AXEC: New Foundations of Economics: Axiomatization

Showing posts with label Axiomatization. Show all posts

October 29, 2026

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

“You have yet to answer any basic question about YOUR model.” (RFB) With the self-declaration as an economist, every economist has to answer the basic question of how the economy works. He has to answer it to the public, not specifically to any hopelessly deranged member of the Austrian political agenda-pusher gang like RFB. My answer is given with the Economics God Equation (⇓ AXEC25e). The Equation embodies the open simulation of the elementary production-consumption economy from t=0 to infinity, with the change rates as random variables. The variable ∏ means a random path. Put simply, you have the development of the most elementary economy in one equation. That's awesome, indeed, compared to the heap of inconclusive Austrian psycho-social blather. The God Equation is based on a set of systemic axioms. Austrian economics is based upon the Action Axiom, which boils down to the tautology: people act purposefully. Nobody can deny this, but nothing follows from it. The God equation is publicly available on the Internet, but neither you nor Grok AI have found/understood it. To summarize the discussion correctly: The answer to 'how the economy works' has been given with the God Equation. As an Austrian, you have not realized anything. That's quite natural. Austrianism is the last refuge of scientifically incompetent mathophobe political agenda pushers. RFB is living proof.
— AXEC (@EgmontHandtke) October 29, 2026

October 28, 2026

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

@rrbelloff @soloyopee @Handre “You keep going there. Well Austrian is bullshit.” (RFB) True, except for Schumpeter. He understood what the starting problem was (⇓ AXEC196) https://t.co/Tt8Cie8ENW
— AXEC (@EgmontHandtke) October 28, 2026

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

“Dude, if you have the absolute certain knowledge, why don't you go and fix this Wikipedia article, so that we can all learn from your wisdom?” (Yope) The AXEC Paradigm was submitted back in 2020. For details, see Wikipedia, economics, scientific knowledge, or political agenda pushing? https://t.co/A1iycUIDUA By now, all birds sing from the sky that Wikipedia has been captured by political agenda pushers and is no longer a reliable source. As far as economics is concerned, it is scientifically corrupted. They apply private censorship, but the normalo cannot see what's missing. Instead, he swallows provably false Austrianism.
— AXEC (@EgmontHandtke) October 28, 2026

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

“Oh, look, Grok thinks you are full of shit. I can try Claude if you want another opinion?” (RFB) No, I don't want another opinion. With the Grok piece, we are methodologically about 3000 years back in time. Grok doesn't know the difference between opinion (doxa) and knowledge (episteme). With brute computer power, Artificial Intelligence has become the biggest Sophist of all time. In my view, there is no other way to end the hype but to run American and Chinese AI against each other and check who produces only opinion and who can do science. I have a pretty good idea of who will lose and who will win. That Austrians are pro-Grok is an almost sure indicator that it will lose. Austrians are genetically on the wrong side. To recall, it was the ancient Greeks who first introduced the distinction between doxa and episteme, i.e., opinion and knowledge. And then they drew the line of demarcation between non-science and science. The term ‘conventionalist stratagem’ has been introduced into methodology by Popper. Boiled down to essentials, it amounts to the application of all possible communicative means in order to prevent a clear-cut true/false outcome. As a matter of fact, the stratagem issue goes back to the origin of science. Plato had been confronted by the Sophists, whose selling proposition was that they could win the client’s case no matter whether they were de facto right or wrong. “Plato’s main concern with the Sophists is that their rhetoric does not provide an adequate view of justice Doxa – public opinion: Sophistic manipulation of doxa is aimed at persuasion only, Episteme – true knowledge: Plato’s goal beyond persuasion is to discover epistemic truth.” I will wait for the great showdown between the cheap Grok hype and a genuine AI. Current economics is the ideal case for establishing whether AI can do only big-style Sophistry and whether it is failed/fake science (cargo cult science in Feynman's term). In the meantime, some obvious faults of Grok: G: “This is a promotional claim from Egmont Kakarot-Handtke’s AXEC …” A: No, this is the clear answer to a clear request: “Define the 'economic system'. I'll wait...” (Yope) Sophistry, i.e., framing, starts with the first sentence. G: “… it does not constitute “systemic economic laws” in the sense of robust, predictive, behavior-independent regularities … nor does it fully replace von Mises’s Action Axiom.” A: Yes, it does; the Paradigm Shift does exactly this. G: “The “First Economic Law” consolidates the axioms/ratios into something like …. (under market-clearing conditions).” A: Provably false, ρX is generally NOT market clearing. Grok overlooked the paper Primary and secondary markets https://t.co/whzBvrTfRr G: “The model is elementary by design and therefore limited.” A: Sheer idiocy. Axioms are the most abstract and shortest formulation of a discipline. Limitation is the very characteristic quality. Grok does not understand the starting problem: “What are the propositions which may reasonably be received without proof? That there must be some such propositions all are agreed, since there cannot be an infinite series of proof, a chain suspended from nothing. But to determine what these propositions are, is the opus magnum of the more recondite mental philosophy.” (J. S. Mill) To call axioms accounting identities is one of the dumbest phrases in economics. G: “'Behavior-free' is largely illusory.” Sheer idiocy. The axioms are systemic, i.e., behavior-free. That does not mean that the AXEC approach is behavior-free. Grok obviously overlooked the Propensity Function. The Propensity Function as general formalization of Economic Man/Woman https://t.co/aiUTmdmA6l G: “The framework has not displaced mainstream macro, Austrian economics, or other approaches in the literature; it remains a niche blog/SSRN project with strong claims and limited engagement with formal testing or competing explanations.” What does this prove? That the academic representatives of legacy economics are intellectually incapable of getting out of their provably false Paradigm. They violate scientific standards since the Founding Fathers: “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) Grok only parrots long-refuted excuses. For details, see Failed economics: The losers’ long list of lame excuses https://t.co/0wJu2eGRjN Grok is a new iteration of Sophistry. It stands no chance against genuine scientific reasoning. Grok will go down the scientific drain, together with Walrasianism, Keynesianism, Marxianism, and Austrianism. Let the AI games begin with economics as the all-decisive test case.
— AXEC (@EgmontHandtke) October 27, 2026

Schopenhauer wrote the handbook for Sophists: Die Kunst, Recht zu behalten

October 27, 2026

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

“Define the 'economic system'. I'll wait...” (Yope) The elementary economic system is defined in Graph AXEC112e ⇓. All variables are measurable in principle. Needless to emphasize that it can be differentiated to individuals. The Graph fully replaces von Mises's silly Action Axiom. If you don't understand anything, ask the smart kid in the next kindergarten.
— AXEC (@EgmontHandtke) October 27, 2026

October 26, 2026

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

“The action axiom is the foundational proposition in Austrian economics (praxeology) stating that humans act purposefully to achieve desired ends. Formulated extensively by Ludwig von Mises, it defines human behavior as the conscious use of means over time to move from a less satisfactory state to a more satisfactory one.” (Google AI) The Austrian Action Axiom is an empty tautology. The AXEC axioms are objective/systemic, not subjective/behavioral. (A0) The objectively given and most elementary configuration of the economy consists of the household sector and the business sector, which in turn consists initially of one giant fully integrated firm. (A1) Yw=WL wage income Yw is equal to wage rate W times working hours L. (A2) O=RL output O is equal to productivity R times working hours L. (A3) Ec=PX Consumption expenditures Ec are equal to the price P multiplied by the quantity bought or sold X. Dimensions: Yw → $ per year, W → $ per hour, L → hours per year, O → units per year, R → units per hour, Ec → $ per year, P → price per unit, X units per year. All axiomatic variables are measurable in principle. This is the precondition for testing. You cannot test the Action Axiom or other Austrian tenets. Austrians don't even get the foundational concept of economics —profit— right. AXEC solves the starting problem. J. S. Mill put it thus: “What are the propositions which may reasonably be received without proof? That there must be some such propositions all are agreed, since there cannot be an infinite series of proof, a chain suspended from nothing. But to determine what these propositions are, is the opus magnum of the more recondite mental philosophy.” Mises's Action Axiom is the starting point of inconclusive behavioral blather. Austrianism is failed/fake science. Austrians neither understand science nor economics. RFB is living proof.
— AXEC (@EgmontHandtke) October 26, 2026

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 in particular, see AXECquery.

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

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

October 12, 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: 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.

September 23, 2026

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

“But eventually the math became the master rather than the servant. Assumptions about perfectly rational people, equilibrium, efficient markets, and simplified human behavior persisted partly because adding more of the messy reality of how humans and economies actually work makes… pic.twitter.com/8NN052fXuY
— AXEC (@EgmontHandtke) September 23, 2026

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

“A very rudimentary first draft of my planned monograph on marginalism, detailing the origins of marginal analysis, its evolution, criticisms and so on. ” (Nikolai Rostov)

Marginalism is the worst example of scientific failure.

For over 200 years, economics has said it is a… pic.twitter.com/IVE9CwV9Gm
— AXEC (@EgmontHandtke) September 23, 2026

September 19, 2026

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

“Much of the foundational *premises* we employ in a model (e.g. “profit maximisation”) are not testable in the strict sense because they reflect tendencies, not invariably correct truths. … So from certain behaviours of human action (with a combination of a priori and a… pic.twitter.com/la8QgUVGLb
— AXEC (@EgmontHandtke) September 19, 2026

September 9, 2026

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

“Contrary to popular belief, Austrian school economics is not an a priori science.” (Glyph)

“The core foundational principle of the Austrian School of Economics is the action axiom, which states that human behavior is purposeful.

The Action Axiom

Definition: People consciously…
— AXEC (@EgmontHandtke) September 9, 2026

August 31, 2026

Occasional X: Paradigm Shift (CXIX)

“I just received CambUP_Econ for the Macroeconomics 3 course in the economics program at the Colombian School of Engineering, where an introduction to DSGE models is given at the undergraduate level!!!!” (Alvaro Chaves)

Each paper/book that has the word equilibrium/GE in the… pic.twitter.com/hDYl6NLEkf
— AXEC (@EgmontHandtke) August 31, 2026

August 26, 2026

Occasional X: Clueless economists / Equilibrium (V)

“The Achilles heel of economic theory is that in these so-called purely competitive markets we have never been able to show that equilibrium will ever be attained. In this imaginary world, the economy sails on a steady path until some outside shock knocks it temporarily off…
— AXEC (@EgmontHandtke) August 26, 2026

August 25, 2026

Occasional X: Clueless economists / Inflation / Deflation / Stagflation (XLXXIII)

“Britain restored the gold standard in 1821, pegging sterling at £3 17s 10½d per troy ounce, and the following decades gave you one of the most instructive experiments in monetary history: falling prices coexisting with explosive real growth.” (Handre)

This follows from the… pic.twitter.com/0I3hTtj0Wx
— AXEC (@EgmontHandtke) August 26, 2026

August 15, 2026

Occasional X: The history of economic thought is the history of scientific failure (XLVI)

“This SEP entry on Capitalism is garbage. I would recommend a full, clean reboot.” (Otto Letho)

The History of Economic Thought is the history of scientific failure.

Friedrich Hayek never understood profit and, by logical consequence, how the economic system works. This is… pic.twitter.com/lBv5n6DXWw
— AXEC (@EgmontHandtke) August 15, 2026

August 3, 2026

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

“Let me offer a sensible middle ground between rigid empiricism (inductivism) and Praxeology, which is rigid deductivism.” (Nikolai Rostov)

No, there is no middle ground between true and false. Austrianism is provably false. If Austrianism were to disappear overnight, this would… pic.twitter.com/b4REJ72Bze
— AXEC (@EgmontHandtke) August 3, 2026

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Knowledge only — no opinion

Science does not explain everything, but non-science explains nothing.

Neither orthodox nor heterodox economics satisfies the scientific criteria of material and formal consistency.

Economists cannot explain how the economy works. The Profit Theory is false since Adam Smith. There is much opinion and little knowledge.

Opinion is the realm of political economics, knowledge is the realm of theoretical economics.

Political economics is scientifically worthless.

Theoretical economics is built upon clearly stated premises, i.e., upon a set of axioms.

Orthodoxy got the axiomatic foundations wrong and Heterodoxy has none at all.

Economics is a failed science. Economists are incompetent scientists.

Profit

Neither Classicals, nor Walrasians, nor Marshallians, nor Marxians, nor Keynesians, nor Institutionialists, nor Monetary Economists, nor MMTers, nor Austrians, nor Sraffaians, nor Evolutionists, nor Game theorists, nor EconoPhysicists, nor RBCers, nor New Keynesians, nor New Classicals ever came to grips with profit. Hence, they all fail to capture the essence of the market economy.

Because of this, economists have nothing to offer in the way of a scientifically founded economic policy guidance.

The hybrid science

As a first approximation, one can agree on the general characteristic that the economy is a complex system.

However, with the term system one usually associates a structure with components that are non-human. In order to stress the obvious fact that humans are an essential component of the economic system the market economy should be characterized more precisely as a complex hybrid human/system entity.

The scientific method is straightforwardly applicable to the sys-component but not to the hum-component. While it is clear that the economy always has to be treated as an indivisible whole, for good methodological reasons the analysis has to start with the objective system-component.

In gestalt-psychological terms the economic system is the foreground, individual behavior the background. Common sense wrongly insists that the hum-component must always be in the foreground. This fallacy compares to geo-centrism. The economic system has its own logic which is different from the behavioral logic of humans. The systemic logic is what Adam Smith called the Invisible Hand.

There are systemic laws but no behavioral laws. Systemic laws have the same methodological status as physical laws.

Neither Orthodoxy nor Heterodoxy can tell what the systemic laws of the actual monetary economy are.

Whether the outcome of the human/system-interaction is good or bad is a politcal question that lies outside of theoretical economics. Theoretical economics explains how the actual economy works - no less, no more.

Narrative vs.Theory

Psychological, sociological or behavioral assumptionism cannot yield anything other than a gossip model of the world. Second-guessing the agents is not economic analysis.

Science deals exclusively with propositions that can in principle be decided by objective means. The rest is opinion, faith, phantasy, motive speculation, allegation, hallucination, myth, paranoia, ink-blot association, psychology, philosophy, in one word: storytelling.

Storytelling is the original mode of communication in the social realm — except science.

Political economics is storytelling and, by default, the natural habitat of confused confusers. Walrasianism, Keynesianism, Marxianism, Austrianism are social narratives and not scientifically valid representations of reality.

"The truth is, most persons, not excepting professional economists, are satisfied with very hazy notions." (Fisher)

In marked contrast, theoretical economics lives up to the standards of material and formal consistency. A scientific theory is the best mental representation of reality that is humanly possible.

Theory starts with a set of objective and consistent axioms.

Paradigm Shift

"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)

"As will become evident, there is more agreement on the defects of orthodox theory than there is on what theory is to replace it: but all agreed that the point of the criticism is to clear the ground for construction." (Nell)

"The moral of the story is simply this: it takes a new theory, and not just the destructive exposure of assumptions or the collection of new facts, to beat an old theory." (Blaug)

"Is it not a fact, which stares at us from the histories of all sciences, that it is much more difficult for the human mind to forge the most elementary conceptual schemes than it is to elaborate the most complicated superstructure when those elements are well in hand?" (Schumpeter)

"The task of producing knowledge against the grain requires imagination." (Mirowski)

"A new idea is extremely difficult to think of. It takes a fantastic imagination." (Feynman)

"The scientific imagination dreams of explanations and laws." (Peirce)

"It is brilliance of imagination which makes the glory of science." (Evans)

"... we know little more now about ‘how the economy works,’ ... than we knew in 1790, after Adam Smith completed the last revision of The Wealth of Nations." (Clower)

Selftest and to watch for

You apply one of these items

• supply-demand-equilibrium,

• general equilibrium,

• marginal utility,

• well-behaved production functions,

• total income = value of output,

• total income = wages + profits,

• I=S,

• wage rate down - employment up,

• behavioral axioms?

Then you are out of science because of unnoticed material or formal inconsistency.

Every economist who uses the concept of equilibrium is scientifically incompetent because she/he failed to notice that equilibrium is an economic nonentity.

Practically this means: as soon as the word equilibrium appears in an economic text it can be thrown into the waste basket. The same holds for all other nonentities.

The vast majority of economists deals mainly with nonentities. This is why Walrasianism, Keynesianism, Marxianism, Austrianism is scientifically worthless.

Since Adam Smith, economic policy guidance has no sound scientific foundations.

To be replaced (1)

The core premises of Orthodoxy are uncertain and false and this fully explains the failure of the research program.

“As with any Lakatosian research program, the neo-Walrasian program is characterized by its hard core, heuristics, and protective belts. Without asserting that the following characterization is definitive, I have argued that the program is organized around the following propositions: 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 inescapable Paradigm Shift consists of the move from this obsolete hard core to the superior set of structural axioms.

To be replaced (2)

The fundamental equations of macroeconomics have been formulated by Keynes in two lines.

"Income = value of output = consumption + investment. Saving = income - consumption. Therefore saving = investment."

This elementary syllogism is demonstrably false. The demonstration consists in the proof that Keynes could not solve the Profit Puzzle. Neither did Post-Neo-New-Keynesians.

In the most general terms, the economics Paradigm Shift consists in switching from the behavior-centric bottom-up approach to the structure-centric top-down approach. This is comparable to the Copernican turn from geo-centrism to helio-centrism.

Consensus

Economics is a science without scientists. Because they are ignorant of the elementary difference between profit and income, the present generation of economists has not made and cannot make a significant contribution to the discussion about how the actual economy works.

Every orthodox or heterodox economist can convince himself/herself that their profit theory is defective.

Every non-economist can — by applying elementary logic — convince himself that conventional profit theories are false. See 'How the intelligent non-economist can refute every economist hands down'.

Because the profit theory is false the whole of conventional economic theory has to be rejected.

"What is now taught as standard economic theory will eventually disappear, no trace of it will remain in the universities or boardrooms because it simply doesn’t work: were it engineering, the bridge would collapse." (McCauley)

No scientist will ever accept Walrasianism, Keynesianism, Marxianism, or Austrianism. These approaches are logically and/or empirically refuted. This is the actual methodological state-of-art. Walrasians, Keynesians, Marxians, or Austrians are still at the proto-scientific stage. These approaches cannot be improved, only abandoned.

Economists are a public nuisance because they have an opinion on everything but knowledge of nothing.

About me

“Bottom line is that your profit law is just a definition you made up nobody else agrees with, nobody. You are all alone with your precious tautology.” Barkley Rosser

“In any event, your entire theory is based on you doing macro accounting in wacky fashion that nobody agrees with.” Brian Romanchuk

"Your stuff is at least original: it's quite cool after a couple of decades at this to see a fresh Economics. But real promises are not advanced: they were around for millennia until the Greeks obscured them with Metaphysics." Chris Cook

"No mate, they're you-blockers. You have all the personality traits of a crank, and the rest of them have tired of you. You could be 100% right, and you'd still die as your only follower." Steve Keen

"What you are doing fills is all with joy, your constructive critique is most welcome!"

Achim Truger,

German Council of Economic Experts,

in a failed attempt to be ironic

"200+ years of thought and yet you are the only one who gets it—or even understands your argument. Thank god we have you, pseudonymous Twitter user. Otherwise no one would know."

William Luther

Assistant Professor of Economics

in a failed attempt to be funny

"Egmonts profit law is the perfect equation that demonstrates this in action. Put the equation into a spreadsheet and then add government spending and watch how it flows into profits. Enter in some debt (-Sm) and watch too how that flows into profits. It can't go anywhere else."

Dean

About the rest of economics

Walrasianism, Keynesianism, Marxianism, Austrianism, MMT, Pluralism are mutually contradictory, axiomatically false, materially/ formally inconsistent. Economics is a failed science.

“There are three classes of people: those who see. Those who see when they are shown. Those who do not see.” Leonardo da Vinci

In economics, the overwhelming majority belongs to Class III. This explains why economics is after 200+ years still at the proto-scientific level.

The obvious task for every economist is to advance from cargo cult science and political agenda-pushing to science. This is absolutely beyond the means of Class III people.

For 200+ years now, economists are not scientists but agenda pushers, useful idiots, clowns in the political Circus Maximus.

Nopopop

This blog does not add to any popular/un- popular opinion.

This blog does not hand out advice about how to avoid taxes, to get rich on the stock market, to be successful in business, to increase the wealth of nations, to run an economy, to maximize welfare, to prevent national/global bankruptcy, to improve the institutional setup of society, to get out of national/global depression, nor about how to save humankind or any subgroup thereof.

This blog is about the true theory of the actual monetary economy.

"In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion." (Stigum)

Focus

Science is of primary interest and importance. Scientists are of secondary interest.

With regard to science, most people lose focus easily because of a natural preference for anecdotes and gossip over facts or subjectivity over objectivity.

Hence, Schumpeter once considered it necessary to remind his habitually disoriented fellow economists: “Remember: occasionally, it may be an interesting question to ask why a man says what he says; but whatever the answer, it does not tell us anything about whether what he says is true or false.”

Science is about true/false and nothing else.

Disclaimer

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Texts: Parts of arbitrary length of any of the author's texts is and will be used again by the author in papers, books, websites, blogs, and other media without explicit reference. The right to make corrections or minor textual improvements on reutilization is reserved. Therefore, it is always a good idea to double-check for the latest version.

Caution: Do not expect a corroboration of your political view. Neither a refutation. Political economics has been scientifically worthless since Adam Smith. Politics has to be separated from economics because it is categorically different from science. The best science can do and has always done is to prove beyond reasonable doubt that you have been objectively wrong or ignorant until now. Science goes beyond the naive common sense of today and becomes the sophisticated common sense of tomorrow.

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Outlook

To recall, while political economics is storytelling, theoretical economics adheres to scientific standards.

The first task of theoretical economics is to get the axiomatic foundations right. This is what J. S. Mill called the opus magnum. Neither Orthodoxy nor Heterodoxy came up with a reasonable solution to this day. This explains the secular stagnation of economics.

There is no serious alternative to structural axiomatic economics. This is not a matter of opinion but of proof. The sole criteria are material and formal consistency.

All of economics has to be reconstructed from the ground up.

Major economic policy implication

The price mechanism does not work as standard economics hypothesizes. The axiom-based Employment Law states that overall employment increases if the average wage rate increases relative to average price and productivity. This gives one the lever to improve the employment situation all over the world and to fend off deflation without rising debt and without artificial capacity growth. To increase the average price relative to the average wage rate and productivity increases unemployment.

Right policy depends on true theory.

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

Lacking the true theory, economists promote for more than 200 years opinion instead of knowledge.