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November 8, 2026

Occasional X: How it works (DXXXVIII)

“Real GDP growth has been lower globally over the last forty years than it was before PCs. All this stuff that claimed to make us more productive just redistributed wealth rather than make us all more wealthy.” (Aswath Damodaran, quoted by Steve Hanke) Aswath Damodaran never understood profit, and consequently, the relationship between productivity, real and nominal GDP. The proof is given in table AXEC235c ⇓. Microfoundations are methodologically false; therefore, the elementary production-consumption economy is given with three macroeconomic axioms in lines 1-3. Under the initial analytical conditions of market-clearing and budget-balancing, this yields the price P in line 5. The price is the dependent variable here. In the initial state, the price is equal to unit wage costs W/R. The workers get the whole product O. Here, consumption good output is real GDP. The profit Qm for the business sector as a whole is zero in line 11. If the condition of budget balancing is lifted, the market clearing price is given by P=:ρEC*W/R. This formula replaces the silly Supply-Demand-Equilibrium cross. It is generalized in lines 15-21. In the most elementary case, the following relationships hold. If the productivity R increases, consumption good output O (undifferentiated real GDP) increases in line 2. Under the condition of market clearing, the price P falls in line 5. The nominal GDP, here Ec, stays the same under the condition of budget-balancing, i.e., Ec=Yw. Profit is still zero in line 11. In sum, in the elementary case, a productivity increase does not show up in an increase in nominal GDP and not in an increase in macroeconomic profit Qm. However, in real terms (i.e., real GDP=O) 'it makes us all more wealthy '. Aswath Damodaran got these interdependencies wrong. It's an entirely different thing, of course, if the starting condition L=constant is lifted.
— AXEC (@EgmontHandtke) November 8, 2026

October 20, 2026

Occasional X: There is an absolute limit to the growth of public debt (VII)

“The Debt/GDP ratio should not be stable at the top of a business cycle. It should be stable over the whole cycle. If it is stable at the top of the business cycle, it will ratchet up over the whole cycle (as we have seen since 2000). This is unsustainable.” (Jon Steinsson) In free-market economies, public debt has increased with minor interruptions for 200+ years. Growing debt has always been a crucial ingredient in Capitalism's life elixir. The representative economist doesn't get it. Put simply, he gets the foundational concepts of profit, distributed profit, income, saving, deficit, and debt wrong. That's why economics has been failed/fake science for 200+ years. The monetary economy in general thrives on growing private/public debt. If this growth stops, the economy implodes. Macroeconomic profit Qm is given by the axiomatically correct Profit Law Qm:=(I−Sm)+(G−T)+(X−M)+Yd. The Law implies Qm:=(G−T)>0, i.e., macroeconomic profit is (co-)produced by deficit-spending/money-creation, i.e., the growth of public debt. The minimum requirement for a free-market economy is that macroeconomic profit is greater than zero, i.e., Qm≥0. If Qm<0, recession/depression/breakdown results. This should be easy to understand, but it has always been above economists' mental capacity. The free-market economy is continuously saved from breakdown by the deficit-spending/money-creating duo of Treasury/Central Bank, i.e., the State. This means that the premise of mainstream economics, i.e., that the unfettered free-market economy is a self-adjusting, self-stabilizing, and self-optimizing system, is axiomatically false. Ultimately, this means that the representative economist is too stupid for science. Currently, the USA is exploding the public debt. This increases macroeconomic profit Qm, according to the Profit Law. The point is that this is only the beginning. Profit will continue to increase exponentially and with it the number of billionaires/trillionaires. It does not matter how badly the real economy performs. The growing public debt ultimately benefits WeTheOligarchy and not WeThePeople. Since the household sector is taxed for interest on government bonds, there is an absolute upper limit for the growth of public debt, which is roughly given by public_debt * avg_interest_rate ≦wage_income. Economic problems, though, start much earlier because of other irreducible items in the budget (military, health, etc.) and a not exactly known upper tax-to-income limit. The limit moves further away into the future if the interest rate approaches zero. If interest rates go up, the wall will be hit sooner. Note well that the State acts as the interest collector for WeTheOligarchy. The USA is a clear example of how Capitalism works and that it will break down with systemic necessity. President Trump is currently in acceleration mode.
— AXEC (@EgmontHandtke) October 20, 2026

October 11, 2026

Occasional X: How it works (DXXV)

“Those large deficits in the 2010s set the stage for today's looming fiscal crisis. The high debt/gdp ratio today is the footprint of all those large deficits, in spite of the French government's low funding costs at the zero lower bound in the 2010s. Those large deficits certainly did not spur enough growth for France to simply grow out of the high debt/gdp ratio, contrary to what was advertised.” (Hanno Lustig) France is a good example of the self-destructive working of Capitalism. In free-market economies, public debt has increased with minor interruptions for 200+ years. Growing debt has always been a crucial ingredient in Capitalism's life elixir. The representative economist doesn't get it. Put simply, he gets the foundational concepts of profit, distributed profit, income, saving, deficit, and debt wrong. That's why economics has been failed/fake science for 200+ years. The monetary economy in general, and the French economy, in particular, thrives on growing private/public debt. If this growth stops, the economy implodes. Macroeconomic profit Qm is given by the axiomatically correct Profit Law Qm:=(I−Sm)+(G−T)+(X−M)+Yd. The Law implies Qm:=(G−T)>0, i.e., macroeconomic profit is (co-)produced by deficit-spending/money-creation, i.e., the growth of public debt. The minimum requirement for a free-market economy is that macroeconomic profit is greater than zero, i.e., Qm≥0. If Qm<0, recession/depression/breakdown results. The free-market economy is continuously saved from breakdown by the deficit-spending/money-creating duo Treasury/Central Bank, i.e., the State. This means that the premise of mainstream economics, i.e., that the unfettered free-market economy is a self-adjusting, self-stabilizing, and self-optimizing system, is axiomatically false. Ultimately, this means that the representative economist is too stupid for science. Hanno Lustig is living proof. Currently, both France and the USA are exploding the public debt. This increases macroeconomic profit Qm, according to the Profit Law. The point is that this is only the beginning. Profit will continue to increase exponentially and with it the number of billionaires/ trillionaires. It does not matter how bad the real economy performs. The growing public debt ultimately benefits WeTheOligarchy and not WeThePeople. Since the household sector is taxed for interest on government bonds, there is an absolute upper limit for the growth of public debt, which is roughly given by public_debt * avg_interest_rate ≦wage_income. Economic problems, though, start much earlier because of other irreducible items in the budget (military, health, etc.) and a not exactly known upper tax-to-income limit. The limit moves further away into the future if the interest rate approaches zero. If interest rates go up, the wall will be hit sooner. France is a clear example of how Capitalism works and that it will break down with systemic necessity.
— AXEC (@EgmontHandtke) October 11, 2026

October 9, 2026

Occasional X: How it works (DXXIV)

“Since the end of 2019, US corporate profits after tax are up 76%. Nominal GDP - the total value of everything the economy produces - is up just 48%. That is not all clever management and artificial intelligence. A large part of it is redistribution. For almost 60 years, workers’ share of US national income - the labour share - hovered around 78% once you strip out the business cycle. Today it is down to 72%, the lowest since 1963, which is as far back as my data go. What workers have lost, companies have gained. This is where Michał Kalecki comes in.” (Lars Christensen) Neither Lars Christensen nor Michał Kalecki ever understood profit. As a logical consequence, they never understood how the economic system works. For details, see Cross-references: Kalecki https://t.co/FemYl1aA8M The monetary economy in general, and the US economy, in particular, thrives on growing private/public debt. If this growth stops, the economy implodes. Macroeconomic profit Qm is given by the axiomatically correct Profit Law Qm:=(I−Sm)+(G−T)+(X−M)+Yd. The Law implies Qm:=(G−T)>0, i.e., macroeconomic profit is (co-)produced by deficit-spending/money-creation, i.e., the growth of public debt. The minimum requirement for a free-market economy is that macroeconomic profit is greater than zero, i.e., Qm≥0. If Qm<0, recession/depression/breakdown results. The free-market economy is continuously saved from breakdown by the deficit-spending/money-creating duo Treasury/Fed, i.e., the State. This means that the premise of mainstream economics, i.e., that the unfettered free-market economy is a self-adjusting, self-stabilizing, and self-optimizing system, is axiomatically false. This means that economics is a failed/fake science. Ultimately, this means that the representative economist is scientifically incompetent. Michał Kalecki was no exception. Currently, President Trump explodes the public debt. This increases macroeconomic profit Qm according to the Profit Law.
— AXEC (@EgmontHandtke) October 9, 2026

September 4, 2026

Occasional X: Clueless economists / Science (CCCLXXXVII)

“People often do not sufficiently understand G.D.P. To discuss it. So, as a public favour, I have summarised the three different ways to calculate G.D.P. and their respective categories in depth and unambiguity.” (Nikolai Rostow)

Nikolai Rostow does not understand profit. That's… pic.twitter.com/uFzERNZV8U
— AXEC (@EgmontHandtke) September 4, 2026

July 27, 2026

Occasional X: Econ 101― still proto-scientific garbage (XVIII)

“So, GDP can be measured also by adding up everyone’s incomes – wages, salaries, interests, profits, and government income. GDP and national income are therefore two sides of the same coin.” (Partha Dasgupta)

This is the foundational error of legacy economics. Partha Dasgupta's…
— AXEC (@EgmontHandtke) July 27, 2026

Occasional X: How it works (CDXCIII)

“Getting this under control is theoretically doable, but it would be extremely painful and politically difficult. In 2002, Britain's national debt was around £350 billion, representing roughly 29% to 30% of GDP. Fast-forward to now and the debt has surpassed £2.8 trillion.”…
— AXEC (@EgmontHandtke) July 27, 2026

July 8, 2026

Occasional X: Clueless economists / Science (CCCLIII)

“GDP answers the question posed to it, as well as we know how: What is the total value of goods and services produced in the market economy, and what is the value of income earned by such production in the market economy? It is a terrible measure of things it wasn't designed to…
— AXEC (@EgmontHandtke) July 8, 2026

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

“Debates on what monies to include or not to include in GDP have been going on forever, some examples are about profits or interest/fees on usury(debt).” (Stefan Demetz)

Yes, economic debates go on endlessly without reaching a definite conclusion because economics is failed… pic.twitter.com/e7UcGTlYNN
— AXEC (@EgmontHandtke) July 8, 2026

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

“GDP(GNI/GNP) accounting is just a necessary evil, as other baseline measurement methods are worse.” (Stefan Demetz)

I do NOT say that GDP accounting is unnecessary; I say that it is done wrong because the representative economist is too stupid for elementary algebra. It is not…
— AXEC (@EgmontHandtke) July 8, 2026

Occasional X: Clueless economists / Science (CCCLII)

“Actually, GDP sucks. I say that as an expert on reconstructions of national accounting. But it sucks in the way that all critics never say: it understates the massive gains in wellbeing that humanity got.” (Vincent Geloso)

Yes, GDP sucks, because the 'expert on reconstructions… pic.twitter.com/vCGuuWx4Tr
— AXEC (@EgmontHandtke) July 8, 2026

May 14, 2026

Occasional X: Clueless economists / Breakdown (XXV)

“Japan carries the world's highest debt-to-GDP ratio (~260%). As rates rise, the cost of servicing that debt becomes alarming, and investors are demanding a risk premium.” (Tobias Carlisle)

If you didn't see this coming since 2020‡, you are scientifically incompetent.

The…
— AXEC (@EgmontHandtke) May 14, 2026

February 15, 2026

Occasional X: How it works (CDLI)

“'High debt share hampers GDP growth' is still somehow a received wisdom preached to developing countries including China, yet just a boomer fat finger error” (Hongshen Zhu)

Not the debt share is relevant for economic growth, but the increase/decrease of the debt, i.e., the… pic.twitter.com/cztEqAFTfB
— AXEC (@EgmontHandtke) February 15, 2026

January 24, 2026

Occasional X: Clueless economists / Productivity (I)

#Economics #AllYouNeedToKnow

“However, standard labour productivity aggregates wages, profits, rents, and interest into its numerator while normalising solely by labour input. ” (James Young)

Because wages are flows and macroeconomic profit is a difference of flows, “wages,… pic.twitter.com/9VTSfzlh7V
— AXEC (@EgmontHandtke) January 24, 2026

December 22, 2025

Occasional X: How it works (CDXXVIII)

#Economics #AllYouNeedToKnow

“Fun fact, the entire GDP growth in the UK since 2019 has been driven by government, not the private sector. Similar entertaining picture in Germany. How did this happen?” (Michael Arouet)

Michael Arouet has no idea how the economy works. This is…
— AXEC (@EgmontHandtke) December 22, 2025

Ha, educate yourself.

“Oligarchy (from Ancient Greek ὀλιγαρχία (oligarkhía) 'rule by few'; from ὀλίγος (olígos) 'few' and ἄρχω (árkhō) 'to rule, command') is a form of government in which power rests with a small number of people. Leaders of such regimes are often referred to…
— AXEC (@EgmontHandtke) December 22, 2025

December 7, 2025

Occasional X: Clueless economists / Profit (CXVIII)

#Economics #AllYouNeedToKnow

“You have to be wildly optimistic to believe that corporate profits as a percent of GDP can, for any sustained period, hold much above 6%.” (Warren Buffett)

Clearly, Warren Buffett does not understand profit, and therefore, how Capitalism works.…
— AXEC (@EgmontHandtke) December 7, 2025

December 3, 2025

Occasional X: Clueless economists / Science (CCXXXVI)

#Economics #AllYouNeedToKnow

“In undergrad, I took a course called 'critical analysis of market economies'. 1st lecture, prof arrives & writes Y=C+I+G+XN on the blackboard. Then says: 'You won't see GDP equations here, because no human relations can be reduced to numbers.'”…
— AXEC (@EgmontHandtke) December 3, 2025

November 20, 2025

Occasional X: How it works (CDXIV)

#Economics #AllYouNeedToKnow

“Are the credit→GDP, credit→profits, and credit→asset-price results enough to fully falsify Selgin’s residual claims (“Intermediationism.”)? … The evidence is conclusive: Credit creation is the causal engine of nominal GDP, profits, inflation,…
— AXEC (@EgmontHandtke) November 20, 2025

November 10, 2025

Occasional X: How it works (CDXI)

#Economics #AllYouNeedToKnow

“Debt sustainability is well captured in a simple formula that goes back to 1944. The interest rate and GDP growth determine the change in the debt-to-GDP ratio.” (jeroen blokland)

Yeah, that's math for morons. If the debt-to-gdp ratio is defined…
— AXEC (@EgmontHandtke) November 10, 2025

November 7, 2025

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

#Economics #AllYouNeedToKnow

“… the poorest US state Mississippi has higher GDP per capita than France or Italy …” (Michael Arouet)

“Washington D.C.'s key industries include government and contracting, security and technology, professional and business services, healthcare,…
— AXEC (@EgmontHandtke) November 7, 2025

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Knowledge only — no opinion

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

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

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

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

Political economics is scientifically worthless.

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

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

Economics is a failed science. Economists are incompetent scientists.

Profit

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

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

The hybrid science

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

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

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

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

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

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

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

Narrative vs.Theory

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

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

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

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

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

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

Theory starts with a set of objective and consistent axioms.

Paradigm Shift

"The problem is not just to say that something might be wrong, but to replace it by something — and that is not so easy." (Feynman)

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

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

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

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

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

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

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

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

Selftest and to watch for

You apply one of these items

• supply-demand-equilibrium,

• general equilibrium,

• marginal utility,

• well-behaved production functions,

• total income = value of output,

• total income = wages + profits,

• I=S,

• wage rate down - employment up,

• behavioral axioms?

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

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

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

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

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

To be replaced (1)

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

“As with any Lakatosian research program, the neo-Walrasian program is characterized by its hard core, heuristics, and protective belts. Without asserting that the following characterization is definitive, I have argued that the program is organized around the following propositions: HC1 economic agents have preferences over outcomes; HC2 agents individually optimize subject to constraints; HC3 agent choice is manifest in interrelated markets; HC4 agents have full relevant knowledge; HC5 observable outcomes are coordinated, and must be discussed with reference to equilibrium states.” (Weintraub)

The inescapable Paradigm Shift consists of the move from this obsolete hard core to the superior set of structural axioms.

To be replaced (2)

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

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

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

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

Consensus

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

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

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

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

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

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

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

About me

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

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

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

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

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

Achim Truger,

German Council of Economic Experts,

in a failed attempt to be ironic

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

William Luther

Assistant Professor of Economics

in a failed attempt to be funny

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

Dean

About the rest of economics

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

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

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

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

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

Nopopop

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

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

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

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

Focus

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

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

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

Science is about true/false and nothing else.

Disclaimer

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

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

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

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

Outlook

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

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

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

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

Major economic policy implication

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

Right policy depends on true theory.

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

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