal for my research” (Jon Steinsson) Jon Steinsson clearly doesn't understand how science works. Economics has been failed/fake science since the Founding Fathers. It has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. To this day, economics is what Feynman called a Cargo Cult. Due to their scientific incompetence and the positive reinforcement provided by the EconNobel, this closed mental shop is an inescapable social matrix for its members.

— AXEC (@EgmontHandtke) October 13, 2026

Occasional X: Scrap the EconNobel (XLXXII)

“2026 economic sciences laureates Robert E. Hall’s and Michael Woodford’s research has made us better equipped to manage economic downturns. They laid the foundation of the New Keynesian paradigm, in which models are built upon microfoundations, which means from the bottom up. ” (The Nobel Prize) Economics is failed/fake science, and the EconNobel is part of it. Microfoundations was dead from the start. It is the unassailable proof that the history of economic thought is the history of scientific failure. The Founding Fathers defined economics as a social science, and accordingly, it has been based on subjective/behavioral assumptions/axioms. This has been the methodological ur-mistake. For example, here are the 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) The methodological mistake is that economists put the behavioral assumption of constrained optimization and equilibrium into the premises. This is a petitio principii, but economists do not know what this means. Stupidity makes faithful worshippers: “And so — faithful to the theory's conceptual cornerstones and hoping against all hope that the unthinkable may still be achieved (i.e., a satisfactory theory of the price mechanism) — the tormented upholders of the validity of the paradigmatic core of economic equilibrium theory appear singularly reluctant to face the problem of comparing expectations and results and assessing the consistency of the theory.” (Ingrao et al., 1990, p. 346) Although microfoundations is methodologically a false concept, economists repeat it nonetheless: “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, 1941, pp. 369-370) Economics has been failed/fake science for 200+ years. The way forward is to reconstruct economics entirely without the concepts of constrained optimization, rational expectations, equilibrium, and other NONENTITIES. In methodology, this is called 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, p. 362) It means, first, that legacy economics goes down the scientific drain for good. Senseless economic debate ends. Disinfotainment on social media ends. It means, secondly, to go forward and perform the Paradigm Shift (⇓ AXEC113h)

— AXEC (@EgmontHandtke) October 12, 2026

For more on top-down, see AXECquery. 

Occasional X: The foul spirit of political economics (CCCLXXXII)

“For the book, I am making little videos explaining each chapters. They are animations. Thanks to AI, I am having a shitton of fun.” (Vincent Geloso) Much fun, zero science. Economists have never understood profit, and consequently how the economic system works. That's scientifically disqualifying. Economics has been failed/fake science since the Founding Fathers. It has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. ⇓ When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. Economic policy advice has never had valid scientific foundations. Economics has always been disinfotainment for a low-IQ audience. The representative economist is NOT, and never has been, a competent scientist but an agenda pusher / useful idiot / impostor / phrase monger / storyteller / troll / self-glorifier / pseudo-psychologist / media talker / clown in the political Circus Maximus.

— AXEC (@EgmontHandtke) October 12, 2026

Occasional X: The foul spirit of political economics (CCCLXXXI)

“There were screams of joy in the Nakamura-Steinsson household this morning when we saw this news!” (Jon Steinsson) Prizes are often not based on true merit. Like the Oscars, they are mainly a marketing/PR instrument. Honoring the look-alike happens in all walks of life. Most economics prizes are NOT rewards for the achieved growth of scientific knowledge but for political disinfotainment. Although it claims to be a science, economics is not one. The Founding Fathers defined economics as a social science, and, accordingly, it has been based on subjective/behavioral assumptions/axioms. This has been the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. ⇓ Economic policy guidance has never had valid scientific foundations. To this day, it has no scientific truth-value but only political use-value. For more about the cargo cult of economics, see Links on the Economics Nobel https://t.co/42laSAw8ME

— AXEC (@EgmontHandtke) October 12, 2026

Occasional X: Clueless economists / Philosophy (XV)

“Heidegger: 'Marx remains the greatest of all the Hegelians.'” (Nicolas Varela) Maybe. Unfortunately, he was an incompetent scientist. Marx's economic theory belongs to the scientific sphere and has to be refuted according to scientific methodology. Because Marx got the foundational concept of economics —profit— wrong, his remaining communicative contributions reduce to psycho-social-political-philosophical blather. Unfortunately, this part has dominated public opinion to this day. Ultimately, the idiocy of the discussion consists of the intentional/unintentional muddling of economics, sociology, psychology, history, politics, philosophy, gossip, and shithrowing. Marx/Engels called their common project Scientific Socialism‡, but its scientific content has been zero from the beginning. Marx/Engels and their followers never understood science. For proof, see the working paper ⇒ Profit for Marxists https://t.co/P1NOW4FyXK Also Here is the long-overdue scientific death certificate for Marx and Marxists https://t.co/9SwjuSW8Ca Marxianism still has no scientific truth-value, only political use-value. It is still good for playing low-IQ communicative games, but for nothing else. In the scientific sphere, Marx is still a zero. In the political/ philosophical sphere, confused blather is the norm; here Marxianism has its ecological niche as a Weltanschauung together with all other occult/ esoteric/ voodoo/ religious/ etc. aberrations of the human mind. From the fact that Marx's economics is provably false, it does not follow that the other approaches are true. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. Hegelian philosophy is not a replacement for failed/fake science. ‡ “Scientific socialism, primarily associated with Karl Marx and Friedrich Engels, is a materialist, historical approach to understanding society, viewing history as a progression driven by economic conditions and class struggle, …” (Google AI, Scientific Socialism)

— AXEC (@EgmontHandtke) October 12, 2026

Occasional X: Scrap the EconNobel (XLXXI)

“The Royal Swedish Academy of Sciences has decided to award the 2026 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Robert E. Hall and Michael Woodford 'for microeconomic foundations of macroeconomic stabilisation'.” (The Nobel Prize) Economics has been failed/fake science since the Founding Fathers. It has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. Top-tier academic economics is cargo cult science. The EconNobel for 'economic sciences' is a fraud. Actually, economics is about how the economy works. It is a genuine systems science. To finally become a science, economics needs a Paradigm Shift from false behavioral microfoundations and false Keynesian macrofoundations to true macrofoundations (⇓ AXEC121l)

— AXEC (@EgmontHandtke) October 12, 2026

See also the answer to Mathias Vernengo. 

Occasional X: Scrap the EconNobel (XLXX)

“Nobel purists stress that the economics prize is technically not a Nobel Prize, but it is always presented together with the others on Dec. 10, the anniversary of Nobel's death in 1896.” (Vincent Geloso) Prizes are often not based on true merit. Like the Oscars, they are mainly a marketing/PR instrument. Honoring the look-alike happens in all walks of life. Most economics prizes are NOT a reward for the achieved growth of scientific knowledge but for political disinfotainment. Although it claims to be a science, economics is not one. The founding fathers defined economics as a social science, and, accordingly, it has been based on subjective/behavioral assumptions/axioms. This has been the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. ⇓ Economic policy guidance has never had valid scientific foundations. To this day, it has no scientific truth-value but only political use-value. For more about the cargo cult of economics, see Links on the Economics Nobel https://t.co/42laSAvAX6

— AXEC (@EgmontHandtke) October 12, 2026

Occasional X: How it works (DXXV)

“Those large deficits in the 2010s set the stage for today's looming fiscal crisis. The high debt/gdp ratio today is the footprint of all those large deficits, in spite of the French government's low funding costs at the zero lower bound in the 2010s. Those large deficits certainly did not spur enough growth for France to simply grow out of the high debt/gdp ratio, contrary to what was advertised.” (Hanno Lustig) France is a good example of the self-destructive working of Capitalism. In free-market economies, public debt has increased with minor interruptions for 200+ years. Growing debt has always been a crucial ingredient in Capitalism's life elixir. The representative economist doesn't get it. Put simply, he gets the foundational concepts of profit, distributed profit, income, saving, deficit, and debt wrong. That's why economics has been failed/fake science for 200+ years. The monetary economy in general, and the French economy, in particular, thrives on growing private/public debt. If this growth stops, the economy implodes. Macroeconomic profit Qm is given by the axiomatically correct Profit Law Qm:=(I−Sm)+(G−T)+(X−M)+Yd. The Law implies Qm:=(G−T)>0, i.e., macroeconomic profit is (co-)produced by deficit-spending/money-creation, i.e., the growth of public debt. The minimum requirement for a free-market economy is that macroeconomic profit is greater than zero, i.e., Qm≥0. If Qm<0, recession/depression/breakdown results. The free-market economy is continuously saved from breakdown by the deficit-spending/money-creating duo Treasury/Central Bank, i.e., the State. This means that the premise of mainstream economics, i.e., that the unfettered free-market economy is a self-adjusting, self-stabilizing, and self-optimizing system, is axiomatically false. Ultimately, this means that the representative economist is too stupid for science. Hanno Lustig is living proof. Currently, both France and the USA are exploding the public debt. This increases macroeconomic profit Qm, according to the Profit Law. The point is that this is only the beginning. Profit will continue to increase exponentially and with it the number of billionaires/ trillionaires. It does not matter how bad the real economy performs. The growing public debt ultimately benefits WeTheOligarchy and not WeThePeople. Since the household sector is taxed for interest on government bonds, there is an absolute upper limit for the growth of public debt, which is roughly given by public_debt * avg_interest_rate ≦wage_income. Economic problems, though, start much earlier because of other irreducible items in the budget (military, health, etc.) and a not exactly known upper tax-to-income limit. The limit moves further away into the future if the interest rate approaches zero. If interest rates go up, the wall will be hit sooner. France is a clear example of how Capitalism works and that it will break down with systemic necessity.

— AXEC (@EgmontHandtke) October 11, 2026

Occasional X: The foul spirit of political economics (CCCLXXX)

Adam Smith was not an original thinker, not a scientist, not an economist; he was a populist moralizer. ⇓ Economics has been failed/fake science since the Founding Fathers. It has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. Economics is about how the economy works. It is a genuine systems science. Adam Smith made it a 'moral science'. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. Economic policy advice has never had valid scientific foundations. Economics has always been a propaganda tool for a low-IQ audience. Continuing to promote Adam Smith is not science, but disinfotainment.

— AXEC (@EgmontHandtke) October 11, 2026

Occasional X: The foul spirit of political economics (CCCLXXIX)

“That's where the jokes come from about how if you gather 5 economists, there are 6 opinions, and 2 of them are Keynes's. …The most important lesson from Keynes was to change one's mind when the times change. Being a free trader or protectionist, fiscally contractionary or expansionary, depends on the circumstances. Today we are overrun by dogmatists with universal and timeless truths.” (Matías Vernengo) Keynes, too, misunderstood the concept of profit because he was too stupid for elementary algebra. Consequently, he botched the long-overdue Paradigm Shift from microfoundations to macrofoundations. This initial blunder means that the entire field of economics (both micro and macro) is proto-scientific garbage. As a result, economics has never been more than silly blather for a low-IQ audience. After-Keynesians never realized the scientific blunder; their incompetence is represented by Matías Vernengo. However, criticism does not lead to progress but to the swamp where 'nothing is clear, and everything is possible.' (Keynes). Only the Paradigm Shift leads from the swamp of opinions (doxa) to scientific knowledge (episteme). The axiomatically correct macroeconomic Employment Law ⇓ tells one how ― in the elementary case ― the employment L depends ― under the condition of product market clearing ― on ρE and ρF. The factor cost ratio ρF is composed of the wage rate W, the inverse productivity R, and the price P. The ratio ρE depends on (public/private) deficit-spending/money-creation. The Law consists of measurable variables and is testable if generalized. The macroeconomic price mechanism is embodied in ρF. An increasing price P means falling employment L, and an increasing wage rate means increasing employment. A falling price increases employment. A rising price decreases employment. The closer ρF is to 1, the higher is employment. The Austrians claimed that the price mechanism (which is embodied in ρF) works automatically towards full employment, and ρE>1, i.e., deficit-spending/money-creation is ultimately toxic. Keynes claimed that the price mechanism fails because of stickiness and that therefore ρE>1 must do the heavy lifting. Say's Law formally means ρE=1; Effective Demand means ρE>1. The latter is necessary if the price system ρF does not automatically produce full employment. The 'universal and timeless truth' is that both Austrianism and Keynesianism are axiomatically false. It is high time that both go down the scientific drain. For more on the correct employment theory, see Cross-references: Employment https://t.co/RfA1hj72qQ

— AXEC (@EgmontHandtke) October 11, 2026

Occasional X: Economics and math ― they just can't get it together (XV)

“if you were thinking of applying to phd programs for math/tcs soon you may want to consider econ instead econ theory has a healthy culture towards valuing new questions, balancing application with elegance, and is well positioned for relevance in 'doing math when math is solved'.” (will brown) Economics is not yet a science, and 'scientism' is as good a characterization as Feynman's 'cargo cult science', but all this has nothing to do with mathematics. The fact is that economists (i) used the false branch of math, and (ii) they committed tons of formal errors. For proof, see Barzilai and the crumbling of the unsafe citadel https://t.co/cLMQK9ieC1 Mathiness and the Ur-Blunder https://t.co/GnEHzPlV6P Profit (not mathematics) is the key https://t.co/kkkZquaGyE Cross-references: Math/Mathiness https://t.co/fDUM2CxdsP The history of economic thought is the history of scientific failure. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. When the axioms are inconsistent, mathematics cannot develop its analytical power. To claim 'econ theory has a healthy culture' is one of economists' worst self-deceptions. The opposite is true.

— AXEC (@EgmontHandtke) October 10, 2026

Occasional X: The foul spirit of political economics (CCCLXXVIII)

“'That great cosmic principle of becoming': elucidating Ludwig von Mises’s multifaceted account of the origin, development and function of the division of labour, by Jonathan Cole.” (Economic thought) Ludwig von Mises never understood profit, and by logical consequence, how the economic system works. The 'great cosmic principle of becoming' didn't help him much. Like other approaches, Austrianism has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. Actually, economics is a genuine systems science. The free-market economy runs on profit. Macroeconomic profit is given by the axiomatically correct Profit Law Qm≔(I−Sm)+(G−T)+(X−M)+Yd. The Law implies PublicDeficit-Is-PrivateProfit Qm≔(G−T)>0, i.e., macroeconomic profit is (co-)produced by deficit-spending/money-creation, i.e., the growth of public debt. In free-market economies, public debt has increased with minor interruptions for over 200 years. Therefore, Qm≔(G−T)>0 is a critical element of the economy's survival. The minimum requirement of a free-market economy is that macroeconomic profit is greater than zero, i.e., Qm≥0. If Qm<0, recession/depression/breakdown results. This is the main economic principle; all other explanations of how the economy works are secondary. Utility/profit maximization or free people on free markets or competition or hard work or innovation or the entrepreneur do not keep the economy above the zero-profit cutoff. Scientifically, it's rather simple: no macroeconomic profit, no economy. But economists are only look-alike scientists. They have never had enough brains to understand the objective, systemic facts, i.e., the existential preconditions. Free-market economies are continuously saved from breakdown by the deficit-spending/money-creating duo of Treasury/Central Bank, i.e., the State. This means that the Austrian premise that the unfettered free-market economy is a self-adjusting, self-stabilizing, and self-optimizing system is axiomatically false. Austrianism is failed/fake science. Neither von Mises nor the sorry bunch of followers ever understood what keeps the economy going. The History of Economic Thought is the mindless repetition of economists' intrinsic scientific incompetence. It is driven by the cosmic principle of stupidity.

— AXEC (@EgmontHandtke) October 9, 2026

Occasional X: How it works (DXXIV)

“Since the end of 2019, US corporate profits after tax are up 76%. Nominal GDP - the total value of everything the economy produces - is up just 48%. That is not all clever management and artificial intelligence. A large part of it is redistribution. For almost 60 years, workers’ share of US national income - the labour share - hovered around 78% once you strip out the business cycle. Today it is down to 72%, the lowest since 1963, which is as far back as my data go. What workers have lost, companies have gained. This is where Michał Kalecki comes in.” (Lars Christensen) Neither Lars Christensen nor Michał Kalecki ever understood profit. As a logical consequence, they never understood how the economic system works. For details, see Cross-references: Kalecki https://t.co/FemYl1aA8M The monetary economy in general, and the US economy, in particular, thrives on growing private/public debt. If this growth stops, the economy implodes. Macroeconomic profit Qm is given by the axiomatically correct Profit Law Qm:=(I−Sm)+(G−T)+(X−M)+Yd. The Law implies Qm:=(G−T)>0, i.e., macroeconomic profit is (co-)produced by deficit-spending/money-creation, i.e., the growth of public debt. The minimum requirement for a free-market economy is that macroeconomic profit is greater than zero, i.e., Qm≥0. If Qm<0, recession/depression/breakdown results. The free-market economy is continuously saved from breakdown by the deficit-spending/money-creating duo Treasury/Fed, i.e., the State. This means that the premise of mainstream economics, i.e., that the unfettered free-market economy is a self-adjusting, self-stabilizing, and self-optimizing system, is axiomatically false. This means that economics is a failed/fake science. Ultimately, this means that the representative economist is scientifically incompetent. Michał Kalecki was no exception. Currently, President Trump explodes the public debt. This increases macroeconomic profit Qm according to the Profit Law.

— AXEC (@EgmontHandtke) October 9, 2026

Occasional X: The foul spirit of political economics (CCCLXXVII)

https://www.unz.com/bhua/marx-without-communism-and-propaganda/#comment-7810065

Link

Occasional X: Clueless economists / Distribution, Inequality (XXIII)

“People ask me what is my aim when I write on inequality (pre-order my book btw). Some expect me to answer that its because I want to show some people (like Zucman, Piketty and Saez) are wrong. They are wrong to think that. My objective is to speak to those who are interested in listening — whether they agree with me or not already. In fact, any true social scientist should think that way: the next margin of convincing people that your results are correct.” (Vincent Geloso) To think that he is a 'true social scientist' is the economist's methodological ur-mistake. Vincent Geloso never understood profit and, by consequence, how the economic system works. Because his Profit Theory is wrong, his Distribution Theory is wrong. The free-market economy runs on profit. Macroeconomic profit is given by the axiomatically correct Profit Law Qm:=(I−Sm)+(G−T)+(X−M)+Yd. The Profit Law implies PublicDeficit=PrivateProfit Qm:=(G−T)>0, i.e., macroeconomic profit is (co-)produced by deficit-spending/money-creation, i.e., the growth of public debt. In free-market economies, public debt has increased with minor interruptions for over 200 years. Therefore, Qm:=(G−T)>0 has been a critical factor for Capitalism's survival. The free-market economy is continuously saved from breakdown by the deficit-spending/money-creating duo of treasury/central bank, i.e., the State. This means that the premise of legacy economics, i.e., that the unfettered free-market economy is a self-adjusting, self-stabilizing, and self-optimizing system, is axiomatically false. This means that economics is failed/fake science. Economists are not scientists. They are mostly silly wafflers for a low-IQ audience. Vincent Geloso is living proof. The free-market polity is an Oligarchy with parliament / treasury / central bank / capital markets / big business / three-letter agencies as integral parts. With the other determinants excluded for the moment, private financial wealth grows with public debt. Eventually, WeTheOligarchy owns the financial assets, and WeThePeople owe the public debt and are taxed for interest on government bonds as long as the debt is rolled over. Interest payments on the debt reduce their disposable income for an indefinite time. The government taxes WeThePeople on behalf of WeTheOligarchy. This profit/interest/tax triple-whopper produces wealth for WeTheOligarchy and debt and real-income reductions for WeThePeople. In addition, by reshuffling debt, resetting interest rates, and taking losses, the central bank acts as a direct profit pump. Its losses reappear mainly as profits of the business sector, particularly the banking sub-sector. In addition to legitimate monetary operations, the Fed is well-positioned to carry out or support illicit operations that are economically equivalent to putting counterfeit money into circulation. The volume of illicit deficit-spending and money-creation, as well as the quantity of Dark Money in circulation, is not publicly known. Therefore, Distribution Theory has no empirical leg to stand on. The financial sub-sector, big business, and billionaires recycle some of their profits and financial wealth to control major public, private, and political institutions. Thus, they corrupt the polity. In essence, this is how the self-alimentation and self-preservation of WeTheOligarchy work and how 'The Great Enrichment' comes about.

— AXEC (@EgmontHandtke) October 8, 2026

Occasional X: AI — boosting scientific competence in economics (XIX) / Axiomatization

“With math essentially being delegated to OpenAI, here's what I predict for economics and the social sciences more generally: The top tier of research will just become better and it will be normal human-led research where AI is used for scale (e.g. conducting qualitative interviews with relevant populations, running behavioral interventions in the field, analyzing massive text data, etc.)” (Ingar Haaland) Ingar Haaland clearly has no understanding of how science works. Economics has been failed/fake science since the Founding Fathers. It has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. Top-tier academic economics is cargo cult science. Actually, economics is about how the economy works. It is a genuine systems science. To finally become a science, economics needs a Paradigm Shift from false behavioral microfoundations and false Keynesian macrofoundations to true macrofoundations (⇓ AXEC121l) Without the Paradigm Shift, AI is just another form of disinfotainment.

— AXEC (@EgmontHandtke) October 7, 2026

Occasional X: Scrap the EconNobel (XLXIX)

“Economics is the *only* scientific field in which the concentration of institutional affiliations of award-winning researchers (i.e., more winners at top universities) has increased over time.” (Florian Ederer) Prizes are often not based on true merit. Like the Oscars, they are mainly a marketing/PR instrument. Honoring the look-alike happens in all walks of life. Most economics prizes are NOT a reward for the achieved growth of scientific knowledge but for political disinfotainment. Although it claims to be a science, economics is not one. The founding fathers defined economics as a social science, and, accordingly, it has been based on subjective/behavioral assumptions/axioms. This has been the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. ⇓ Economic policy guidance has never had valid scientific foundations. To this day, it has no scientific truth-value but only political use-value. For more about the cargo cult of economics, see Links on the Economics Nobel https://t.co/42laSAvAX6

— AXEC (@EgmontHandtke) October 7, 2026

Occasional X: The futile attempt to recycle Marginalism (IV)

“In 1871, Menger published his groundbreaking Principles of Economics, arguing that the value of a good is not determined by the labour required to produce it, but by the subjective importance individuals place on it. Value is not objective or embodied in objects. It is marginal - determined by the least important use of a good to the individual. Jevons and Walras reached similar conclusions around the same time. Together, they launched what became known as the Marginalist Revolution, shifting economics from production costs and labour theories toward subjective marginal utility.” (Creative Deduction) Marginalism is the worst example of scientific failure. For over 200 years, economics has said it is a science, but it isn't. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory and axiomatically false and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. The root cause of economics' scientific failure lies in the foundational propositions/assumptions/axioms. It is the fatal methodological blunder to base economics on behavioral/subjective microfoundations instead of objective/systemic macrofoundations. Legacy economics is built upon this set of foundational propositions, a.k.a. 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) Marginalism comes from “HC2 agents individually optimize subject to constraints”. It's unnecessary to emphasize that economists borrowed this idea from physics/mathematics, where it was discovered that light takes the shortest possible time. In other words, Nature seems to apply an optimization principle. And this was where calculus came in, which reappeared later in economics as Marginalism, i.e., as utility/profit maximization. The behavioral axioms and auxiliary assumptions like well-behaved production functions are methodologically untenable (⇓ AXEC113h). The point is that the market transforms the endless multitude of subjective values into one objective market price. The claim that Austrianism refutes Marxianism has no scientific substance. Both are political agenda pushing dressed up as science. For details, see ⇒ Cross-references Axiomatization and Marginalism is the landmark of scientific incompetence https://t.co/r1Lmt9qZ6D It's high time to flush the 'architects of subjective value', i.e., Carl Menger, Stanley Jevons, Léon Walras, Philip Wicksteed, and Eugen von Boehm-Bawerk down the scientific drain.

— AXEC (@EgmontHandtke) October 7, 2026

Occasional X: The foul spirit of political economics (CCCLXXVI)

“What the Marxist fails to grasp is that the market is neither moral nor immoral. It is simply a coordination system. And prices are not 'good' or 'bad' either. They are prices and nothing more. Period.” (Diego Angulo) Economists never understood profit and, by logical consequence, how the markets function. (i) The free-market system is, in the last instance, a quasi-Darwinian selection mechanism, i.e., the economic analog to triage in medicine. For example, during a famine, only the rich person can pay the high price of bread and survive. In contrast, the poor person leaves the market empty-handed to die of starvation. The market's primary function is NOT efficient information-processing/resource-allocation (Hayek's hallucination) but the redistribution of the Quality-of-Life. In economically extreme situations, the Invisible Hand kills anonymously. Because the price mechanism is a powerful tool, the most important task of an economist ― who is smart enough to know on which side his bread is buttered ― is to praise its informational magic, its efficiency, or its welfare effects. This distracts from the fact of selection. The optical illusion is this: the price is co-determined by nominal demand, and demand depends on different earnings, profit distribution, and different accumulated wealth. The price structure distributes in any period real output/wealth to already existing financial wealth. It distributes the Quality-of-Life. The problem is that richness often does not come from merit but from fraud, exploitation, crime, primitive accumulation, crime, or simply printing money. The price mechanism has not much to do with abstract optimal allocation of resources but makes sure that the Quality-of-Life is ultimately allocated to the Oligarchy. (ii) Everybody understands that macroeconomic profit must be greater than zero. Otherwise, firms go bankrupt, and the breakdown starts. Therefore, profit has existential primacy in the free-market economy, not utility/profit-maximizing free people on free markets. The axiomatically correct macroeconomic profit formula reads: Qm:=Yd+(I−Sm)+(G−T)+(X−M). It holds for every monetary economy, independently of political ideology. Macroeconomic profit is equal in Capitalism and Socialism according to the Profit Law. The Profit Law implies Public-Deficit-is-Private-Profit Qm:=(G−T)>0, i.e., macroeconomic profit is (co-)produced by deficit-spending/money-creation, i.e., the growth of public debt. In free-market economies, public debt has increased with minor interruptions for over 200 years. Therefore, Qm:=(G−T)>0 must be considered a critical factor for Capitalism's survival. Capitalism is continuously saved from breakdown by the deficit-spending/money-creating duo of Treasury/Central Bank, i.e., the State. The State has existential primacy, not the free market or the price system. Capitalists and Socialists have never really understood what profit is. They never understood how the economic system works. Friedrich Hayek never came intellectually above the microeconomic level and fell foul of the Fallacy of Composition. He was not a scientist but a political agenda pusher — not one iota different from Karl Marx.

— AXEC (@EgmontHandtke) October 4, 2026

Occasional X: The foul spirit of political economics (CCCLXXV)

“It is a shame that many people who are against austerity, neoliberalism, trickle down economics, or Milton Friedman, have absolutely no idea what those words mean, and have not read a single text from Friedman or Hayek or any of the figures they dislike, and when they are asked about, say Pinochet’s Chile, they give a few quantitative statistics and investigate no further.” (Nikolai Rostov) People are a shame, but economists are even worse. Neither orthodox nor heterodox economists have ever understood profit, and consequently how the economic system works. That's scientifically disqualifying. Economics has been failed/fake science since the Founding Fathers. It has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. ⇓ When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. Economic policy advice has never had valid scientific foundations. Economics has always been a propaganda tool for a low-IQ audience. The representative economist is NOT, and never has been, a competent scientist but an agenda pusher / useful idiot / impostor / phrase monger / storyteller / troll / self-glorifier / pseudo-psychologist / media talker / clown in the political Circus Maximus.

— AXEC (@EgmontHandtke) October 4, 2026

Occasional X: The foul spirit of political economics (CCCLXXIV)

“The trap of decline is simple. With public debt, we chose 'insurance' to protect the elderly and fixed incomes. Result: low growth, little innovation. But in stagnation, the demand for insurance grows even more. Causing even more stagnation.” (Tommaso Monacell) The free-market economy runs on profit. Macroeconomic profit is given by the axiomatically correct Profit Law Qm:=(I−Sm)+(G−T)+(X−M)+Yd. The Profit Law implies PublicDeficit=PrivateProfit Qm:=(G−T)>0, i.e., macroeconomic profit is (co-)produced by deficit-spending/money-creation, i.e., the growth of public debt. In free-market economies, public debt has increased with minor interruptions for over 200 years. Therefore, Qm:=(G−T)>0 is a critical factor for Capitalism's survival. The other factor is, of course, private debt. The minimum requirement for a free-market economy is that macroeconomic profit is Qm≥0. If Qm<0, recession/ depression/ breakdown results. Qm≥0 is existential. Free-market economies are continuously saved from breakdown by the deficit-spending/money-creating duo of Treasury/Central Bank, i.e., the State. If the debt growth stops, macroeconomic profit falls, and this is the beginning of a breakdown. It does not matter whether the deficit is from social or military spending. The deficit is the balance of all taxes minus all spending. Therefore, it is propaganda to assign the deficit to social spending and to insinuate that it is for the benefit of WeThePeople. Because PublicDeficit=PrivateProfit, the growing public debt is ultimately for the benefit of WeTheOligarchy. They get the financial assets, and WeThePeople are left with the public debt. Not to forget, interest on public debt is taxed from WeThePeople. The State acts as an interest collector for WeTheOligarchy. Economic decline is a built-in, long-term feature of Capitalism. For details, see Mathematical Proof of the Breakdown of Capitalism https://t.co/T45mXJwNss Blaming economic decline on the elderly is one of the worst propaganda deceptions of all time.

— AXEC (@EgmontHandtke) October 4, 2026

Occasional X: The foul spirit of political economics (CCCLXXIII)

“The rise of neoclassical models and the Cold War purge of Marxist approaches from economics departments severed the link between politics and economics.” (Ingrid Kvangraven) Neither orthodox nor heterodox economists have ever understood profit, and consequently how the economic system works. That's scientifically disqualifying. Economics has been failed/fake science since the Founding Fathers. It has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. ⇓ Economic policy advice has never had valid scientific foundations. Economics has always been a propaganda tool for a low-IQ audience. The representative economist is NOT, and never has been, a competent scientist but an agenda pusher / useful idiot / impostor / phrase monger / storyteller / troll / self-glorifier / pseudo-psychologist / media talker / clown in the political Circus Maximus. Ingrid Kvangraven is a prime example.

— AXEC (@EgmontHandtke) October 4, 2026

Occasional X: Clueless economists / Profit (CLXVII)

@ACphenomen Economists got the subject's foundational economic concept — profit — wrong. This is self-disqualifying. Macroeconomic profit Qm is given by the axiomatically correct Profit Law Qm:=(I−Sm)+(G−T)+(X−M)+Yd. For details, see Cross-references: Profit https://t.co/ifMxxHEc7d

— AXEC (@EgmontHandtke) October 4, 2026

Occasional X: How it works (DXXIII)

“High debt is the price tag of the French social contract entailed by Dirigisme, bloated bureaucracy, and notoriously restive unions.” (Aditya Chaturvedi)

The free-market economy runs on profit. Macroeconomic profit is given by the axiomatically correct Profit Law…

— AXEC (@EgmontHandtke) October 3, 2026

Occasional X: Paradigm Shift (CXXVI)

“Joan Robinson knew that economics isn't a neutral science—it’s all about power. We don't need more unthinking economists parroting econ class teachings. We need rethinkers ready to push for an economy that serves people and planet.” (Rethinking Economics)

The problem with… pic.twitter.com/7dlxe92xdO

— AXEC (@EgmontHandtke) October 2, 2026

Occasional X: The foul spirit of political economics (CCCLXXII)

“Russell also said Keynes was the cleverest ('sharpest and clearest') person he had ever met. (Kaushik Basu)

Keynes, too, misunderstood the concept of profit because he was too stupid for elementary algebra. ⇓ Consequently, he botched the long-overdue Paradigm Shift from… pic.twitter.com/FjOnKDtarC

— AXEC (@EgmontHandtke) October 2, 2026

Occasional X: The foul spirit of political economics (CCCLXXI)

“As I joked in one of my first blog posts, the dispute between the Monetarists and the Keynesians was resolved when the Keynesians conceded all the substantive points and the Monetarists agreed to be called Keynesians.” (Ariele)

That's pure economics brain rot.

Economics has… pic.twitter.com/Y0h9HArZwW

— AXEC (@EgmontHandtke) September 30, 2026

Occasional X: The futile attempt to recycle MMT (CCVIII)

“Government spending creates private-sector income.” (MMTAction)

It sounds innocent, but it's a shell game. First, there is no such thing as the 'private sector'; there is only the business sector and the household sector. To add them mechanically together lets (i) profit/… pic.twitter.com/TYb0altRI2

— AXEC (@EgmontHandtke) September 30, 2026

Occasional X: The futile attempt to recycle MMT (CCVII)

“Government spending creates private-sector income. Every pound the state spends is a pound in someone's account. So why do politicians pretend deficits are reckless? Because they don't understand sectoral balances.” (MMTAction)

Neither do MMTers.

There is no such thing as… pic.twitter.com/PNsK8ctxBY

— AXEC (@EgmontHandtke) September 30, 2026

Occasional X: The futile attempt to recycle Austrianism (CXXXII)

Friedrich Hayek never understood profit and, by logical consequence, how the economic system works. This is self-disqualifying and is a shame for academia.

Hayek got economics wrong; whether his psychology/sociology/history/politics is any better is an entirely separate…

— AXEC (@EgmontHandtke) September 30, 2026