Bang — the representative economist and supply-demand-equilibrium are dead

Comment on Brian Albrecht on ‘You'll have to pry supply and demand from my cold, dead hands’*

Twitter-Reference and Blog-Reference

Walrasianism, Keynesianism, Marxianism, Austrianism, MMT, and Pluralism are mutually contradictory, axiomatically false, materially/formally inconsistent, and all get profit ― the foundational concept of economics ― wrong. Because of the foundational blunder, the analytical superstructure of economics is false. Economics is failed/fake science.#1 This includes, of course, supply-demand-equilibrium, the one-graph-fits-all explanation of what happens in the economy.

Whether the ‘Totem of the Micro’ which consists of ill-founded marginalistic curves, has scientific value has often been questioned.#2-#10

• “The primitive apparatus of the theory of supply and demand is scientific. But the scientific achievement is so modest, and common sense and scientific knowledge are logically such close neighbors in this case, that any assertion about the precise point at which the one turned into the other must of necessity remain arbitrary.” (Schumpeter 1954)

• “You can make even a parrot into a learned political economist – all he must learn are the two words ‘supply’ and ‘demand’.” (Anonymous in Samuelson 1973)

• “You cannot teach a parrot to be an economist simply by teaching it to say ‘supply’ and ‘demand’.” (Anonymous in Samuelson 2010)

The genuine scientists among economists are well aware of the failure of the overarching general equilibrium theory and acknowledge the need for 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)

This, though, is not how things play out in economics because the vast majority of economists are either stupid or corrupt or both. Economists either apply willful ignorance or come up with silly excuses.#11 Morgenstern criticized this back in 1941: “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.”

Refuted theories are not discarded but stubbornly recycled in Econ 101. The disgrace of economics consists of teaching generation after generation approaches that are provably false at the level of elementary algebra.#12

Brian Albrecht has heard about the failure of economics in general and of supply-demand-equilibrium in particular but that does not stop him: “I’m kicking this shindig off with a simple defense of (the increasingly scoffed at by the loudest voices online) supply and demand. It seems silly to need to defend supply and demand within economics circles. But it is 2020… tl;dr We can’t forget how much supply and demand explains about labor markets, especially when teaching students in their first economics course.”

Brian Albrecht does not know that without valid scientific foundations, economic policy guidance is something between worthless and socially disastrous: “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 1991)

To this day, economists do NOT have the true theory. Supply-demand-equilibrium has never been more than educated common sense. Its scientific value is zero. There is a fast and easy way to determine the scientific value of a theory/model. One has to look at what the theory/model says about profit. Profit is the pivot of economics, if profit is false the whole approach is false.#13

Now, how often does the word profit appear in Brian Albrecht's explanation of supply and demand? Not at all, zero! And this tells one without going into detail that Brian Albrecht is one of the many brain-dead blatherers who populate economics and are the very cause for the unassailable fact that economics is for 200+ years now a failed/fake science.

The right thing to do is to bury supply-demand-equilibrium at the Flat-Earth Cemetery and start anew. In methodological jargon, this is called a Paradigm Shift. More specifically, one has to move from provably false Walrasian microfoundations and provably false Keynesian macrofoundations to true macrofoundations.#14

This, though, is entirely beyond the capacities of the representative economist. The only thing they can do is sell their obsolete stuff to mentally retarded students: “We are trying to keep this lighthearted and fun while still discussing important economic ideas. We hope you do too.” Of course, the students do. The history of religion and the entertainment industry proves that young people readily accept any absurdity and stick to it until the end of their lives.

So, what does the correct Law of Supply and Demand look like? It is NOT derived from microfoundations because these end with methodological necessity in the Fallacy of Composition. There is no way to come from microfoundations to an understanding of how the economy works.

Here are the basics of the macrofoundations approach.#15 The elementary production-consumption economy is defined with this set of macroeconomic axioms: (A0) 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) E_c=PX consumption expenditure E_c is equal to price P times quantity bought/sold X.

Under the conditions of market-clearing X=O and budget-balancing E_c=Yw in each period, the price as the dependent variable is given by P=W/R (1a). The price is determined by the wage rate W, which takes the role of the nominal numéraire, and the productivity R. This is the most elementary case.

The macroeconomic Law of Supply and Demand (1a) implies W/P=R (1b), i.e. the real wage is always equal to the productivity no matter how the wage rate W is set or how long the working time L is. Full employment is possible, and the workers always get the whole product O. The workers' living standard depends ultimately on productivity.

The logical next steps are (i) to skip the conditions of market-clearing and budget-balancing, (ii) to differentiate the business sector into multiple firms and markets, and to determine the price structure.

For the time being, real balances are excluded, i.e. it holds X=O. The condition of budget-balancing, i.e. C=Yw, is now skipped. The monetary saving/dissaving of the household sector is defined as S≡Yw−E_c. The monetary profit/loss of the business sector is defined as Q≡E_c−Yw. Ergo Q≡−S.

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

Instant ramifications: (i) Because the mirror image of saving is loss Keynes' I=S is false, (ii) ALL IS-LM models are false, (iii) Post-Keynesianism in ALL variants is false.

For the macroeconomic Law of Supply and Demand follows P=ρ_E W/R with ρ_E≡E_c/Yw. This Law becomes a bit more complex when differentiated for an arbitrary number of firms/markets.

The point to grasp is that the Law of Supply and Demand has to be derived top-down from macrofoundations and NOT bottom-up from microfoundations and silly behavioral assumptions like utility or profit maximization. Time to pry supply and demand from Brian Albrecht's cold, dead hands.

Egmont Kakarot-Handtke

#1 Cross-references: Proto-Science/Cargo Cult Science/Fake Science

#2 Feeble minds, shaky assumptions, and the inevitable failure of economics

#3 The monstrous utility-supply-demand-equilibrium failure

#4 Essentials of Constructive Heterodoxy: The Market

#5 Econ 101: supply-demand-equilibrium is dead for 150+ years

#6 There is NO such thing as supply-demand-equilibrium

#7 How to Get Rid of Supply-Demand-Equilibrium

#8 The Law of Supply and Demand: Here It Is Finally

#9 Price theory — more than beating the dead horse again and again

#10 Ch. 3 Market interdependence in Sovereign Economics

#11 Failed economics: The losers’ long list of lame excuses

#12 Economics is a disgrace ― now more than ever

#13 Profit

#14 Cross-references Paradigm Shift

#15 The canonical macroeconomic model

Related 'Supply-demand-equilibrium employment theory as an example of proto-scientific soapbubbling' and 'Economists never understood how the price mechanism works' and 'Your economics is refuted on all counts: here is the real thing'.

***

“You can make even a parrot into a learned political economist – all he must learn are the two words ‘supply’ and ‘demand’.” (Anon. in Samuelson 1973)

“You cannot teach a parrot to be an economist simply by teaching it to say ‘supply’ and ‘demand’.” (Anon. in Samuelson 2010)

— E.K-H (@AXECorg) September 12, 2020

For more about supply-demand-equilibrium see AXECquery.

The tragedy of economics: stupid/corrupt economists

Comment on Lars P. Syll/Tom Hickey on ‘On war and economics’

Blog-Reference and Blog-Reference

Lars Syll argues: “Models may help us think through problems. But we should never forget that the formalism we use in our models is not self-evidently transportable to a largely unknown and uncertain reality. The tragedy with mainstream economic theory — and the ‘theorists’ that Clausewitz criticised — is that it thinks that the logic and mathematics used are sufficient for dealing with our real-world problems.”

The tragedy with Lars Syll is that he still thinks that mainstream economics is science. Time to take notice that economics is NOT science and never has been. Economics is proto-scientific garbage for 200+ years. Walrasianism, Keynesianism, Marxianism, Austrianism, MMT, Pluralism are mutually contradictory, axiomatically false, and materially/formally inconsistent. Economics is cargo cult science.

What Lars Syll sells as his grand methodological insight is a truism among genuine scientists and well-known among methodologists: “We are very far from being able to predict, even in physics, the precise results of a concrete situation, such as a thunderstorm, or a fire.” (Popper) Or a war, for that matter.

And, guess what, already J. S. Mill was well aware of the methodological situation: “Since, therefore, it is vain to hope that truth can be arrived at, either in Political Economy or in any other department of the social science, while we look at the facts in the concrete, clothed in all the complexity with which nature has surrounded them, and endeavour to elicit a general law by a process of induction from a comparison of details; there remains no other method than the à priori one, or that of ‘abstract speculation’.”

This means nothing more than that figuring out how the economy works requires a certain amount of abstraction. And here is exactly the point where economists in their bottomless methodological incompetence failed. Their blunder is known as Fallacy of Insufficient Abstraction.

The philosopher Tom Hickey hallucinates about science: “Science works quite well and consistently in dealing with physical matters, and fairly well in dealing with biological matters — other than psychology. But the record is not so good with social matters.”

The record is not so good with social matters because so-called social scientists are NOT scientists but stupid/corrupt political agenda pushers. Economists are even too stupid for the elementary algebra that underlies macroeconomics. The fact of the matter is, that economists do not know to this day what profit — the foundational concept of their subject matter — is.#3

To cover the scientific failure of economics with ontological and epistemological wish wash is the personal disgrace of Lars Syll and Tom Hickey within the general scientific disgrace of economics.#4

Egmont Kakarot-Handtke

#1 Scientists do NOT predict the future

#2 Shocking: methodology is a tricky business

#3 Wikipedia, economics, scientific knowledge, or political agenda pushing?

#4 Economics is a disgrace ― now more than ever

Related 'Failed economics: The losers’ long list of lame excuses' and 'Macroeconomics: Economists are too stupid for science' and 'Your economics is refuted on all counts: here is the real thing'. For details of the big picture see cross-references Failed/Fake Scientists

MMT and the unbearable lightness of public debt slavery

Comment on Calgacus on ‘Anthropologist David Graeber, the man behind "We are the 99%" slogan, dead at 59’

Blog-Reference

I said “To recall, Debt: The First 5000 Years is about all forms of debt slavery” and referred to a post of mine.#1.

You answered, “Egmont, were it true that MMT sells children into debt slavery, I would oppose it.”

This if-my-grandma-had-wheels-she-would-be-an-omnibus counterfactual does NOT count as a refutation of my argument.

While nobody denies that debt slavery/bondage#2 is a historical fact and still practice in many countries, MMTers assert that no such thing can ever happen with the MMT policy of deficit-spending/money-creation as long as the debt is internal, i.e. not denoted in foreign currency.

Of course, purely internal debt slavery happens also but WeThePeople a.k.a. the 99-percenters normally do not realize it.

MMT policy is a two-step process:

1. According to the macroeconomic Profit Law it holds PublicDeficit = PrivateProfit. While the Oligarchy gets a free lunch, WeThePeople are taxed in real terms via a one-off unnoticeable price hike (NO inflation!). Deficit spending increases the public debt but WeThePeople does not care much because they think that this is a matter of the state. This is an error. For public debt holds WeThePeople owes the debt and the Oligarchy owns the corresponding financial assets.

2. Now, there is an interest rate greater than zero on public debt. Because the public debt is not paid off but grows continuously through deficit spending, the interest has to be paid for an indefinite time by children, grandchildren, etcetera.

At this point, MMTers apply Lerner’s Lie: “… if our children or grandchildren repay some of the national debt these payments will be made to our children or grandchildren and to nobody else.”

No, rather, the children or grandchildren of WeThePeople will pay annuity/interest to the children or grandchildren of the Oligarchy. They will pay it in the form of taxes. And this is why WeThePeople realize NOTHING. They hate the IRS and the taxman who, as a matter of fact, acts merely on behalf of the Oligarchy which owns the financial assets as the other side of the public debt.

In real terms, the disposable income of WeThePeople’s children, and thus their part of the output is reduced while the opposite applies to the Oligarchy’s children.

When the veil of money/deficit/debt/tax is taken away, the situation is not much different from the children of WeThePeople working part-time on the plantation of the children of the Oligarchy.#4 Therefore, it is economically correct to say that the deficit cheerleader Stephanie Kelton sells children into debt slavery.

Needless to emphasize that academic MMTers and their social media applause trolls stick to Lerner’s Lie and pose as progressive Friends-of-the-People. The fact is that they are merely the useful idiots of the Oligarchy.

Egmont Kakarot-Handtke

#1 Stephanie Kelton sells children into debt slavery

#2 Wikipedia

#3 Some nasty MMT surprises behind the time horizon

#4 For the broader issue of slavery/debt/interest see Leaf Garrit, British Abolition, Another Massive Taxpayer Heist

Related 'Q: How are you going to pay for it? MMT: By stealth taxation!' and 'How to pay for the war and to be bamboozled by economists' and 'How Stephanie Kelton brain-washes a lovely young English girl' and 'How Keynesians, Lernerians, MMTers make the Oligarchy great' and 'Keynes, Lerner, MMT, Trump, Biden, and exploding profit'.

No false-hero memorials (III)

Comment on Barkley Rosser on ‘Assar Lindbeck Passes On’

Blog-Reference

Barkley Rosser remembers: “There are some oddities I shall recount based on gossip from primary sources I have heard from. So when I went to his [Lindbeck’s] Wikipedia page to double check on details of his career, it claimed that the award for James Buchanan in particular in 1986 was especially important for him as part of this general ideological agenda. … At the time Buchanan was pushing for a balanced-budget amendment to the US Constitution, basically a silly idea. But supposedly Lindbeck saw that as a way to send a message to the Reagan administration of disapproval for their high budget deficit policies, and this overcame whatever it was that had previously made Lindbeck so negative on Buchanan.”

Economics is NOT a science. Economists are NOT scientists but clowns and useful idiots in the political Circus Maximus. Because of this, the Bank of Sweden Nobel is a scientific fraud.#1, #2, #3

The EconNobel has never been anything else than a piece of political propaganda. Barkley Rosser “(I used to have good sources on that famous committee, …)” deserves praise for presenting the proof.

To this day, the ‘Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel’ has nothing to do with sciences because there is NO such thing as economic sciences.#4

Egmont Kakarot-Handtke

#1 Links on the Economics Nobel

#2 No False-Hero Memorials (I)

#3 Economics is a disgrace ― now more than ever

#4 How to spot economics trolls

***

Twitter Sep 5

#Economics#FailedScience#FakeScience#CargoCultScience

NoFalseHeroMemorialshttps://t.co/4KbKjjoSoH

— E.K-H (@AXECorg) September 5, 2020

MMT: fraudsters united

Comment on Richard Murphy on ‘Steve Keen’s lightbulb moment on modern monetary theory’*

Blog-Reference

Richard Murphy, Steve Keen, and Stephanie Kelton have been individually refuted some time ago.#1, #2, #3

According to Richard Murphy, the big MMT lightbulb consists of “the deficit creates money”. This is not quite correct because the public deficit creates counterfeit currency.#4 And because of the Profit Law ⇒ Public Deficit = Private Profit this mode of money creation is NOT neutral with regard to distribution but a massive free lunch for the Oligarchy.

Needless to emphasize that distribution is not an issue for the MMT sales team that poses as progressive friends of WeThePeople.

These are the facts

• MMT policy is NOT in the interest of the WeThePeople.

• MMT policy amounts to an abuse of the fiat money system.

• The profit effect of MMT money-creation/deficit-spending strengthens the Oligarchy.

• Politically, MMT is a fraud and scientifically it is garbage.#5

Axiomatic macroeconomics tells one that late capitalism can only survive with ever-increasing public deficit-spending. COVID has made this clear to even the dullest person as deficit-spending explodes around the world. This is why Steve Keen jumped on the MMT bandwagon. His Minsky model now confirms Stephanie Kelton’s new sales brochure. What a happy coincidence!

Egmont Kakarot-Handtke

* Tax Research UK

#1 MMT: Richard Murphy’s battle-for-money hoax

#2 Where advanced Heterodoxy — represented by Steve Keen — took the wrong turn

#3 The Kelton-Fraud

#4 The counterfeit currency printers

#5 For the full-spectrum refutation of MMT see cross-references MMT

All behavior-based economic textbooks are false

Comment on John Komlos on ‘A new real-world economics textbook’

Blog-Reference

Mainstream economics is known for a long time to be dead and in need of 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)

John Komlos echoes this insight “… how misleading it can be to apply oversimplified models of perfect competition to the real world. The math works well on college blackboards but not so well on the Main Streets of America.”

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)

John Komlos takes up the challenge. His textbook “… demonstrates how we should take into account the inefficiencies that arise due to asymmetric information, mental biases, unequal distribution of wealth and power, and the manipulation of demand.”

This is laudable, except for one point: John Komlos’ approach is behavior-centered like the mainstream approach, only the behavioral premises have been changed and are certainly more ‘realistic’. However, John Komlos remains in the old economics-is-a-social-science paradigm. This is a lethal blunder because economics is a systems science. Economics is NOT about how people behave but how the economic system behaves. Human behavior is the subject matter of psychology and sociology and history and political science but NOT of economics.

Why do economists cling so tenaciously to the behavioral approach? Because they are political agenda pushers and NOT scientists. And politics is about the control of behavior. Economic incentives are but one form of behavioral control.

It is a scientific fact that economics as social science has to this day not figured out what macroeconomic profit — the foundational concept of economics — is. The behavioral approach is a methodological failure. Walrasianism, Keynesianism, Marxianism, Austrianism, MMT, and Pluralism are mutually contradictory, axiomatically false, and materially/formally inconsistent.#1, #2

What economics needs is a Paradigm Shift from behavioral microfoundations to structural macrofoundations.#3

This Paradigm Shift and its far-reaching consequences can be studied with Sovereign Economics. This textbook contains the axiomatically true theory as an indispensable prerequisite of economic policy guidance.

“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)

John Komlos’ textbook is an outstanding example of educated common sense. The fact of the matter is, though, that neither orthodox nor heterodox economists have realized to this day what science is all about.

Egmont Kakarot-Handtke


#1 Economics is a disgrace ― now more than ever
#2 Wikipedia, economics, scientific knowledge, or political agenda pushing?
#3 Your economics is refuted on all counts: here is the real thing

Disgrace again ― is economics really that bad?

Comment on David Glasner on ‘Why The Wall Street Journal Editorial Page is a Disgrace’

Blog-Reference

There is a lot of talk about the disgrace of economics these days.#1, #2, #3, #4 Now, David Glasner is pouring petrol on the fire by characterizing The Wall Street Journal’s editorial page as “a self-parody of obnoxious, philistine anti-intellectualism.”

What is the rage all about? It is about Mr. Moore’s claim “Because too often economic theories defy common sense.” This, indeed, is a recurring issue since J. S. Mill debunked the “bigots of common sense” a long time ago.#5 Obviously, there has not been much progress in the meantime.

The fact of the matter is that economists lack the true theory for 200+ years now and therefore regress periodically to common sense: “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)

David Glasner argues: “But Keynesian ideas are also rooted in certain common-sense notions, for example, the idea that income and expenditure are mutually interdependent, the income of one person being derived from the expenditure of another.”

Yes, Keynes famously stated in the General Theory: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63)

This elementary syllogism is false because the premise is false. It is quite commonsensical but nonetheless false that “Income = value of output”. The value of output is normally greater than income and the difference is macroeconomic profit. Profit, though, is a balance of flows and not a flow like wage income. Against common sense: profit is NOT income. A balance and a flow are different things.

Keynes NEVER understood profit: “His Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson et al.)

What did Keynes do? “In the early thirties he confessed to Roy Harrod that he was ‘returning to an age-long tradition of common sense’.”#6

A fatal move, but After-Keynesians did not spot the blunder to this day.

Economists got macroeconomic profit wrong. Because of this foundational blunder, the whole of economics is proto-scientific garbage. See Ch. 13, The indelible scientific disgrace of economics, in Sovereign Economics.#7

Common sense naively assumes that so many economists can not be wrong for such a long time. As always, common sense is mistaken.

Egmont Kakarot-Handtke

#1 Economics is a disgrace (Sahm)
#2 Economics is a disgrace (EKH)
#3 Economics is a disgrace ― now more than ever
#4 Economists can hardly wait for their burial at the Flat-Earth-Cemetery
#5 The bigots of common sense
#6 Coates, The Claims of Common Sense: Moore, Wittgenstein, Keynes, 2007, p. 11
#7 Amazon, BoD, etc

Economists can hardly wait for their burial at the Flat-Earth Cemetery

Comment on Barkley Rosser on ‘Is The Latest Apparent Economist Suicide A Sign "Economics Is A Disaster"?’

Blog-Reference

“Economics is the study of the economy, not the study of economists.” (Ricardo Reis)

Economists, though, are not very talented scientists (they fail already at elementary macroeconomic algebra#1) and therefore every professional debate turns sooner or later into gossiping about idiosyncratic aches, pains, and neuroses.#2 Thus, academic economics has completely lost its scientific status and has become just another shitshow in the political Circus Maximus.

What economics needs after the obvious failure of Walrasianism, Keynesianism, Marxianism, Austrianism, MMT, and Pluralism is a Paradigm Shift. What it gets is another report about economics as a human cesspool.

Claudia Sahm, who mentions as their credentials bipolar disorder and an econ Ph.D. has recently given a report of the psychological toxicity of economics and its on-duty tormenters.#3

No word about economics as a failed/fake science, though. And that means that she is part of it. #4,#5

Not even at gossiping economists are overwhelmingly smart. Claudia Sahm “names names of quite a few prominent economists she charges with bad behavior of one sort or another.” “At least one of those she criticizes has engaged in public behavior that is well known and notorious, namely Larry Summers, who is also notoriously arrogant, and some of these the charge of arrogance is a large part of her argument, indeed mostly towards those beneath them, as well as simply to rivals, with it being especially nasty when directed at women or minorities.” (Barkley Rosser)

However, what is also well-known is that Summers and Epstein were best buddies.#6

I wonder why neither Claudia Sahm nor Barkley Rosser ― the Sherlock Holmes of EconoSpeak ― nor anybody else connects the dots that seem to neatly explain the human and institutional rottenness of academic economics.

Egmont Kakarot-Handtke

#1 Cross-reference: Scientific Incompetence

#2 Economics as storytelling and entertainment for the masses

#3 Economics is a disgrace (Sahm)

#4 Economics is a disgrace (EKH)

#5 Economics is a disgrace ― now more than ever

#6 Twitter, Michael Krieger, here and here

Source: Twitter

Source: Twitter

***

Twitter Aug 8

Source: Twitter

***

REPLY to Barkley Rosser Aug 10

Where is Barkley Rosser (“He is guilty guilty guuilty”) when you need him?

These are the dots to connect:

• Barkley Rosser mentions Larry Summers “At least one of those she [Claudia Sahm] criticizes has engaged in public behavior that is well known and notorious, namely Larry Summers, who is also notoriously arrogant, and some of these the charge of arrogance is a large part of her argument, indeed mostly towards those beneath them, as well as simply to rivals, with it being especially nasty when directed at women or minorities.”

• Larry Summers, though, is not only known for nasty behavior but for heavy-duty political agenda-pushing “Epstein was convicted in 08. So, how could LHSummers possibly have known something was amiss? Clearly, he was in the dark; like when he scrapped Glass-Steagall, blocked the regulation of derivatives, & lost $1bn for Harvard. Poor Larry, how could he have known?” #1

• The Epstein/Maxwell duo was not only in the sex business but also in the science business.

• There are four suicides in academic economics in the wake of Epstein’s suicide.#2

• Claudia Sahm attributes these strange events to the psychological toxicity of economics “Many graduate students and economists have mental health issues. Research at Harvard found notably higher rates of depression and anxiety among economics PhD students than other PhD students and the general population. Departments often do send students to campus health resources. The faculty place unrealistic expectations on the students. … Faculty suffer too. [Krueger, Weitzman, Sandholm, Farhi, rest in peace. I am so sorry.]”.

• Barkley Rosser knew Krueger, Weitzman, and Sandholm personally. Not to forget Mark Thoma who retired unexpectedly and abandoned the leading blog Economist’s View.

Strange things happen in economics. Being a lifelong insider, Barkley Rosser maintains that “economics and economists have some very serious problems to deal with.”

Yes, the first and foremost problem is, how could it happen that economics has become scientific fake and fraud from the peer review selection process onwards to the EconNobel?

Barkley Rosser concludes cryptically “I could say more, actually a lot more, but I think this will do for now.”

What shitshow economics is!

#1 MarkGB, Twitter

#2 Is doing economics really depressing?

Economics is a disgrace ― now more than ever

Comment on Claudia Sahm on ‘Economics is a disgrace’ * ‡

Blog-Reference

The true disgrace of economics is that it has been a failed/fake/cargo cult science for 200+ years. Walrasianism, Keynesianism, Marxianism, Austrianism, MMT, and Pluralism are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational economic concept of profit wrong.#1 As a consequence, economic policy guidance has never had sound foundations. This applies to left/center/right policy. Economists are a hazard to their fellow citizens.#2

This is why economics has to be burnt down to the ground. However, Claudia Sahm demands “Burn it down: economics failed us.” This is upside-down thinking. In the scientific realm, the question is, what have you done for science and not what has science done for you. However, economists are not scientists, and science is the last thing Claudia Sahm cares about.

Claudia Sahm is “privileged enough to hold a PhD” but has not realized to this day that economics is failed/fake science.#3 That means that she is part of it.

What she cares about primarily is to make the story of her martyrdom in a toxic institutional culture (painful appears 7 times in her post) and her psychic condition (bipolar disorder) as widely known as possible. She does this for herself and on behalf of other victims, in particular vulnerable students and women of color, but does not forget to mention the recent deaths of Krueger, Weitzman, Sandholm, and Farhi as proof of the psychological toxicity of economics.

Everybody knows that something is rotten in economics as a scientific discipline. However, Claudia Sahm does not deliver a material/formal refutation of mainstream economics but sends a letter to Janet Yellen, Ben Bernanke, and Peter Rosseau complaining about the toxic culture of the profession.

This, of course, is a farce. You cannot be an economist without realizing at some point that academic economics is not committed to the advancement of objective scientific truth but that it is a crucial propaganda outlet of the Oligarchy.

This is no secret. Arrow defined the rules of the game in his famous AEA address: “It is a touchstone of accepted economics that all explanations must run in terms of the actions and reactions of individuals. Our behavior in judging economic research, in peer review of papers and research, and in promotions, includes the criterion that in principle the behavior we explain and the policies we propose are explicable in terms of individuals, not of other social categories.”

So, either you subscribe to the ideology of methodological individualism and the peer-review gatekeepers let you in and thus help you to get on a financially attractive trajectory with the Bank of Sweden Nobel at the end of the rainbow or you get problems ― psychological or otherwise.

All this is really old stuff. Economics started as Political Economy and J. S. Mill was on the payroll of the East India Company. Economics has from the beginning been the Oligarchy’s heavily promoted queen of the so-called social sciences.

The disgrace of economics is that economists have not produced much of genuine scientific value for 200+ years: “Thousands upon thousands of scholars, as well as thousands of statesmen and men of affairs, have contributed their efforts to the attempt to understand the course of events of the economic world. And today this field of investigation is being cultivated more extensively, than ever before. How is it, then, that in all these years, and with all the undoubted talent that has been lavished upon it, the subject of economics has advanced so little? (Schoeffler)

Worse, economists still do not understand profit ― the foundational concept of their subject matter.#4 Worse, MMTers with academic credentials apply a provably false macroeconomic balances equation to camouflage that public deficit-spending/money-creation is to the disadvantage of WeThePeople and a free lunch for the Oligarchy.

Claudia Sahm does not address any scientific issues or the role of economists as useful idiots, she instead accuses academic economics of psychological cruelty, well knowing that this emotional issue will bring her immediate attention and the approval of the general public.

No doubt, the economics profession in the incarnation of the AEA will pledge guilt and promise betterment and reform and rework their code of conduct.

This, of course, is the usual farce. Claudia Sahm wittingly or unwittingly helps to cover the real disgrace of economics. Economics ― orthodox and heterodox alike ― needs to be condemned for the corruption of science. The condemnation of toxic culture is justified but entirely beside the point. It is like a sociopathic mobster getting off cheaply by pleading guilty to having stolen a candy bar.

Egmont Kakarot-Handtke

* macromom

‡ Twitter

#1 Economics is a disgrace

#2 Econogenics: economists pose a hazard to their fellow citizens

#3 Section Exemplary proof of the inconsistency of economics in Wikipedia, economics, scientific knowledge, or political agenda pushing?

#4 Your economics is refuted on all counts: here is the real thing

Related 'Economists can hardly wait for their burial at the Flat-Earth-Cemetery' and 'Disgrace again ― is economics really that bad?'. For details of the big picture see cross-references Political Economics/Stupidity/Corruption and cross-references Failed/Fake Scientists and cross-references Paradigm Shift.

***

AXEC106l

***

AXEC121i

Occasional Tweets: MMT is refuted on all counts (I)

Twitter Aug 2

Economics is a disgrace

Comment on Claudia Sahm on ‘Economics is a disgrace’*

Blog-Reference

Economics is an institution and a science. Claudia Sahm gives a personal summary of the toxic institutional culture: “We hurt economists from undergraduate classrooms to offices at the White House. We drive away talent; we mistreat those who stay; and we tolerate bad behavior.” So, economics is a failed institution, “Burn it down”.

Not being a part of this institution, I am not entitled to comment on it.

The all-decisive point about economics is not human failure but scientific failure. Walrasianism, Keynesianism, Marxianism, Austrianism, MMT, and Pluralism are materially/ formally inconsistent and therefore scientifically worthless.#1

The blunder is, with regard to the subject matter, at the axiomatic level, and concerning formal consistency at the level of elementary algebra.

Microfoundations are false since 150+ years. Macrofoundations are false since Keynes. Economists have not spotted Keynes's foundational blunder to this day.

THIS is the indelible disgrace of economics.#2 The mistreatment of students/colleagues is bad, the mistreatment of science is worse. Institutional failure is bad, scientific failure is worse.

Egmont Kakarot-Handtke

 * macromom

#1 Section Exemplary proof of the inconsistency of economics in Wikipedia, economics, scientific knowledge, or political agenda pushing?

#2 See Ch. 13, The indelible scientific disgrace of economics, in Sovereign Economics, BoD

***

AXEC106k

The question economists could not answer for 200+ years

Comment on Tom Hickey on “Where do profits come from? — Nathan Tankus”

Blog-Reference

Where do profits ultimately come from? Macroeconomic profit is not made from a longer labor time, not from higher productivity, not from innovation/creative destruction, not from a lower wage rate, not from more greed, not from exploitation, not from monopoly power, not from risk-taking, not from rent-seeking, not from wishful thinking or any other subjective factor, but in the most elementary case of the production-consumption economy from the dissaving/deficit spending of the household sector, i.e., Q_m≡−S_m. Starting with a balanced-budget economy, macroeconomic profit presupposes credit/money creation by the banking sector (central bank and commercial banks). Macroeconomic profit has nothing to do with property rights. The Profit Law holds for capitalism and communism.

Accordingly, microeconomic profit is the result of the continuous redistribution of macroeconomic profit between the firms that constitute the business sector. If macroeconomic profit is zero, i.e., if the household sector's budget is balanced, then the sum of microeconomic profits is equal to the sum of microeconomic losses.

Macroeconomic profit comes ultimately from the household and state sector’s deficit spending/money creation.#1-#6

Egmont Kakarot-Handtke


#1 Profit
#2 The Levy/Kalecki Profit Equation is false
#3 Truth by definition? The Profit Theory has been axiomatically false for 200+ years
#4 The profit theory is false since Adam Smith
#5 Cross-references Profit
#6 The Profit Law, AXEC143d

***

REPLY to NeilW on Jul 27

You ask: “Anybody spotted where Apple's cash pile sits in all this? There's a section for household saving, but none for dead net saving by corporations.”

It's there for all who can read and think.

The distributed profit of the business sector is given by Yd.#1 The difference between profit Qm and distributed profit Yd is retained profit Qre, and this is the cash pile the corporations sit on if they don't buy government bonds or other financial assets or reinvest.

Learn economics. I recommend the textbook Sovereign Economics.#2


#1 The Profit Law, Grafik AXEC143d

#2 Amazon or BoD

***

AXEC109i

#HallOfScientificShame

Reference Twitter Thread

See also the hashtags #Economics #DebunkingEconomics #FailedScience #FakeScience #CargoCultScience #ScientificIncompetence #Economists #StupidOrCorruptOrBoth #EconBlocker #OrthodoxEconomics #HeterodoxEconomics #Pluralism #NoFalseHeroMemorials #AgendaPusher #DrainTheScientificSwamp #DeleteEconomics #DefundEconomics #FireEconomists #ScrapTheLot #ParadigmShift #NewParadigm #Science #MacroFoundations #ProfitTheory #SovereignEconomics

Ob das Stefan Homburg ist? 🤣🤣🤣 https://t.co/scanjo9CF9

— Rudi Bachmann (@BachmannRudi) July 18, 2020

Reference Profit

*** 

Conclusion: The proof that Rudi Bachmann, partybus, and Blub are too stupid for the elementary algebra that underlies macroeconomics has successfully been carried out online.#DefundEconomics #FireEconomists #ScrapTheLot

— E.K-H (@AXECorg) July 18, 2020

***

AXEC109i

For details of the big picture see cross-references Profit

MMT ― a Wall Street myth

Comment on Chris Dillow on ‘The Deficit Myth: A Review’

Blog-Review and Blog-Reference and Blog-Reference

Chris Dillow’s main point of critique is “For me, Kelton is ― albeit very lucidly ― reinventing the wheel.”

This is, in fact, a spurious compliment because MMT is proto-scientific garbage and Stephanie Kelton is academic fraud.#1

MMT’s macroeconomics is provably false since Keynes, Kalecki, Lerner, etc. So, MMT policy guidance has no sound scientific foundations.

The macroeconomic Profit Law implies Public Deficit = Private Profit. This means that the greater part of the profit in the United States is actually produced by the state. The US economy has been hanging for a long time already on the state ventilator for its survival.

Among all that academic garbage, MMT has the right message for Wall Street. Who is MMT’s first apostle? Right, Warren Mossler, ex-Wall Street. But Stephanie Kelton is, without doubt, the more attractive salesperson. Economics has become part of the entertainment industry long ago and the casting is done in Hollywood where they know best what sells.

The rest is marketing/PR routine. Interviews, book, media hype, No. 1 on the best-seller list, and then, of course, trolling on social media. This is where Chris Dillow comes in: “Dr Kelton explains these ideas wonderfully clearly, so I recommend this book to all non-economists interested in government finances.”

MMT is itself a myth. MMT policy is NOT for the benefit of WeThePeople. MMT is the issuance of counterfeit currency in the form of deficit spending/money creation for the benefit of the one-percenters. Because PublicDeficit = PrivateProfit, MMT is the biggest redistribution program ever. MMT is a political fraud.

“Chris Dillow is a Marxian economist,” says Tom Hickey at Mike Norman Economics. There are historians who claim that Marx was already on the payroll of the financial Oligarchy.

Egmont Kakarot-Handtke


#1 More details

Related 'Wikipedia, economics, scientific knowledge, or political agenda pushing?' and 'Your economics is refuted on all counts: here is the real thing' and 'Dear idiots, MMTers are Wall Street’s agenda pushers' and 'How MMT enlightens Washington' and 'Very busy these days: Wall Street’s agents' and 'Hype does not help: MMT is toast' and 'Mr. Wray goes to Washington' and '#PublicDeficitIsPrivateProfit #MMT #JustAnotherFraud' and 'Links on Liza N. Burby‘s ‘Cutting-Edge Economist Stephanie Kelton Delivers Presidential Lecture’' and 'MMT, Warren Mosler, and the little helpers from Wall Street and Academia' and 'Stephanie Kelton: MMT’s public farce' and 'Occasional Tweets No 201215: The mental collapse of MMT'.

***

COMMENT on aragon on Jul 14

You say, “Every unit of currency gets a vote in economics, resulting in efficiency of the transfer of wealth to the top 0.01%.”

And how does this happen practically? This is due to the macroeconomic Profit Law which implies Public Deficit = Private Profit.#1 As a logical consequence, the public debt of WeThePeople is roughly equal to the financial assets of the one-percenters.

You are an economist, and this happens right before your eyes! And you don't see that the MMT policy of deficit spending/money creation is the biggest financial hoax of all time ($3.7 trillion)? And you do not wonder that the “Marxian economist” Chris Dillow applauds the Wall Street agenda pusher Stephanie Kelton? And all you can think of is this Anatole France kitsch?


#1 Profit

***

REPLY to aragon on Jul 15

You quote approvingly, “It will be a very long time before the process of creative destruction unleashes fresh growth.”

It is pretty obvious that you have NO idea of how the monetary economy works.

The underlying problem is that the monetary economy (capitalism or communism does not matter) is NOT a self-optimizing equilibrium system but will eventually break down.#1

The Profit Law#3 Qm≡I−Sm tells one that macroeconomic profit is positive in a growing economy as long as the business sector’s investment is greater than the household sector’s saving. If this fails, macroeconomic profit turns into a loss, and the economy breaks down. This must eventually happen; what is unknown is the exact date.#2

However, there is a way to postpone the breakdown. The Profit Law, including the state sector, reads Qm≡(I−Sm)+(G−T), that is, the second component of macroeconomic profit is the state sector’s deficit. It holds Public Deficit = Private Profit.

This tells one that the greater part of profit in the United States is actually produced by the state. The US economy has been hanging for a long time already on the state ventilator for its survival.

The MMT policy of deficit spending/money creation is ultimately a means of postponing the breakdown of the US economy. From a political standpoint, the COVID pandemic provides a good rationale to mute the budget-balancers (Kelton ukase on Twitter: Learn MMT ― shout down the critics) and to blow the deficit up to hitherto unknown proportions.

The volume of the deficit and the popularity of MMT#4 is a good metric for the acceleration of the breakdown.#5 This breakdown has nothing at all to do with creative destruction; it is destructive destruction. And it is very improbable that it “unleashes fresh growth” somewhere in the future.

If you intend to learn economics, I recommend the new textbook Sovereign Economics.#6


#1 Major Defects of the Market Economy
#2 Mathematical Proof of the Breakdown of Capitalism
#3 AXEC143f
#4 Keynes, Lerner, MMT, Trump, etc. and exploding profit
#5 Criminals and the monetary order
#6 Amazon.de or BoD

MMT Basics

Comment on Lars Syll on ‘MMT basics’

Blog-Reference and Blog-Reference on Jul 8

• The counterfeiter never runs out of money.
• The counterfeiter never stops stealing stuff from the rest of society.
• The counterfeiter increases the profit of the business sector with his additional demand.
• The counterfeiter says that he is good for the economy and employment.
• When the economy breaks down, the counterfeiter increases deficit spending/ money creation.
• The counterfeiter 'solves' any problem from unemployment to pandemics to global warming with deficit spending/money creation.
• The counterfeiter continuously increases the public debt but says that it does not matter.
• The counterfeiter is a criminal but never gets caught because he games the fiat money system from within.#1, #2, #3
• The counterfeiter gets valuable PR support from academia, in particular from the MMT fake science trolls.#4

Egmont Kakarot-Handtke


#1 Criminals and the monetary order
#2 MMT sucks
#3 Cross-references MMT
#4 The sectoral balances obfuscation: stupidity or corruption?

***

AXEC152

Economists: at the end of the wrong track

Comment on Barkley Rosser on ‘July 24 Society For Chaos Theory In Psychology And Life Sciences Conference’

Blog-Reference

As usual, Barkley Rosser promotes cargo cult stuff. Cargo cult was the name that Feynman gave the ‘social sciences’, in order to clearly distinguish them from genuine science. Here are some programmatic highlights from the ongoing aberration:

• "Applications of prisoner's dilemma modeling in search of a more socially just dominant strategy: Overcoming anxiety associated with group oppression: Lessons from a single case study"
• "Stability swtiching in Cournot duopoly games with three delays"
• "Covid-19 and the nonlinear dynamics of everyday life"

All this fits perfectly with Feynman's definition: “They’re doing everything right. The form is perfect. ... But it doesn’t work. ... So I call these things cargo cult science because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential.”

The essential insight that economists are missing is that they are for 200+ years now on the wrong track, i.e., in the wrong Paradigm. Economics is not a 'social science' but a systems science.#1, #2

For Barkley Rosser, it is too late, but for those who are fed up with 200+ years of proto-scientific garbage and want to know what the Paradigm Shift looks like, there is now the first scientifically valid economics textbook available.#3

Egmont Kakarot-Handtke


#1 Wikipedia, economics, scientific knowledge, or political agenda pushing?
#2 Your economics is refuted on all counts: here is the real thing
#3 Sovereign Economics

Related 'Dilettantes at the end of the coal-pit' and 'Modern macro moronism' and 'Economics: 200+ years of scientific incompetence and fraud'.

***

REPLY to Fred C. Dobbs on Jul 5

You say, “Kanye West tweets he’s running for president this year.”

That’s a nice try to distract from the fact that Barkley Rosser is promoting the agenda of the Society for Chaos Theory in Psychology And Life Sciences. The title reminds one immediately of a $30 bill.

Note that economists do not know to this very day what profit is. They are simply too stupid for the elementary algebra that underlies macroeconomics. Just check the proof. #1 What do you think one can learn from failed economists about psychology or any other topic?

Nothing. Right.

By the way, if Caligula made his horse a Roman consul, Kanye West can be made president. What goes on in contemporary politics is old hat in academia. After all, Barkley Rosser has been made an economics professor. And he is not as smart as a horse.

#1 Wikipedia, economics, scientific knowledge, or political agenda pushing?
Section Provably false

***

REPLY to Barkley Rosser on Jul 6

Name-dropping again ... the world's leading blablahblah ... cited many tens of thousands of times ... Princeton ... RAND ... John von Neumann ... And almost all are best buddies of the academic busybody Barkley Rosser.

Yes, Barkley Rosser, you know a lot of people from the academic entertainment industry, too bad that you have no idea how the economy works.

You say, “It is true that economists have used game theory a lot, but they did not invent it, and people from many other disciplines have used it.” Did it ever occur to you that game theory is zero-sum and that the market economy is not zero-sum? For 200+ years now, macroeconomic profit is obviously greater than zero. So, to begin with, game theory does NOT apply to economics. Von Neumann’s Theory of Games and Economic Behavior is plain methodological BS because it gets the pivotal economic concept of profit wrong.

And you hang around in academia and all these pointless conferences and have not realized that something is deeply wrong with economics. Guess what, it has nothing to do with animal behavior or the nonlinear dynamics of armed groups in Yemen and Pakistan.

Learn economics, Barkley Rosser. The canonical textbook Sovereign Economics#1 is your last chance.


#1 Amazon or BoD

***

REPLY to Barkley Rosser on Jul 7

You say, “Wow, I have not seen you fall so spectacularly on your face practically ever. I do not know where you went to econ grad school, but apparently they did not teach you even the most elementary game theory.” and “Sorry, Egmont, but no, it is not in general zero sum. Indeed, the classic example of it not being zero sum is that most famous of cases you poked at: the prisoner's dilemma.”

Take notice first, Barkley Rosser, that the term game theory covers TWO different approaches, that of von Neumann and that of Nash. The prisoner's dilemma belongs to Nash. Von Neumann had only utter contempt for the Nash approach (see Mirowski, who has extensively dealt with the issue).

Here is the summary: “Finally, algorithmic rationality infected game theory itself, changing von Neumann’s original project considerably. The Nash Equilibrium, for Mirowski the paradigm case of the ‘rationality of the paranoid’ (p. 343), stands for him in marked contrast to von Neumann and Morgenstern’s earlier work. Mirowski points to various sources that report von Neumann’s rejection of the equilibrium concept; further, he finds in Nash’s work all of the ingredients that had beset the Cowles Commission: ‘hyper-individualism, non-accessible utility functions, constrained maximization, and cognition as a species of statistical inference’ (p. 348). The Nash equilibrium, Mirowski concludes, is to be seen as a ‘logical extension of the Walrasian general equilibrium tradition into the Cold War context’ (p. 339), but not as a continuation of von Neumann’s project.”#1

Obviously, it is you who is not familiar with the most elementary facts about game theory. No surprises here.

The term zero-sum game relates to the von Neumann approach and has nothing to do with the prisoner's dilemma.

Von Neumann was well aware that there are non-zero-sum n-person games, but he transformed them into zero-sum games with the introduction of the n+1th player.

Take notice, second, that von Neumann had no idea of what macroeconomic profit is. There are three references to profit in the index and they tell you that von Neumann did not understand the essence of economics. He simply redefined utility as profit for the entrepreneur, see footnote 2 on p. 33 ToG.

No way leads from game theory in any version to macroeconomic profit.#2 Game theory is essentially a new version of the old angels-on-a-pinpoint blather that is so beloved in scientifically incompetent academic circles, of which you are a card-carrying member.

Economics is a fake science, and you are living proof.


#1 Economica Till Gruene
#2 Wikipedia, economics, scientific knowledge, or political agenda pushing?

***

REPLY to Barkley Rosser on Jul 8

The lethal defect of game theory is that neither von Neumann nor Nash got the foundational economic concept of profit right. This defect they share with the representative economist to this very day.

So, this whole set-theoretical fireworks with Brower's and Kakutani's fixpoint theorems is scientifically beside the point and serves only to train mentally retarded economists to dance around false-hero memorials.

Von Neumann got his math from Hilbert in Göttingen. There, he was one of many talented mathematicians. He learned soon that he could sell his talent at a premium in the United States. In an environment that runs on the principles of show business, he hyped himself or was hyped to the status of mathematical demi-good (Mirowski, Machine Dreams).

Von Neumann was on the payroll of the military and he died as an alcoholic in the Institute for Advanced Salaries as he himself called it. In sum, von Neumann was instrumental in weaponizing mathematics and swapping the principles of science for the dictates of show business. In the history of science, von Neumann will feature as one of the corruptors of mathematics.

The sickest joke in the sick story of game theory is that the foundational blunder of economics lies on the level of elementary algebra.#1 So much for the achievements of mathematical economics. It is proto-scientific garbage, just like the rest of economics.

Here is the three-step program for the New Paradigm
1. Defund economics.
2. Fire economists.
3. Scrap the lot and start again. (J. Robinson)


#1 Your economics is refuted on all counts: here is the real thing

***

REPLY to Barkley Rosser on Jul 8

You say: “What? Joan Robinson accepted your wacko profit theory, Egmont? I never knew.”

Of course, you know nothing because you are not only stupid but also lazy. Go to the library and get Robinson, J. (1956). The Accumulation of Capital. London: Macmillan. See pp. 400-402.

“… an excess of investment over saving is an undistributed profit to the firm, …” (p. 402), and this corresponds formally to equation (32) in my 2011 working paper Keynes’s Missing Axioms.

Do you need more proof of your utter scientific incompetence, wacko Barkley?

***

REPLY to Barkley Rosser on Jul 9

You say, “I have never said that your theory is wrong, but rather that it is a vcuous tautology. Everybody knows about retained earnings, and it is a matter of no importance except slightly in determining investment.”

No, you did not say that my profit theory is wrong, you said that it is wacko.

You try to suggest that for me “… thinking about retained earnings is the most important thing in economics, …”.

No, the most important thing in economics is to get the foundational concept of profit right. And the fact of the matter is that economics is provably false on this all-decisive score for 200+ years.#1

Economics is NOT a science, economists are NOT scientists but clowns and useful idiots in the political Circus Maximus. The representative economist is stupid or corrupt or both. The economics Nobel is a fraud.


#1 Your economics is refuted on all counts: here is the real thing

***

REPLY to Barkley Rosser on Jul 10

You say, “The wacko part is that you think it is important. It is utterly trivial. It is rather like somebody deciding that the fundamental key to understanding all of mathematics is to realize that 7 + 2 = 9. This is certainly true, and it is also something that anybody who knows even basic arithmetic knows.”

By trying to trivialize the absolutely devastating proof that economists got profit wrong for 200+ years, you shoot yourself in the head.

Ultimately, the Profit Law for the investment economy, i.e., Q_m≡I−S_m, is indeed trivial. It is elementary algebra. The point is that economists are too stupid for elementary algebra.#1 And because of this, they get profit for the elementary production-consumption economy, i.e. Q_m≡−S_m, wrong, and then the more complex investment economy with profit distribution, i.e. Q_m≡Y_d+I−S_m, and so on. By consequence: because economists are too stupid for the elementary algebra of macroeconomic profit determination, the whole analytical superstructure of economics is provably false. As a consequence, economic policy guidance has never had sound scientific foundations.

This proven scientific incompetence does not only apply to Barkley Rosser, it applies also to his faculty. More, it applies to ALL economics faculties in the United States, and it applies to the American Economic Association and the peer-reviewers of its journals. ALL these folks get the trivial algebra of profit wrong.


#1 See section ‘Provably false’ in Wikipedia, economics, scientific knowledge, or political agenda pushing?

***

REPLY to Barkley Rosser on Jul 11

You say “Weil, Egmont, my evolutionary game theorist friend, Bill Sandhlm may have just blown his brains out, at least he did himself in somehow or other. Perhaps he read your recent writings and took them too cloaely to heart. Heck, he might even have come to believe that 2=7=10. ”

The University of Wisconsin–Madison says “Colleagues knew Bill as “a genuine scientist; detail-oriented, open-minded, and uncompromising in the pursuit of truth,” “a humble scholar with an enormous love for research,” “an exceptional human being, generous with his time,” “kind and supportive to all, and a cherished mentor.” and “After years of struggling with depression, Bill ended his life earlier this week.”