AXEC: New Foundations of Economics: Walrasianism

Showing posts with label Walrasianism. Show all posts

September 1, 2025

Occasional Xs: Clueless economists / Science (CXC)

#Economics #FailedFakeScience

“'Marginalism' is the essence of good economics.” (Deirdre Nansen McCloskey)

No. Actually, Marginalism is the epitome of scientific failure.

For 200+ years, economics has claimed to be science but never was. The major approaches (Walrasianism,…
— AXEC (@EgmontHandtke) September 1, 2025

August 31, 2025

Occasional Xs: Clueless economists / Science (CLXXXIX)

#Economics #AllYouNeedToKnow

“Lausanne, where much of modern economics was born. Walras & Pareto worked here.” (Kaushik Basu)

Modern economics is failed/fake science.

For over 200 years, economics has claimed to be a science, but it still is not. The major approaches… pic.twitter.com/4IJP3KfJPM
— AXEC (@EgmontHandtke) August 31, 2025

June 13, 2025

Occasional Xs: Clueless economists / Science (CLXXIII)

#Economics #AllYouNeedToKnow

“But these simplistic models are just for educational purposes. We also have complex, realistic models.” (quoted by Shahin Ashkiani)

The key criterion of Science is true/false and not realistic/unrealistic. Truth is well-defined by material and… pic.twitter.com/vpHcqeOOdB
— AXEC (@EgmontHandtke) June 13, 2025

January 5, 2025

Occasional Xs: The futile attempt to recycle behavioral economics (VII)

#Economics #AllYouNeedToKnow

“On this day in 1910, Leon Walras died. A hugely influential economist and part of the marginal revolution, …” (EconomicsinTen)

The #MarginalRevolution is the result of the application of the behavioral hardcore proposition “HC2 agents individually…
— E.K-H (@AXECorg) January 5, 2025

November 29, 2024

Occasional Xs: Paradigm Shift (XLIV)

#Economics #FailedFakeScience

“I am often asked what I would keep of Neoclassical economics in a new paradigm. My answer is that I would keep as much of Neoclassical economics as modern astronomy kept of Ptolemaic astronomy ― which is to say, nothing at all.” (Steve Keen)

For… pic.twitter.com/x9iSNjVuCd
— E.K-H (@AXECorg) November 29, 2024

March 21, 2024

Occasional Xs: The futile attempt to recycle Walrasianism (I)

#Economics #FailedFakeScience

The major approaches (#Walrasianism, #Keynesianism, #Marxianism, #Austrianism, and their derivatives) are mutually contradictory & axiomatically false & materially/formally inconsistent & ALL got #Profit wrong. When the foundational concepts of the… pic.twitter.com/i7BuEgFa9g
— E.K-H (@AXECorg) March 21, 2024

December 27, 2023

Occasional Xs: Paradigm Shift (X)

#Keynes got macroeconomic #Profit wrong bc he was too stupid for elementary #Algebra. So, he messed up the #ParadigmShift from #MicroFoundations to #MacroFoundations. Bc of this initial blunder, the whole of (#Micro & #Macro) #Economics is scientifically worthless to this day. pic.twitter.com/Edbf2EQk6V
— E.K-H (@AXECorg) December 27, 2023

October 31, 2022

Occasional Tweets: Neoclassics or Keynesianism? ― another case of the False Dichotomy Fallacy

#Economics #FailedFakeScience #Economists #StupidOrCorruptOrBoth #Walrasianism, #Keynesianism, #Marxianism, #Austrianism, #MMT are axiomatically false & materially/formally inconsistent. Bc of this, ALL goes down the scientific drain. pic.twitter.com/ZOWRUTFa6E
— E.K-H (@AXECorg) October 31, 2022

***

AXEC121m

June 25, 2022

Occasional Tweets: The history of economic thought is the history of scientific failure (IV)

#Economics #FailedScience #FakeScience

The history of economic thought is the history of scientific failure. #Walrasianism, #Keynesianism, #Marxianism, #Austrianism, and #MMT are axiomatically false and materially/formally inconsistent. #Economics is scientifically worthless. pic.twitter.com/flCNj0PuCV
— E.K-H (@AXECorg) June 25, 2022

For more about economic thought see AXECquery.

June 22, 2022

Occasional Tweets: There are still folks around who have not realized that DSGE models are proto-scientific garbage

#Econ #Walrasianism, #Keynesianism, #Marxianism, #Austrianism, #MMT are mutually contradictory, axiomatically false, materially/formally inconsistent. And there are still folks around who have not realized that DSGE models are proto-scientific garbage. ⇒https://t.co/wUZPePdQFM pic.twitter.com/oKrlynYSps
— E.K-H (@AXECorg) June 22, 2022

January 10, 2022

Occasional Tweet: In essence, economics is the endless recycling of proto-scientific garbage

#Economics #FailedScience #FakeScience

Like #Walrasianism, #Keynesianism has been buried long ago at the Flat-Earth-Cemetery. #Keynes messed up #MacroEconomics because he was too stupid for elementary #Algebra.

Forget Keyneshttps://t.co/T6Y8aFo72J pic.twitter.com/t9uyU0fmvm
— E.K-H (@AXECorg) January 10, 2022

For more about microfoundations see AXECquery.

For more about macrofoundations see AXECquery.

December 25, 2021

Occasional Tweets: Economics ― the future is now

Millennia from now, the century 1850-1950 will be remembered for the scientific failure of #Economics. #Walrasianism, #Keynesianism, #Marxianism, #Austrianism, #MMT are mutually contradictory, axiomatically false, and materially/formally inconsistent. pic.twitter.com/X54Ah0asku
— E.K-H (@AXECorg) December 25, 2021

Occasional Tweets: 0.1% of "criticisms of economists from non-economists are completely stupid and wrong"

#Economics #Walrasianism, #Keynesianism, #Marxianism, #Austrianism, #MMT are mutually contradictory, axiomatically false, and materially/formally inconsistent. #Economists are too stupid for #Science. The history of economic thought is the history of scientific failure. pic.twitter.com/RvFjFbAz2a
— E.K-H (@AXECorg) December 25, 2021

November 8, 2021

Occasional Tweets: Some folks are still stuck with the rational expectation equilibrium

#Walrasianism, #Keynesianism, #Marxianism, #Austrianism, #MMT are mutually contradictory, axiomatically false, materially/formally inconsistent. #Economists are too stupid for the #Algebra of #MacroFoundations. So the whole analytical superstructure is scientifically worthless. pic.twitter.com/NbDkWpOiod
— E.K-H (@AXECorg) November 8, 2021

For more about microfoundations see AXECquery.

For more about macrofoundations see AXECquery.

September 22, 2021

MMT vs Mainstream ― a proto-scientific clown show

Comment on Bill Mitchell on ‘ECB researchers find fiscal policy is very effective and more so if central banks buy up the debt’ and ‘They never wrote about it, talked about it, and, did quite the opposite ― yet they knew it all along!’*

Blog-Reference

In these two pieces, Bill Mitchell argues in great detail that mainstream economics is proto-scientific garbage. And he correctly identifies the foundational methodological blunder: “Consequently, treating macro as if it is micro means there is a tendency to conclude that what applies at the individual level also applies at the aggregate level, which is demonstrably false.” Indeed, this is the well-known Fallacy of Composition.#1

As far a the critique of mainstream economics goes, Bill Mitchell is on firm ground. However, the death and burial of mainstream economics at the Flat-Earth Cemetery is NOT news, and repeating the non-news is not exactly a contribution to scientific progress. Also, the suggestion that the provable falsity of mainstream economics somehow implies the correctness of MMT is misleading.#2-#4

While MMT's policy intuition is superior to that of the Sargent/Wallace crowd.#5, the underlying theoretical foundations are also provably false. So, this is the current state of economics: the Walrasian microfoundations of the mainstream are false and the Keynesian macrofoundations of MMT are false.#6-#10

Bill Mitchell concludes:

(i) “So far in more than 25 years of doing this stuff, I have not been systematical wrong about my predictions, which are quite converse relative to the mainstream predictions.”

(ii) “So it matters how you come to a conclusion, which might be similar to a conclusion that the rival paradigm reaches. The surrounding body of knowledge is what matters.”

It turns out that (i) is true with regard to fiscal and monetary policy. It is NOT true with regard to macroeconomic profit, distribution, the advantages for the Oligarchy, and the disadvantages for WeThePeople. The problem-solving capacity of MMTers is basically that of counterfeiters.#11

Yes, from the standpoint of science “it matters how you come to a conclusion” and the “body of knowledge is what matters”. The fact is that both mainstream and MMT are based on provably false axiomatic foundations and because of this, all policy advice lacks sound scientific foundations. Actually, mainstream policy guidance is plucked from the vacuum of five behavioral axioms.#12

Economics has to advance beyond the mainstream and MMT.

Egmont Kakarot-Handtke

* Bill Mitchell's blog here and here

#1 For more about the Fallacy of Composition see AXECquery

#2 MMT vs Mainstream: examining proto-scientific garbage in detail

#3 From the fact that mainstream economics is false does not logically follow that MMT is true

#4 MMT: fundamentally false

#5 “When I started studying economics in the mid-1970s, this was a raved about paper. I read it and couldn’t believe how asinine it was.”

#6 Clueless economists / Macrofoundations

#7 Forget Keynes

#8 Profit: The most powerful formula of economics

#9 Refuting MMT’s Macroeconomics Textbook

#10 The page where Stephanie Kelton gets macroeconomics wrong

#11 Criminals and the monetary order

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

September 18, 2021

Occasional Tweets: MMT has no scientific legitimacy, neither has the rest of economics

The history of economic thought is the history of scientific failure. #Walrasianism, #Keynesianism, #Marxianism, #Austrianism, #MMT, are mutually contradictory, axiomatically false, and materially/formally inconsistent. #Economics has NO scientific #Legitimacy. Nothing of all.
— E.K-H (@AXECorg) September 18, 2021

September 12, 2021

Occasional Tweets: Fire economists

#Economics

The history of economic thought is the history of scientific failure. #Walrasianism, #Keynesianism, #Marxianism, #Austrianism, #MMT, are mutually contradictory, axiomatically false, and materially/formally inconsistent.#DefundEconomics #FireEconomists #ScrapTheLot pic.twitter.com/IeEMNn5f8i
— E.K-H (@AXECorg) September 12, 2021

June 17, 2021

Occasional Tweets: All one needs to know about economics

#FailedScience #FakeScience #Walrasianism, #Keynesianism, #Marxianism, #Austrianism, #MMT, #Pluralism are mutually contradictory, axiomatically false, materially/formally inconsistent, and all get #Profit wrong. That's #AllOneNeedsToKnow about the last 200+ years of #Economics.
— E.K-H (@AXECorg) June 17, 2021

***

AXEC109i

May 1, 2021

Orthodoxy is refuted ― but MMT also

Comment on Bill Mitchell on ‘The Cambridge Controversy ― a fundamental refutation of orthodox economic theory’ *

Blog-Reference and Blog-Reference on May 2

It goes without saying that what Paul Krugman says about the CCC and Joan Robinson is abysmally stupid. In Bill Mitchell's words: “Paul Krugman is either a liar or didn’t really get the point, or both.”#1 The fact that he is still a member of good standing of academic economics tells one all about the subzero level of scientific competence/ethics of the profession. In Bill Mitchell's words: “The import though is clear ― orthodox economics, which is still taught on a daily basis in our universities and which people like Krugman use to make money by writing textbooks about is based on a series of myths that cannot be sustained, both logically, in terms of their own internal consistency, and, in relation to saying anything about the real world we live in.”

Neoclassical economists do not understand profit and by consequence distribution. Bill Mitchell argues that Karl Marx did: “The major insight provided by Marx’s theory of surplus-value was that capitalist profits are sourced in the production of surplus-value. In turn, surplus-value is produced by unpaid labour and so under capitalism workers remain exploited (as they were under previous modes of production).” The fact is, that Marx, too, got profit wrong.#2

From this, one may infer that Bill Mitchell and the MMTers have no idea about what profit is. And this, too, is a provable fact.#3

Conclusion: Walrasianism, Keynesianism, Marxianism, Austrianism, MMT are mutually contradictory, axiomatically false, materially/formally inconsistent, and ALL got profit wrong. What passes as economics (“economic sciences” according to the EconNobel) is the pluralism of idiotism.#4

Because the foundational concept of economics ― profit ― is ill-defined and not understood to this day, economic policy guidance has NEVER had sound scientific foundations but has always been brain-dead agenda pushing. In their scientific incompetence, economists have always been a hazard to their fellow citizens. If humanity has made some progress it was NOT because of economists but despite them.

Egmont Kakarot-Handtke

* Bill Mitchell's MMT Blog Part 1 Part 2

#1 Links on Paul Krugman, proto-scientific impresario

#2 Proﬁt for Marxists

#3 For those who want to check the refutation of MMT in greater detail here are the relevant references:

ad Mitchell: Proving Bill Mitchell wrong ― burying MMT for good

ad Kelton: The page where Stephanie Kelton gets macroeconomics wrong

ad Mosler: MMT: The one deadly error/fraud of Warren Mosler

ad Keen: MMT: fraudsters united

ad Wray: MMT: Agenda-pushing and money-making for the Oligarchy

ad Godley: Do economists finally wake up from their methodological delirium?

ad Kalecki: MMT: How mathematical incompetence helps the Kelton-Fraud

ad Minsky: Profit is the key

ad Textbook: Refuting MMT’s Macroeconomics Textbook

#4 For the reset of economics and the correct macroeconomic Profit Law see Profit

March 3, 2021

Going beyond the pluralism of idiotism

Comment on Andri Stahel on 'The ideological function of economic theories and models'*

Blog-Reference

The question, Is economics a science? has a simple answer: NO. Walrasianism, Keynesianism, Marxianism, Austrianism, MMT are mutually contradictory, axiomatically false, and materially/formally inconsistent.

Economics is failed/fake science for 200+ years. Economists are too stupid for the elementary algebra that underlies macroeconomics.#1 Therefore, the whole analytical superstructure is scientifically worthless. Economic policy guidance never has had sound scientific foundations. Economists, though, do not understand the proof of their own inconsistency. So, they are stuck in the swamp of the pluralism of provably false theories.

What is needed is a Paradigm Shift.#2

Because the representative economist is not a scientist but a retarded agenda pusher in the political Circus Maximus he has no idea what a Paradigm Shift is all about. By consequence, there is no alternative than to leave all this intellectual dead weight behind in the swamp in order to gain some scientific height.

It is time now that those who say that economics is not a science and those who say it is a science but have nothing to show for it have to be expelled from the sciences.

To start with MMTers is in the given conditions certainly a good idea.#3

Egmont Kakarot-Handtke

* Is economics a science?

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

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

#3 Political fraud and the silence of academia

For more about pluralism, see AXECquery.

***

AXEC106m

Subscribe to: Posts (Atom)

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

Missing Blog-Reference links: AXEC does not guarantee that their comments can at any time be recovered from where they have been posted intitially because the availability depends on the publication policy of the blog owner which is implicitly accepted on entering a debate. See also: 'Economists: Incompetent? Stupid? Corrupt?'

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.

See also Terms of Use and Legal at www.AXEC.org

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.