Occasional X: Paradigm Shift (CXXXII)

“Marxian-Keynesian Post-MMT is the future and will lead the revolution.” (Alicia Gerardo) “she apparently didn't read rothbard's history of economic thought which said: 'There is one good thing about Marx: He was not a Keynesian'.” (Robert Murphy) Marx and Keynes have no future. Both have been failed/fake science from the beginning. The state of economics is this: there is political economics and scientific economics. The Founding Fathers called themselves political economists; that is, they left no doubt that their main business was agenda pushing. Economists never got out of political economics. From the beginning, economics has not been a science but silly political agenda pushing. There has not been genuine scientific progress since the Enlightenment, only changes in propaganda. Watch the sorry contemporary academic discussion. They're just turning over the proto-scientific dung heap without ever arriving at a result that satisfies the most elementary scientific principles. “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) Economics is materially/formally inconsistent, i.e., provably false. Economics has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. Actually, economics is about how the economy works. It is a genuine systems science. To finally become a science, economics needs a Paradigm Shift from false Austrian microfoundations and false Keynesian macrofoundations to true macrofoundations (⇓ AXEC121l).

— AXEC (@EgmontHandtke) November 9, 2026

Occasional X: How it works (DXXXIX)

“Private markets contain mechanisms to guide economic actors. Property rights over the means of production incentivize owners to use resources efficiently because they reap the rewards for doing so and bear the costs of failing to do so.” (Christopher Coyne & Abigail Hall) Actually, private markets contain mechanisms to systematically guide economic actors to corrupt/criminal behavior. The representative economist never understood cross-over exploitation. He never understood profit, and consequently, how the economic system works. Scientific incompetence and utter ignorance are the representative economist's normal mental states. Left/center/right does not matter. The proof is given in table AXEC221b ⇓. Microfoundations are methodologically false. First, a Paradigm Shift is required. Therefore, the elementary production-consumption economy is given with three macroeconomic axioms in lines 1, 4, 7. Under the initial analytical conditions of market-clearing and budget-balancing, this yields the price P in line 16. 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. The profit Qm for the business sector is zero. Then, the business sector is split. The axioms are differentiated in lines 1-2, 4-5, 7-8 Now, the wage rate W in firm 1 is lowered arbitrarily; otherwise, both firms are identical in every respect. As a result, the market price P decreases in line 12. The profit of firm 1 increases in line 19; firm 2 makes a loss in line 20. Total profit remains zero. The household sector as a whole still gets the whole product O, but the workers of firm 1 can buy less with their lower wage income; the workers of firm 2 can buy more with their unchanged wage rate W and a lower price P. The Invisible Hand redistributes. The firm that somehow manages to pay less for the same labor input increases profit Qm. Firm 2 makes a loss and will go bankrupt if it does not also make a wage cut. As a result, firm 1 wins the race to the bottom. The workers of firm 1 cannot evade the wage cut and move to firm 2 because it no longer hires or doesn't exist any longer. This process of cross-over exploitation is inherent to Capitalism and inevitably leads to higher concentration. Cross-over exploitation means that one firm gains at the cost of the others, and that one group of workers gains at the cost of the others. That means that there are no classes with a common interest. Politically, intra-sectoral competition incentivizes 'class treason'. Both the economic and the political sphere favor the corrupt persons in a State, if unchecked. As a rule of thumb, the evolutionary outlook of free-market economies is not socially progressive but inherently degenerative. If profit is positive in the initial state, firm 1 increases profit, and firm 2 decreases it. If a firm can undercut minimum wage regulations, it can be said that the criminal firm wins and the honest firm loses. What remains in the long run is a degenerated/corrupted free-market economy. Other incentives work in the same direction. A firm can increase its productivity and profits with the adoption of an invention. This is the first half of the chain of interrelations. The other firms then make a loss and are pushed to the brink of bankruptcy. The first firm has an incentive to keep the invention secret, because if the other firm can adapt, the profit lead vanishes again. The systemic incentive is to restrict the spread of innovation. The Schumpeter effect only appears if knowledge is public. On closer inspection, economics is revealed as intra-sectoral cross-over exploitation among firms and among households. Ultimately, the market is not primarily an allocation mechanism but a quasi-Darwinian selection mechanism that increases the survival chances of the corrupt entrepreneur and decreases them for the honest.

— AXEC (@EgmontHandtke) November 9, 2026

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

“This debate between orthodox and heterodox economics may have been justified in the 2000s, but today economics is a diverse discipline in which a wide range of approaches are pursued.” (Mark Schieritz) True, the distinction between Orthodoxy and Heterodoxy is obsolete. Today, every economist produces his own approach. Diversity is the euphemism for inconsistency. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless (⇓ AXEC109k). Economic policy guidance has never had valid scientific foundations. It has never been much more than the blather of confused confusers. The representative economist is NOT, and never has been, a competent scientist but an agenda pusher / useful idiot / impostor / phrase monger / storyteller / troll / pseudo-psychologist / self-gloryfier / 'good-cause' fighter / clown in the political Circus Maximus. Economics needs a Paradigm Shift. But the representative economist is too stupid for it: “There is another alternative: to formulate a completely new research program and conceptual approach. As we have seen, this is often spoken of, but there is still no indication of what it might mean.” (Ingrao et al., 1990) In science, diversity is an almost sure sign of brain rot.

— AXEC (@EgmontHandtke) November 8, 2026

Occasional X: Paradigm Shift (CXXXI)

“Total garbage. The human action axiom is simply a synthetic a posteriori proposition. There is no reason to think (Kantian) synthetic a priori propositions exist and Einstein famously REJECTED synthetic a priori knowledge such as in geometry.” (Lord Keynes) “If then it is the case that the axiomatic basis of theoretical physics cannot be an inference from experience, but must be free invention, have we any hope that we shall find the correct way?” (Einstein) “In the definition which we have attempted to frame of the science of Political Economy, we have characterized it as essentially an abstract science, and its method as the method à priori.” (J. S. Mill) Science is binary true/false and nothing in between. Non-science is the swamp between true and false where ‘nothing is clear and everything is possible’ (Keynes). The distinction between science and non-science corresponds to the ancient Greeks’ distinction between episteme (= knowledge) and doxa (= opinion). The state of economics is this: there is political economics and theoretical economics. The Founding Fathers called themselves political economists; that is, they left no doubt that their main business was agenda pushing. Economists never got out of political economics. In other words, theoretical economics (= science) ultimately could not emancipate itself from political economics (= agenda-pushing). From the beginning, economics has not been a science but silly political agenda pushing. There has not been genuine scientific progress since the Enlightenment, only changes in propaganda. Watch the sorry contemporary academic discussion. They're just turning over the proto-scientific dung heap without ever arriving at a result that satisfies the most elementary scientific principles. “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) Economics has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. Actually, economics is about how the economy works. It is a genuine systems science. Von Mises's Action Axiom refers to human behavior; therefore, it is unsuitable as a starting point. Aristotle put it thus: “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.” (Aristotle, Analytica) What Austrians, as incompetent scientists, overlook is that behavioral premises are neither 'certain, true, nor primary'. Methodologically, the Action Axiom is the wrong starting point. To finally become a science, economics needs a Paradigm Shift from false behavioral microfoundations and false Keynesian macrofoundations to true macrofoundations (⇓ AXEC121l).

— AXEC (@EgmontHandtke) November 8, 2026

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

“James K. Galbraith sees jasonfurman's recent comments about 'heterodox' economics as a veiled swipe at IsabellaMWeber and as evidence that mainstream economics is showing signs of insecurity.” (Project Syndicate) Insecurity is a euphemism for the realization that mainstream economics is failed/fake science. For 200+ years, economics has claimed to be a science. But it still is not. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory & axiomatically false & materially/ formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the whole analytical superstructure is scientifically worthless. While it is true that Orthodoxy is scientifically defunct, the inevitable Paradigm Shift won't come from Heterodoxy either. Heterodox economics is also scientifically worthless. For details, see ⇛ Heterodoxy ― an axiomatic failure just like Orthodoxy https://t.co/P04clprP31 It is high time that both Orthodoxy and Heterodoxy were consigned to the Hall of Eternal Scientific Shame. To finally become a science, economics needs a Paradigm Shift from false behavioral microfoundations and false Keynesian macrofoundations to true macrofoundations (⇓ AXEC121l).

— AXEC (@EgmontHandtke) November 7, 2026

Occasional X: How it works (DXXXVI)

“Prices should be understood first and foremost as a mechanism through which monetary incomes, including profits, are generated and realized. After all, firms set prices not simply to cover their costs, but also to make profits.” (Khazbi Budunov) Time to get Price and Profit Theory right. Economics has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. Economics needs a Paradigm Shift. The representative economist will not survive it intellectually. That's a bad outlook for Khazbi Budunov. The methodologically correct approach is summarized in table AXEC244a ⇓. Microfoundations are methodologically false; therefore, the elementary production-consumption economy is given with three macroeconomic axioms in lines 1, 2, 3. Under the initial analytical conditions of market-clearing, i.e., X=O, and budget-balancing, i.e., Ec=Yw or ρEC=1, this yields the price P in line 5 and 8 as equal to unit wage costs W/R. Without budget-balancing, it is ρEC*W/R, in the general case with ρEC≠1. For a start, the price is the dependent variable here. This is a starting condition. In the most elementary case, the price is equal to unit wage costs W/R. The workers get the whole product O. The profit Qm for the business sector as a whole is zero. In the general case, the macroeconomic price depends on demand, expressed by ρEC≠1, and unit wage costs W/R. If the condition of budget balancing is lifted, then nominal demand is not equal to wage income. The market-clearing price P is now co-determined by the expenditure ratio ρE, i.e., ρE1<1 means saving of the household sector as a whole. Dissaving, i.e., ρE1>1, means that the household sector takes a credit from the Central Bank. The Central Bank stands here for the banking system. Dissaving also means that the business sector makes a profit in line 12 and accordingly has demand deposits at the Central Bank. If the household sector saves, the business sector makes a loss. As a result, the expenditure ratio ρE determines both price P (line 8) and profit/loss Qm (line 12) simultaneously. Without ρE>1, the price cannot rise above unit wage costs W/R, and there is no profit Qm. Profit is not a monetary income; distributed profit is. Profit is a balance, i.e., the difference of flows. Economists have not understood this since the time of the Founding Fathers. If the firm simply increases the price, the market-clearing condition no longer holds and the inventory increases, i.e., O−X>0. Whether the firm wants to make a profit is irrelevant. Profit appears only if ρE>1. Profit does not appear either if the firm simply increases the price. Profit is not psychic or behavioral but depends on the objective/systemic precondition ρE>1. To expect profit from the entrepreneur's wishes or expectations or price increases is as good as expecting rain from the chief's rain dance.

— AXEC (@EgmontHandtke) November 6, 2026

Occasional X: Clueless economists / Science (CCCXCIV)

“In his 1957 essay In Defense of ‘Extreme Apriorism’, Murray Rothbard embraces and defends Ludwig von Mises's methodology of praxeology against critics who claimed its rejection of empirical testing was too extreme. Rothbard argues that economics is fundamentally different from the natural sciences; rather than relying on testing hypotheses against external facts, economic theory is built on absolutely true axioms derived from the indisputable reality of human action.” (Google AI) “Psychic profit is the gain an actor obtains by achieving his most valued end instead of the most valued end he had to give up (this gain is intensive, not extensive, because value is ordinal and not cardinal). … This is a description of how people really act, not a fiction.” (Martin Gamazo) “In the definition which we have attempted to frame of the science of Political Economy, we have characterized it as essentially an abstract science, and its method as the method à priori.” (J. S. Mill) Science is binary true/false and nothing in between. Non-science is the swamp between true and false where ‘nothing is clear and everything is possible’ (Keynes). The distinction between science and non-science corresponds to the ancient Greeks’ distinction between episteme (= knowledge) and doxa (= opinion). The state of economics is this: there is political economics and theoretical economics. The Founding Fathers called themselves political economists; that is, they left no doubt that their main business was agenda pushing. Economists never got out of political economics. In other words, theoretical economics (= science) ultimately could not emancipate itself from political economics (= agenda-pushing). From the beginning, economics has not been a science but silly political agenda pushing. There has not been genuine scientific progress since the Enlightenment, only changes in propaganda. Watch the sorry contemporary academic discussion. They're just turning over the proto-scientific dung heap without ever arriving at a result that satisfies the most elementary scientific principles. “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) Economics has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. Actually, economics is about how the economy works. It is a genuine systems science. Von Mises's Action Axiom refers to human behavior; therefore, it is unsuitable as a starting point. With his Extreme Apriorism, Murray Rothbard echoes Aristotle: “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.” (Aristotle, Analytica) What Murray Rothbard, as an incompetent scientist, overlooked is that behavioral premises are neither 'certain, true, nor primary'. Methodologically, the Action Axiom is the wrong starting point. To finally become a science, economics needs a Paradigm Shift from false behavioral microfoundations and false Keynesian macrofoundations to true macrofoundations (⇓ AXEC121l) No Austrian will survive the Paradigm Shift intellectually. Austrianism is not Extreme Apriorism but Extreme Stupidity.

— AXEC (@EgmontHandtke) November 5, 2026

Occasional X: Clueless economists / Science (CCCXCIII)

“Robbins was deeply alarmed by the rising tide of government interventionism, and seeking an intellectual heavyweight to challenge Keynes’s dominance, he invited the young Austrian economist to deliver a series of lectures on business cycle theory. Hayek’s presentations were a sensation, leading to his immediate appointment as the Tooke Professor of Economic Science and Statistics at the LSE.” (Creative Deduction) The discussion between Keynes and Hayek is just another episode in the endless inconclusive blather between incompetent scientists. Keynes failed to understand the concept of profit because he was too stupid for the elementary algebra that underlies macroeconomic accounting. Therefore, he didn't understand how the economic system works. Keynesian policy guidance has never had valid scientific foundations. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. Keynes has been provably false from the start. However, this never meant that Austrianism was any better. Everybody understands that macroeconomic profit must be greater than zero. Otherwise, firms go bankrupt, and the breakdown starts. Therefore, profit has existential primacy in the free-market economy. 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. In the free-market economies, public debt has increased with minor interruptions for 200+ years. So, Qm:=(G−T)>0 has been a crucial ingredient of Capitalism's life elixir. The free-market economy is temporarily saved from implosion by the deficit-spending/money-creating duo of Treasury / Central Bank, i.e., the State. This means that the premise of Austrian economics, i.e., that the unfettered free-market economy is a self-adjusting, self-stabilizing, and self-optimizing system, is axiomatically false. And this means that Austrianism has always been proto-scientific garbage, just like Keynesianism. It's just the usual discussion between two blind men about color. To this day, neither Keynesians nor Austrians understand how profit and the price system work. In economics, the Paradigm Shift is long overdue. Neither Keynesians nor Austrians will survive it intellectually.

— AXEC (@EgmontHandtke) November 5, 2026

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

“James K. Galbraith shows why exponents of the discipline’s 'orthodoxy' are struggling to counter 'heterodox” insights.' (Project Syndicate) Both Orthodoxy and Heterodoxy are failed/fake science. Keynesianism has been proven false from the beginning (⇓ AXEC172a). Therefore, it has never been more than theatrics, or what Feynman called a Cargo Cult Science. Keynes got macroeconomics axiomatically wrong. His scientifically incompetent followers never spotted the methodological defect. After-Keynesian macrofoundations are not a real improvement of the orthodox microeconomic approach. Both are axiomatically false. Keynes, too, misunderstood the concept of profit because he was too stupid for elementary algebra. Consequently, he botched the long-overdue Paradigm Shift from microfoundations to macrofoundations. This initial blunder means that the entire field of economics (both micro and macro) is provably false. As a result, economics has never been more than silly blather for a low-IQ audience. But scientific principles have not really mattered in economics for over 200 years: “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, 1941) Together, the orthodox and heterodox economists are just turning over the scientific dung heap without ever arriving at a result that satisfies the most elementary scientific principle. The After-Keynesian critique of mainstream economics is spot on, but their alternative is also scientifically worthless. However, for a theatrical performance on the academic stage, it's good enough. After all, the show must go on. For details, see Cross-references: Keynesianism https://t.co/ZoIDUg46Lg Cross-references: Heterodoxy: https://t.co/3Ec3ZDuv5p

— AXEC (@EgmontHandtke) November 5, 2026

Occasional X: How it works (DXXXV)

“Mises in Human Action is very clear in the passage below: money prices of factor inputs do not directly determine the output prices: factor input prices are determined 'EXCLUSIVELY by the anticipation of future prices of the products'.” (Lord Keynes) Time to get Price Theory right. Economics has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. Economics needs a Paradigm Shift. The representative economist will not survive it intellectually. The methodologically correct approach is summarized in table AXEC247 ⇓. Microfoundations are methodologically false; therefore, the elementary production-consumption economy is given with three macroeconomic axioms in lines 1, 2, 3. Under the initial analytical conditions of market-clearing, i.e., X=O, and budget-balancing, i.e., Ec=Yw or ρEC=1, this yields the price P in line 6 as equal to unit wage costs W/R. Without budget-balancing it is ρEC*W/R. For a start, the price is the dependent variable here. This is a starting condition. In the most elementary case, the price is equal to unit wage costs W/R. The workers get the whole product O. The profit Qm for the business sector as a whole is zero. In the general case, the macroeconomic price depends on demand and unit wage costs. If the condition of budget balancing is lifted, i.e., nominal demand is not determined by income. The market-clearing price P is now co-determined by the expenditure ratio ρE, i.e., ρE1<1 means saving of the household sector as a whole. Dissaving, i.e., ρE1>1, means that the household sector takes a credit from the Central Bank. The Central Bank stands here for the banking system. Dissaving also means that the business sector makes a profit in line 9 and accordingly has demand deposits at the Central Bank. If the household sector saves, the business sector makes a loss. If the condition of zero distributed profit is lifted in line 13, the resulting market-clearing price in line 14 is dependent on the differentiated expenditure ratios of wage income and distributed profit income, the relative weight of distributed profit ρD, and unit wage costs W/R. This relationship consists of measurable variables and is testable in principle. The axiomatically based price formula in line 14 fully replaces Demand-Supply-Equilibrium for the elementary production-consumption economy. It replaces also the silly Demand-Supply-Equilibrium storytellers.

— AXEC (@EgmontHandtke) November 4, 2026

Occasional X: Paradigm Shift (CXXX)

“Yes it doesnt matter, I dont need a particular homo economicus. individuals and firms in Marx's framework can believe what they want, act how they desire, but ultimately the market ensures that those not in line are banished to the shadowrealm of bankrupcy.” (Moulaga expropriator) Almost right. Economics is not about how people behave but how the economic system behaves. The economic system is given with the axiomatically correct macrofoundations AXEC121l ⇓. Human behavior is formally added to the objective/systemic axiom set with the Propensity Function. As Aristotle put it 2400 years ago: “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.” (Aristotle, Analytica) The representative economist is methodologically more than 2000 years behind the curve — Walrasianism, Keynesianism, Marxianism, and Austrianism don't matter.

— AXEC (@EgmontHandtke) November 4, 2026

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

“Really? :-D it doesn't matter what guides people to do things? The incentive and behavior under the incentives doesn't matter for your economics? :-D then what do you study, you don't study the economy - how people allocate resources. So what do you study?” (Inclamiente) You are behind the curve. The question has already been answered: “The subject matter of economics is not homo oeconomicus but the economic system. Because of this, economics has to be redefined. — Old definition, subjective-behavioral: “Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.” (Lionel Robbins, 1935) — New definition, objective-structural: “Economics is the science which studies how the monetary economy works.” (AXEC) The original methodological blunder of Orthodoxy has been that it attempted to axiomatize human behavior. This is a fine example of what Feynman called cargo cult science, i.e., ‘The form is perfect. But it doesn't work.’ The correct approach consists of axiomatizing the objective structural relationships of the monetary economy.” For details, see Redefining economics (I) https://t.co/Ju2upUfGPg To finally become a science, economics needs a Paradigm Shift (AXEC121l. It's pretty obvious that low-IQ folks like Inclamiente will not survive this intellectually.

— AXEC (@EgmontHandtke) November 3, 2026

Occasional X: How it works (DXXXIV)

“Here is one of the clearest proofs of how prices have become *relatively* inflexible since the 1930s. In the 1700s and 1800s, many prices really were quite flexible, but not so today. Once you take out 1970s Stagflation (an anomaly), the data is as clear as day: …” (Lord Keynes) Price Theory has been proto-scientific garbage since the Founding Fathers. Economics has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. Price Theory has to be based on systemic axioms instead of behavioral axioms. The methodologically correct approach is summarized in table AXEC246 ⇓. Microfoundations are methodologically false; this requires a Paradigm Shift. Therefore, the elementary production-consumption economy is given with three macroeconomic axioms in lines 1, 2, 3. Under the initial analytical conditions of market-clearing, i.e., X=O, and budget-balancing, i.e., Ec=Yw, this yields the price P in line 4. For a start, the price is the dependent variable here. This is a starting condition that is lifted later. In the initial state, i.e., ρEC=1, the price is equal to unit wage costs W/R in line 6. The workers get the whole product O. The profit Qm for the business sector as a whole is zero. Now, the tacit assumption that macroeconomic accounting covers all transactions is dropped. In the best case, it registers all licit transactions. Therefore, the axioms have to include illicit transactions. This is done in lines 13 and 14. Illicit transactions consist of illicit income in line 13 and normal consumption expenditures in line 14. As an example, illicit income consists of the off-balance payments of three-letter agencies to their unofficial employees. This income is paid with central-bank-produced counterfeit money. This money is practically indistinguishable from 'original' money. The dark income does not appear in the official statistics. As a result, the market-clearing price in line 15 increases. For the special case of budget-balancing and market -clearing, macroeconomic profit is equal to the illicit income in line 17. Lord Keynes's graph can be reinterpreted as follows: The long-run inflation that started around 1950 coincides with the founding of the CIA in 1948. Since this time, their inofficial employees are paid with counterfeit money. Illicit income fuels normal consumption expenditures and increases the market price and the profit of the business sector. The inflation since the 1950s is attributable to the steady growth of all kinds of three-letter agencies. Whether this hypothesis is true or not can not be empirically established because of Dark Money. Monetary Theory has no empirical leg to stand on. Testing the Quantity Theory is impossible for all practical purposes because National Accounting is incomplete. There is no such thing as the 'clearest proof'.

— AXEC (@EgmontHandtke) November 3, 2026

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

“Why does economics work with utility functions, and not just decision rules? The key trick is the use of the mathematical technique of Lagrangians to solve the age-old philosophical 'is-ought' problem” (alz) The methodological problem with modern economics is that it is axiomatically false. Economics is failed/fake science. The microfoundations approach was doomed from the outset. The Founding Fathers defined economics as a social science, and accordingly, it has been based on subjective/behavioral assumptions/axioms. This has been the methodological ur-mistake. For example, here are the Walrasian axioms: “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 methodological mistake is that economists put the behavioral assumption of constrained optimization and equilibrium into the premises. This is a petitio principii, but economists do not know what this means. Stupidity makes faithful worshipers: “And so — faithful to the theory's conceptual cornerstones and hoping against all hope that the unthinkable may still be achieved (i.e., a satisfactory theory of the price mechanism) — the tormented upholders of the validity of the paradigmatic core of economic equilibrium theory appear singularly reluctant to face the problem of comparing expectations and results and assessing the consistency of the theory.” (Ingrao et al., 1990, p. 346) Although microfoundations is methodologically a false concept, economists repeat it nonetheless: “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, 1941, pp. 369-370) The way forward is to reconstruct economics entirely without the concepts of constrained optimization, rational expectations, equilibrium, and other NONENTITIES. In methodology, this is called a Paradigm Shift: “There is another alternative: to formulate a completely new research program and conceptual approach. As we have seen, this is often spoken of, but there is still no indication of what it might mean.” (Ingrao et al., 1990, p. 362) It means, first, that legacy economics goes down the scientific drain for good. It means, second, to go forward and perform the Paradigm Shift (⇓ AXEC113i). It means, finally, to bury microeconomists in the darkest corner of the Flat-Earth cemetery. Economics is a genuine system science, not a social science. Economists have gotten it wrong since the Founding Fathers. The EconNobel for 'economic sciences' is a scientific fraud. The representative economist is either stupid or corrupt or both.

— AXEC (@EgmontHandtke) November 3, 2026

Occasional X: Clueless economists / Science (CCCXCII)

“Economists will look you dead in the face and call this science.” (Jack Meyer) Yes, this is the sorry state of economics. It's scientifically worthless — only good for inconclusive political blather. But they award themselves the EconNobel for 'economic sciences' (AXEC136j ⇓). Science is binary true/false and NOTHING in between. Non-science is the swamp between true and false where ‘nothing is clear and everything is possible’ (Keynes). The distinction between science and non-science corresponds to the ancient Greeks’ distinction between episteme (= knowledge) and doxa (= opinion). Methodologically, economists are 2400 years behind the curve. The fact is that about ninety-nine per cent of people are satisfied with opinion, and only one per cent is devoted to episteme. Economists do NOT belong to the latter group. Economics is a cargo cult science, and economists are fake scientists, and the EconNobel is a fraud. When they've used all their arguments, the scientifically clueless hit the social media emergency brake and retreat to an etiquette class: “Personal insults are best left in the schoolyard. Nor do they contribute to the persuasiveness of your derivative arguments. You are Blocked.” (Roger Farmer, #EconBlocker) The state of economics is this: there is political economics and theoretical economics. The founding fathers called themselves political economists; that is, they left no doubt that their main business was agenda pushing. Economists never got out of political economics. In other words, theoretical economics (= science) ultimately could not emancipate itself from political economics (= agenda-pushing). This is why economics never rose above the level of a proto- or cargo cult science. There are the hard rocks of true or false and the swamp between them. The swamp is the natural habitat of morons, agenda pushers, confused confusers, incompetent scientists, political economists, status-quo inertionalists, commonsensers, and anti-scientists. Political economists are natural-born swampies. In marked contrast to scientists who drive the question under discussion to the point of a clear-cut decision between true or false, neither the orthodox nor the heterodox swampy has a genuine interest in a definite outcome but seeks to keep matters in the swamp of inconclusiveness. Swampiness is what Popper called an immunizing stratagem because: “Another thing I must point out is that you cannot prove a vague theory wrong.” (Feynman) Therefore, the cargo cult scientist is mainly occupied with producing a methodological smoke screen that consists of vague concepts, anything-goes, pluralism of false theories, alleged complexity, ontological uncertainty, unreliable data, faux humility, the post-modern replacement of true theory by political narrative, and a veritable artillery barrage of silly excuses. The beauty of the swamp is that logical and empirical failure is inconsequential.” (AXEC) For more details, see What is so great about cargo cult science? or, How economists learned to stop worrying about failure https://t.co/VoQJMa4CUZ From the beginning, economics has not been a science but silly political agenda pushing. There has not been genuine scientific progress since the Enlightenment, only changes in propaganda. Watch the sorry contemporary academic discussion. They're just turning over the scientific dung heap without ever arriving at a result that satisfies the most elementary scientific principle: “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, 1941) Economics has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. The minimum requirement in science is logical consistency. Economists never rose above confused blather. As far as an approach is formalized, economists apply the wrong math. However: “The problem is not just to say that something might be wrong, but to replace it by something ― and that is not so easy.” (Feynman) To finally become a science, economics needs a Paradigm Shift. The current group of academic non-scientists will not survive this.

— AXEC (@EgmontHandtke) November 2, 2026

Occasional X: Paradigm Shift (CXXIX)

“Yes. General Equilibrium Theory is a language that enforces internal consistency. Like individual rationality: GE alone is irrefutable. That does not mean it is worthless: Far from it.” (Roger Farmer) Yes, consistency is important: “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) However, each Paradigm stands or falls with its premises: “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.” (Aristotle, Analytica) J. S. Mill was perfectly clear about the starting problem: “What are the propositions which may reasonably be received without proof? That there must be some such propositions all are agreed, since there cannot be an infinite series of proof, a chain suspended from nothing. But to determine what these propositions are, is the opus magnum of the more recondite mental philosophy.” The problem with modern macroeconomics is that it is axiomatically false. Economics is failed/fake science. The microfoundations approach was doomed from the outset. The Founding Fathers defined economics as a social science, and accordingly, it has been based on subjective/behavioral assumptions/axioms. This has been the methodological ur-mistake. For example, here are the Walrasian axioms: “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 methodological mistake is that economists put the behavioral assumption of constrained optimization and equilibrium into the premises. This is a petitio principii, but economists do not know what this means. Stupidity makes faithful worshipers: “And so — faithful to the theory's conceptual cornerstones and hoping against all hope that the unthinkable may still be achieved (i.e., a satisfactory theory of the price mechanism) — the tormented upholders of the validity of the paradigmatic core of economic equilibrium theory appear singularly reluctant to face the problem of comparing expectations and results and assessing the consistency of the theory.” (Ingrao et al., 1990, p. 346) Although microfoundations is methodologically a false concept, economists repeat it nonetheless: “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, 1941, pp. 369-370) The way forward is to reconstruct economics entirely without the concepts of constrained optimization, rational expectations, equilibrium, and other NONENTITIES. In methodology, this is called a Paradigm Shift: “There is another alternative: to formulate a completely new research program and conceptual approach. As we have seen, this is often spoken of, but there is still no indication of what it might mean.” (Ingrao et al., 1990, p. 362) It means, first, that legacy economics goes down the scientific drain for good. It means, second, to go forward and perform the Paradigm Shift (⇓ AXEC113i). It means, finally, to bury microeconomists in the darkest corner of the Flat-Earth cemetery. Economics is a genuine system science, not a social science. Economists have gotten it wrong since the Founding Fathers. The EconNobel for 'economic sciences' is a scientific fraud. Roger Farmer is a retarded blatherer.

— AXEC (@EgmontHandtke) November 1, 2026

Occasional X: The futile attempt to recycle Kalecki (XVIII)

“Assessment: AXEC is partly right about accounting, but substantially overstates his conclusions. My rating: 4/10 for the economic argument as a whole. His emphasis on accounting consistency, profits and financial balances is valuable. However, his claim that Kalecki never understood profit is poorly supported, and his assertion that an economy must implode whenever aggregate monetary profit becomes negative is not established by his equation.” (James Young)‡ One of the unavoidable stomach-churners in economics is that scientifically incompetent folks pontificate about methodology. One of the dumbest phrases in economics is: That's an accounting identity, but economics is about human behavior. No, psychology and sociology are about human behavior; economics is about the economic system. Accounting relationships are systemic laws, and, best of all, they are testable. To be sure, utility maximization is not a testable proposition. Actually, it is much worse; for example, here are the neo-Walrasian axioms: “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) This behavioral axiom set consists of psycho-social hallucinations; its variables are NONENTITIES, and therefore its conclusions are not testable in principle. Equilibrium is the worst petitio principii of all. Every theory/model that contains the concept of equilibrium/disequilibrium is proto-scientific garbage. Economic methodology has been a scientific disaster from the Founding Fathers onward. Unfortunately, Keynes messed up the unavoidable Paradigm Shift from microfoundations to macrofoundations. See the graphic AXEC172a https://t.co/ynvCeZQGlx. Kalecki was somewhat better, but he, too, messed up profit and distributed profit. Profit is a balance, and distributed profit is a flow. Because of his methodological blunder, he got the concepts of income and saving wrong. In the elementary case, income is NOT the sum of wage income and profit, but of wage income and distributed profit. That's the first axiom in line 1. See also Kalecki got it wrong, Allais got it right https://t.co/MybEzLGDkg In table AXEC238a ⇓, the case of profit distribution is consistently dealt with. From the objective systemic axiom set in lines 1-3 follows that profit is equal to distributed profit, i.e., Qm:=Yd, if the expenditure ratio ρE of both wage income Yw and distributed profit Yd is 1 (line 15). In this case, the Capitalists reproduce their profit by fully spending their distributed profit on consumption. Thereby, they get a part of the real product O, without ever having contributed to its production. This is what Kalecki's famous punch line: they get what they spend, ultimately means. In principle, the Capitalists as a whole can make their profit as big as they want. Practically, they don't, because normally there is retained profit, and distributed profit is mostly saved. Luckily, there are other sources of profit Qm:=Yd+(I−Sm)+(G−T)+(X−M). Keynes and Kalecki are only special cases of the methodologically correct AXEC macrofoundations and, by implication, of the systemic Profit Law. Strictly speaking, Keynes, Kalecki and their followers were too stupid for the elementary math that underlies macroeconomic accounting. Note well that no behavioral economist ever arrived at the systemic Profit Law. Profit is the foundational variable of the subject matter. All behavioral profit explanations are provably false. Because profit is false, the whole of legacy economics is scientifically worthless. Against this backdrop, Kalecki was a real progress. ‡ It has been established in the working paper Mathematical Proof of the Breakdown of Capitalism https://t.co/2NkX9FRklW

— AXEC (@EgmontHandtke) October 30, 2026

Occasional X: The futile attempt to recycle Kalecki (XVII)

“Kalecki's Theory of Economic Dynamics explains more about how firms actually set prices in a few chapters than the entire theory of subjective value and marginal utility.” (Mr.Keynes) Neither Mr.Keynes nor Michał Kalecki ever understood profit. That's the worst thing for an economist. For details, see Kalecki: the man who missed it by a hair's breadth https://t.co/JOlDMelY4C and 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 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. Qm≥0 is the systemic existential precondition. This is easy to understand, but economists still don't get it. They can only think behaviorally, not systemically. PsySoc economics is proto-scientific garbage. 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 took the first step, i.e., a valid critique. He never managed to advance to the Paradigm Shift. As Feynman put it: “The problem is not just to say that something might be wrong, but to replace it by something ― and that is not so easy.” To sell his outdated book on social media is a losing proposition.

— AXEC (@EgmontHandtke) October 30, 2026

Occasional X: Paradigm Shift (CXXVIII)

“‘You tried to reason from an identity.’ A young Ronald Coase (or was it Hayek?) growled. ‘You should know better. In the real world, factors like ‘V’ and ‘T’ cannot simply be assumed to be held constant, because aggregates don’t interact with aggregates, individuals interact with individuals.'” (Nikolai Rostov) The problem with modern macro is that it is axiomatically false. Economics is failed/fake science. Microfoundations was dead from the start. The Founding Fathers defined economics as a social science, and accordingly, it has been based on subjective/behavioral assumptions/axioms. This has been the methodological ur-mistake. For example, here are the Walrasian axioms: “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 methodological mistake is that economists put the behavioral assumption of constrained optimization and equilibrium into the premises. This is a petitio principii, but economists do not know what this means. Stupidity makes faithful worshipers: “And so — faithful to the theory's conceptual cornerstones and hoping against all hope that the unthinkable may still be achieved (i.e., a satisfactory theory of the price mechanism) — the tormented upholders of the validity of the paradigmatic core of economic equilibrium theory appear singularly reluctant to face the problem of comparing expectations and results and assessing the consistency of the theory.” (Ingrao et al., 1990, p. 346) Although microfoundations is methodologically a false concept, economists repeat it nonetheless: “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, 1941, pp. 369-370) The way forward is to reconstruct economics entirely without the concepts of constrained optimization, rational expectations, equilibrium, and other NONENTITIES. In methodology, this is called a Paradigm Shift: “There is another alternative: to formulate a completely new research program and conceptual approach. As we have seen, this is often spoken of, but there is still no indication of what it might mean.” (Ingrao et al., 1990, p. 362) It means, first, that legacy economics goes down the scientific drain for good. It means, second, to go forward and perform the Paradigm Shift (⇓ AXEC113i). It means, finally, to bury microeconomists in the darkest corner of the Flat-Earth cemetery. Economics is a genuine system science, not a social science. Economists have gotten it wrong since the Founding Fathers. The EconNobel for 'economic sciences' is a scientific fraud.

— AXEC (@EgmontHandtke) October 30, 2026

Occasional X: AI — boosting scientific competence in economics (XXI) / Axiomatization

“Oh, look, Grok thinks you are full of shit. I can try Claude if you want another opinion?” (RFB) No, I don't want another opinion. With the Grok piece, we are methodologically about 3000 years back in time. Grok doesn't know the difference between opinion (doxa) and knowledge (episteme). With brute computer power, Artificial Intelligence has become the biggest Sophist of all time. In my view, there is no other way to end the hype but to run American and Chinese AI against each other and check who produces only opinion and who can do science. I have a pretty good idea of who will lose and who will win. That Austrians are pro-Grok is an almost sure indicator that it will lose. Austrians are genetically on the wrong side. To recall, it was the ancient Greeks who first introduced the distinction between doxa and episteme, i.e., opinion and knowledge. And then they drew the line of demarcation between non-science and science. The term ‘conventionalist stratagem’ has been introduced into methodology by Popper. Boiled down to essentials, it amounts to the application of all possible communicative means in order to prevent a clear-cut true/false outcome. As a matter of fact, the stratagem issue goes back to the origin of science. Plato had been confronted by the Sophists, whose selling proposition was that they could win the client’s case no matter whether they were de facto right or wrong. “Plato’s main concern with the Sophists is that their rhetoric does not provide an adequate view of justice Doxa – public opinion: Sophistic manipulation of doxa is aimed at persuasion only, Episteme – true knowledge: Plato’s goal beyond persuasion is to discover epistemic truth.” I will wait for the great showdown between the cheap Grok hype and a genuine AI. Current economics is the ideal case for establishing whether AI can do only big-style Sophistry and whether it is failed/fake science (cargo cult science in Feynman's term). In the meantime, some obvious faults of Grok: G: “This is a promotional claim from Egmont Kakarot-Handtke’s AXEC …” A: No, this is the clear answer to a clear request: “Define the 'economic system'. I'll wait...” (Yope) Sophistry, i.e., framing, starts with the first sentence. G: “… it does not constitute “systemic economic laws” in the sense of robust, predictive, behavior-independent regularities … nor does it fully replace von Mises’s Action Axiom.” A: Yes, it does; the Paradigm Shift does exactly this. G: “The “First Economic Law” consolidates the axioms/ratios into something like …. (under market-clearing conditions).” A: Provably false, ρX is generally NOT market clearing. Grok overlooked the paper Primary and secondary markets https://t.co/whzBvrTfRr G: “The model is elementary by design and therefore limited.” A: Sheer idiocy. Axioms are the most abstract and shortest formulation of a discipline. Limitation is the very characteristic quality. Grok does not understand the starting problem: “What are the propositions which may reasonably be received without proof? That there must be some such propositions all are agreed, since there cannot be an infinite series of proof, a chain suspended from nothing. But to determine what these propositions are, is the opus magnum of the more recondite mental philosophy.” (J. S. Mill) To call axioms accounting identities is one of the dumbest phrases in economics. G: “'Behavior-free' is largely illusory.” Sheer idiocy. The axioms are systemic, i.e., behavior-free. That does not mean that the AXEC approach is behavior-free. Grok obviously overlooked the Propensity Function. The Propensity Function as general formalization of Economic Man/Woman https://t.co/aiUTmdmA6l G: “The framework has not displaced mainstream macro, Austrian economics, or other approaches in the literature; it remains a niche blog/SSRN project with strong claims and limited engagement with formal testing or competing explanations.” What does this prove? That the academic representatives of legacy economics are intellectually incapable of getting out of their provably false Paradigm. They violate scientific standards since the Founding Fathers: “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, 1941) Grok only parrots long-refuted excuses. For details, see Failed economics: The losers’ long list of lame excuses https://t.co/0wJu2eGRjN Grok is a new iteration of Sophistry. It stands no chance against genuine scientific reasoning. Grok will go down the scientific drain, together with Walrasianism, Keynesianism, Marxianism, and Austrianism. Let the AI games begin with economics as the all-decisive test case.

— AXEC (@EgmontHandtke) October 27, 2026

 

Schopenhauer wrote the handbook for Sophists: Die Kunst, Recht zu behalten