Showing posts with label Orthodoxy. Show all posts
Showing posts with label Orthodoxy. Show all posts

August 14, 2025

Occasional Xs: Clueless economists / Science (CLXXXIII)


Related Cross-References Heterodoxy.

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May 4, 2025

Occasional Xs: Clueless economists / Science (CLXIV)

 
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February 9, 2025

Occasional Xs: Clueless economists / Science (CXLVIII)

 
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September 9, 2024

Occasional Xs: Clueless economists / Science (CXII)

 
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July 24, 2024

Occasional Xs: Clueless economists / Science (XCVII)

 
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March 18, 2024

Occasional Xs: What economists really do (CXCIX)

 
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March 16, 2024

Occasional Xs: What economists really do (CXCVIII)

 
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January 7, 2024

Occasional Xs: Paradigm Shift (XII)

 
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November 10, 2023

Occasional Xs: The futile attempt to recycle Heterodoxy (IV)

 


For details of the big picture see cross-references Heterodoxy. 
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September 1, 2023

Occasional Xs: The futile attempt to recycle Heterodoxy (III)

 



For more about traditional Heterodoxy see AXECquery.
For more about Constructive Heterodoxy see AXECquery. 
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February 8, 2023

Occasional Tweets: The futile attempt to recycle Heterodoxy (II)

 


For details of the big picture see cross-references Heterodoxy. 
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April 7, 2022

Occasional Tweets: The futile attempt to recycle Heterodoxy (I)

 


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July 28, 2021

Occasional Tweets: The absolute & invariable truth about orthodox & heterodox economics

 


For more about Orthodoxy see AXECquery.
For more about Heterodoxy see AXECquery.
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February 24, 2021

Occasional Tweets: Once upon a time there was Orthodoxy and Heterodoxy

 


Orthodoxy / Heterodoxy / Metadoxy

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January 20, 2021

Occasional Tweets: Orthodoxy is idiocy, Heterodoxy also / Orthodoxie ist Schwachsinn, Heterodoxie auch

 

Learn economics

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September 10, 2020

The tragedy of economics: stupid/corrupt economists

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


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



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August 27, 2020

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

Comment on Blair Fix on ‘Supply and demand deconstructed’

Blog-Reference and Blog-Reference

Blair Fix summarizes “… Jonathan Nitzan demolishes the neoclassical theory of prices. It’s a master lesson in how to deconstruct a theory.”

Mainstream economics, though, does not need another deconstruction. Mainstreamers have admitted failure long ago “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)

Clearly, everybody knows by now for sure that supply-demand-equilibrium is proto-scientific garbage. Back in 1954, Schumpeter found it still necessary to diffuse doubts about the scientific status of the supply-demand-equilibrium approach “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.”

So, the right thing to do is to bury and forget the “Totem of the Micro”: “If neoclassical theory is bunk, then what explains prices? Jonathan Nitzan, together with Shimshon Bichler, argues that prices are inseparable from power.”#4

With this, though, everything remains in the old economics-is-a-social-science paradigm. The behavioral assumption of price-taking is replaced by the assumption of price-setting. To remain in the psycho-sociological sphere is the lethal blunder of the power approach because economics is a systems science.#5

Here are the basics of the macrofoundations approach. The elementary production-consumption economy is defined with this set of macroeconomic axioms: (A0) The economy consists of the household and the business sector which, in turn, consists initially of one giant fully integrated firm. (A1) Yw=WL wage income Yw is equal to wage rate W times working hours. L, (A2) O=RL output O is equal to productivity R times working hours L, (A3) C=PX consumption expenditure C is equal to price P times quantity bought/sold X.

Under the conditions of market-clearing X=O and budget-balancing 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, i.e. when the economy gets more complex the price equation becomes longer.*

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 individual or aggregate working time L is. Full employment is possible, 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 and to allow for price-setting, (ii) to differentiate the business sector into multiple firms and markets and to determine the price structure.#6

Egmont Kakarot-Handtke


#1 There is NO such thing as supply-demand-equilibrium
#2 How to Get Rid of Supply-Demand-Equilibrium
#3 The Law of Supply and Demand: Here It Is Finally
#4 This echoes Macht und ökonomisches Gesetz (Power and Economic Law), Schriften des Vereins für Socialpolitik, 1972.
#5 Your economics is refuted on all counts: here is the real thing
#6 See Ch. 3 Market interdependence in Sovereign Economics

Related 'Economists never understood how the price mechanism works' and '10 steps to leave cargo cult economics behind for good' and 'Primary and Secondary Markets' and 'Hayek and other informationally retarded proto-economists' and 'How to overcome the manifest silliness of Econ 101 and save the economy' and 'Why you should NEVER use supply-demand-equilibrium' and 'Traditional Heterodoxy’s paradigmatic impotence' and 'Essentials of Constructive Heterodoxy: The Market' and 'Understanding Profit and the Markets: The Canonical Model' and 'Major Defects of the Market Economy' and 'How to finally hammer down the nails in the coffin of Monty Python economics' and 'Get it econ suckers: behavioral microfoundations ⇒ false, systemic macrofoundations ⇒ true' and 'Econ 101: Economists flunk the intelligence test at the first hurdle' and 'The monstrous utility-supply-demand-equilibrium failure' and 'To this day, economists have produced NOT ONE textbook that satisfies scientific standards' and 'Ch. 9, Price mechanism vs quantity mechanism in Sovereign Economics, BoD'.

“Totem of the Micro” has been coined by Axel Leijonhufvud.

* E.g. AXEC64


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#PointOfProof
Aug 29
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August 26, 2020

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
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February 8, 2020

There are NO crank scientists in economics because economics is NOT a science

Comment on Blair Fix on ‘How do you spot a crank?’

Blog-Reference

Crank-spotting is a recurrent issue in economics: “A sure sign of a crisis is the prevalence of cranks. It is characteristic of a crisis in theory that cranks get a hearing from the public which orthodoxy is failing to satisfy. In the thirties we had Major Douglas, and social credit ― it can all be done with a fountain pen ― and Warren and Pearson who convinced President Roosevelt that raising the dollar price of gold would raise the price of everything else and bring the slump to an end. The cranks are to be preferred to the orthodox because they see that there is a problem. Nowadays we have plenty of cranks taking up the problems that the economists overlook.” (Joan Robinson, 1972)#1

Blair Fix takes up the issue for our time and clarifies it for himself: “I think about everything I know about neoclassical economics ― its flaws, its absurdities. I reassure myself that I’ve made the right choice. I’m not a crank. I’m a rational critic of an absurd theory.”

Well, that is what all cranks say, so Blair Fix has to go a little deeper: “The only way to judge if someone is a crank is to think rationally for yourself. You must become knowledgeable in the subject matter. You must immerse yourself in the crank’s arguments, and in the counterarguments. You must study the evidence, and if needed, run your own tests. In short, to identify a ‘crank’ you must become a scientist yourself.”

And this brings us immediately to the end of the road: “You likely see the problem with this approach. Few people have the time to become experts in one subject. And no one has the time to become an expert in every subject. So the best way to identify a crank (do science for yourself) is out of most people’s reach.”

Having told lay people that they have no chance of spotting a crank, Blair Fix then turns around and tells them how to spot cranks and how he spotted them in economics, more specifically, in neoclassical economics.

But in the end it amounts again to a big frustration for laypeople: “Philosophers of science have thought for a long time about the ‘crank identification problem’. But they don’t call it this, of course. They call it the ‘demarcation problem’. The demarcation problem is about how to distinguish between ‘science’ and ‘non-science’. It’s a problem that has kept many philosophers up at night. Karl Popper thought he had the solution with ‘falsifiability’. Scientific theories, Popper proposed, make falsifiable predictions. Pseudoscience, in contrast, does not. Many scientists (including me) still think that falsifiability is the bare-bones standard of a good theory.”

Note that Blair Fix has just played a trick on you. By citing philosophers of science he implicitly suggested that economics is a science and he, too, is a scientist: “Many scientists (including me) still think …”. The point is that Blair Fix is a fake scientist who has to be expelled from the scientific community.

The methodological fact of the matter is that economists claim from Adam Smith/Karl Marx onward to the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel” that they are doing science. They do NOT. Economics is what Feynman called cargo cult science: “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.”#2

What economics is still missing after 200+ years is the true theory. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational concept of the subject matter ― profit ― wrong. As a result of the utter scientific incompetence of the representative economist, what has been achieved is the pluralism of provably false theories.

Economics is a failed science. Blair Fix, though, cannot admit that economists are incompetent scientists but pulls the complexity argument out of the top hat#3: “But as we move to more complex systems, theory becomes more difficult to test. And for that reason, knowledge becomes less secure. Chemistry is more complex than physics, and so less secure knowledge. Biology is more complex than chemistry, and so less secure still. And the social sciences? They study impossibly complex systems. So knowledge in the social sciences is orders of magnitude less secure than in the natural sciences.”

It is worth recalling that this lame excuse has already been used by the founding fathers: “There is a property common to almost all the moral sciences, and by which they are distinguished from many of the physical; this is, that it is seldom in our power to make experiments in them. In chemistry and natural philosophy, we can not only observe what happens under all the combinations of circumstances which nature brings together, but we may also try an indefinite number of new combinations. This we can seldom do in ethical, and scarcely ever in political science. We cannot try forms of government and systems of national policy on a diminutive scale in our laboratories, shaping our experiments as we think they may most conduce to the advancement of knowledge. We therefore study nature under circumstances of great disadvantage in these sciences; being confined to the limited number of experiments which take place (if we may so speak) of their own accord, without any preparation or management of ours; in circumstances, moreover, of great complexity, and never perfectly known to us; and with the far greater part of the processes concealed from our observation. (J.S. Mill)#4

Sounds plausible but is completely beside the point because economics is NOT a social science and not a science of human behavior but a systemsm science.

What economists tell the world is that the failure of economics is due to the subject matter and not to the scientific incompetence of economists. On this point, there is unanimity among economists of all schools. The fact of the matter is, though, that economists are even too stupid for the elementary algebra that underlies macroeconomics.#5, #6

Economics is a failed science. Economists are NOT scientists but political agenda pushers, i.e. clowns and useful idiots in the political Circus Maximus.#7 Blair Fix is no exception.

Egmont Kakarot-Handtke


#1 For the history of crank-spotting see Wikipedia Fads and Fallacies in the Name of Science
#2 What is so great about cargo cult science? or, How economists learned to stop worrying about failure
#3 Failed economics: The losers’ long list of lame excuses
#4 Complexity and stupidity
#5 In principle, everybody can check it out for themselves: How the Intelligent Non-Economist Can Refute Every Economist Hands Down
#6 MMT: How mathematical incompetence helps the Kelton-Fraud
#7 Cross-references Political Economics/Stupidity/Corruption

Related 'Complexity, scientific incompetence, and the art of asking the right questions' and 'There is no soft science only soft brains' and 'The problem with economics as a discipline' and 'Microfoundations have been for 150+ years: high time to move on' and 'Why is economics such a scientific embarrassment?' and 'Economics: The greatest scientific fraud in modern times' and 'Economics: Not a pretty story' and 'Ending the pluralism of provably false economic theories with the long-overdue Paradigm Shift' and 'Your economics is refuted on all counts: here is the real thing'.

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#PointOfProof
Feb 10
after

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Scientific American May 2020
Hermits and Cranks: Lessons from Martin Gardner on Recognizing Pseudoscientists

Source: Scientific American ‡

‡ This has been a test. If you felt the urge to vomit while reading Gardner's text you have good scientific instincts. Scientists prove and refute but never resort to psychologizing. In science, the criterion is true/false with truth well-defined since the ancient Greeks by material/formal consistency. Psychologizing is what Popper called an immunizing stratagem.
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December 12, 2019

Trust in science? Yes, but economics is NOT a science

Links on Lars Syll on ‘Public trust in economists’*

Blog-Reference and Blog-Reference and Blog-Reference on Dec 13

When things get serious, there is NO In-God-We-Trust. Everybody trusts in science even religious people who reject science as too rational, incomprehensible, abstract, limited, or emotionally unsatisfactory. Every time priests of whatever denomination#1 board an aircraft or undergo surgery they practically admit that they trust more in science than in their particular faith.

It is quite natural#2 and unavoidable that sooner or later science look-alikes appear that exploit the prestige/authority of science. This is pretty much like counterfeiters who exploit the difference between the purchasing value of money and the material value of the money token. Fake is profitable.

Look-alike scientists produce cargo cult science: “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 general public cannot recognize the difference between science and cargo-cult science.

Economics is a cargo cult science. More precisely, there are political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.

The fact is that (i) theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers), and (ii), political economics has produced NOTHING of scientific value in the last 200+ years. Economics started as Political Economy and never got above the proto-scientific level.

As a result, economics does NOT deserve the trust that science has rightfully earned for over 2300+ years. On the contrary. Economists are NOT scientists but agenda pushers and they deserve all the contempt for cheaters, clowns, confused confusers, and useful idiots in the political Circus Maximus.#3-#16

Egmont Kakarot-Handtke


* Lars P. Syll Blog
#1 Wikipedia Priest
#2 Wikipedia Mimicry
#3 What is so great about cargo cult science? or, How economists learned to stop worrying about failure
#4 Economics and scientific foolishness
#5 Economics: The greatest scientific fraud in modern times
#6 Macroeconomics: Economists are too stupid for science
#7 There is NO such thing as “smart, honest, honorable economists”
#8 Economics: ‘a tale told by an idiot ... signifying nothing’
#9 There is NO such thing as an economic expert
#10 Economists cannot do the simple math of profit — better keep them out of politics
#11 Economics as storytelling and entertainment for the masses
#12 Trust in economics as a science?
#13 Lars Syll ― a particularly stupid/corrupt fake scientist
#14 Cryptoeconomics ― the best of Lars Syll’s spam folder
#15 Feynman Integrity, fake science, and the econblogosphere
#16 The economist as storyteller

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Source: Lars P. Syll Blog
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