Comment on Lars Syll on ‘Modelling consistency and real world non-coherence in mainstream economics’
Blog-Reference
Walras has to be credited for making great methodological progress in comparison to what he called the English School, or, what may be called with more accuracy the Cambridge School of Loose Verbal Reasoning.
What Walras correctly pointed out was (i) that partial analysis does not allow for generalizations and therefore had to be replaced by total analysis and (ii) that the forbidding wish-wash of his contemporaries had to be replaced by rigorous argument.
The methodological credo of the Cambridge School of Loose Verbal Reasoning comes in different wordings but always with the same irresistible message for muddle heads.
“Marshall followed the maxim: Better to be ambigous and relevant than precise and irrelevant.” (Colander, 1995, p. 283)
“Another danger is that you may ‘precise everything away’ and be left with only a comparative poverty of meaning. ... Such a problem was avoided, said Keynes, by Marshall who used loose definitions but allowed the reader to infer his meaning from ‘the richness of context’.” (Coates, 2007, p. 87)
“For Keynes as for Post Keynesians the guiding motto is ‘it is better to be roughly right than precisely wrong!’" (Davidson, 1984, p. 574)
The Elements are quite clear on multiple occasions about Walras's take on proto-scientific economics.
“To state a theory is one thing; to prove it is another. I know that in economics so-called proofs which are actually nothing more than gratuitous assertions are doled out and find acceptance again and again. And precisely for this reason, I submit that economics will not attain the status of a science until economists are compelled to demonstrate that which they have hitherto been content, in the main, mainly to assert.” (Walras, 2010, p. 427)
Walras's critique, no doubt, was valid and still is. He got economics out of a deep roadside ditch — but only to steer it into the other. He based his approach on assumptions like utility, optimization, perfect foreknowledge, production function, supply/demand function, perfect competition, capital, equilibrium, etcetera. All these notions are nonentities.
Now the problem is: one can formulate a green-cheese assumption as vivid or colorful or suggestive or precise or rigorous as one likes — it does not help.
As Lawson put it: “It is a form of modelling consistency ... that underpins the notion of equilibrium itself. In modern mainstream economics the category equilibrium has nothing to do with the features of the real economy.” (See intro)
To paint dancing angels-on-a-pinpoint or supply-demand-equilibrium does not make either real. The crucial methodological mistake, however, is not so much in the painting or the formalism but in the underlying green-cheese assumptions.
Equilibrium is a nonentity and therefore all equilibrium models are false. There are many differences between Walras and the post-Walrasians. These do not count at all. Both approaches are based on the same set of nonentities. Therefore both are irrelevant.
Unfortunately, heterodox methodologists simply do not get the crucial point. “Tony Lawson traces this irrelevance to the failure of economists to match their deductive-axiomatic methods with their subject.” (See intro)
The irrelevance of economics since Walras is not due to the deductive-axiomatic method but to green-cheese assumptionism.
Note in passing that Walras's general equilibrium is a zero profit economy (2015). Since his time economists have not become tired of presenting and discussing models which every intelligent layman could immediately dismiss as irrelevant.
Economics is still in the scientific roadside ditches — one half of economists is trapped in the Cambridge ditch the other in the Laussane ditch, neither moves along the real-world road.
Egmont Kakarot-Handtke
References
Coates, J. (2007). The Claims of Common Sense. Moore, Wittgenstein, Keynes and
the Social Sciences. Cambridge, New York, etc.: Cambridge University Press.
Colander, D. (1995). Marshallian General Equilibrium Analysis. Eastern Economic Journal, 21(3): 281–293. URL
Davidson, P. (1984). Reviving Keynes’s Revolution. Journal of Post Keynesian Economics, 6(4): 561–575. URL
Kakarot-Handtke, E. (2015). Essentials of Constructive Heterodoxy: Profit. SSRN Working Paper Series, 2575110: 1–18. URL
Walras, L. (2010). Elements of Pure Economics. London, New York: Routledge. (1874).
Showing posts sorted by relevance for query "Cambridge School". Sort by date Show all posts
Showing posts sorted by relevance for query "Cambridge School". Sort by date Show all posts
May 24, 2015
July 6, 2021
Occasional Tweets: The Cambridge School of consistent scientific failure
#Economics#FailedScience#FakeScience#Economists#StupidOrCorruptOrBoth
— E.K-H (@AXECorg) July 6, 2021
I, too, recommend the renowned Cambridge School of Plain Economic Gibberish and the brilliant Carolina Alves for updates on the ongoing scientific failure of economics. ⇒https://t.co/MWuyJY8trR
For more about the Cambridge School see AXECquery.
December 20, 2015
Quixotic Keynes exegesis
Comment on David Glasner on ‘Keynes on the Theory of the Rate of Interest’
Blog-Reference
Keynes was a political economist and he said many things on many occasions: “It is well known that John Maynard was born anew every morning; for this reason, his colleagues at Bretton Woods commented that he was too intelligent to be consistent.” (Valentino, 1988, p. 239)
Logical consistency — one essential criterion of science — has never been Keynes’ main concern. Just the contrary, Keynes’ natural habitat has always been the wish-wash zone where “nothing is clear and everything is possible.” (Keynes, 1973, p. 292)
Accordingly, Keynes has been the most outspoken proponent of the Cambridge School of Loose Verbal Reasoning “Another danger is that you may ‘precise everything away’ and be left with only a comparative poverty of meaning. ... Such a problem was avoided, said Keynes, by Marshall who used loose definitions but allowed the reader to infer his meaning from ‘the richness of context’.” (Coates, 2007, p. 87)
So, here you have it: the reader is allowed to infer his meaning. This invitation to free ink-blot association gave rise to the great palaver about ‘what Keynes really meant’. It should have been clear from the very beginning to every person of average wit and life experience that this palaver could never ever have a worthwhile outcome. And it has not until this very day. Nonetheless, David Glasner heroically carries on with the interpretation of Keynes’ interpretation of what the classicals could have meant.
The methodological moronism of the Cambridge School of Loose Verbal Reasoning has been carved in stone for the amusement of posterity with this statement: “Marshall followed the maxim: Better to be ambiguous and relevant than precise and irrelevant.” (Colander, 1995, p. 283)
This phony trade-off exists only in the minds of economists. Science is qua definition precise and relevant. Because Keynes and the After-Keynesians never understood this they are outside of science (2011).
There is no use to refute Keynes’ employment theory or his theory of interest or the multiplier or the ex-ante/ex-post equality of I and S or whatnot. Keynes’ profit theory is provably false, and that is enough. When the foundational concept of profit is false then the whole theoretical superstructure falls apart.#1
Because Keynes has been logically inconsistent the attempt to find out what he really meant has always been a quixotic enterprise. Keynes cannot be saved. There is one passage in the General Theory that is — in contrast to the usual verbiage — formally crystal clear and it says “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (Keynes, 1973, p. 63) This syllogism is provably false and no amount of interpretation and exegesis can talk this away.#2
That Keynes as a political economist produced not much of scientific value is bad but what the neoclassical maximization-and-equilibrium sect has produced then and now is worse. “I consider that Keynes had no real grasp of formal economic theorizing (and also disliked it), and that he consequently left many gaping holes in his theory. I none the less hold that his insights were several orders more profound and realistic than those of his recent critics.” (Hahn, 1982, pp. x-xi)
What Keynes and Fisher had in common was a false profit theory and this is the worst thing that can happen to an economist. In addition, they applied NONENTITIES like constrained optimization and equilibrium. More than 80 years later economists are still occupied with making sense of what had no sense right from the start. Not very efficient all this loose verbal reasoning, to say the least.
Egmont Kakarot-Handtke
References
Coates, J. (2007). The Claims of Common Sense. Moore, Wittgenstein, Keynes and the Social Sciences. Cambridge, New York, etc.: Cambridge University Press.
Colander, D. (1995). Marshallian General Equilibrium Analysis. Eastern Economic Journal, 21(3): 281–293. URL
Hahn, F. H. (1982). Money and Inflation. Oxford: Blackwell.
Kakarot-Handtke, E. (2011). Why Post Keynesianism is Not Yet a Science. SSRN Working Paper Series, 1966438: 1–20. URL
Keynes, J. M. (1973). The General Theory of Employment Interest and Money. The Collected Writings of John Maynard Keynes Vol. VII. London, Basingstoke: Macmillan.
Valentino, R. (1988). Discussion. In H. Hanusch (Ed.), Evolutionary Economics. Applications of Schumpeter’s Ideas, 238–249. Cambridge, New York, etc.: Cambridge University Press.
#1 How the intelligent non-economist can refute every economist hands down
#2 For details of the big picture see cross-references Refutation of I=S.
Related 'Dear idiots, time to get saving and investment straight' and 'Macroeconomics for retarded economists' and 'Keynes and the logical brilliance of Bedlam'. For details of the big picture see cross-references Keynesianism.
Blog-Reference
Keynes was a political economist and he said many things on many occasions: “It is well known that John Maynard was born anew every morning; for this reason, his colleagues at Bretton Woods commented that he was too intelligent to be consistent.” (Valentino, 1988, p. 239)
Logical consistency — one essential criterion of science — has never been Keynes’ main concern. Just the contrary, Keynes’ natural habitat has always been the wish-wash zone where “nothing is clear and everything is possible.” (Keynes, 1973, p. 292)
Accordingly, Keynes has been the most outspoken proponent of the Cambridge School of Loose Verbal Reasoning “Another danger is that you may ‘precise everything away’ and be left with only a comparative poverty of meaning. ... Such a problem was avoided, said Keynes, by Marshall who used loose definitions but allowed the reader to infer his meaning from ‘the richness of context’.” (Coates, 2007, p. 87)
So, here you have it: the reader is allowed to infer his meaning. This invitation to free ink-blot association gave rise to the great palaver about ‘what Keynes really meant’. It should have been clear from the very beginning to every person of average wit and life experience that this palaver could never ever have a worthwhile outcome. And it has not until this very day. Nonetheless, David Glasner heroically carries on with the interpretation of Keynes’ interpretation of what the classicals could have meant.
The methodological moronism of the Cambridge School of Loose Verbal Reasoning has been carved in stone for the amusement of posterity with this statement: “Marshall followed the maxim: Better to be ambiguous and relevant than precise and irrelevant.” (Colander, 1995, p. 283)
This phony trade-off exists only in the minds of economists. Science is qua definition precise and relevant. Because Keynes and the After-Keynesians never understood this they are outside of science (2011).
There is no use to refute Keynes’ employment theory or his theory of interest or the multiplier or the ex-ante/ex-post equality of I and S or whatnot. Keynes’ profit theory is provably false, and that is enough. When the foundational concept of profit is false then the whole theoretical superstructure falls apart.#1
Because Keynes has been logically inconsistent the attempt to find out what he really meant has always been a quixotic enterprise. Keynes cannot be saved. There is one passage in the General Theory that is — in contrast to the usual verbiage — formally crystal clear and it says “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (Keynes, 1973, p. 63) This syllogism is provably false and no amount of interpretation and exegesis can talk this away.#2
That Keynes as a political economist produced not much of scientific value is bad but what the neoclassical maximization-and-equilibrium sect has produced then and now is worse. “I consider that Keynes had no real grasp of formal economic theorizing (and also disliked it), and that he consequently left many gaping holes in his theory. I none the less hold that his insights were several orders more profound and realistic than those of his recent critics.” (Hahn, 1982, pp. x-xi)
What Keynes and Fisher had in common was a false profit theory and this is the worst thing that can happen to an economist. In addition, they applied NONENTITIES like constrained optimization and equilibrium. More than 80 years later economists are still occupied with making sense of what had no sense right from the start. Not very efficient all this loose verbal reasoning, to say the least.
Egmont Kakarot-Handtke
References
Coates, J. (2007). The Claims of Common Sense. Moore, Wittgenstein, Keynes and the Social Sciences. Cambridge, New York, etc.: Cambridge University Press.
Colander, D. (1995). Marshallian General Equilibrium Analysis. Eastern Economic Journal, 21(3): 281–293. URL
Hahn, F. H. (1982). Money and Inflation. Oxford: Blackwell.
Kakarot-Handtke, E. (2011). Why Post Keynesianism is Not Yet a Science. SSRN Working Paper Series, 1966438: 1–20. URL
Keynes, J. M. (1973). The General Theory of Employment Interest and Money. The Collected Writings of John Maynard Keynes Vol. VII. London, Basingstoke: Macmillan.
Valentino, R. (1988). Discussion. In H. Hanusch (Ed.), Evolutionary Economics. Applications of Schumpeter’s Ideas, 238–249. Cambridge, New York, etc.: Cambridge University Press.
#1 How the intelligent non-economist can refute every economist hands down
#2 For details of the big picture see cross-references Refutation of I=S.
Related 'Dear idiots, time to get saving and investment straight' and 'Macroeconomics for retarded economists' and 'Keynes and the logical brilliance of Bedlam'. For details of the big picture see cross-references Keynesianism.
October 13, 2016
The Cambridge crap curriculum
Comment on Lars Syll and Pontus Rendahl on ‘Crash and learn?’
Blog-Reference plus Blog-Reference on Oct 13
Pontus Rendahl argues: “... it would be wrong to teach heterodox theories as though they had equal validity. ‘In the same way, I don’t think heterodox engineering or alternative medicine should be taught’.”
Science is well-defined: “Research is, in fact, a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant, 1994). It is pretty obvious that Heterodoxy does NOT satisfy the criteria of material/formal consistency. In its current state, it cannot be admitted to science.#1
Pontus Rendahl’s conclusion is right, except for the fact that his tacit premise is false. His tacit premise is that orthodox economics is valid science. This is not the case. Orthodoxy does NOT satisfy scientific criteria either, but the representative economist has not realized it until this day. It is a remarkable fact that each student generation has swallowed the utterly silly supply-demand-equilibrium core model without turning an eyelid for 150 years.#2 By accepting standard supply-demand-equilibrium Pontus Rendahl, too, flunked the intelligence test for scientists.
So, while Heterodoxy cannot be admitted to science, Orthodoxy has to be thrown out of it. This is the situation: there is NO such thing as an economic curriculum that satisfies scientific standards. Both, the orthodox and the heterodox curriculum is proto-scientific garbage.#3
Lars Syll argues: “Once Cambridge was known for its famous economists. People like John Maynard Keynes. Nowadays it’s rather infamous for its economists inhabiting a neoclassical world of delusion.”
Keynes was more a political economist than a scientist and never rose methodologically above Marshall, the protagonist of the Cambridge School of Loose Verbal Reasoning.#4 The materially/formally inconsistent Cambridge curriculum has not been science then and is not science now.
Egmont Kakarot-Handtke
#1 When proto-scientific Heterodoxy calls Orthodoxy pseudo-scientific
#2 How to Get Rid of Supply-Demand-Equilibrium and The Law of Supply and Demand: Here It Is Finally
#3 See the pedagogy blog on RWER
#4 Marshall and the Cambridge school of plain economic gibberish
Immediately preceding Feeble thinkers, feeble rethinkers: the perennial misery of economics.
Blog-Reference plus Blog-Reference on Oct 13
Pontus Rendahl argues: “... it would be wrong to teach heterodox theories as though they had equal validity. ‘In the same way, I don’t think heterodox engineering or alternative medicine should be taught’.”
Science is well-defined: “Research is, in fact, a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant, 1994). It is pretty obvious that Heterodoxy does NOT satisfy the criteria of material/formal consistency. In its current state, it cannot be admitted to science.#1
Pontus Rendahl’s conclusion is right, except for the fact that his tacit premise is false. His tacit premise is that orthodox economics is valid science. This is not the case. Orthodoxy does NOT satisfy scientific criteria either, but the representative economist has not realized it until this day. It is a remarkable fact that each student generation has swallowed the utterly silly supply-demand-equilibrium core model without turning an eyelid for 150 years.#2 By accepting standard supply-demand-equilibrium Pontus Rendahl, too, flunked the intelligence test for scientists.
So, while Heterodoxy cannot be admitted to science, Orthodoxy has to be thrown out of it. This is the situation: there is NO such thing as an economic curriculum that satisfies scientific standards. Both, the orthodox and the heterodox curriculum is proto-scientific garbage.#3
Lars Syll argues: “Once Cambridge was known for its famous economists. People like John Maynard Keynes. Nowadays it’s rather infamous for its economists inhabiting a neoclassical world of delusion.”
Keynes was more a political economist than a scientist and never rose methodologically above Marshall, the protagonist of the Cambridge School of Loose Verbal Reasoning.#4 The materially/formally inconsistent Cambridge curriculum has not been science then and is not science now.
Egmont Kakarot-Handtke
#1 When proto-scientific Heterodoxy calls Orthodoxy pseudo-scientific
#2 How to Get Rid of Supply-Demand-Equilibrium and The Law of Supply and Demand: Here It Is Finally
#3 See the pedagogy blog on RWER
#4 Marshall and the Cambridge school of plain economic gibberish
Immediately preceding Feeble thinkers, feeble rethinkers: the perennial misery of economics.
For details of the big picture see cross-references Political Economics/Stupidity/Corruption
December 30, 2014
Marshall: a monument of scientific incompetence
Comment on Lars Syll on 'Proper use of math in economics'
Blog-Reference
Marshall was unable to render an appropriate portrayal of the market. For the correct three-dimensional depiction of a market, see Graphic AXEC_001, and for the underlying rationale, see (2014a).
Marshall could not tell the difference between profit and income, which is not exactly a recommendation for an economist. For the correct Profit Law, see (2014b).
Marshall's application of mathematics bordered on utter dilettantism: “In patriotic duty bound, the Cambridge of Newton adhered to Newton’s fluxions, to Newton’s geometry, to the very text of Newton’s Principia … Thus English mathematics was isolated: Cambridge became a school that was self-supporting, self-content, almost marooned in its limitations.” (Forsyth, quoted in Mirowski, 2004, p. 355)
“Marshall … was a product of this system, which valued … down-to-earth geometry over continental analysis, and regimented conformity in puzzle solving and humble prostration before timeless truths over originality.” (Mirowski, 2004, p. 355)
Quite unsurprisingly, Marshall applied mathematics incorrectly. “As was standard with Marshall, the narrative told one story, the mathematics another.” (Mirowski, 1995, p. 299)
Compare Marshall's approach to the creative use of mathematics in physics: “Experience can of course guide us in our choice of serviceable mathematical concepts; it cannot possibly be the source from which they are derived; experience of course remains the sole criterion of the serviceability of a mathematical construction for physics, but the truly creative principle resides in mathematics.” (Einstein, 1934, p. 167)
The botched application of mathematics by Marshall and the Orthodoxy is no reason to dismiss it. “When very sound and proper mathematics is misused and misapplied to fairyland problems without any basis in the real world, the fact that the mathematics itself is impeccable makes the whole obnoxious game just that more offensive.” (Blatt, 1983, p. 173)
Rule number one of the good hand and brain craftsman: never blame the tool. Not much of Marshall will be part of truly scientific economics. Certainly not his burn-phrase. This is the way forward: “... perhaps the most legitimate research program in economics should generate its own mathematical tools simultaneously with its development of the economic theory, ...” (Mirowski, 1986, p. 221), see also (Velupillai, 2005, pp. 866-870), (Morishima, 1984, p. 67)
To cite Marshall on mathematics is self-defeating.
Egmont Kakarot-Handtke
References
Blatt, J. (1983). How Economists Misuse Mathematics. In A. S. Eichner (Ed.), Why Economics is Not Yet a Science, 166–186. Armonk: M.E. Sharpe.
Einstein, A. (1934). On the Method of Theoretical Physics. Philosophy of Science, 1(2): 163–169. URL
Kakarot-Handtke, E. (2014a). Economics for Economists. SSRN Working Paper Series, 2517242: 1–29. URL
Kakarot-Handtke, E. (2014b). The Three Fatal Mistakes of Yesterday Economics: Profit, I=S, Employment. SSRN Working Paper Series, 2489792: 1–13. URL
Mirowski, P. (1986). Mathematical Formalism and Economic Explanation. In P. Mirowski (Ed.), The Reconstruction of Economic Theory,179–240. Boston, Dordrecht, Lancaster: Kluwer-Nijhoff.
Mirowski, P. (1995). More Heat than Light. Cambridge: Cambridge University Press.
Mirowski, P. (2004). The Effortless Economy of Science?, chapter Smooth Operator: How Marshall’s Demand and Supply Curves Made Neoclassicism Safe for Public Consumption but Unfit for Science. Durham, London: Duke University Press.
Morishima, M. (1984). The Good and Bad Use of Mathematics. In P. Wiles and G. Routh (Eds.), Economics in Disarray, 51–73. Oxford: Blackwell.
Velupillai, K. (2005). The Unreasonable Ineffectiveness of Mathematics in Economics. Cambridge Journal of Economics, 29: 849–872.
Blog-Reference
Marshall was unable to render an appropriate portrayal of the market. For the correct three-dimensional depiction of a market, see Graphic AXEC_001, and for the underlying rationale, see (2014a).
Marshall could not tell the difference between profit and income, which is not exactly a recommendation for an economist. For the correct Profit Law, see (2014b).
Marshall's application of mathematics bordered on utter dilettantism: “In patriotic duty bound, the Cambridge of Newton adhered to Newton’s fluxions, to Newton’s geometry, to the very text of Newton’s Principia … Thus English mathematics was isolated: Cambridge became a school that was self-supporting, self-content, almost marooned in its limitations.” (Forsyth, quoted in Mirowski, 2004, p. 355)
“Marshall … was a product of this system, which valued … down-to-earth geometry over continental analysis, and regimented conformity in puzzle solving and humble prostration before timeless truths over originality.” (Mirowski, 2004, p. 355)
Quite unsurprisingly, Marshall applied mathematics incorrectly. “As was standard with Marshall, the narrative told one story, the mathematics another.” (Mirowski, 1995, p. 299)
Compare Marshall's approach to the creative use of mathematics in physics: “Experience can of course guide us in our choice of serviceable mathematical concepts; it cannot possibly be the source from which they are derived; experience of course remains the sole criterion of the serviceability of a mathematical construction for physics, but the truly creative principle resides in mathematics.” (Einstein, 1934, p. 167)
The botched application of mathematics by Marshall and the Orthodoxy is no reason to dismiss it. “When very sound and proper mathematics is misused and misapplied to fairyland problems without any basis in the real world, the fact that the mathematics itself is impeccable makes the whole obnoxious game just that more offensive.” (Blatt, 1983, p. 173)
Rule number one of the good hand and brain craftsman: never blame the tool. Not much of Marshall will be part of truly scientific economics. Certainly not his burn-phrase. This is the way forward: “... perhaps the most legitimate research program in economics should generate its own mathematical tools simultaneously with its development of the economic theory, ...” (Mirowski, 1986, p. 221), see also (Velupillai, 2005, pp. 866-870), (Morishima, 1984, p. 67)
To cite Marshall on mathematics is self-defeating.
Egmont Kakarot-Handtke
References
Blatt, J. (1983). How Economists Misuse Mathematics. In A. S. Eichner (Ed.), Why Economics is Not Yet a Science, 166–186. Armonk: M.E. Sharpe.
Einstein, A. (1934). On the Method of Theoretical Physics. Philosophy of Science, 1(2): 163–169. URL
Kakarot-Handtke, E. (2014a). Economics for Economists. SSRN Working Paper Series, 2517242: 1–29. URL
Kakarot-Handtke, E. (2014b). The Three Fatal Mistakes of Yesterday Economics: Profit, I=S, Employment. SSRN Working Paper Series, 2489792: 1–13. URL
Mirowski, P. (1986). Mathematical Formalism and Economic Explanation. In P. Mirowski (Ed.), The Reconstruction of Economic Theory,179–240. Boston, Dordrecht, Lancaster: Kluwer-Nijhoff.
Mirowski, P. (1995). More Heat than Light. Cambridge: Cambridge University Press.
Mirowski, P. (2004). The Effortless Economy of Science?, chapter Smooth Operator: How Marshall’s Demand and Supply Curves Made Neoclassicism Safe for Public Consumption but Unfit for Science. Durham, London: Duke University Press.
Morishima, M. (1984). The Good and Bad Use of Mathematics. In P. Wiles and G. Routh (Eds.), Economics in Disarray, 51–73. Oxford: Blackwell.
Velupillai, K. (2005). The Unreasonable Ineffectiveness of Mathematics in Economics. Cambridge Journal of Economics, 29: 849–872.
April 26, 2017
Ricardian vice and Keynesian confusedness
Comment on Lars Syll on ‘The Ricardian Vice’
Blog-Reference and Blog-Reference on May 3
Ricardo is the traditional boogeyman of Heterodoxy: “Ricardo literally invented the technique of economics. … His gift for heroic abstractions produced one of the most impressive models, judged by its scope and practical import, in the entire history of economic theory: seizing hold of a wide range of significant problems with a simple analytical model involving only a few strategic variables, he produced dramatic conclusions oriented to policy action. In short, he was the first to master that art that brought success to Keynes in our own day. Not everyone will consider this praiseworthy. Even Schumpeter calls Ricardo’s habit of applying severely simplified abstractions to the solution of practical problems ‘the Ricardian Vice’. And to the Historical School and the American Institutionalists, Ricardo has always stood for everything they detest in orthodox economics.” (Blaug)
In April 1817, David Ricardo published The Principles of Political Economy and Taxation, where he laid out ― among others ― the idea of comparative advantage which serves until this day as the ultimate rationale for free trade. Heterodoxy criticizes Ricardo for 200 years. Time enough, one should think, to spot Ricardo’s pivotal blunder and to come up with a superior alternative.
This did not happen. Keynes, for one, complained that Malthus “failed to furnish an alternative construction; and Ricardo conquered England as completely as the Holy Inquisition conquered Spain”. But Keynes, too, failed to furnish an alternative construction. Keynes subscribed to the Cambridge School of Loose Verbal Reasoning and established himself in the scientific no man’s land where ‘nothing is clear and everything is possible.’#1
The common blunder of Keynes and Ricardo is the profit theory. Both got the foundational concept of economics wrong: “His [Keynes’s] 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.)
In his chapter On Profits Ricardo stated that “profits would be high or low in proportion as wages were low or high.” This relationship holds for a single firm but is false for the business sector as a whole. Ricardo committed the classical logical Fallacy of Composition.#2 Overall profit does NOT depend on wages.
What Keynes and Ricardo had in common was a false profit theory and this is the worst thing that can happen to an economist. In 200 years of critique of the Ricardian vice neither Orthodoxy nor Heterodoxy has made any progress. As the Palgrave Dictionary summarizes: “A satisfactory theory of profits is still elusive.” (Desai, 2008) The state of economics 200 years after Ricardo is this: the four major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, and materially/formally inconsistent.
Since Ricardo, the root of methodological vice and intellectual confusion is scientific incompetence.
Egmont Kakarot-Handtke
#1 Marshall and the Cambridge school of plain economic gibberish
#2 When Ricardo Saw Profit, He Called It Rent: On the Vice of Parochial Realism
For details of the big picture see cross-references Profit.
Blog-Reference and Blog-Reference on May 3
Ricardo is the traditional boogeyman of Heterodoxy: “Ricardo literally invented the technique of economics. … His gift for heroic abstractions produced one of the most impressive models, judged by its scope and practical import, in the entire history of economic theory: seizing hold of a wide range of significant problems with a simple analytical model involving only a few strategic variables, he produced dramatic conclusions oriented to policy action. In short, he was the first to master that art that brought success to Keynes in our own day. Not everyone will consider this praiseworthy. Even Schumpeter calls Ricardo’s habit of applying severely simplified abstractions to the solution of practical problems ‘the Ricardian Vice’. And to the Historical School and the American Institutionalists, Ricardo has always stood for everything they detest in orthodox economics.” (Blaug)
In April 1817, David Ricardo published The Principles of Political Economy and Taxation, where he laid out ― among others ― the idea of comparative advantage which serves until this day as the ultimate rationale for free trade. Heterodoxy criticizes Ricardo for 200 years. Time enough, one should think, to spot Ricardo’s pivotal blunder and to come up with a superior alternative.
This did not happen. Keynes, for one, complained that Malthus “failed to furnish an alternative construction; and Ricardo conquered England as completely as the Holy Inquisition conquered Spain”. But Keynes, too, failed to furnish an alternative construction. Keynes subscribed to the Cambridge School of Loose Verbal Reasoning and established himself in the scientific no man’s land where ‘nothing is clear and everything is possible.’#1
The common blunder of Keynes and Ricardo is the profit theory. Both got the foundational concept of economics wrong: “His [Keynes’s] 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.)
In his chapter On Profits Ricardo stated that “profits would be high or low in proportion as wages were low or high.” This relationship holds for a single firm but is false for the business sector as a whole. Ricardo committed the classical logical Fallacy of Composition.#2 Overall profit does NOT depend on wages.
What Keynes and Ricardo had in common was a false profit theory and this is the worst thing that can happen to an economist. In 200 years of critique of the Ricardian vice neither Orthodoxy nor Heterodoxy has made any progress. As the Palgrave Dictionary summarizes: “A satisfactory theory of profits is still elusive.” (Desai, 2008) The state of economics 200 years after Ricardo is this: the four major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, and materially/formally inconsistent.
Since Ricardo, the root of methodological vice and intellectual confusion is scientific incompetence.
Egmont Kakarot-Handtke
#1 Marshall and the Cambridge school of plain economic gibberish
#2 When Ricardo Saw Profit, He Called It Rent: On the Vice of Parochial Realism
For details of the big picture see cross-references Profit.
September 15, 2016
Marshall and the Cambridge School of plain economic gibberish
Comment on Lars Syll on ‘Proper use of math’
Blog-Reference
“The currently prevailing pattern of economic theorizing exhibits the following three characteristics: (1) a syncopated style of argument fluctuating back and forth between literary and symbolic modes of expression, (2) naive translation, or the loose paraphrasing of formulae into sentences, and (3) loose verbal reasoning for certain aspects of theoretical argumentation where explicit symbolic formulation is lacking.” (Dennis, 1982, p. 698)
As many have noted, current economics in the incarnation of Walrasianism, Keynesianism, Marxianism, and Austrianism is not science but gibberish decorated with more or less mathematics. How did we get stuck in this bottomless swamp?
To make the world we live in understandable to ourselves, we have not only myth and science but also common sense ― uneasily sitting between the two. John Stuart Mill had no friendly word for common sense: “People fancied they saw the sun rise and set, the stars revolve in circles round the pole. We now know that they saw no such thing; what they really saw was a set of appearances, equally reconcileable with the theory they held and with a totally different one. It seems strange that such an instance as this, ..., should not have opened the eyes of the bigots of common sense, and inspired them with a more modest distrust of the competency of mere ignorance to judge the conclusions of cultivated thought.” (2006, p. 783)
The message that common sense is not merely a huge obstacle to science but its very ANTITHESIS got lost on Keynes. Before starting work on the General Theory, he had made up his mind: “In the early thirties he confessed to Roy Harrod that he was ‘returning to an age-long tradition of common sense’.” (Coates, 2007, p. 11)
Now, economics deals not only with individuals and social relations but the economic system as a whole, and Keynes had to come to grips with ‘definitions and ideas’. In fact, he did not. He spent an immense amount of his time on Book II ‘and still left his successors in confusion’ (Moggridge, 1976, p. 33).
Being more an agenda pusher than a scientist, Keynes, like Marshall before him, had the ambition to gain the applause of the practical man, the politician, the businessman, and the general public represented by the business journalist ― however, without ever giving up the appearance of a scientist. “By choosing definitions on the ground that they correspond with actual usage Keynes was formulating an ordinary language social science, one that bears a resemblance to those argued for by philosophers of hermeneutics.” (Coates, 2007, p. 90)
Keynes related his definition of income expressly to ‘the practices of the Income Tax Commissioners.’ He was in grave doubt whether ‘it might be better to employ the term windfalls for what I call profits.’ But he was quite sure that ‘saving and investment are, necessarily and by definition, equal ― which after all, is in full harmony with common sense and the common usage of the world.’ (Keynes, quoted in Coates, 2007, pp. 93, 91)
As a result, the opportunistic commonsenser Keynes never arrived at a clear idea of the fundamental economic concepts of income and profit, and he knew it: “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., 2010, pp. 12-13, 16)
In the discussions following the publication of the General Theory, Keynes had ‘no desire’ that the particular forms of his ‘comparatively simple fundamental ideas ... should be crystallized at the present state of the debate’ (cited in Rotheim, 1981, p. 571). Keynes kept the discussion within the compass of common sense, where ‘nothing is clear and everything is possible’. (1973, p. 292)
Keynes followed the philosophically well-established Cambridge tradition of loose verbal reasoning: “Another danger is that you may ‘precise everything away’ and be left with only a comparative poverty of meaning. ... Such a problem was avoided, said Keynes, by Marshall who used loose definitions but allowed the reader to infer his meaning from ‘the richness of context.’” (Coates, 2007, p. 87)
This spurious freedom of reading into the GT or out of it whatever seemed convenient led to the vacuous discussion of “what Keynes really meant” and the phenomenon that virtually everybody can call himself a Keynesian. This, though, did not help much: “Looking back over the last 70 years it is an inescapable fact that the theoretical arm of the Keynesian Revolution never got off the ground.” (Rogers, 2010, p. 152)
Like Walrasianism, Keynesianism is a failed approach. But both still have some application as a scientific fig leaf in politics, which explains their zombie-like survival.
The Cambridge tradition, continual failure notwithstanding, still holds the majority of retarded economists: “For Keynes as for Post Keynesians the guiding motto is ‘it is better to be roughly right than precisely wrong!’” (Davidson, 1984, p. 574). This contrasts with the motto of science: “It is better to be precisely right than roughly wrong!”
The methodological debate between rigorous Orthodoxy and loose Heterodoxy quite naturally ended in the cul-de-sac: “Mathematical economics, it seems, had the great virtue of demonstrable irrelevance, which was morally preferable to spurious relevance.” (Porter, 1994, p. 155)
The fact of the matter is that both Orthodoxy and Heterodoxy got the foundational concepts wrong. Without consistent conceptual foundations, though, economics will never get out of the self-made thickness of confusion: “I mean by this that formalization eliminates provincial and inessential features of the way in which a scientific theory has been thought about. ... Formalization is a way of setting off from the forest of implicit assumptions and the surrounding thickness of confusion, the ground that is required for the theory being considered. ... In areas of science where great controversy exists about even the most elementary concepts, the value of such formalization can be substantial.” (Suppes, 1968, pp. 654-655)
Formalization is indispensable in economics but presupposes clarifying elementary concepts. With vacuous concepts/NONENTITIES formalization degenerates to mathiness. There is nothing to choose between Keynesian loose verbal reasoning and Walrasian mathiness.
Economists of ALL schools have messed up the foundational concepts of profit and income. With Marshall and Keynes as leading spokesmen, the Cambridge School of Loose Verbal Reasoning is an outstanding example of utter scientific incompetence to this day.
Egmont Kakarot-Handtke
References
Coates, J. (2007). The Claims of Common Sense. Moore, Wittgenstein, Keynes and the Social Sciences. Cambridge, New York, etc.: Cambridge University Press.
Davidson, P. (1984). Reviving Keynes’s Revolution. Journal of Post Keynesian Economics, 6(4): 561–575. URL
Dennis, K. (1982). Economic Theory and the Problem of Translation (I). Journal of Economic Issues, 16(3): 691–712. URL
Keynes, J. M. (1973). The General Theory of Employment Interest and Money. London, Basingstoke: Macmillan.
Mill, J. S. (2006). A System of Logic Ratiocinative and Inductive. Being a Connected View of the Principles of Evidence and the Methods of Scientific Investigation, Vol. 8 of Collected Works of John Stuart Mill. Indianapolis: Liberty Fund.
Moggridge, D. E. (1976). Keynes. London, Basingstoke: Macmillan.
Porter, T. M. (1994). Rigor and Practicality: Rival Ideals of Quantification in Nineteenth-Century Economics. In P. Mirowski (Ed.), Natural Images in Economic Thought, 128–170. Cambridge: Cambridge University Press.
Rogers, C. (2010). The Principle of Effective Demand: The Key to Understanding the General Theory. In R. W. Dimand, R. A. Mundell, and A. Vercelli (Eds.), Keynes’s General Theory after Seventy Years, IEA Conference Vol.147, 136–156. Houndmills, Basingstoke, New York: Palgrave Macmillan.
Rotheim, R. J. (1981). Keynes’ Monetary Theory of Value (1933). Journal of Post Keynesian Economics, 3(4): 568–585. URL
Suppes, P. (1968). The Desirability of Formalization in Science. Journal of Philosophy, 65(20): 651–664.
Tómasson, G., and Bezemer, D. J. (2010). What is the Source of Profit and Interest? A Classical Conundrum Reconsidered. MPRA Paper, 20557: 1–34. URL
Related 'Keynesianism: The triumph of blathering over thinking' and 'How Keynes got macro wrong and Allais got it right' and 'Economists and the destructive power of stupidity' and 'Economics ― worse than fake'. For details of the big picture, see cross-references Failed/Fake Scientists and cross-references Math/Mathiness and cross-references Marshall and 'Links on Alfred Marshall' and cross-references Paradigm Shift.
Blog-Reference
“The currently prevailing pattern of economic theorizing exhibits the following three characteristics: (1) a syncopated style of argument fluctuating back and forth between literary and symbolic modes of expression, (2) naive translation, or the loose paraphrasing of formulae into sentences, and (3) loose verbal reasoning for certain aspects of theoretical argumentation where explicit symbolic formulation is lacking.” (Dennis, 1982, p. 698)
As many have noted, current economics in the incarnation of Walrasianism, Keynesianism, Marxianism, and Austrianism is not science but gibberish decorated with more or less mathematics. How did we get stuck in this bottomless swamp?
To make the world we live in understandable to ourselves, we have not only myth and science but also common sense ― uneasily sitting between the two. John Stuart Mill had no friendly word for common sense: “People fancied they saw the sun rise and set, the stars revolve in circles round the pole. We now know that they saw no such thing; what they really saw was a set of appearances, equally reconcileable with the theory they held and with a totally different one. It seems strange that such an instance as this, ..., should not have opened the eyes of the bigots of common sense, and inspired them with a more modest distrust of the competency of mere ignorance to judge the conclusions of cultivated thought.” (2006, p. 783)
The message that common sense is not merely a huge obstacle to science but its very ANTITHESIS got lost on Keynes. Before starting work on the General Theory, he had made up his mind: “In the early thirties he confessed to Roy Harrod that he was ‘returning to an age-long tradition of common sense’.” (Coates, 2007, p. 11)
Now, economics deals not only with individuals and social relations but the economic system as a whole, and Keynes had to come to grips with ‘definitions and ideas’. In fact, he did not. He spent an immense amount of his time on Book II ‘and still left his successors in confusion’ (Moggridge, 1976, p. 33).
Being more an agenda pusher than a scientist, Keynes, like Marshall before him, had the ambition to gain the applause of the practical man, the politician, the businessman, and the general public represented by the business journalist ― however, without ever giving up the appearance of a scientist. “By choosing definitions on the ground that they correspond with actual usage Keynes was formulating an ordinary language social science, one that bears a resemblance to those argued for by philosophers of hermeneutics.” (Coates, 2007, p. 90)
Keynes related his definition of income expressly to ‘the practices of the Income Tax Commissioners.’ He was in grave doubt whether ‘it might be better to employ the term windfalls for what I call profits.’ But he was quite sure that ‘saving and investment are, necessarily and by definition, equal ― which after all, is in full harmony with common sense and the common usage of the world.’ (Keynes, quoted in Coates, 2007, pp. 93, 91)
As a result, the opportunistic commonsenser Keynes never arrived at a clear idea of the fundamental economic concepts of income and profit, and he knew it: “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., 2010, pp. 12-13, 16)
In the discussions following the publication of the General Theory, Keynes had ‘no desire’ that the particular forms of his ‘comparatively simple fundamental ideas ... should be crystallized at the present state of the debate’ (cited in Rotheim, 1981, p. 571). Keynes kept the discussion within the compass of common sense, where ‘nothing is clear and everything is possible’. (1973, p. 292)
Keynes followed the philosophically well-established Cambridge tradition of loose verbal reasoning: “Another danger is that you may ‘precise everything away’ and be left with only a comparative poverty of meaning. ... Such a problem was avoided, said Keynes, by Marshall who used loose definitions but allowed the reader to infer his meaning from ‘the richness of context.’” (Coates, 2007, p. 87)
This spurious freedom of reading into the GT or out of it whatever seemed convenient led to the vacuous discussion of “what Keynes really meant” and the phenomenon that virtually everybody can call himself a Keynesian. This, though, did not help much: “Looking back over the last 70 years it is an inescapable fact that the theoretical arm of the Keynesian Revolution never got off the ground.” (Rogers, 2010, p. 152)
Like Walrasianism, Keynesianism is a failed approach. But both still have some application as a scientific fig leaf in politics, which explains their zombie-like survival.
The Cambridge tradition, continual failure notwithstanding, still holds the majority of retarded economists: “For Keynes as for Post Keynesians the guiding motto is ‘it is better to be roughly right than precisely wrong!’” (Davidson, 1984, p. 574). This contrasts with the motto of science: “It is better to be precisely right than roughly wrong!”
The methodological debate between rigorous Orthodoxy and loose Heterodoxy quite naturally ended in the cul-de-sac: “Mathematical economics, it seems, had the great virtue of demonstrable irrelevance, which was morally preferable to spurious relevance.” (Porter, 1994, p. 155)
The fact of the matter is that both Orthodoxy and Heterodoxy got the foundational concepts wrong. Without consistent conceptual foundations, though, economics will never get out of the self-made thickness of confusion: “I mean by this that formalization eliminates provincial and inessential features of the way in which a scientific theory has been thought about. ... Formalization is a way of setting off from the forest of implicit assumptions and the surrounding thickness of confusion, the ground that is required for the theory being considered. ... In areas of science where great controversy exists about even the most elementary concepts, the value of such formalization can be substantial.” (Suppes, 1968, pp. 654-655)
Formalization is indispensable in economics but presupposes clarifying elementary concepts. With vacuous concepts/NONENTITIES formalization degenerates to mathiness. There is nothing to choose between Keynesian loose verbal reasoning and Walrasian mathiness.
Economists of ALL schools have messed up the foundational concepts of profit and income. With Marshall and Keynes as leading spokesmen, the Cambridge School of Loose Verbal Reasoning is an outstanding example of utter scientific incompetence to this day.
Egmont Kakarot-Handtke
References
Coates, J. (2007). The Claims of Common Sense. Moore, Wittgenstein, Keynes and the Social Sciences. Cambridge, New York, etc.: Cambridge University Press.
Davidson, P. (1984). Reviving Keynes’s Revolution. Journal of Post Keynesian Economics, 6(4): 561–575. URL
Dennis, K. (1982). Economic Theory and the Problem of Translation (I). Journal of Economic Issues, 16(3): 691–712. URL
Keynes, J. M. (1973). The General Theory of Employment Interest and Money. London, Basingstoke: Macmillan.
Mill, J. S. (2006). A System of Logic Ratiocinative and Inductive. Being a Connected View of the Principles of Evidence and the Methods of Scientific Investigation, Vol. 8 of Collected Works of John Stuart Mill. Indianapolis: Liberty Fund.
Moggridge, D. E. (1976). Keynes. London, Basingstoke: Macmillan.
Porter, T. M. (1994). Rigor and Practicality: Rival Ideals of Quantification in Nineteenth-Century Economics. In P. Mirowski (Ed.), Natural Images in Economic Thought, 128–170. Cambridge: Cambridge University Press.
Rogers, C. (2010). The Principle of Effective Demand: The Key to Understanding the General Theory. In R. W. Dimand, R. A. Mundell, and A. Vercelli (Eds.), Keynes’s General Theory after Seventy Years, IEA Conference Vol.147, 136–156. Houndmills, Basingstoke, New York: Palgrave Macmillan.
Rotheim, R. J. (1981). Keynes’ Monetary Theory of Value (1933). Journal of Post Keynesian Economics, 3(4): 568–585. URL
Suppes, P. (1968). The Desirability of Formalization in Science. Journal of Philosophy, 65(20): 651–664.
Tómasson, G., and Bezemer, D. J. (2010). What is the Source of Profit and Interest? A Classical Conundrum Reconsidered. MPRA Paper, 20557: 1–34. URL
Related 'Keynesianism: The triumph of blathering over thinking' and 'How Keynes got macro wrong and Allais got it right' and 'Economists and the destructive power of stupidity' and 'Economics ― worse than fake'. For details of the big picture, see cross-references Failed/Fake Scientists and cross-references Math/Mathiness and cross-references Marshall and 'Links on Alfred Marshall' and cross-references Paradigm Shift.
***
#Science#TheScientistIsNoActivist#TheActivistIsNoScientist
— E.K-H (@AXECorg) September 16, 2020
At some point in history, Cambridge has been captured by the Oligarchy and turned into a political propaganda outlet. To erect a False-Hero-Memorial for Mr. Gates Sr is a futile attempt to turn disgrace into merit.
February 4, 2019
MMT and Marxism ― blather as immunizing stratagem
Comment on Tom Hickey on ‘Michael Roberts Blog MMT 2 ― the tricks of circulation’
Blog-Reference and Blog-Reference
Tom Hickey cites Aquinas, paraphrasing Aristotle: “‘A small mistake in the beginning is a big one in the end.’ Most economic theory stumbles out of the gate by getting this wrong.”
Or as Marx put it: “Beginnings are always difficult in all sciences.” or as Schumpeter said: “There is no more fertile source of error than apparently trivial premises.” or as Georgescu-Roegen put it: “In fact, the history of every science, including that of economics, teaches us that the elementary is the hotbed of the errors that count most.” or as Aristotle knew already: “When the premises are certain, true, and primary and the conclusion formally follows from them, this is demonstration, and produces scientific knowledge of a thing.”
Scientific knowledge is missing in economics. This is the actual state: The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got the pivotal concept of the subject matter ― profit ― wrong.
Because the premises are false, economics is, after 200+ years, still not more than confused proto-scientific blather. #1
As Tom Hickey correctly observes: “There are many interpretations favorable to Marx among Marxist and Marxian economists. There is no agreed-upon ‘standard’ interpretation of Marx that all Marxists and Marxians accept. Roberts’s view is one among many. In addition, Marx has been criticized widely by just about every other school of economics, and members of a school sometimes disagree over how Marx should be criticized. Pinning Marx down to a particular interpretation has proved impossible.” and “The same might be said of Keynes, as any other thinker, theory or school.” #2
In other words, economists sit over both ears in an intellectual swamp where “nothing is clear and everything is possible”. (Keynes) Whether this is by innate stupidity or educational design is an open question. Swampiness, wish-wash, and inconclusiveness are what Popper called instances of an immunizing stratagem because: “Another thing I must point out is that you cannot prove a vague theory wrong.” (Feynman) This benefit was not lost on fake scientists. #3
Now, the fact of the matter is that economists have occasionally spelled out their premises clearly and in these cases, they have promptly been proven wrong. In these cases, though, economists simply trample over scientific standards: “In economics we should strive to proceed, wherever we can, exactly according to the standards of the other, more advanced, sciences, where it is not possible, once an issue has been decided, to continue to write about it as if nothing had happened.” (Morgenstern)
As a result, economists discuss the various approaches until they are blue in the face without ever taking notice that their stuff lacks sound scientific foundations. This is the case for Walrasianism, Keynesianism, Marxianism, Austrianism, and MMT, which are all axiomatically false, i.e., based on provably false premises.
MMT, for example, is based on this false sectoral balances equation (I−S)+(G−T)+(X−M)=0. And here the methodological curse kicks in: “A small mistake in the beginning is a big one in the end.”
There is no need to study MMT in greater detail and to bother oneself with different interpretations. It is absolutely sufficient to prove that one premise/axiom is false. #4, #5 This collapses the whole verbal superstructure of interpretations and confused blather.
There is no use in waffling inconclusively about the 1001st interpretations of Marx or Keynes. The multiplicity of interpretations is proof enough that one is NOT dealing with a valid scientific theory but with political BS. #6
Marx and Keynes are refuted, and Tom Hickey’s clarification of the relationship between the two is an exercise in futility. The right thing to do is to bury this proto-scientific garbage at the Flat-Earth-Cemetery and to move on. #7
Egmont Kakarot-Handtke
#1 Confused Confusers: How to Stop Thinking Like an Economist and Start Thinking Like a Scientist
#2 John Hicks, fake scientist
#3 And the answer is NCND ― economics after 200+ years of Glomarization
#4 Where economics went wrong (II)
#5 The miracle cure of economists’ micro-macro schizo
#6 Why is economics a total scientific failure?
#7 From false micro to true macro: the new economic paradigm
Related 'Here is the long overdue scientific death certificate for Marx and Marxists' and 'There is NO such thing as “smart, honest, honorable economists”' and 'If religion is opium of the people, economics is crack of the people' and '“But economics is not pure mathematics or logic” No, it is pure blather' and 'Marshall and the Cambridge School of plain economic gibberish' and 'Profit for Marxists' and 'The Profit Theory is False Since Adam Smith'.
You summarize: “You tell us we are wasting our time because economics is not scientific and rigorous.” and counter: “… it seems you also are just ‘one among many’”.
Take notice that there are some differences between blathering and scientific proof:
Because both Marxianism and MMT are false, any discussion about and between these two goofy approaches is no more than a sitcom.
#1 Profit for Marxists
#2 Ricardo and the invention of class war
#3 Essentials of Constructive Heterodoxy: Employment
#4 Wikipedia and the promotion of economists’ idiotism (II)
For the founding fathers, Political Economy was what is today called sociology. Economics started as a hodgepodge of sociology, history, folk psychology, and folk philosophy (a mixture of utilitarianism, Hegelianism, Malthusianism/Darwinism, Individualism/ Protestantism). The two issues, ‘how society works’ and ‘how the economy works’, were not properly kept apart.
J. S. Mill defined Political Economy as a social science: “The fundamental problem, therefore, of the social science, is to find the laws according to which any state of society produces the state which succeeds it and takes its place.”
With regard to the subject matter, there is no difference between Mill and Marx: “My standpoint, from which the evolution of the economic formation of society is viewed as a process of natural history, …” (Marx) #1
Clearly, the blunder lies in the definition of economics as a social science.#2 Fact is that economics is a systems science that deals with how the monetary economy works. Sociology, on the other hand, is a so-called social science or a cargo cult science, as Feynman so aptly characterized it.
The characteristic of the so-called social sciences is endless blather and interpretation and meta-communication, and political agenda pushing. Economics, as a systems science, figures out what the systemic laws are. For example, the macroeconomic Profit Law is given by Q≡Yd+(I−S)+(G−T)+(X−M), and it consists of variables that are measurable with the precision of two decimal places. NO interpretation here!
From this equation follows, inter alia, that Keynes’ I=S is false, which, in turn, means that all IS-LM models from Hicks to Krugman are false. NO interpretation here!
As far as economics deals with psychology/sociology, it is fake science just like the so-called social sciences as a whole.
The ‘multiplicity of interpretations’ is the very characteristic of proto-, non-, anti-science and of post-modern anything-goes. #3
The true theory is well-defined by material and formal consistency. The ‘multiplicity of interpretations’ is the mark of idiocy. #4, #5
#1 Karl Marx, fake scientist
#2 For details of the big picture, see cross-references Not a Science of Behavior
#3 If religion is opium of the people, economics is crack of the people
#4 Marshall and the Cambridge School of plain economic gibberish
#5 A brief history of soapbox economics
As I said, the ‘multiplicity of interpretations’ is the mark of idiocy. You confirm this conclusion with your incompetent comments. Marx got profit, exploitation, and class wrong 200 years ago, and after-Marxians are still behind the curve. For details see
► Capitalism, poverty, exploitation, and cross-over exploitation
► No exploitation, no classes
► If we only had classes
► Here is the long overdue scientific death certificate for Marx and Marxists
You say: “If you’ve read my own stuff for any length of time, you’re familiar with ideas like the savings-investment identity, and it’s no revelation that government deficits have to be financed either by debt creation or money creation, … But phrased in particular, and slightly misleading ways (like “The only way for the private sector to accumulate a surplus is for the government to run a deficit”), these rather boring accounting identities are used by MMT as tools that promise only benefits from currency-financed deficit spending.”
Then you go on: “The one-minute exposition begins with the basic accounting equation for national income and output:
GDP = Consumption + Investment + Government Spending + Exports – Imports
which is typically written as:
Y=C+I+G+X−M
Adding and subtracting taxes T and rearranging gives:
(Y−T−C)+(M−X)+(T−G)=I
This is the savings-investment identity, and is always true by definition.”
Take notice that there is NO such thing as a savings-investment identity and that the “rather boring accounting identities” are false because MMTers and the rest of economists, including you, are too stupid for the elementary algebra that underlies macroeconomics. #1, #2, #3
The correct macroeconomic relations are given by Q≡−S for the elementary production-consumption economy and Q≡I−S for the elementary investment economy, with Q the business sector’s monetary profit, S the household sector’s monetary saving, business sector’s I investment expenditures. Saving is NEVER equal to investment.
MMTers, Marxians, and you simply get macroeconomic profit wrong. Economists are incompetent scientists, and this is “always true by definition”.
#1 Wikipedia and the promotion of economists’ idiotism (II)
#2 For details, see cross-references Refutation of I=S
#3 For the full-spectrum refutation of MMT, see cross-references MMT
Blog-Reference and Blog-Reference
Tom Hickey cites Aquinas, paraphrasing Aristotle: “‘A small mistake in the beginning is a big one in the end.’ Most economic theory stumbles out of the gate by getting this wrong.”
Or as Marx put it: “Beginnings are always difficult in all sciences.” or as Schumpeter said: “There is no more fertile source of error than apparently trivial premises.” or as Georgescu-Roegen put it: “In fact, the history of every science, including that of economics, teaches us that the elementary is the hotbed of the errors that count most.” or as Aristotle knew already: “When the premises are certain, true, and primary and the conclusion formally follows from them, this is demonstration, and produces scientific knowledge of a thing.”
Scientific knowledge is missing in economics. This is the actual state: The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got the pivotal concept of the subject matter ― profit ― wrong.
Because the premises are false, economics is, after 200+ years, still not more than confused proto-scientific blather. #1
As Tom Hickey correctly observes: “There are many interpretations favorable to Marx among Marxist and Marxian economists. There is no agreed-upon ‘standard’ interpretation of Marx that all Marxists and Marxians accept. Roberts’s view is one among many. In addition, Marx has been criticized widely by just about every other school of economics, and members of a school sometimes disagree over how Marx should be criticized. Pinning Marx down to a particular interpretation has proved impossible.” and “The same might be said of Keynes, as any other thinker, theory or school.” #2
In other words, economists sit over both ears in an intellectual swamp where “nothing is clear and everything is possible”. (Keynes) Whether this is by innate stupidity or educational design is an open question. Swampiness, wish-wash, and inconclusiveness are what Popper called instances of an immunizing stratagem because: “Another thing I must point out is that you cannot prove a vague theory wrong.” (Feynman) This benefit was not lost on fake scientists. #3
Now, the fact of the matter is that economists have occasionally spelled out their premises clearly and in these cases, they have promptly been proven wrong. In these cases, though, economists simply trample over scientific standards: “In economics we should strive to proceed, wherever we can, exactly according to the standards of the other, more advanced, sciences, where it is not possible, once an issue has been decided, to continue to write about it as if nothing had happened.” (Morgenstern)
As a result, economists discuss the various approaches until they are blue in the face without ever taking notice that their stuff lacks sound scientific foundations. This is the case for Walrasianism, Keynesianism, Marxianism, Austrianism, and MMT, which are all axiomatically false, i.e., based on provably false premises.
MMT, for example, is based on this false sectoral balances equation (I−S)+(G−T)+(X−M)=0. And here the methodological curse kicks in: “A small mistake in the beginning is a big one in the end.”
There is no need to study MMT in greater detail and to bother oneself with different interpretations. It is absolutely sufficient to prove that one premise/axiom is false. #4, #5 This collapses the whole verbal superstructure of interpretations and confused blather.
There is no use in waffling inconclusively about the 1001st interpretations of Marx or Keynes. The multiplicity of interpretations is proof enough that one is NOT dealing with a valid scientific theory but with political BS. #6
Marx and Keynes are refuted, and Tom Hickey’s clarification of the relationship between the two is an exercise in futility. The right thing to do is to bury this proto-scientific garbage at the Flat-Earth-Cemetery and to move on. #7
Egmont Kakarot-Handtke
#1 Confused Confusers: How to Stop Thinking Like an Economist and Start Thinking Like a Scientist
#2 John Hicks, fake scientist
#3 And the answer is NCND ― economics after 200+ years of Glomarization
#4 Where economics went wrong (II)
#5 The miracle cure of economists’ micro-macro schizo
#6 Why is economics a total scientific failure?
#7 From false micro to true macro: the new economic paradigm
Related 'Here is the long overdue scientific death certificate for Marx and Marxists' and 'There is NO such thing as “smart, honest, honorable economists”' and 'If religion is opium of the people, economics is crack of the people' and '“But economics is not pure mathematics or logic” No, it is pure blather' and 'Marshall and the Cambridge School of plain economic gibberish' and 'Profit for Marxists' and 'The Profit Theory is False Since Adam Smith'.
***
REPLY to michael roberts on Feb 5You summarize: “You tell us we are wasting our time because economics is not scientific and rigorous.” and counter: “… it seems you also are just ‘one among many’”.
Take notice that there are some differences between blathering and scientific proof:
- Marx’s profit theory is provably false. #1
- Because the foundational concept of profit is false, Marx’s whole analytical superstructure is false. #2
- Because the theory is defective, Marx’s policy guidance NEVER had sound scientific foundations.
- After-Marxians have not spotted Marx’s foundational blunder to this day.
- After-Marxians are scientifically incompetent. You, for example, do not realize that public deficit D is defined as public spending G minus taxes T, i.e., D=G−T. Now, it is the deficit D that reduces unemployment and NOT G. If G=T, there is NO effect on employment, no matter how big G is. This is why you cannot find any correlation. #3
- MMT, too, gets macroeconomic profit wrong. The MMT sectoral balances equation (I−S)+(G−T)+(X−M)=0 applies to a zero-profit economy. MMTers are simply too stupid for the elementary algebra that underlies macroeconomics. #4
Because both Marxianism and MMT are false, any discussion about and between these two goofy approaches is no more than a sitcom.
#1 Profit for Marxists
#2 Ricardo and the invention of class war
#3 Essentials of Constructive Heterodoxy: Employment
#4 Wikipedia and the promotion of economists’ idiotism (II)
***
REPLY to jlowrie on Feb 5For the founding fathers, Political Economy was what is today called sociology. Economics started as a hodgepodge of sociology, history, folk psychology, and folk philosophy (a mixture of utilitarianism, Hegelianism, Malthusianism/Darwinism, Individualism/ Protestantism). The two issues, ‘how society works’ and ‘how the economy works’, were not properly kept apart.
J. S. Mill defined Political Economy as a social science: “The fundamental problem, therefore, of the social science, is to find the laws according to which any state of society produces the state which succeeds it and takes its place.”
With regard to the subject matter, there is no difference between Mill and Marx: “My standpoint, from which the evolution of the economic formation of society is viewed as a process of natural history, …” (Marx) #1
Clearly, the blunder lies in the definition of economics as a social science.#2 Fact is that economics is a systems science that deals with how the monetary economy works. Sociology, on the other hand, is a so-called social science or a cargo cult science, as Feynman so aptly characterized it.
The characteristic of the so-called social sciences is endless blather and interpretation and meta-communication, and political agenda pushing. Economics, as a systems science, figures out what the systemic laws are. For example, the macroeconomic Profit Law is given by Q≡Yd+(I−S)+(G−T)+(X−M), and it consists of variables that are measurable with the precision of two decimal places. NO interpretation here!
From this equation follows, inter alia, that Keynes’ I=S is false, which, in turn, means that all IS-LM models from Hicks to Krugman are false. NO interpretation here!
As far as economics deals with psychology/sociology, it is fake science just like the so-called social sciences as a whole.
The ‘multiplicity of interpretations’ is the very characteristic of proto-, non-, anti-science and of post-modern anything-goes. #3
The true theory is well-defined by material and formal consistency. The ‘multiplicity of interpretations’ is the mark of idiocy. #4, #5
#1 Karl Marx, fake scientist
#2 For details of the big picture, see cross-references Not a Science of Behavior
#3 If religion is opium of the people, economics is crack of the people
#4 Marshall and the Cambridge School of plain economic gibberish
#5 A brief history of soapbox economics
***
REPLY to jlowrie on Feb 5As I said, the ‘multiplicity of interpretations’ is the mark of idiocy. You confirm this conclusion with your incompetent comments. Marx got profit, exploitation, and class wrong 200 years ago, and after-Marxians are still behind the curve. For details see
► Capitalism, poverty, exploitation, and cross-over exploitation
► No exploitation, no classes
► If we only had classes
► Here is the long overdue scientific death certificate for Marx and Marxists
***
REPLY to brunobertezautresmondes on Feb 5You say: “If you’ve read my own stuff for any length of time, you’re familiar with ideas like the savings-investment identity, and it’s no revelation that government deficits have to be financed either by debt creation or money creation, … But phrased in particular, and slightly misleading ways (like “The only way for the private sector to accumulate a surplus is for the government to run a deficit”), these rather boring accounting identities are used by MMT as tools that promise only benefits from currency-financed deficit spending.”
Then you go on: “The one-minute exposition begins with the basic accounting equation for national income and output:
GDP = Consumption + Investment + Government Spending + Exports – Imports
which is typically written as:
Y=C+I+G+X−M
Adding and subtracting taxes T and rearranging gives:
(Y−T−C)+(M−X)+(T−G)=I
This is the savings-investment identity, and is always true by definition.”
Take notice that there is NO such thing as a savings-investment identity and that the “rather boring accounting identities” are false because MMTers and the rest of economists, including you, are too stupid for the elementary algebra that underlies macroeconomics. #1, #2, #3
The correct macroeconomic relations are given by Q≡−S for the elementary production-consumption economy and Q≡I−S for the elementary investment economy, with Q the business sector’s monetary profit, S the household sector’s monetary saving, business sector’s I investment expenditures. Saving is NEVER equal to investment.
MMTers, Marxians, and you simply get macroeconomic profit wrong. Economists are incompetent scientists, and this is “always true by definition”.
#1 Wikipedia and the promotion of economists’ idiotism (II)
#2 For details, see cross-references Refutation of I=S
#3 For the full-spectrum refutation of MMT, see cross-references MMT
April 22, 2016
Heterodoxy: From bad to better or from bad to worse?
Comment on Asad Zaman on ‘The Education of an Economist’
Blog-Reference and Blog-Reference on Apr 26 adapted to context
“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, p. 30)
You say: “In our PhD Economics program at Stanford, we learnt nothing about the history of major economic events of the twentieth century. Instead, we were taught the rather arcane and difficult skill of building models.”
Yes, standard economics is cargo cult science and your education has been a waste of time and money. The question is, how does Heterodoxy proceed from this common understanding of the actual situation?
Obviously, criticizing model bricolage and mathiness and unrealism is fully justified but not very productive. What is the alternative? The flight to naive empiricism and history is the wrong way. The acceptance of the pluralism of false models is the wrong way. To discuss Trump vs. Clinton is the wrong way.
“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, 1998, p. 703)
Orthodoxy has failed, no doubt, but traditional Heterodoxy has failed to develop a superior alternative. Economics, represented by the four sects Walrasians, Keynesians, Marxians, Austrians, is still at the proto-scientific stage.
One possible reaction to this embarrassment is to give up the idea of scientific truth in economics and to resort to anything goes. This attitude is rather popular among heterodox economists — and it is self-defeating.
“If economics cannot aspire to any substantive knowledge of economic relationships, it cannot speak with authority about questions of economic policy.” (Blaug, 1990, p. 111). Without this aspiration, economics degenerates to mere opinion, pluralism of false theories, and in the last consequence to brain-dead political blather.
For economists the mission is clear since J. S. Mill: develop the true theory. The true theory of the market economy is neither to be found in Econ 101 nor in the textbooks nor in the journals nor in the newspapers nor in the history books. There is a lot to do for constructive Heterodoxy.
Egmont Kakarot-Handtke
References
Blaug, M. (1990). Economic Theories, True or False? Aldershot, Brookfield: Edward Elgar.
Blaug, M. (1998). Economic Theory in Retrospect. Cambridge: Cambridge University Press, 5th edition.
Stigum, B. P. (1991). Toward a Formal Science of Economics: The Axiomatic Method in Economics and Econometrics. Cambridge: MIT Press.
“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, p. 30)
Standard economics is cargo cult science. The question is, how does Heterodoxy proceed from this common understanding of the actual situation?
Obviously, criticizing model bricolage and mathiness and unrealism is fully justified but not very productive. What is the alternative? The flight to naive empiricism and history is the wrong way. The acceptance of the pluralism of false models is the wrong way. To discuss Trump vs. Clinton is the wrong way.
“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, 1998, p. 703)
Orthodoxy has failed, no doubt, but Heterodoxy has failed to develop a superior alternative. Economics, represented by the four sects Walrasians, Keynesians, Marxians, Austrians, is still at the proto-scientific stage.
One possible reaction to this embarrassment is to give up the idea of scientific truth in economics and to resort to anything goes and storytelling. This attitude is rather popular among heterodox economists — and it is self-defeating.
“If economics cannot aspire to any substantive knowledge of economic relationships, it cannot speak with authority about questions of economic policy.” (Blaug, 1990, p. 111). Without this aspiration, economics degenerates to mere opinion, pluralism of false theories, and in the last consequence to brain-dead political blather.
True, Krugman does “not understand the problem with models” but neither does Nanikore or the Swedish branch of Heterodoxy.
References
Blaug, M. (1990). Economic Theories, True or False? Aldershot, Brookfield: Edward Elgar.
Blaug, M. (1998). Economic Theory in Retrospect. Cambridge: Cambridge University Press, 5th edition.
Stigum, B. P. (1991). Toward a Formal Science of Economics: The Axiomatic Method in Economics and Econometrics. Cambridge: MIT Press.
You remind me: “You are missing out the Georgist School of macroeconomic thought and philosophy.”
True, but my argument applies to the Georgist School as well.
It is of utmost importance to distinguish between political and theoretical economics. The main differences are: (i) The goal of political economics is to push an agenda, the goal of theoretical economics is to explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics, scientific standards are observed.
It is perfectly legitimate to push an agenda. That’s NOT the point. The point is that agenda pushers use economic theory as a means to an end. And that is the wrong priority from the viewpoint of science.
Adam Smith, Ricardo, Marx, Henry George, Keynes, Hayek, or Friedman were political economists. I do not criticize their political objectives, I criticize that they were lousy scientists, that is, their respective theories do not satisfy the scientific criteria of formal and material consistency. In other words, when the underlying theory is provable false economic policy proposals are hanging in midair. It does no matter how good and sensible they appear, they are scientifically worthless.
This said I agree with the Georgist School that the treatment of land in standard economics is false since Ricardo (2011).
I do not agree, though, with this job description ‘consequential macroeconomics–rationalizing is about how our social system works.’
To figure out how the social system works is the task of sociology and/or political science. The task of economics is to figure out how the economic system works.
The ludicrousness of economists derives from the fact that they have failed on their mission and cannot explain how the actual monetary economy works (2015) but tell the world how to improve society — which is none of their business as scientists.
References
Kakarot-Handtke, E. (2011). When Ricardo Saw Profit, He Called it Rent: On the Vice of Parochial Realism. SSRN Working Paper Series, 1932119: 1–19. URL
Kakarot-Handtke, E. (2015). Major Defects of the Market Economy. SSRN Working Paper Series, 2624350: 1–40. URL
Blog-Reference and Blog-Reference on Apr 26 adapted to context
“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, p. 30)
You say: “In our PhD Economics program at Stanford, we learnt nothing about the history of major economic events of the twentieth century. Instead, we were taught the rather arcane and difficult skill of building models.”
Yes, standard economics is cargo cult science and your education has been a waste of time and money. The question is, how does Heterodoxy proceed from this common understanding of the actual situation?
Obviously, criticizing model bricolage and mathiness and unrealism is fully justified but not very productive. What is the alternative? The flight to naive empiricism and history is the wrong way. The acceptance of the pluralism of false models is the wrong way. To discuss Trump vs. Clinton is the wrong way.
“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, 1998, p. 703)
Orthodoxy has failed, no doubt, but traditional Heterodoxy has failed to develop a superior alternative. Economics, represented by the four sects Walrasians, Keynesians, Marxians, Austrians, is still at the proto-scientific stage.
One possible reaction to this embarrassment is to give up the idea of scientific truth in economics and to resort to anything goes. This attitude is rather popular among heterodox economists — and it is self-defeating.
“If economics cannot aspire to any substantive knowledge of economic relationships, it cannot speak with authority about questions of economic policy.” (Blaug, 1990, p. 111). Without this aspiration, economics degenerates to mere opinion, pluralism of false theories, and in the last consequence to brain-dead political blather.
For economists the mission is clear since J. S. Mill: develop the true theory. The true theory of the market economy is neither to be found in Econ 101 nor in the textbooks nor in the journals nor in the newspapers nor in the history books. There is a lot to do for constructive Heterodoxy.
Egmont Kakarot-Handtke
References
Blaug, M. (1990). Economic Theories, True or False? Aldershot, Brookfield: Edward Elgar.
Blaug, M. (1998). Economic Theory in Retrospect. Cambridge: Cambridge University Press, 5th edition.
Stigum, B. P. (1991). Toward a Formal Science of Economics: The Axiomatic Method in Economics and Econometrics. Cambridge: MIT Press.
***
REPLY to Nanikore on Apr 26“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, p. 30)
Standard economics is cargo cult science. The question is, how does Heterodoxy proceed from this common understanding of the actual situation?
Obviously, criticizing model bricolage and mathiness and unrealism is fully justified but not very productive. What is the alternative? The flight to naive empiricism and history is the wrong way. The acceptance of the pluralism of false models is the wrong way. To discuss Trump vs. Clinton is the wrong way.
“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, 1998, p. 703)
Orthodoxy has failed, no doubt, but Heterodoxy has failed to develop a superior alternative. Economics, represented by the four sects Walrasians, Keynesians, Marxians, Austrians, is still at the proto-scientific stage.
One possible reaction to this embarrassment is to give up the idea of scientific truth in economics and to resort to anything goes and storytelling. This attitude is rather popular among heterodox economists — and it is self-defeating.
“If economics cannot aspire to any substantive knowledge of economic relationships, it cannot speak with authority about questions of economic policy.” (Blaug, 1990, p. 111). Without this aspiration, economics degenerates to mere opinion, pluralism of false theories, and in the last consequence to brain-dead political blather.
True, Krugman does “not understand the problem with models” but neither does Nanikore or the Swedish branch of Heterodoxy.
References
Blaug, M. (1990). Economic Theories, True or False? Aldershot, Brookfield: Edward Elgar.
Blaug, M. (1998). Economic Theory in Retrospect. Cambridge: Cambridge University Press, 5th edition.
Stigum, B. P. (1991). Toward a Formal Science of Economics: The Axiomatic Method in Economics and Econometrics. Cambridge: MIT Press.
***
REPLY to David Chester on Apr 27You remind me: “You are missing out the Georgist School of macroeconomic thought and philosophy.”
True, but my argument applies to the Georgist School as well.
It is of utmost importance to distinguish between political and theoretical economics. The main differences are: (i) The goal of political economics is to push an agenda, the goal of theoretical economics is to explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics, scientific standards are observed.
It is perfectly legitimate to push an agenda. That’s NOT the point. The point is that agenda pushers use economic theory as a means to an end. And that is the wrong priority from the viewpoint of science.
Adam Smith, Ricardo, Marx, Henry George, Keynes, Hayek, or Friedman were political economists. I do not criticize their political objectives, I criticize that they were lousy scientists, that is, their respective theories do not satisfy the scientific criteria of formal and material consistency. In other words, when the underlying theory is provable false economic policy proposals are hanging in midair. It does no matter how good and sensible they appear, they are scientifically worthless.
This said I agree with the Georgist School that the treatment of land in standard economics is false since Ricardo (2011).
I do not agree, though, with this job description ‘consequential macroeconomics–rationalizing is about how our social system works.’
To figure out how the social system works is the task of sociology and/or political science. The task of economics is to figure out how the economic system works.
The ludicrousness of economists derives from the fact that they have failed on their mission and cannot explain how the actual monetary economy works (2015) but tell the world how to improve society — which is none of their business as scientists.
References
Kakarot-Handtke, E. (2011). When Ricardo Saw Profit, He Called it Rent: On the Vice of Parochial Realism. SSRN Working Paper Series, 1932119: 1–19. URL
Kakarot-Handtke, E. (2015). Major Defects of the Market Economy. SSRN Working Paper Series, 2624350: 1–40. URL
December 29, 2014
Why J.S. Mill had no friendly word for the bigots and votaries of common sense
Comment on Lars Syll on 'The riddle of induction'
Blog-Reference
When the discussion is about induction/deduction, then the appeal to common sense is utterly misleading.
To be quite clear: nobody denies that common sense is good for getting out of bed, crossing the street, and many other practical purposes. However, the task is to keep it out of science. Why? Because common sense is so convincing.
There is no need to go back a few hundred years. If, in a discussion, participant A says that it is nonsense and a conspiracy of these arrogant scientists to claim that the earth moves with a tremendous speed, because he and nobody else in this room feels the slightest movement, then he has a good chance to get the assent of roughly 80 percent of an average audience (cf. Mirowski, 1995, p. 104). Participant B, who tries to explain the optical illusion with the theory of relative motion, has a hard time.
It is a curious fact that science is necessarily counter-intuitive: “... that the new physics of the seventeenth century, which replaced the older concepts of motion, rest, and change, involved a radical reorientation of the view of the cosmos and the possibilities of an infinite void space, thus yielding an almost entirely new philosophy of nature and a wholly different physics that contradicted ordinary intuition and common sense.” (Cohen, 1977, pp. 318-319)
The problem with economics is that it has a strong and proud tradition of common sense: “... [Adam Smith] disliked whatever went beyond plain common sense. He never moved above the heads of even the dullest readers. He led them on gently, encouraging them by trivialities and homely observations, making them feel comfortable all along.” (Schumpeter, 1994, p. 185)
This tradition has a stronghold in Cambridge: “In the early thirties, he [Keynes] confessed to Roy Harrod that he was 'returning to an age-long tradition of common sense'” (Coates, 2007, p. 11)
And this explains why Keynesianism is not a science to this day (2011). Again and again, it turns out that common sense is a millstone around the neck of economics. This was already clear to Mill (!), and this is why he had no friendly word for it (2006, pp. 783, 790).
As Einstein famously put it: “... common sense is the collection of prejudices acquired by age eighteen.”
Egmont Kakarot-Handtke
References
Coates, J. (2007). The Claims of Common Sense. Moore, Wittgenstein, Keynes and the Social Sciences. Cambridge, New York, etc.: Cambridge University Press.
Cohen, I. B. (1977). History and the Philosopher of Science. In F. Suppe (Ed.), The Structure of Scientific Theories, 308–349. Urbana, Chicago: University of Illinois Press.
Kakarot-Handtke, E. (2011). Why Post Keynesianism is Not Yet a Science. SSRN Working Paper Series, 1966438: 1–15. URL
Mill, J. S. (2006). A System of Logic Ratiocinative and Inductive. Being a Connected View of the Principles of Evidence and the Methods of Scientific Investigation, Vol. 8 of Collected Works of John Stuart Mill. Indianapolis: Liberty Fund.
Mirowski, P. (1995). More Heat than Light. Cambridge: Cambridge University Press.
Schumpeter, J. A. (1994). History of Economic Analysis. New York: Oxford University Press.
Related 'The bigots of common sense' and 'Economics, too, has been almost ruined by the bigots of common sense' and 'A brief history of soapbox economics' and 'Appearances and evidence' and 'Misled by ordinary intuition and common sense' and 'Marshall and the Cambridge School of plain economic gibberish' and 'First Lecture in New Economic Thinking'.
Blog-Reference
To be quite clear: nobody denies that common sense is good for getting out of bed, crossing the street, and many other practical purposes. However, the task is to keep it out of science. Why? Because common sense is so convincing.
There is no need to go back a few hundred years. If, in a discussion, participant A says that it is nonsense and a conspiracy of these arrogant scientists to claim that the earth moves with a tremendous speed, because he and nobody else in this room feels the slightest movement, then he has a good chance to get the assent of roughly 80 percent of an average audience (cf. Mirowski, 1995, p. 104). Participant B, who tries to explain the optical illusion with the theory of relative motion, has a hard time.
It is a curious fact that science is necessarily counter-intuitive: “... that the new physics of the seventeenth century, which replaced the older concepts of motion, rest, and change, involved a radical reorientation of the view of the cosmos and the possibilities of an infinite void space, thus yielding an almost entirely new philosophy of nature and a wholly different physics that contradicted ordinary intuition and common sense.” (Cohen, 1977, pp. 318-319)
The problem with economics is that it has a strong and proud tradition of common sense: “... [Adam Smith] disliked whatever went beyond plain common sense. He never moved above the heads of even the dullest readers. He led them on gently, encouraging them by trivialities and homely observations, making them feel comfortable all along.” (Schumpeter, 1994, p. 185)
This tradition has a stronghold in Cambridge: “In the early thirties, he [Keynes] confessed to Roy Harrod that he was 'returning to an age-long tradition of common sense'” (Coates, 2007, p. 11)
And this explains why Keynesianism is not a science to this day (2011). Again and again, it turns out that common sense is a millstone around the neck of economics. This was already clear to Mill (!), and this is why he had no friendly word for it (2006, pp. 783, 790).
As Einstein famously put it: “... common sense is the collection of prejudices acquired by age eighteen.”
Egmont Kakarot-Handtke
References
Coates, J. (2007). The Claims of Common Sense. Moore, Wittgenstein, Keynes and the Social Sciences. Cambridge, New York, etc.: Cambridge University Press.
Cohen, I. B. (1977). History and the Philosopher of Science. In F. Suppe (Ed.), The Structure of Scientific Theories, 308–349. Urbana, Chicago: University of Illinois Press.
Kakarot-Handtke, E. (2011). Why Post Keynesianism is Not Yet a Science. SSRN Working Paper Series, 1966438: 1–15. URL
Mill, J. S. (2006). A System of Logic Ratiocinative and Inductive. Being a Connected View of the Principles of Evidence and the Methods of Scientific Investigation, Vol. 8 of Collected Works of John Stuart Mill. Indianapolis: Liberty Fund.
Mirowski, P. (1995). More Heat than Light. Cambridge: Cambridge University Press.
Schumpeter, J. A. (1994). History of Economic Analysis. New York: Oxford University Press.
Related 'The bigots of common sense' and 'Economics, too, has been almost ruined by the bigots of common sense' and 'A brief history of soapbox economics' and 'Appearances and evidence' and 'Misled by ordinary intuition and common sense' and 'Marshall and the Cambridge School of plain economic gibberish' and 'First Lecture in New Economic Thinking'.
September 19, 2016
Critique is good, refutation is better, Paradigm Shift is best
Comment on Lars Syll on ‘Why critique in economics is so important’
Blog-Reference and Blog-Reference on Sep 22
It is long known that DSGE is a failed approach, and nobody needs the critique of Romer et al., which amounts to not much more than the smarter rats abandoning the sinking ship. What is needed is a constructive idea about how to switch from the degenerated neoclassical research program to a progressive paradigm. As Blaug put it: “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.” (1998, p. 703)
The only reason why DSGE is still around despite the fact that even its dullest proponents have realized by now that it is indefensible garbage is that Heterodoxy has failed to develop a suitable alternative: “... we may say that ... the omnipresence of a certain point of view is not a sign of excellence or an indication that the truth or part of the truth has at last been found. It is, rather, the indication of a failure of reason to find suitable alternatives which might be used to transcend an accidental intermediate stage of our knowledge.” (Feyerabend, 2004, p. 72)
Heterodoxy’s failure is due to the fact that it stands methodologically still in the Cambridge tradition of loose verbal reasoning: “For Keynes as for Post Keynesians the guiding motto is ‘it is better to be roughly right than precisely wrong!’” (Davidson, 1984, p. 574). #1 This contrasts with the motto of science, “it is better to be precisely right than roughly wrong!”
There is nothing to choose between failed Orthodoxy and failed Heterodoxy. Both are logically and empirically refuted. Effective critique does NOT consist of Romer’s folk-psychological crap about heroic critique and killing poor Bob; it consists of throwing false theories out of the window and incompetent scientists out of science.
As Feynman knew: “The problem is not just to say that something might be wrong, but to replace it by something ― and that is not so easy.”
Egmont Kakarot-Handtke
References
Blaug, M. (1998). Economic Theory in Retrospect. Cambridge: Cambridge University Press, 5th edition.
Davidson, P. (1984). Reviving Keynes’s Revolution. Journal of Post Keynesian Economics, 6(4): 561–575. URL
Feyerabend, P. K. (2004). Problems of Empiricism. Cambridge: Cambridge University Press.
#1 Marshall and the Cambridge school of plain economic gibberish
Blog-Reference and Blog-Reference on Sep 22
It is long known that DSGE is a failed approach, and nobody needs the critique of Romer et al., which amounts to not much more than the smarter rats abandoning the sinking ship. What is needed is a constructive idea about how to switch from the degenerated neoclassical research program to a progressive paradigm. As Blaug put it: “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.” (1998, p. 703)
The only reason why DSGE is still around despite the fact that even its dullest proponents have realized by now that it is indefensible garbage is that Heterodoxy has failed to develop a suitable alternative: “... we may say that ... the omnipresence of a certain point of view is not a sign of excellence or an indication that the truth or part of the truth has at last been found. It is, rather, the indication of a failure of reason to find suitable alternatives which might be used to transcend an accidental intermediate stage of our knowledge.” (Feyerabend, 2004, p. 72)
Heterodoxy’s failure is due to the fact that it stands methodologically still in the Cambridge tradition of loose verbal reasoning: “For Keynes as for Post Keynesians the guiding motto is ‘it is better to be roughly right than precisely wrong!’” (Davidson, 1984, p. 574). #1 This contrasts with the motto of science, “it is better to be precisely right than roughly wrong!”
There is nothing to choose between failed Orthodoxy and failed Heterodoxy. Both are logically and empirically refuted. Effective critique does NOT consist of Romer’s folk-psychological crap about heroic critique and killing poor Bob; it consists of throwing false theories out of the window and incompetent scientists out of science.
As Feynman knew: “The problem is not just to say that something might be wrong, but to replace it by something ― and that is not so easy.”
Egmont Kakarot-Handtke
References
Blaug, M. (1998). Economic Theory in Retrospect. Cambridge: Cambridge University Press, 5th edition.
Davidson, P. (1984). Reviving Keynes’s Revolution. Journal of Post Keynesian Economics, 6(4): 561–575. URL
Feyerabend, P. K. (2004). Problems of Empiricism. Cambridge: Cambridge University Press.
#1 Marshall and the Cambridge school of plain economic gibberish
July 5, 2019
How to spot economics trolls
Comment on Craig Murray on ‘How To Spot A Twitter Troll’*
Blog-Reference
Craig Murray summarizes: “It is a matter of simple fact that the British government employs a very large number of people whose full time job is to influence the political narrative on social media. The 77th Brigade of the British Army, the Integrity Initiative, MI5 and MI6 and GCHQ all run major programmes of covert online propaganda. These information warriors operate on Twitter, Facebook, and in comments sections across the internet. I have long been fascinated by the disconnect by which people, who do know and understand that the security services employ tens of thousands of people and have budgets of billions, nevertheless find it hard to accept that they may come personally into contact with their operations.”
Does this come as a surprise? No: “Plato has Socrates describe a group of people who have lived chained to the wall of a cave all of their lives, facing a blank wall. The people watch shadows projected on the wall from objects passing in front of a fire behind them, and give names to these shadows. The shadows are the prisoners’ reality. Socrates explains how the philosopher is like a prisoner who is freed from the cave and comes to understand that the shadows on the wall are not reality at all, for he can perceive the true form of reality rather than the manufactured reality that is the shadows seen by the prisoners. The inmates of this place do not even desire to leave their prison; for they know no better life.” #1
The situation has not fundamentally changed since the ancient Greeks. Newspapers, radio, TV, and social media only multiply the shadows on the blank wall. The communicative situation is schematically summarized with a graphic AXEC153. #2
So, we have three elements reality-medium-consciousness. Who controls the medium manufactures reality as it appears in consciousness. The British government has been a major player in this business since around WWI, and social media added merely a new facet to the communication mix, which consisted originally of rumor, horror stories (enemy), hero stories (own), disinformation, and censorship.
While everybody knows since George Orwell that history and actuality are, for the most part, literary fiction and medial stagings of scribes/Ministry of Truth/entertainment industry, one tends to think that science is non- and anti-hallucinatory.
The task of science is to eliminate all distortions between reality and consciousness. A materially/formally consistent theory is the best mental representation of reality that is humanly possible. Science is binary, i.e., true/false with nothing in between. The ultimate goal of science is the true theory.
This, of course, also holds for economics: “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)
The fact of the matter, though, is this: The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, etc. ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got profit ― the foundational concept of the subject matter ― wrong. Economics is not a coherent body of certain knowledge but a heap of provably false theories.
So, economics has no scientific content but is propaganda in a scientific bluff package. There has been no scientific progress for 200+ years. False theories are not replaced by true theories but simply repeated. Oskar Morgenstern criticized his academic peers 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.”
From this follows that the vast majority of economists were already trolls long before the launch of the econblogosphere. The characteristic of economics is that production and distribution of communicative content have traditionally not so much been under the control of the government as of the Oligarchy. Well-known examples are pivotal institutions like the London School of Economics, #3 the Cowles Commission, #4, or the University of Chicago. #5 This, though, is only the historical tip of the iceberg. The conclusion is not too far-fetched that, in the meantime, academia and the greater part of economics publication/ communication are orchestrated and sponsored by a handful of activist billionaires. This carries quite naturally over to the econblogosphere.
Since the scientific failures of Adam Smith/Karl Marx, who both did not understand profit and how the monetary economy works, economics has not been science but political agenda pushing. This starts with econ textbooks and ends with the EconNobel.
Spotting economics trolls is easy, they identify themselves by waving their camp flag (Walrasian, Keynesian, Marxian, Austrian, MMTer, Pluralist), announcing to improve/save the world, hype their current bellwether (excellent article, Paul), stubbornly repeat proto-scientific garbage, utter their silly left/center/right opinion, stage their pointless debates, gossip extensively about their private lives, and play their dirty tricks in the background. #6, #7, #8. There is not the slightest idea of scientific truth, i.e. of material/formal consistency, in what they produce. An economist is the epitome of a useful political idiot.
James Buchanan, himself a billionaire-funded economic agenda-pusher, called his colleagues “a bevy of camp-following whores” and more cannot be said about the academic and non-academic folks that populate the econblogosphere. It is troll business as usual.
Egmont Kakarot-Handtke
* Craig Murray
#1 Wikipedia Allegory of the Cave
#2 Graphic AXEC153 Allegory of the Cave
#3 “The London School of Economics was founded in 1895 by Beatrice and Sidney Webb, initially funded by a bequest of £20,000 from the estate of Henry Hunt Hutchinson. Hutchinson, a lawyer and member of the Fabian Society, left the money in trust, to be put ‘towards advancing its [The Fabian Society's] objects in any way they [the trustees] deem advisable.’
“In 1895, he [Sidney Webb] helped to establish the London School of Economics, using a bequest left to the Fabian Society. He was appointed Professor of Public Administration in 1912, a post he held for fifteen years. In 1892, Webb married Beatrice Potter, who shared his interests and beliefs. The money she brought with her enabled him to give up his clerical job and concentrate on his other activities. Sidney and Beatrice Webb founded the New Statesman magazine in 1913.” (Wikipedia)
#4 “Alfred Cowles III … was an American economist, businessman and founder of the Cowles Commission. He graduated from Yale in 1913, where he was a member of Skull and Bones. He was the grandson of Alfred Cowles, Sr., who was a founder of the Chicago Tribune.” (Wikipedia)
#5 “Veblen’s first job was at the University of Chicago, the university bought and paid for by John D. Rockefeller the classic robber baron, …. Rockefeller called the university ‘the best investment’ he ever made, since he intended to use it to advance the interests of his class and suppress opposition.” (Zimmermann)
#6 The economist as storyteller
#7 Economics as storytelling and entertainment for the masses
#8 Economists/MMTers: agenda pushers, distractors, blockers, muters, censors
Related 'Economics, Plato’s Cave and the Silver Blaze Case' and 'MMT and the woes of useful political idiots' and 'The end of political economics (I)' and 'The end of political economics (II)' and 'Are economics professors really that incompetent? Yes!' 'Marshall and the Cambridge School of plain economic gibberish' and 'Oxford economics — still at the proto-scientific level' and 'Economists: Jacks-of-all-trades ― except economics' and 'Mad but true: 200+ years after Adam Smith economists still have no idea what profit is' and 'Economics debate ― just another variant of hardcore wrestling' and 'Economics: The greatest scientific fraud in modern times' and 'Right troll left troll pack your bag and get out of economics'. For details of the big picture, see cross-references Political Economics/Stupidity/Corruption.
Blog-Reference
Craig Murray summarizes: “It is a matter of simple fact that the British government employs a very large number of people whose full time job is to influence the political narrative on social media. The 77th Brigade of the British Army, the Integrity Initiative, MI5 and MI6 and GCHQ all run major programmes of covert online propaganda. These information warriors operate on Twitter, Facebook, and in comments sections across the internet. I have long been fascinated by the disconnect by which people, who do know and understand that the security services employ tens of thousands of people and have budgets of billions, nevertheless find it hard to accept that they may come personally into contact with their operations.”
Does this come as a surprise? No: “Plato has Socrates describe a group of people who have lived chained to the wall of a cave all of their lives, facing a blank wall. The people watch shadows projected on the wall from objects passing in front of a fire behind them, and give names to these shadows. The shadows are the prisoners’ reality. Socrates explains how the philosopher is like a prisoner who is freed from the cave and comes to understand that the shadows on the wall are not reality at all, for he can perceive the true form of reality rather than the manufactured reality that is the shadows seen by the prisoners. The inmates of this place do not even desire to leave their prison; for they know no better life.” #1
The situation has not fundamentally changed since the ancient Greeks. Newspapers, radio, TV, and social media only multiply the shadows on the blank wall. The communicative situation is schematically summarized with a graphic AXEC153. #2
So, we have three elements reality-medium-consciousness. Who controls the medium manufactures reality as it appears in consciousness. The British government has been a major player in this business since around WWI, and social media added merely a new facet to the communication mix, which consisted originally of rumor, horror stories (enemy), hero stories (own), disinformation, and censorship.
While everybody knows since George Orwell that history and actuality are, for the most part, literary fiction and medial stagings of scribes/Ministry of Truth/entertainment industry, one tends to think that science is non- and anti-hallucinatory.
The task of science is to eliminate all distortions between reality and consciousness. A materially/formally consistent theory is the best mental representation of reality that is humanly possible. Science is binary, i.e., true/false with nothing in between. The ultimate goal of science is the true theory.
This, of course, also holds for economics: “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)
The fact of the matter, though, is this: The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, etc. ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got profit ― the foundational concept of the subject matter ― wrong. Economics is not a coherent body of certain knowledge but a heap of provably false theories.
So, economics has no scientific content but is propaganda in a scientific bluff package. There has been no scientific progress for 200+ years. False theories are not replaced by true theories but simply repeated. Oskar Morgenstern criticized his academic peers 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.”
From this follows that the vast majority of economists were already trolls long before the launch of the econblogosphere. The characteristic of economics is that production and distribution of communicative content have traditionally not so much been under the control of the government as of the Oligarchy. Well-known examples are pivotal institutions like the London School of Economics, #3 the Cowles Commission, #4, or the University of Chicago. #5 This, though, is only the historical tip of the iceberg. The conclusion is not too far-fetched that, in the meantime, academia and the greater part of economics publication/ communication are orchestrated and sponsored by a handful of activist billionaires. This carries quite naturally over to the econblogosphere.
Since the scientific failures of Adam Smith/Karl Marx, who both did not understand profit and how the monetary economy works, economics has not been science but political agenda pushing. This starts with econ textbooks and ends with the EconNobel.
Spotting economics trolls is easy, they identify themselves by waving their camp flag (Walrasian, Keynesian, Marxian, Austrian, MMTer, Pluralist), announcing to improve/save the world, hype their current bellwether (excellent article, Paul), stubbornly repeat proto-scientific garbage, utter their silly left/center/right opinion, stage their pointless debates, gossip extensively about their private lives, and play their dirty tricks in the background. #6, #7, #8. There is not the slightest idea of scientific truth, i.e. of material/formal consistency, in what they produce. An economist is the epitome of a useful political idiot.
James Buchanan, himself a billionaire-funded economic agenda-pusher, called his colleagues “a bevy of camp-following whores” and more cannot be said about the academic and non-academic folks that populate the econblogosphere. It is troll business as usual.
Egmont Kakarot-Handtke
* Craig Murray
#1 Wikipedia Allegory of the Cave
#2 Graphic AXEC153 Allegory of the Cave
#3 “The London School of Economics was founded in 1895 by Beatrice and Sidney Webb, initially funded by a bequest of £20,000 from the estate of Henry Hunt Hutchinson. Hutchinson, a lawyer and member of the Fabian Society, left the money in trust, to be put ‘towards advancing its [The Fabian Society's] objects in any way they [the trustees] deem advisable.’
“In 1895, he [Sidney Webb] helped to establish the London School of Economics, using a bequest left to the Fabian Society. He was appointed Professor of Public Administration in 1912, a post he held for fifteen years. In 1892, Webb married Beatrice Potter, who shared his interests and beliefs. The money she brought with her enabled him to give up his clerical job and concentrate on his other activities. Sidney and Beatrice Webb founded the New Statesman magazine in 1913.” (Wikipedia)
#4 “Alfred Cowles III … was an American economist, businessman and founder of the Cowles Commission. He graduated from Yale in 1913, where he was a member of Skull and Bones. He was the grandson of Alfred Cowles, Sr., who was a founder of the Chicago Tribune.” (Wikipedia)
#5 “Veblen’s first job was at the University of Chicago, the university bought and paid for by John D. Rockefeller the classic robber baron, …. Rockefeller called the university ‘the best investment’ he ever made, since he intended to use it to advance the interests of his class and suppress opposition.” (Zimmermann)
#6 The economist as storyteller
#7 Economics as storytelling and entertainment for the masses
#8 Economists/MMTers: agenda pushers, distractors, blockers, muters, censors
Related 'Economics, Plato’s Cave and the Silver Blaze Case' and 'MMT and the woes of useful political idiots' and 'The end of political economics (I)' and 'The end of political economics (II)' and 'Are economics professors really that incompetent? Yes!' 'Marshall and the Cambridge School of plain economic gibberish' and 'Oxford economics — still at the proto-scientific level' and 'Economists: Jacks-of-all-trades ― except economics' and 'Mad but true: 200+ years after Adam Smith economists still have no idea what profit is' and 'Economics debate ― just another variant of hardcore wrestling' and 'Economics: The greatest scientific fraud in modern times' and 'Right troll left troll pack your bag and get out of economics'. For details of the big picture, see cross-references Political Economics/Stupidity/Corruption.
***
Graphic AXEC139d
***
Also, to keep an eye on 'Trolls of a feather flock together' see for example Wikipedia for history
or BuzzFeed News for present-day “Science Philanthropy”.
***
Twitter/X Feb 10, 2024, The media watershed moment
June 15, 2015
Warning: Einstein can be hazardous to heterodox methodology
Comment on Lars Syll on ‘Econometrics — rhetorics and reality’
Blog-Reference
In order to rehabilitate ‘conventionally verbal based economic discourses as the principal medium of rhetoric’ Duo Qin refers to a well-known Einstein quote which reads in full length:
“In my opinion the answer to this question is, briefly, this: As far as the laws of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality.” (Einstein, 1921)
From the quote's final part Qin concludes that the laws of mathematics are ‘certain’ when ‘they do not refer to reality.’ Reality, everybody knows, is uncertain, hence mathematics, as a matter of principle, misses reality. And therefore formalization is not only useless in economics but definitively misleading.
Thus, it seems to be just the other way round: because reality is uncertain it is vagueness that captures reality. This has been the methodological gospel of the Cambridge School of Loose Verbal Reasoning since Marshall: “From his discussions with Wittgenstein, Keynes was well aware of the significance of vague concepts and the possible trade-off between precision and accuracy: This led him to conclude that formalization runs the risk of leaving behind the subject matter we are interested in.” (Coates, 2007, p. 256)
Keynes dismissed formal precision and became the prophet of vagueness: “Theories constructed with vague concepts paradoxically can maximize precision and economy.” (Coates, 2007, p. 8)
It seems that Einstein supports what became Post Keynesian and heterodox methodology. But let us read the full quote again. What exactly was the question Einstein was answering? “At this point an enigma presents itself which in all ages has agitated inquiring minds. How can it be that mathematics, being after all a product of human thought which is independent of experience, is so admirably appropriate to the objects of reality?” (Einstein, 1921), see also (Wigner, 1979), (Velupillai, 2005)
That is a bit surprising, now mathematics captures reality admirably. Einstein does not support Qin's interpretation? Not at all. Here, Einstein clarifies the puzzling relationship between the axiomatic-deductive method and reality: “It is clear that the system of concepts of axiomatic geometry alone cannot make any assertions as to the relations of real objects of this kind, which we will call practically-rigid bodies. To be able to make such assertions, geometry must be stripped of its merely logical-formal character by the co-ordination of real objects of experience with the empty conceptual frame-work of axiomatic geometry. To accomplish this, we need only add the proposition:—Solid bodies are related, with respect to their possible dispositions, as are bodies in Euclidean geometry of three dimensions. Then the propositions of Euclid contain affirmations as to the relations of practically-rigid bodies.” (Einstein, 1921)
In other words: “Formal axiomatic systems must be interpreted in some domain ... to become an empirical science.” (Boylan and O'Gorman, 1995, p. 198)
What is the domain of economics? The accustomed definition is: “Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.” (Robbins, 1935, p. 16)
The keywords are human behavior. But wait, the study of human behavior is the domain of psychology/sociology/anthropology etcetera. The domain of economics is fundamentally different from the so-called social sciences. Therefore Robbins's definition must change to Economics is the science which studies how the actual economic system works.
The economic system is something objective that follows its own structural laws. In the system's behavior, there is no vagueness and uncertainty. It is humans that are the randomizers (2015).
The inexcusable methodological dilettantism of Orthodoxy does not consist of the application of the axiomatic-deductive method but in the application of behavioral axioms. Who, except generations of economists, would ever accept utility maximization as an axiom? To paraphrase Einstein: An enigma presents itself which in all ages has agitated inquiring minds.
Egmont Kakarot-Handtke
References
Boylan, T. A., and O’Gorman, P. F. (1995). Beyond Rhetoric and Realism in Economics. Towards a Reformulation of Economic Methodology. London: Routledge.
Coates, J. (2007). The Claims of Common Sense. Moore, Wittgenstein, Keynes and the Social Sciences. Cambridge, New York, etc.: Cambridge University Press.
Einstein, A. (1921). Geometry and Experience. Website. URL
Kakarot-Handtke, E. (2015). Essentials of Constructive Heterodoxy: Behavior. SSRN Working Paper Series, 2600523: 1–17. URL
Robbins, L. (1935). An Essay on the Nature and Significance of Economic Science. London, Bombay, etc.: Macmillan, 2nd edition.
Velupillai, K. (2005). The Unreasonable Ineffectiveness of Mathematics in Economics. Cambridge Journal of Economics, 29: 849–872.
Wigner, E. P. (1979). Symmetries and Reflections, chapter The Unreasonable Effectiveness of Mathematics in the Natural Sciences, 222–237. Woodbridge: Ox Bow Press.
Cross-references: Axiomatization and Mathiness and Burn the mathematic and Don't blame the method
Blog-Reference
In order to rehabilitate ‘conventionally verbal based economic discourses as the principal medium of rhetoric’ Duo Qin refers to a well-known Einstein quote which reads in full length:
“In my opinion the answer to this question is, briefly, this: As far as the laws of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality.” (Einstein, 1921)
From the quote's final part Qin concludes that the laws of mathematics are ‘certain’ when ‘they do not refer to reality.’ Reality, everybody knows, is uncertain, hence mathematics, as a matter of principle, misses reality. And therefore formalization is not only useless in economics but definitively misleading.
Thus, it seems to be just the other way round: because reality is uncertain it is vagueness that captures reality. This has been the methodological gospel of the Cambridge School of Loose Verbal Reasoning since Marshall: “From his discussions with Wittgenstein, Keynes was well aware of the significance of vague concepts and the possible trade-off between precision and accuracy: This led him to conclude that formalization runs the risk of leaving behind the subject matter we are interested in.” (Coates, 2007, p. 256)
Keynes dismissed formal precision and became the prophet of vagueness: “Theories constructed with vague concepts paradoxically can maximize precision and economy.” (Coates, 2007, p. 8)
It seems that Einstein supports what became Post Keynesian and heterodox methodology. But let us read the full quote again. What exactly was the question Einstein was answering? “At this point an enigma presents itself which in all ages has agitated inquiring minds. How can it be that mathematics, being after all a product of human thought which is independent of experience, is so admirably appropriate to the objects of reality?” (Einstein, 1921), see also (Wigner, 1979), (Velupillai, 2005)
That is a bit surprising, now mathematics captures reality admirably. Einstein does not support Qin's interpretation? Not at all. Here, Einstein clarifies the puzzling relationship between the axiomatic-deductive method and reality: “It is clear that the system of concepts of axiomatic geometry alone cannot make any assertions as to the relations of real objects of this kind, which we will call practically-rigid bodies. To be able to make such assertions, geometry must be stripped of its merely logical-formal character by the co-ordination of real objects of experience with the empty conceptual frame-work of axiomatic geometry. To accomplish this, we need only add the proposition:—Solid bodies are related, with respect to their possible dispositions, as are bodies in Euclidean geometry of three dimensions. Then the propositions of Euclid contain affirmations as to the relations of practically-rigid bodies.” (Einstein, 1921)
In other words: “Formal axiomatic systems must be interpreted in some domain ... to become an empirical science.” (Boylan and O'Gorman, 1995, p. 198)
What is the domain of economics? The accustomed definition is: “Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.” (Robbins, 1935, p. 16)
The keywords are human behavior. But wait, the study of human behavior is the domain of psychology/sociology/anthropology etcetera. The domain of economics is fundamentally different from the so-called social sciences. Therefore Robbins's definition must change to Economics is the science which studies how the actual economic system works.
The economic system is something objective that follows its own structural laws. In the system's behavior, there is no vagueness and uncertainty. It is humans that are the randomizers (2015).
The inexcusable methodological dilettantism of Orthodoxy does not consist of the application of the axiomatic-deductive method but in the application of behavioral axioms. Who, except generations of economists, would ever accept utility maximization as an axiom? To paraphrase Einstein: An enigma presents itself which in all ages has agitated inquiring minds.
Egmont Kakarot-Handtke
References
Boylan, T. A., and O’Gorman, P. F. (1995). Beyond Rhetoric and Realism in Economics. Towards a Reformulation of Economic Methodology. London: Routledge.
Coates, J. (2007). The Claims of Common Sense. Moore, Wittgenstein, Keynes and the Social Sciences. Cambridge, New York, etc.: Cambridge University Press.
Einstein, A. (1921). Geometry and Experience. Website. URL
Kakarot-Handtke, E. (2015). Essentials of Constructive Heterodoxy: Behavior. SSRN Working Paper Series, 2600523: 1–17. URL
Robbins, L. (1935). An Essay on the Nature and Significance of Economic Science. London, Bombay, etc.: Macmillan, 2nd edition.
Velupillai, K. (2005). The Unreasonable Ineffectiveness of Mathematics in Economics. Cambridge Journal of Economics, 29: 849–872.
Wigner, E. P. (1979). Symmetries and Reflections, chapter The Unreasonable Effectiveness of Mathematics in the Natural Sciences, 222–237. Woodbridge: Ox Bow Press.
Cross-references: Axiomatization and Mathiness and Burn the mathematic and Don't blame the method
July 10, 2015
Mental messies and loose losers
Reply to comments on E.K-H's ‘Keenonomics, aggregate demand/change of debt, and some misleading critique’
Blog-Reference
I=S is the epitome of economists' scientific incompetence. If this were as plain as a meteorite hitting the earth the problem would have been fixed long ago; it is, though, just the contrary: subtle, unspectacular, counter-intuitive, subterranean, and rather involved.
Already von Neumann spotted the peculiar methodological defect of economics: “I think it is the lack of quite sharply defined concepts that the main difficulty lies, and not in any intrinsic difference between the fields of economics and other sciences.” (quoted in Mirowski, 2002, p. 146 fn. 49)
This, however, has never been a point of great concern for the representative economist. In particular, for the Cambridge School of Loose Verbal Reasoning sharpness, precision, uniqueness, rigor, bivalent logic, etcetera always amounted rather to a violation of the human right to mental messiness. This stance has habitually been defended with a false but suggestive alternative: “Marshall followed the maxim: Better to be ambiguous and relevant than precise and irrelevant.” (Colander, 1995, p. 283)
Then, Keynes occupied the realm of vagueness, ambivalence, indeterminism, fogginess, wish-wash, casual conversation, inconclusiveness, complexity, twilight, uncertainty — the realm where nothing is clear and everything is possible — as the ecological niche of Keynesianism: “Another danger is that you may ‘precise everything away’ and be left with only a comparative poverty of meaning. ... Such a problem was avoided, said Keynes, by Marshall who used loose definitions but allowed the reader to infer his meaning from ‘the richness of context’.” (Coates, 2007, p. 87)
This problem avoidance strategy was soon summed up in a catchy pseudo-choice: “For Keynes, as for Post Keynesians the guiding motto is ‘it is better to be roughly right than precisely wrong!’" (Davidson, 1984, p. 574)
With this cavalier mentality, Keynesians, and eventually the majority of other schools, have occupied the habitat between true and false where the scientific procedure of ‘conjecture and refutation’ runs into the bottomless swamp: “Another thing I must point out is that you cannot prove a vague theory wrong.” (Feynman, 1992, p. 158)
So, economics is no longer about the true economic theory; all one has to do is avoid a crystal-clear refutation. This can be achieved by persevering in fuzzy filibustering and by maintaining that a crystal-clear refutation is impossible in the first place. If, against all defensive complacency, a refutation plainly succeeds, ignorance and business-as-usual help. This has become standard operating procedure in economics, as already Morgenstern complained: “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.” (1941, pp. 369-370)
With these two stratagems, economists entrenched themselves in the swamp of anything-goes and subsequently turned to defend their scientific no-man's-land in the main with rhetorical soap bubbles. All this is — as economists always readily admit — second-best; however, “... most economists neither seek alternative theories nor believe that they can be found.” (Hausman, 1992, p. 248)
What made this deadlock possible is a tacit quid-pro-quo agreement among different camps on the legitimacy of Humpty Dumpty methodology: "When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less." "The question is," said Alice, "whether you can make words mean so many different things." "The question is," said Humpty Dumpty, "which is to be master — that's all." (Carroll, Through the Looking-Glass)
This quasi-feudal Freedom-of-Definition Privilege constitutes the different schools and has been sanctioned by the likes of Schumpeter. “For, on principle, we may call things what we please.” (1994, p. 598)
Of course, freedom of definition is a methodological illusion. It applies only to the FIRST definition. Subsequently, one has to make sure that every additional definition is consistent with the preceding ones. Overall consistency cannot be achieved in the economist's cavalier fashion: “The only way to arrive at coherent languages is to set up axiomatic systems implicitly defining the basic concepts.” (Schmiechen, 2009, p. 344)
Institutionalized economics never seriously aimed at, and therefore never arrived at, a coherent language, not to speak of an axiomatic framework of foundational concepts. Thus, debates/conversations between schools resemble nothing so much as ‘Babylonian incoherent babble’ (cf. Dow, 2005, p. 385). Without a common frame of reference, perpetual cross-talk is guaranteed. Economics fits the format of a sitcom.
The lack of a minimal common ground explains the secular stagnation of economics: “We know from the history of science that entrenched classificatory schemes and misleading descriptive vocabularies have impeded scientific advance as much or more than the complexities and observational inaccessibility of the subject matter.” (Rosenberg, 1980, p. 114)
What, then, is the — minimal, objective, consistent, testable — common conceptual ground of all of the economics?
Total period income in an elementary production-consumption economy with only one giant firm is given by the sum of wage income and distributed profit, i.e., (1) Y=Yw+Yd. Total consumption expenditures are equal to the product of price and quantity sold, i.e., (2) C=PX. That's all for a start.
The monetary profit of the business sector as a whole is then defined as the difference between consumption expenditures and wage costs, i.e., Qm≡C−Yw. Monetary saving of the household sector is then defined as the difference between total income and consumption expenditure Sm≡Y−C. Hence, Sm≡−Qm if, for a start, Yd=0. In simple words: saving Sm is equal to loss −Qm, or, dissaving −Sm is equal to profit Qm. From this follows immediately that all I=S or IS-LM models from Keynes, to Hicks, to Krugman, and all the busy blogging rest are false — irrevocably in all eternity.
Generally speaking, it holds for the production-consumption economy that Qre≡−Sm, i.e., retained profit Qre is equal to dissaving −S. And for the investment economy holds Qre≡I−Sm, i.e., retained profit is equal to the difference between investment and saving (for details see 2014). No accounting trick, no ex-ante/ ex-post filibuster, and no expected/unexpected stock changes, no equilibrium verbiage, and no natural rate of interest will ever make the household sector's saving equal to the business sector's investment expenditures. Never ever! No way! Forget it!
Saving-equals-investment is the epitome of conceptual and logical incompetence of economists of all schools. In science, there is no ecological niche between true/false and no pluralism of false theories. Humpty Dumpty’s methodological no-man’s-land is an uninhabitable swamp for every thinking human being.
The root cause of the IS error/mistake is a complete lack of understanding of what profit is. Total income is not the sum of wage income and profit but of wage income and distributed profit (2013). The profit theory is false since Adam Smith. This, in turn, means that economists have failed to capture the essence of the market system. Neither attack nor defense of the market economy ever had a sound theoretical foundation (2015). Political economics has been a complete waste of time.
The economics of the last 200 years is the most embarrassing failure in the history of modern science.
Egmont Kakarot-Handtke
References
Coates, J. (2007). The Claims of Common Sense. Moore, Wittgenstein, Keynes and the Social Sciences. Cambridge, New York, etc.: Cambridge University Press.
Colander, D. (1995). Marshallian General Equilibrium Analysis. Eastern Economic Journal, 21(3): 281–293. URL
Davidson, P. (1984). Reviving Keynes’s Revolution. Journal of Post Keynesian Economics, 6(4): 561–575. URL
Dow, S. C. (2005). Axioms and Babylonian Thought: A Reply. Journal of Post Keynesian Economics, 27(3): 385–391. URL
Feynman, R. P. (1992). The Character of Physical Law. London: Penguin.
Hausman, D. M. (1992). The Inexact and Separate Science of Economics. Cambridge: Cambridge University Press.
Kakarot-Handtke, E. (2013). Debunking Squared. SSRN Working Paper Series, 2357902: 1–5. URL
Kakarot-Handtke, E. (2014). Economics for Economists. SSRN Working Paper Series, 2517242: 1–29. URL
Kakarot-Handtke, E. (2015). Major Defects of the Market Economy. SSRN Working Paper Series, 2624350: 1–40. URL
Mirowski, P. (2002). Machine Dreams. Cambridge: Cambridge University Press.
Morgenstern, O. (1941). Professor Hicks on Value and Capital. Journal of Political Economy, 49(3): 361–393. URL
Rosenberg, A. (1980). Sociobiology and the Preemption of Social Science. Oxford: Blackwell.
Schmiechen, M. (2009). Newton’s Principia and Related ‘Principles’ Revisited, Vol. 1. Norderstedt: Books on Demand BoD, 2nd edition. URL
Schumpeter, J. A. (1994). History of Economic Analysis. New York: Oxford University Press.
Related 'Economists: Jacks of all trades ― except economics' and 'Economics ― a doctor worse than the disease' and 'Confused Confusers: How to Stop Thinking Like an Economist and Start Thinking Like a Scientist' and 'Knowledge is attainable ― even in economics'. For details of the big picture see cross-references Failed/Fake Scientists and cross-references Not a Science of Behavior and cross-references Profit (i.e., the foundational concept of economics).
Blog-Reference
I=S is the epitome of economists' scientific incompetence. If this were as plain as a meteorite hitting the earth the problem would have been fixed long ago; it is, though, just the contrary: subtle, unspectacular, counter-intuitive, subterranean, and rather involved.
Already von Neumann spotted the peculiar methodological defect of economics: “I think it is the lack of quite sharply defined concepts that the main difficulty lies, and not in any intrinsic difference between the fields of economics and other sciences.” (quoted in Mirowski, 2002, p. 146 fn. 49)
This, however, has never been a point of great concern for the representative economist. In particular, for the Cambridge School of Loose Verbal Reasoning sharpness, precision, uniqueness, rigor, bivalent logic, etcetera always amounted rather to a violation of the human right to mental messiness. This stance has habitually been defended with a false but suggestive alternative: “Marshall followed the maxim: Better to be ambiguous and relevant than precise and irrelevant.” (Colander, 1995, p. 283)
Then, Keynes occupied the realm of vagueness, ambivalence, indeterminism, fogginess, wish-wash, casual conversation, inconclusiveness, complexity, twilight, uncertainty — the realm where nothing is clear and everything is possible — as the ecological niche of Keynesianism: “Another danger is that you may ‘precise everything away’ and be left with only a comparative poverty of meaning. ... Such a problem was avoided, said Keynes, by Marshall who used loose definitions but allowed the reader to infer his meaning from ‘the richness of context’.” (Coates, 2007, p. 87)
This problem avoidance strategy was soon summed up in a catchy pseudo-choice: “For Keynes, as for Post Keynesians the guiding motto is ‘it is better to be roughly right than precisely wrong!’" (Davidson, 1984, p. 574)
With this cavalier mentality, Keynesians, and eventually the majority of other schools, have occupied the habitat between true and false where the scientific procedure of ‘conjecture and refutation’ runs into the bottomless swamp: “Another thing I must point out is that you cannot prove a vague theory wrong.” (Feynman, 1992, p. 158)
So, economics is no longer about the true economic theory; all one has to do is avoid a crystal-clear refutation. This can be achieved by persevering in fuzzy filibustering and by maintaining that a crystal-clear refutation is impossible in the first place. If, against all defensive complacency, a refutation plainly succeeds, ignorance and business-as-usual help. This has become standard operating procedure in economics, as already Morgenstern complained: “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.” (1941, pp. 369-370)
With these two stratagems, economists entrenched themselves in the swamp of anything-goes and subsequently turned to defend their scientific no-man's-land in the main with rhetorical soap bubbles. All this is — as economists always readily admit — second-best; however, “... most economists neither seek alternative theories nor believe that they can be found.” (Hausman, 1992, p. 248)
What made this deadlock possible is a tacit quid-pro-quo agreement among different camps on the legitimacy of Humpty Dumpty methodology: "When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less." "The question is," said Alice, "whether you can make words mean so many different things." "The question is," said Humpty Dumpty, "which is to be master — that's all." (Carroll, Through the Looking-Glass)
This quasi-feudal Freedom-of-Definition Privilege constitutes the different schools and has been sanctioned by the likes of Schumpeter. “For, on principle, we may call things what we please.” (1994, p. 598)
Of course, freedom of definition is a methodological illusion. It applies only to the FIRST definition. Subsequently, one has to make sure that every additional definition is consistent with the preceding ones. Overall consistency cannot be achieved in the economist's cavalier fashion: “The only way to arrive at coherent languages is to set up axiomatic systems implicitly defining the basic concepts.” (Schmiechen, 2009, p. 344)
Institutionalized economics never seriously aimed at, and therefore never arrived at, a coherent language, not to speak of an axiomatic framework of foundational concepts. Thus, debates/conversations between schools resemble nothing so much as ‘Babylonian incoherent babble’ (cf. Dow, 2005, p. 385). Without a common frame of reference, perpetual cross-talk is guaranteed. Economics fits the format of a sitcom.
The lack of a minimal common ground explains the secular stagnation of economics: “We know from the history of science that entrenched classificatory schemes and misleading descriptive vocabularies have impeded scientific advance as much or more than the complexities and observational inaccessibility of the subject matter.” (Rosenberg, 1980, p. 114)
What, then, is the — minimal, objective, consistent, testable — common conceptual ground of all of the economics?
Total period income in an elementary production-consumption economy with only one giant firm is given by the sum of wage income and distributed profit, i.e., (1) Y=Yw+Yd. Total consumption expenditures are equal to the product of price and quantity sold, i.e., (2) C=PX. That's all for a start.
The monetary profit of the business sector as a whole is then defined as the difference between consumption expenditures and wage costs, i.e., Qm≡C−Yw. Monetary saving of the household sector is then defined as the difference between total income and consumption expenditure Sm≡Y−C. Hence, Sm≡−Qm if, for a start, Yd=0. In simple words: saving Sm is equal to loss −Qm, or, dissaving −Sm is equal to profit Qm. From this follows immediately that all I=S or IS-LM models from Keynes, to Hicks, to Krugman, and all the busy blogging rest are false — irrevocably in all eternity.
Generally speaking, it holds for the production-consumption economy that Qre≡−Sm, i.e., retained profit Qre is equal to dissaving −S. And for the investment economy holds Qre≡I−Sm, i.e., retained profit is equal to the difference between investment and saving (for details see 2014). No accounting trick, no ex-ante/ ex-post filibuster, and no expected/unexpected stock changes, no equilibrium verbiage, and no natural rate of interest will ever make the household sector's saving equal to the business sector's investment expenditures. Never ever! No way! Forget it!
Saving-equals-investment is the epitome of conceptual and logical incompetence of economists of all schools. In science, there is no ecological niche between true/false and no pluralism of false theories. Humpty Dumpty’s methodological no-man’s-land is an uninhabitable swamp for every thinking human being.
The root cause of the IS error/mistake is a complete lack of understanding of what profit is. Total income is not the sum of wage income and profit but of wage income and distributed profit (2013). The profit theory is false since Adam Smith. This, in turn, means that economists have failed to capture the essence of the market system. Neither attack nor defense of the market economy ever had a sound theoretical foundation (2015). Political economics has been a complete waste of time.
The economics of the last 200 years is the most embarrassing failure in the history of modern science.
Egmont Kakarot-Handtke
References
Coates, J. (2007). The Claims of Common Sense. Moore, Wittgenstein, Keynes and the Social Sciences. Cambridge, New York, etc.: Cambridge University Press.
Colander, D. (1995). Marshallian General Equilibrium Analysis. Eastern Economic Journal, 21(3): 281–293. URL
Davidson, P. (1984). Reviving Keynes’s Revolution. Journal of Post Keynesian Economics, 6(4): 561–575. URL
Dow, S. C. (2005). Axioms and Babylonian Thought: A Reply. Journal of Post Keynesian Economics, 27(3): 385–391. URL
Feynman, R. P. (1992). The Character of Physical Law. London: Penguin.
Hausman, D. M. (1992). The Inexact and Separate Science of Economics. Cambridge: Cambridge University Press.
Kakarot-Handtke, E. (2013). Debunking Squared. SSRN Working Paper Series, 2357902: 1–5. URL
Kakarot-Handtke, E. (2014). Economics for Economists. SSRN Working Paper Series, 2517242: 1–29. URL
Kakarot-Handtke, E. (2015). Major Defects of the Market Economy. SSRN Working Paper Series, 2624350: 1–40. URL
Mirowski, P. (2002). Machine Dreams. Cambridge: Cambridge University Press.
Morgenstern, O. (1941). Professor Hicks on Value and Capital. Journal of Political Economy, 49(3): 361–393. URL
Rosenberg, A. (1980). Sociobiology and the Preemption of Social Science. Oxford: Blackwell.
Schmiechen, M. (2009). Newton’s Principia and Related ‘Principles’ Revisited, Vol. 1. Norderstedt: Books on Demand BoD, 2nd edition. URL
Schumpeter, J. A. (1994). History of Economic Analysis. New York: Oxford University Press.
Related 'Economists: Jacks of all trades ― except economics' and 'Economics ― a doctor worse than the disease' and 'Confused Confusers: How to Stop Thinking Like an Economist and Start Thinking Like a Scientist' and 'Knowledge is attainable ― even in economics'. For details of the big picture see cross-references Failed/Fake Scientists and cross-references Not a Science of Behavior and cross-references Profit (i.e., the foundational concept of economics).
For more about the Humpty Dumpty Fallacy, see AXECquery.
For more about inconclusiveness, see AXECquery.
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Graphic AXEC172
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