Occasional X: Clueless economists / Money (CXLXXV)

“That money is a store of value is absolutely wrong. Money is a receipt issued at purchase and extinguished when buyer turn seller.” (Scott Cahill) Scott Cahill has never had any idea of the difference between transaction money and money as a store of value. Let's clarify some basics about the two with the summary in table AXEC237e ⇓. 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, 2, 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. That's a starting condition. Methodologically, the formula in line 5 replaces the silly Supply-Demand-Equilibrium cross. Line 9 delivers the generalization with ρE≠1. 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. Price increases can come only from wage rate increases or from productivity decreases. The quantity of money is not a determinant. The methodologically right approach to start with in Monetary Theory is that transaction money is pure fiat money at the Central Bank. How money developed historically is not an issue. Symmetric fiat money is zero at the beginning and the end of a given period; see line 16. It is periodically created out of nothing and returns to nothing. There's no problem here; money is endogenous. It's a medium. The quantity of the medium is determined by the autonomous transactions between the business and the household sector. (i) If the wage rate W doubles in line 5, the price doubles, and the average quantity of transaction money M doubles in line 16. It is still zero at the period's beginning and end. If tested, this yields a proportionality between price P and the average quantity of transaction money M. However, this is NOT causality. The common cause is the doubling of the wage rate W. However, empirically this correlation between P and M seems to be a strong indication that the Quantity Theory holds. (ii) If the real variable employment L is doubled, output O in line 2 and wage income Yw in line 1 double. The market-clearing/budget-balancing price P remains unchanged in line 5. The average quantity of transaction money M doubles in line 16. Now, there is no relationship between the price and the average quantity of transaction money. The Quantity Theory fails. Reality is a mix of (i) and (ii). That money is created out of nothing and backed by nothing is NOT the critical point of a fiat money system. In period 0, the transactions between the business sector and the household sector are symmetrical. At the beginning, transaction money is zero. Monthly, the households receive wage income and spend it successively on consumption. This increases and reduces their deposits at the Central Bank. The business sector mirrors the transaction. Thus, deposits and overdrafts are always equal. At the end of the initial period, transaction money is again zero. The average stock of transaction money is calculated in lines 16, 17. If the household sector saves in period 1, its deposits increase. This gives rise to losses Qm in line 11. Accordingly, the business sector's overdrafts increase. The average quantity of money M in lines 16, 17 increases because of the household sector's saving. Here, money as a store of value emerges. In period 2, one has both: money as a transaction medium and money as a store of value. In period 3, the households dissave, and the business sector makes a profit, according to line 11. Over all periods, the sum of profit/loss is zero. Things are rather simple as long as ρE=1. As soon as balances appear, i.e., ρE≠1, complexity increases and money as a store of value logically emerges from transaction money. The store-of-value money can also be used to buy financial assets. It then vanishes again. But that's a different story.

— AXEC (@EgmontHandtke) November 11, 2026

Occasional X: Clueless economists / Money (CXLXXIV)

“It is an indisputable fact that quantity theory is nothing but a tautology. There is another point too. Cochrane has also pointed this out. Correlation does not imply causation. The direction of the relationship between inflation and the money supply is not from the money supply to inflation, as foolish monetarists claim, but more strongly from inflation to the money supply.” (Baki Demirel) No, money is not among the determinants of the price. That's false macroeconomics. The microbrained representative economist has never had any idea of the difference between transaction money and money as a store of value. Let's clarify some basics about transaction money with the summary in table AXEC237d ⇓. 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, 2, 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. That's a starting condition. Methodologically, the formula in line 5 replaces the silly Supply-Demand-Equilibrium cross. 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. Price increases can come only from wage rate increases or from productivity decreases. The quantity of money is not a determinant. The methodologically right approach to start with in Monetary Theory is that transaction money is pure fiat money at the Central Bank. Symmetric fiat money is zero at the beginning and the end of a given period; see line 16. It is periodically created out of nothing and returns to nothing. There's no problem here; money is endogenous. It's a medium. The quantity of the medium is determined by the autonomous transactions between the business and the household sector. (i) If the wage rate W doubles in line 5, the price doubles, and the average quantity of transaction money M doubles in line 16. It is still zero at the period's beginning and end. If tested, this yields a proportionality between price P and the average quantity of transaction money M. However, this is NOT causality. The common cause is the doubling of the wage rate W. However, empirically this correlation between P and M seems to be a strong indication that the Quantity Theory holds. (ii) If the real variable employment L is doubled, output O in line 2 and wage income Yw in line 1 double. The market-clearing/budget-balancing price P remains unchanged in line 5. The average quantity of transaction money M doubles in line 16. Now, there is no relationship between the price and the average quantity of transaction money. The Quantity Theory fails. Reality is a mix of (i) and (ii). That money is created out of nothing and backed by nothing is NOT the critical point of a fiat money system. The point is whether money is injected (i) on the left side of the business sector's national account in the form of wages, or (ii) on the right side in the form of additional nominal demand, i.e., in the form of deficit spending. This gives rise to profit Qm in line 11 and the average quantity of money M in lines 16, 18, because of ρE>1. Here, money as a store of value emerges. The case of deficit-spending/money-creation, i.e., increasing consumptive public debt, is equivalent to bringing counterfeit money into circulation, which in real terms amounts to stealing stuff from WeThePeople. National debt is roughly equal to the financial wealth of WeTheOligarchy. Ultimately, most of WeTheOligarchy's financial wealth is printed by the Central Bank. This is not a 'problem', but the defining characteristic of Capitalism. The problem with the Central Bank is NOT that it creates fiat money out of nothing, but that it creates profit out of nothing. If the Central Bank is only allowed to create transaction money to meet the needs of businesses and households, then fiat money is the most economical solution. The problems arise with sectoral balances, i.e., ρE≠1, and with licit/illicit money creation. For the axiomatically correct Monetary Theory, see the working paper ⇒ The Dark-Matter Theory of Fiat Money https://t.co/0QSqFFrVUX

— AXEC (@EgmontHandtke) November 11, 2026

Occasional X: Clueless economists / Money (CXLXXIII)

“Essential reminder. Inflation is always a monetary phenomenon.” (Daniel Lacalle) No, money is not among the determinants of the price. That's false macroeconomics. The microbrained representative economist has never had any idea of the difference between transaction money and money as a store of value. Let's clarify some basics about transaction money with the summary in table AXEC237d ⇓. 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, 2, 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. That's a starting condition. Methodologically, the formula in line 5 replaces the silly Supply-Demand-Equilibrium cross. 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. Price increases can come only from wage rate increases or from productivity decreases. The quantity of money is not a determinant. The methodologically right approach to start with in Monetary Theory is that transaction money is pure fiat money at the Central Bank. Symmetric fiat money is zero at the beginning and the end of a given period; see line 16. It is periodically created out of nothing and returns to nothing. There's no problem here; money is endogenous. It's a medium. (i) If the wage rate W doubles in line 5, the price doubles, and the average quantity of transaction money M doubles in line 16. It is still zero at the period's beginning and end. If tested, this yields a proportionality between price P and the average quantity of transaction money M. However, this is NOT causality. The common cause is the doubling of the wage rate W. However, empirically this correlation between P and M seems to be a strong indication that the Quantity Theory holds. (ii) If the real variable employment L is doubled, output O in line 2 and wage income Yw in line 1 double. The market-clearing/budget-balancing price P remains unchanged in line 5. The average quantity of transaction money M doubles in line 16. Now, there is no relationship between the price and the average quantity of transaction money. The Quantity Theory fails. Reality is a mix of (i) and (ii). That money is created out of nothing and backed by nothing is NOT the critical point of a fiat money system. The point is whether money is injected (i) on the left side of the business sector's national account in the form of wages, or (ii) on the right side in the form of additional nominal demand, i.e., in the form of deficit spending. This gives rise to profit Qm in line 11 and the average quantity of money M in lines 16, 18, because of ρE>1. Here, money as a store of value emerges. The case of deficit-spending/money-creation, i.e., increasing consumptive public debt, is equivalent to bringing counterfeit money into circulation, which in real terms amounts to stealing stuff from WeThePeople. National debt is roughly equal to the financial wealth of WeTheOligarchy. Ultimately, most of WeTheOligarchy's financial wealth is printed by the Central Bank. This is not a 'problem', but the defining characteristic of Capitalism. The problem with the Central Bank is NOT that it creates fiat money out of nothing, but that it creates profit out of nothing. If the Central Bank is only allowed to create transaction money to meet the needs of businesses and households, then fiat money is the most economical solution. The problems arise with sectoral balances, i.e., ρE≠1, and with licit/illicit money creation. For the axiomatically correct Monetary Theory, see the working paper ⇒ The Dark-Matter Theory of Fiat Money https://t.co/0QSqFFrVUX

— AXEC (@EgmontHandtke) November 11, 2026

Occasional X: The futile attempt to recycle Keynesianism (CII)

“Only an idiot would mistake reading Ludwig von Mises for economic literacy in the 21st century. Keynes is still worth your time. Parts are dated, but much of his framework can be updated and developed, particularly the marginal efficiency of capital.” (Mr.Keynes) Neither von Mises nor Keynes are worth your time. 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 microeconomic approach. Both approaches are axiomatically false. When the axioms are inconsistent, no improvement is ever possible. 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. 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) So, folks like Mr.Keynes are just turning over the scientific dung heap again and again and are spreading the hope that a breakthrough is just around the corner. Like von Mises's approach, Keynes's approach has always been scientifically worthless. However, for a theatrical performance on the academic stage, vacuous political discussions, and selling the remaining stock of obsolete books to a low-IQ audience, it's good enough.

— AXEC (@EgmontHandtke) November 10, 2026

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

“Every time the neoliberal narrative runs out of arguments in the face of inequality, poverty wages, or capitalism’s recurring crises, they resort to a crude myth: Marx never worked, lived on charity, and was a lazy bum.” (Omar Montoya Suárez) The representative economist does not know the difference between denunciation and refutation. Denunciation is the modus operandi in politics; refutation is the modus operandi in science. Refutation is the proof that a theory/hypothesis is materially/formally inconsistent. Marx may have been an evil person; however, his approach may have been scientifically valid nonetheless. Evil character and false theory/hypotheses are incommensurate things. Marx's economic theory belongs to the scientific sphere and has to be refuted according to scientific methodology. Because Marx got the foundational concept of economics —profit— wrong, his remaining communicative contributions reduce to psycho-social-political-philosophical blather. Unfortunately, this part has dominated public opinion to this day. Ultimately, the idiocy of the discussion consists of the intentional/unintentional muddling of economics, sociology, psychology, history, politics, philosophy, gossip, and shithrowing. Marx/Engels called their common project Scientific Socialism‡, but its scientific content has been zero from the beginning. Marx/Engels and their followers never understood science. For proof, see the working paper ⇒ Profit for Marxists https://t.co/P1NOW4FyXK Also Here is the long-overdue scientific death certificate for Marx and Marxists. https://t.co/9SwjuSW8Ca Marxianism still has no scientific truth-value, only political use-value. It is still good for playing low-IQ communicative games, but for nothing else. In the scientific sphere, Marx is still a zero. In the political/ philosophical sphere, confused blather is the norm; here Marxianism has its ecological niche as a Weltanschauung together with all other occult/ esoteric/ voodoo/ religious/ etc. aberrations of the human mind. Marx goes down the scientific drain because he was a lousy scientist, and not because he was an evil character. To think/talk much about his character is disinfotainment. On the other hand, to refute denunciations does not make a false theory true. It's also disinfotainment. Marx has been refuted according to scientific criteria. The rest is communicative junk. ‡ “Scientific socialism, primarily associated with Karl Marx and Friedrich Engels, is a materialist, historical approach to understanding society, viewing history as a progression driven by economic conditions and class struggle, …” (Google AI, Scientific Socialism)

— AXEC (@EgmontHandtke) November 10, 2026

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

What the average citizen thinks is one thing; what the representative economist thinks is another. Unfortunately, the representative economist is very poor at thinking. 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. Economic policy guidance has never had valid scientific foundations. 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. Political economists are card-carrying members of the Idiocracy.

— AXEC (@EgmontHandtke) November 10, 2026

Occasional X: Clueless economists / Money (CXLXXII)

“M= PY/V or PY = MV? You'd think after decades of extremely sophisticated causal econometrics, the most basic correlation isn't causation of all would not keep resurfacing. Money tracks nominal income in every theory, including FTPL, because central banks supply money passively, and demand is proportional to nominal income.” (John Cochrane) The microbrained representative economist has been weak on macroeconomics in general and the Theory of Money in particular. He has never had any idea of the difference between transaction money and money as a store of value. Let's clarify some basics with the summary in table AXEC237d ⇓. 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, 2, 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. That's a starting condition. Methodologically, the formula in line 5 replaces the silly Supply-Demand-Equilibrium cross. 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. The methodological right approach to start with in Monetary Theory is that transaction money is pure fiat money at the Central Bank. Symmetric fiat money is zero at the beginning and the end of a given period; see line 16. It is periodically created out of nothing and returns to nothing. There's no problem here; money is endogenous. If the wage rate W doubles in line 5, the price doubles, and the average quantity of transaction money M doubles in line 16. It is still zero at the period's beginning and end. If tested, this yields a proportionality between price P and the average quantity of transaction money M. However, this is NOT causality. The common cause is the doubling of the wage rate W. However, empirically this correlation seems to be a strong indication that the Quantity Theory holds. If the real variable employment L is doubled, output O in line 2 and wage income Yw in line 1 double. The market-clearing/budget-balancing price P remains unchanged in line 5. The average quantity of transaction money M doubles in line 16. Now, there is no relationship between the price and the average quantity of transaction money. The Quantity Theory fails. That money is created out of nothing and backed by nothing is NOT the critical point of a fiat money system. The point is whether money is injected (i) on the left side of the business sector's national account in the form of wages, or (ii) on the right side in the form of additional nominal demand, i.e., in the form of deficit spending. The case of deficit-spending/money-creation, i.e., increasing consumptive public debt, is equivalent to bringing counterfeit money into circulation, which in real terms amounts to stealing stuff from WeThePeople. National debt is roughly equal to the financial wealth of WeTheOligarchy. Ultimately, most of WeTheOligarchy's financial wealth is printed by the Central Bank. This is not a 'problem', but the defining characteristic of Capitalism. The problem with the Central Bank is NOT that it creates money out of nothing, but that it creates profit out of nothing. If the Central Bank is only allowed to create transaction money to meet the needs of businesses and households, then fiat money is the most economical solution. The problems arise (i) with sectoral balances, and (ii) with illicit money creation. For the axiomatically correct Monetary Theory, see the working paper ⇒ The Dark-Matter Theory of Fiat Money https://t.co/0QSqFFrVUX

— AXEC (@EgmontHandtke) November 10, 2026

Occasional X: Clueless economists / Money (CXLXXI)

“A famous quote by Milton Friedman says that “inflation is always and everywhere a monetary phenomenon.” A natural question, then, is whether money supply growth is a reliable predictor of inflation. A new analysis covers this topic.” (Michael McCracken & Lillian Fu, St. Louis Fed) Milton Friedman has been weak on macroeconomics in general and the Theory of Money in particular. He has never had any idea of the difference between transaction money and money as a store of value. Let's clarify some basics with the help of table AXEC237d ⇓. 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, 2, 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. That's a starting condition. Methodologically, the formula in line 5 replaces the silly Supply-Demand-Equilibrium cross. 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. The methodological right approach to start with in Monetary Theory is that transaction money is pure fiat money at the Central Bank. Symmetric fiat money is zero at the beginning and the end of a given period; see line 16. It is periodically created out of nothing and returns to nothing. There's no problem here; money is endogenous. If the wage rate W doubles in line 5, the price doubles, and the average quantity of transaction money M doubles in line 16. It is still zero at the period's beginning and end. If tested, this yields a proportionality between price P and the average quantity of transaction money M. However, this is NOT causality. The common cause is the doubling of the wage rate W. However, empirically this seems to be a strong indication that the Quantity Theory holds. If the real variable employment L is doubled, output O in line 2 and wage income Yw in line 1 double. The market-clearing/budget-balancing price P remains unchanged in line 5. The average quantity of transaction money M doubles in line 16. There is no relationship between the price and the average quantity of transaction money. The Quantity Theory fails. That money is created out of nothing and backed by nothing is NOT the critical point of a fiat money system. The point is whether money is injected (i) on the left side of the business sector's national account in the form of wages, or (ii) on the right side in the form of additional nominal demand, i.e., in the form of deficit spending. The case of deficit-spending/money-creation, i.e., increasing consumptive public debt, is equivalent to bringing counterfeit money into circulation, which in real terms amounts to stealing stuff from WeThePeople. National debt is roughly equal to the financial wealth of WeTheOligarchy. Ultimately, most of WeTheOligarchy's financial wealth is printed by the Central Bank. This is not a 'problem', but the defining characteristic of Capitalism. The problem with the Central Bank is NOT that it creates money out of nothing, but that it creates profit out of nothing. If the Central Bank is only allowed to create transaction money to meet the needs of businesses and households, then fiat money is the ideal solution. The problems arise with sectoral balances. For the axiomatically correct Monetary Theory, see the working paper ⇒ The Dark-Matter Theory of Fiat Money https://t.co/0QSqFFstKv

— AXEC (@EgmontHandtke) November 9, 2026

Occasional X: Clueless economists / Money (CXLXX)

“By the late 1960s, France noticed the gap between printed dollars and actual gold and started converting. Nixon stopped this by closing the gold window on August 15, 1971. Pure fiat with no anchor whatsoever.” (Handre) The storyteller Handre is weak on macroeconomics in general and the Theory of Money in particular. He has never had any idea of the difference between transaction money and money as a store of value. Let's clarify some basics with the help of table AXEC237c ⇓. 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, 2, 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. That's a starting condition. The formula in line 5 replaces the silly Supply-Demand-Equilibrium cross. 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. The methodological right approach to start with in Monetary Theory is that transaction money is pure fiat money at the Central Bank. Symmetric fiat money is zero at the beginning and the end of a given period; see line 16. It is periodically created out of nothing and returns to nothing. There's no problem here; money is endogenous. If the wage rate W doubles in line 5, the price doubles, and the average quantity of transaction money M doubles in line 16. It is still zero at the period's beginning and end. If tested, this yields a proportionality between price P and the average quantity of transaction money M. However, this is NOT causality. The common cause is the doubling of the wage rate W. However, empirically this seems to be a strong indication that the Quantity Theory holds. If the real variable employment L is doubled, output O in line 2 and wage income Yw in line 1 double. The market-clearing/budget-balancing price P remains unchanged in line 5. The average quantity of transaction money M doubles in line 16. There is no relationship between the price and the average quantity of transaction money. It is now assumed that transaction money is backed by gold and the stock of gold is limited. As a consequence, the doubling of employment L cannot happen if M cannot increase proportionally, because the ratio of M to gold is fixed. The gold anchor becomes a brake that hinders the economy's real growth and the proper functioning of the fiat system. The obvious solution is to cut the anchor. This happened in 1971. It has no inflationary consequences. The real growth goes on smoothly. That money is created out of nothing and backed by nothing is NOT the critical point of a fiat money system. The point is whether money is injected (i) on the left side of the business sector's national account in the form of wages, or (ii) on the right side in the form of additional nominal demand, i.e., in the form of deficit spending. The case of deficit-spending/money-creation, i.e., increasing consumptive public debt, is equivalent to bringing counterfeit money into circulation, which in real terms amounts to stealing stuff from WeThePeople. National debt is roughly equal to the financial wealth of WeTheOligarchy. Ultimately, most of WeTheOligarchy's financial wealth is printed by the Central Bank. This is not a 'problem', but the defining characteristic of Capitalism. The problem with the Central Bank is NOT that it creates money out of nothing, but that it creates profit out of nothing. If the Central Bank is only allowed to create transaction money to meet the needs of businesses and households, then fiat money is the ideal solution. The problems arise with sectoral balances. For the axiomatically correct Monetary Theory, see the working paper ⇒ The Dark-Matter Theory of Fiat Money https://t.co/0QSqFFrVUX

— AXEC (@EgmontHandtke) November 9, 2026

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

“Show me economists who have the ability to 'dictate', but if this is the call for ignoring expertise then it is a step toward Idiocracy.” (Wojtek Kopczuk) On closer inspection, economists have only fake expertise. 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. Economic policy guidance has never had valid scientific foundations. 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. Political economists are card-carrying members of the Idiocracy (AXEC108o ⇓).

— AXEC (@EgmontHandtke) November 9, 2026

Occasional X: The futile attempt to recycle MMT (CCXII)

“MMT never claimed to be in itself sufficient to bring about social change (nor does it deny politics exist outside of monetary capacities) simply that understanding it is essential to doing so.” (Patricia) Economics has no political mandate. This could have been known for a long time: “A scientific observer or reasoner, merely as such, is not an adviser for practice. His part is only to show that certain consequences follow from certain causes, and that to obtain certain ends, certain means are the most effectual. Whether the ends themselves are such as ought to be pursued, and if so, in what cases and to how great a length, it is no part of his business as a cultivator of science to decide, and science alone will never qualify him for the decision.” (Mill) 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. For the record: scientifically, MMT has long been refuted; see Cross-references: MMT https://t.co/XMHq0sZWU1 MMTers are not competent scientists. They are political agenda pushers for a low-IQ audience ( ⇓ AXEC152c). MMT is not part of science, but part of politics.

— AXEC (@EgmontHandtke) November 9, 2026

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 (CDXLI)

“Economists will never be able to escape Wicksell.” (Nikolai Rostow) This explains why economics is still failed/fake science. For details, see How Wicksell and the rest got inflation/deflation wrong https://t.co/ygMiWmIrJD Reminder: 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, and materially/ formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. This also holds for Wicksell. He got profit, distributed profit, income, saving, interest, and the price system wrong.

— AXEC (@EgmontHandtke) November 8, 2026

Occasional X: Clueless economists / Profit (CLXIX)

“This is a macroeconomic accounting identity: aggregate profits equal investment plus capitalist consumption, the government deficit, and net exports, minus workers’ savings. One sector’s profits are determined by spending and saving decisions across the economy.” (Khazbi Budunov) This is one of the dumbest pronouncements in economics: This is a macroeconomic accounting identity, implying that it is true by definition. Actually, economists are too stupid for the elementary algebra that underlies macroeconomic accounting. For details, see The Levy/Kalecki Profit Equation is false https://t.co/pkoZclG49K Reminder: 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. If the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. This also holds for the Levy/Kalecki profit equation. Khazbi Budunov has not been smart enough to figure out the macroeconomic basics. He goes down the scientific drain together with the rest of the Kalecki crowd.

— AXEC (@EgmontHandtke) 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

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: How it works (DXXXVII)

“Remember that no matter who or what a worker may be, if he works for wages he is in precisely the same economic position that you are. He is in your class; he is your brother; he is your comrade.” (Eugene Debs) No, there are no classes. Eugene Debs never understood cross-over exploitation. He never understood profit, and consequently, how the economic system works. Utter ignorance is the representative economist's normal mental state. Left/center/right does not matter. The proof is given in table AXEC221b ⇓. Microfoundations are methodologically false; 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, and is equal for both firms. The workers get the whole product O. The profit Qm for both firms and the business sector as a whole 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 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 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. Eugene Debs got the fundamentals wrong. 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. Whether OC takes over the State is an open question. 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 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 (CDXXXVII)

“The core Keynesian error is treating consumption as the engine of wealth. Keynes fixated on aggregate demand, the total spending flowing through an economy, as the variable governments must manage. Boost it artificially, and you rescue the economy. Production precedes consumption. …Government stimulus spending doesn't create resources. It redirects them. When Washington borrows a billion dollars and injects it into infrastructure or green energy, it pulls that capital away from whatever private actors would have funded.” (Handre) Economic debate suffers from the fact that economics is a failed/fake science. Economists do not know what profit is, and consequently, how the economic system works. It's been that way ever since Adam Smith. Both Keynesianism and Austrianism is proto-scientific garbage. The free-market economy runs on profit. Macroeconomic profit Qm is given by the axiomatically correct Profit Law Qm:=(I−Sm)+(G−T)+(X−M)+Yd. The Law implies Qm≔(I−Sm)>0 for Early Capitalism, and it implies Qm≔(G−T)>0 for Late Capitalism. Keynes observed that investment expenditures I were insufficient; therefore, the balance (I−Sm) was too low. He proposed to compensate the shortfall with a bigger balance (G−T) of public deficit spending. Handre's claim that this “pulls capital away from whatever private actors would have funded” is a hallucination because the actual problem was that there never were private actors in the wings to fund private investment I in the first place. In the monetary economy, investment is not restricted by the household sector's saving Sm. If Sm is zero, investment is fully financed by credit and retained profit. In free-market economies, public debt has increased with minor interruptions for 200+ years. So, Qm≔(G−T)>0 is a crucial ingredient of Capitalism's life elixir. Everybody understands that the overriding principle of economics is that macroeconomic profit is greater than zero; otherwise, firms start going bankrupt, and the breakdown begins. All other principles are secondary at best. Neither utility maximization nor profit maximization nor efficient resource allocation keeps the economy above the zero-profit cutoff. Currently, the free-market economy is temporarily saved from breakdown by the deficit-spending/money-creating duo of Treasury/Central Bank, i.e., the State. This means that the premise of legacy 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 too stupid to understand the elementary algebra that underlies macroeconomic accounting. Austrians can't get beyond their microeconomic/ behavioral horizon. Math was never their strong suit. From the fact that the free-market economy thrives on positive/increasing macroeconomic profit, which, in turn, stems mainly from the State's deficit-spending/money-creation, it follows immediately that budget-balancing/debt-reduction turns macroeconomic profit into loss, and this means that the free-market economy cannot dismount from the debt tiger. Because of deficit-spending/money-creation, i.e., of the free lunches for the Oligarchy, the distribution of income/wealth becomes progressively more extreme. As the debt grows, the number of millionaires/billionaires/zillionaires grows exponentially. Since the household sector is taxed for interest, there is an absolute upper limit for the growth of public debt, which is given by public_debt times 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 breakdown of the free-market economy is a systemic inevitability. The important thing is not whether it will happen, but when. The current system can only exist as a nominally growing economy. If debt growth stops, macroeconomic profit approaches zero, and the economy implodes. Austrians correctly observe the lethal weaknesses of the free-market system. Their communicative modus operandi is to simply attribute all economic misdevelopments to the State and to advertize the unchained entrepreneur as the economic savior who is eagerly waiting in the wings. The fact is, behind the wings there has never been anything.

— AXEC (@EgmontHandtke) November 7, 2026