Showing posts sorted by date for query title:Heterodoxy. Sort by relevance Show all posts
Showing posts sorted by date for query title:Heterodoxy. Sort by relevance Show all posts

October 20, 2025

Occasional X: The futile attempt to recycle Heterodoxy (VIII)

 
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February 6, 2025

Occasional X: The futile attempt to recycle Heterodoxy (VII)

 
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November 27, 2024

Occasional X: The futile attempt to recycle Heterodoxy (VI)

 

For details of the big picture see cross-references Heterodoxy. 
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January 19, 2024

Occasional Xs: The futile attempt to recycle Heterodoxy (V)

 
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November 10, 2023

Occasional Xs: The futile attempt to recycle Heterodoxy (IV)

 


For details of the big picture see cross-references Heterodoxy. 
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September 1, 2023

Occasional Xs: The futile attempt to recycle Heterodoxy (III)

 



For more about traditional Heterodoxy see AXECquery.
For more about Constructive Heterodoxy see AXECquery. 
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February 8, 2023

Occasional Tweets: The futile attempt to recycle Heterodoxy (II)

 


For details of the big picture see cross-references Heterodoxy. 
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December 7, 2022

Occasional Tweets: Heterodoxy, too, goes down the scientific drain

 

For details of the big picture see cross-references Heterodoxy. 
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April 7, 2022

Occasional Tweets: The futile attempt to recycle Heterodoxy (I)

 


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October 20, 2021

Occasional Tweets: Heterodoxy, too, messed it up

 


For more about Heterodoxy see AXECquery.

 
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February 24, 2021

Occasional Tweets: Once upon a time there was Orthodoxy and Heterodoxy

 


Orthodoxy / Heterodoxy / Metadoxy

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January 20, 2021

Occasional Tweets: Orthodoxy is idiocy, Heterodoxy also / Orthodoxie ist Schwachsinn, Heterodoxie auch

 

Learn economics

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January 2, 2019

Heterodoxy’s trouble with macro

Comment on Asad Zaman on ‘Romer’s Trouble With Macro’

Blog-Reference

“In light of the five propositions listed above, there are two major tasks that emerge as important for the heterodoxy. One of the tasks is to prove the truth of the five propositions. This is generally where most of the effort is being made. … However, I believe that the SECOND task, not undertaken here, is much more important, as well as greatly neglected, and not well understood. We must reflect on the nature of a world where lunatic asylum class theories are propounded at leading universities throughout the world, and taught to the brightest (but innocent) students who come to believe them. What is the nature of knowledge? How do we come to believe in ridiculous theories?”

Asad Zaman runs again in the wrong direction.#1 No, there is just one task: “The moral of the story is simply this: it takes a new theory, and not just the destructive exposure of assumptions or the collection of new facts, to beat an old theory.” (Blaug)

The failure of macroeconomics since Keynes is a fact #2, but Asad Zaman somehow forgets to mention that Heterodoxy never managed to beat something so ridiculously wrong as orthodox economics. Heterodoxy itself is a failure.#3 Like their orthodox colleagues, heterodox and pluralist economists are too stupid for elementary algebra and never realized the blunder in Keynes' macrofoundations that invalidates the whole of macroeconomics.

It is not too hard to see why economics is, after 200+ years, still at the proto-scientific level. Economics consists of political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda; the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics, anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.

Economics claims to be a science, but it is NOT. Theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers). Political economics has produced NOTHING of scientific value in the last 200+ years. #4, #5

Heterodoxy’s failure consists of being unable to develop the true economic theory. Both Orthodoxy and Heterodoxy have violated the principle of the separation of science and politics and have wasted their energies on political agenda pushing. The actual status of economics can be defined as the pluralism of provably false theories.
The inevitable Paradigm Shift in economics consists of the replacement of false Walrasian microfoundations and false Keynesian macrofoundations by true macrofoundations. #6

Asad Zaman, though, defines a completely different research program: “What is the nature of knowledge? How do we come to believe in ridiculous theories?” This is neither a mystery nor a secret: economists are either stupid or corrupt or both. There is no real difference between Orthodoxy and Heterodoxy.#7

Egmont Kakarot-Handtke


#1 Refutation of Asad Zaman’s heterodox methodology: all arguments you ever need
#2 Macroeconomics ― dead since Keynes
#3 For details, see cross-references Heterodoxy
#4 Why is economics such a scientific embarrassment?
#5 The biggest scientific mistake of the last centuries, and it has much to do with academic economists
#6 From false microfoundations to true macrofoundations
#7 Throw them out! Orthodox and heterodox economists are unfit for science

Related 'The failure of Post-Keynesianism' and 'Economists: Time to say goodbye' and 'Macroeconomics: Drain the scientific swamp' and 'Kalecki and Keynes: The double macroeconomic false start' and 'Keynes, Kalecki, MMT, and the accidental invention of the perpetual profit machine' and 'Heterodoxy ― an axiomatic failure just like Orthodoxy' and 'How Heterodoxy became the venue for science’s scum' and 'Real-World Economics: The sanctuary of stupidity and corruption'.

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AXEC121i

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February 17, 2018

Heterodoxy ― an axiomatic failure just like Orthodoxy

Comment on Christian Arnsperger/Yanis Varoufakis on ‘The first axiom of neoclassical economics: methodological individualism’

Blog-Reference and Blog-Reference

After 200+ years, economists still do not have the true theory/model. The failure of economics had been programmed by the founding fathers with the definition of the subject matter as social science and later on with this very specific guideline: “It is a touchstone of accepted economics that all explanations must run in terms of the actions and reactions of individuals. Our behavior in judging economic research, in peer review of papers and research, and in promotions, includes the criterion that in principle the behavior we explain and the policies we propose are explicable in terms of individuals, not of other social categories.” (Arrow)

This translates into the neo-Walrasian axiom set: “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)

Of course, economists did not stick slavishly to HC1/HC5 but varied the one or the other axiom. This, though, never to the point of abandoning the neoclassical paradigm completely. Arrow’s definition, therefore, covers General Equilibrium Theory, Marshallian partial analysis, Behavioral Economics, DSGE, RBC, New Keynesianism, Agent-Based Models, and a whole grab bag of verbalized/common sense/ad hoc/special purpose models. In effect, everybody starts from his own do-it-yourself set of premises and the inevitable result is a heap of inconsistent and incoherent models with a lost common core.

While the failure of economics is beyond a reasonable doubt, the representative economist still suffers from the delusion that what he does is science. Economics is nothing but a cargo cult science which Feynman described as: “They’re doing everything right. The form is perfect. ... But it doesn’t work. ... So I call these things cargo cult science because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential.”

Christian Arnsperger/Yanis Varoufakis see the crucial methodological blunder in methodological individualism: “So, the first feature of the ‘body of theory’ we think of as neoclassical is its methodological individualism: the idea that socio-economic explanation must be sought at the level of the individual agent.”

This is accurate but a bit shallow. While methodological individualism is indeed false in all dimensions, the problem goes deeper. And here is where Heterodoxy’s own failure comes into view.

The common understanding of neoclassical models is that they are behavioral. The representative economist traditionally takes Human Nature/motives/behavior/action, i.e. a mixture of folk psychology and folk sociology, as a starting point and then tries to explain the behavior of the economy as a whole. The crucial methodological defect of the behavioral approach is that NO way leads from the explanation of Human Nature/motives/ behavior/action to the explanation of how the economic system works. All behavioral/ microfounded approaches crash against the methodological wall that is known as the Fallacy of Composition.

Economics does not conform to Aristotle’s general definition of science: “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.” The neoclassical premises = microfoundations have NEVER been certain/true/primary. This is why orthodox economics a.k.a. the mainstream is an axiomatic failure.

The only reason why Orthodoxy is still around is that Heterodoxy has failed to develop a suitable alternative: “... we may say that ... the omnipresence of a certain point of view is not a sign of excellence or an indication that the truth or part of the truth has at last been found. It is, rather, the indication of a failure of reason to find suitable alternatives which might be used to transcend an accidental intermediate stage of our knowledge.” (Feyerabend) #1

Heterodoxy habitually criticizes/rejects methodological individualism but shares the underlying methodological tenet that economics is a social science. It is not. Economics is a systems science. The subject matter of economics is not human behavior but the behavior of the economic system. #2

So, there is NO use in changing the one or the other neo-Walrasian axiom and keeping the rest. A Paradigm Shift is indispensable, and this means that the neoclassical approach has to go out of the window for good. Economics has to move from behavioral axioms/ microfoundations to systemic axioms/macrofoundations. Keynes tried but failed. #3

The state of economics is as follows: (i) all neoclassical/microfoundations approaches are axiomatically dead, (ii) all Keynesian approaches are defective with regard to the definition of macroeconomic profit/income, (iii) neither Orthodoxy nor Heterodoxy has consistent axiomatic foundations, (iv) it holds: If it isn’t macro-axiomatized it isn’t economics #4, (v) in the scientifically strict sense, economics is still at the level of a proto-science.

Heterodoxy has exhausted itself with the repetitive critique of detail but never got to the point of wholesale and definitive refutation which is the hallmark of a Paradigm Shift: “The moral of the story is simply this: it takes a new theory, and not just the destructive exposure of assumptions or the collection of new facts, to beat an old theory.” (Blaug) and “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)

In fact, this has always been too hard for traditional Heterodoxy and this is why it has to be buried in the same scientific graveyard as neoclassical economics.

Egmont Kakarot-Handtke


#1 The stupidity of Heterodoxy is the life insurance of Orthodoxy
#2 For details of the big picture, see cross-references NOT a Science of Behavior
#3 For details of the big picture, see cross-references Keynesianism
#4 The core of macroeconomic premises/axioms reads: (A0) The objectively given and most elementary systemic configuration of the economy consists of the household and the business sector which, in turn, consists initially of one giant fully integrated firm. (A1) Yw=WL wage income Yw is equal to wage rate W times working hours. L, (A2) O=RL output O is equal to productivity R times working hours L, (A3) Ec=PX consumption expenditure Ec is equal to price P times quantity bought/sold X.

Related 'From false microfoundations to true macrofoundations' and 'Dilettantes at the end of the coal-pit' and 'Economics ― a doctor worse than the disease' and 'From Orthodoxy to Heterodoxy to Metadoxy' and 'The miracle cure of economists’ micro-macro schizo'. For details of the big picture see cross-references Axiomatization and cross-references Heterodoxy and cross-references Paradigm Shift.


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AXEC121i

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November 18, 2017

Why Heterodoxy is NO real alternative to mainstream economics

Comment on Lars Syll on ‘Why Krugman and Stiglitz are no real alternatives to mainstream economics’

Blog-Reference and Blog-Reference

Mainstream economics is a failed/fake science, that much is obvious. Only a moron can take DSGE seriously. The problem is that there are still so many of them around. Why this is so is a deep sociological question. Even deeper is the question of why Heterodoxy never developed a real alternative to mainstream economics.

Lars Syll noticed the obvious, that is, alleged new economic thinking has never been more than putting lipstick on the dead Walrasian pig: “Despite all their radical rhetoric, Krugman and Stiglitz are — where it really counts — nothing but die-hard mainstream neoclassical economists. Just like Milton Friedman, Robert Lucas or Greg Mankiw.” This, however, is not a sensational new insight. After all, Krugman tells anybody on any occasion that “most of what I and many others do is sorta-kinda neoclassical because it takes the maximization-and-equilibrium world as a starting point.”

Anyone who expects that an orthodox economist honors the scientific protocol and retires quietly after he has been refuted has not studied the history of economic thought. Economists violate scientific standards for 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)

Not only Orthodoxy violates scientific standards and blathers on as if nothing had happened, but Heterodoxy, too. What we actually have is the pluralism of false theories. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got the foundational economic concept of profit wrong. Neither Orthodoxy nor Heterodoxy satisfies well-established and well-known scientific standards. Neither Orthodoxy nor Heterodoxy has achieved anything of scientific value. #1

Take Adam Smith and Issac Newton as reference points. How much knowledge did science produce and how much did the cargo cult science economics produce in roughly 200 years? Economists live either in the maximization-and-equilibrium world, in the Keynesian world, or in the pluralistic world of anything-goes. All three worlds are hallucinatory.

Lars Syll buries Orthodoxy for good: “No matter how many thousands of technical working papers or models mainstream economists come up with, as long as they are just ‘wildly inconsistent’ axiomatic variations of the same old mathematical-deductive ilk, they will not take us one single inch closer to giving us relevant and usable means to further our understanding and possible explanations of real economies.”

True, but to repeat this in thousands of posts on Heterodox blogs does not help much either: “The moral of the story is simply this: it takes a new theory, and not just the destructive exposure of assumptions or the collection of new facts, to beat an old theory.” (Blaug)

This is the enigma of economics: why does Heterodoxy “not take us one single inch closer to giving us relevant and usable means to further our understanding and possible explanations of real economies?” #2 Fact is that Heterodoxy is not part of the solution but part of the problem.

In order to get out of the proto-scientific mess, economics needs a Paradigm Shift. #3 Nothing less will do. Both Orthodoxy AND Heterodoxy are proto-scientific garbage.

Egmont Kakarot-Handtke


#1 Yes, economics is a bogus science
#2 For details of the big picture, see cross-references Heterodoxy
#3 From false microfoundations to true macrofoundations

Related 'Not big news: political economics is a failure' and 'Economics is NOT a science of behavior' and 'Where modern macroeconomics went wrong' and 'Heterodox schizo' and 'Economists simply don’t get it'.

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Graphic AXEC106l

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November 7, 2017

Heterodoxy and Pluralism, too, are proto-scientific garbage

Note on Edward Fullbrook on ‘This intellectual cult threatening us all’

 Blog-Reference

Edward Fullbrook summarizes: “Locke’s general conception of the human mind became commonplace among 18th-century philosophers, so when Adam Smith came to write the foundational text for economics, The Wealth of Nations (1776), he had the example not only of Newton’s material atomism but also of Locke’s extension of it to an altogether different area of inquiry. If atomism could form the basis of a theory of ideas, then why not apply it as well to a theory of human beings?”

Joseph Schumpeter characterized Adam Smith correctly as a storyteller: “… in fact he disliked whatever went beyond plain common sense. He never moved above the heads of even the dullest readers. He led them on gently, encouraging them by trivialities and homely observations, making them feel comfortable all along.”

In fact, Smith is the founder of economics as narrative or soapbox rhetoric or plain sophistry or sitcom entertainment. With Newton as the beacon of science before everyone’s eyes, 18th-century philosophers and economists were seen for what they were: scientifically incompetent blatherers who cannot be taken seriously.

This lead to a change of rhetoric in public discourse. Locke and Smith, among others, mimicked physics without ever understanding what science is all about. This is how the so-called social sciences became what Feynman famously called cargo cult science: “They’re doing everything right. The form is perfect. ... But it doesn’t work. ... So I call these things cargo cult science because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential.”

Understanding nothing, the fake scientists of Political Economy took determinism as the characteristic feature of science. This was a rather silly methodological mistake because it was long known that determinism does not apply to human action: “The bifurcation of motion into two fundamentally different types, one for natural motions of non-living objects and another for acts of human volition ... is obviously related to the issue of free will, and demonstrates the strong tendency of scientists in all ages to exempt human behavior from the natural laws of physics, and to regard motions resulting from human actions as original, in the sense that they need not be attributed to other motions.” (Brown) What scientists of all ages knew, the fake scientists of economics simply ignored.

But the incompetence of the representative economist goes even deeper. What economists never realized is that economics cannot be founded on any assumptions about Human Nature/motives/behavior/action. Economics is not a so-called social science but a systems science. There is, of course, no such thing as a deterministic law of human behavior but there are indeed deterministic laws of the economic system.#2

The state of economics is this: theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers). Political economics has produced NOTHING of scientific value in the last 200+ years.#3 The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got profit wrong. With the pluralism of provably false theories economics sits squarely at the proto-scientific level.

Heterodoxy’s crime against science consists in (i) praising the pluralism of false theories, (ii) misleading students about want science is all about, and (iii), the inability for 200+ years to come forward with something better than Orthodoxy.#4

Economists in their utter scientific incompetence ― right-wing or left-wing do not matter ― always were and still are a threat to their fellow citizens.

Egmont Kakarot-Handtke


#1 What is so great about cargo cult science? or, How economists learned to stop worrying about failure
#2 The existence of economic laws and the nonexistence of behavioral laws
#3 Economics: 200+ years of scientific incompetence and fraud
#4 The stupidity of Heterodoxy is the life insurance of Orthodoxy

Related 'Are economics professors really that incompetent? Yes!' and 'What it takes to become a great economist' and 'How Heterodoxy became the venue for science’s scum'. For details of the big picture see cross-references Heterodoxy and cross-references Pluralism and cross-references Failed/Fake Scientists and cross-references Political Economics/Stupidity/Corruption.
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October 14, 2017

Why does Heterodoxy not abolish the fake Nobel?

Comment on Lars Syll on ‘Thaler and behavioural economics — some critical perspectives’

Blog-Reference and Blog-Reference on Oct 15

The core message of Heterodoxy is that Orthodoxy has failed on all theoretical and empirical counts and that New Economic Thinking is required. Heterodoxy claims to be the living example of New Thinking which, however, has NOT produced the true economic theory but the pluralism of provably false theories. Worse, Heterodoxy argues that the criteria of science do not literally apply to economics as a social science and that to insist on the well-defined standards of material and formal consistency is merely physics envy.

While it is true that Orthodoxy has abysmally failed, it is important to stress that Heterodoxy, too, has achieved nothing of scientific value.#1 The simple reason is that orthodox and heterodox economists share the same mental handicap: they do not understand what science is all about. What we have underneath the conspicuous hick-hack of the diverse schools is the grand unity and solidarity of the scientifically incompetent.#2 Well knowing that economics is not a science, no economics school puts the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel” in earnest into question.

What the Bank of Sweden does, though, is either (i) a self-delusional overreach, (ii) an arrogation of scientific competence, (iii) an arrogation of legitimacy, or/and (iv), a deception of the general public.

The question is, why have heterodox economists never made a serious attempt to abolish the fake Nobel which makes the ridiculous claim that economics is science[s]. There is a blatant contradiction between reality and what the Bank of Sweden declares.

The Bank of Sweden has no legitimacy whatsoever to elevate a proto-science to the status of a science. The four major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, and materially/formally inconsistent. Economists do not even understand the foundational concept of their subject matter, that is, macroeconomic profit. Economics is not a science, and economists are not scientists.

What neither orthodox nor heterodox economists have realized until this day is that economics is NOT a science of behavior. Behavioral Economics from Adam Smith’s Theory of Moral Sentiment to homo oeconomicus to bounded rationality to game theory to Richard Thaler’s nudge is not economics at all but the very subject matter of Sociology, Psychology, Anthropology, Political Science, History, etcetera. The subject matter of economics is the economic system.

Lars Syll entirely misses the point with his patronizing critique: “So — although it is good that people like Kahneman and Thaler are rewarded ‘Nobel prizes’ and that much of their research has vastly undermined the lure of axiomatic-deductive mainstream economics, there is still a long way to go before economics has become a truly empirical science.”

There is no other way to go for failed/fake scientists than to apply for immediate retirement. This, of course, includes the misdirected methodologist, confused blatherer, and clueless heterodox prophet Lars Syll.#3

Egmont Kakarot-Handtke


#1 Economics: 200+ years of scientific incompetence and fraud
#2 For details of the big picture see cross-references Scientific Incompetence
#3 The stupidity of Heterodoxy is the life insurance of Orthodoxy

Related 'The real problem with the economics Nobel' and 'The economics Cargo Cult Prize' and 'A social science is NOT a science but a sitcom' and 'Schizonomics' and 'There is NO such thing as an economic expert' and 'The economist as stand-up comedian' and 'Is Lars Syll’s stupidity really infinite?' and 'Legitimacy lost'. For details of the big picture see cross-references Not a Science of Behavior and cross-references Heterodoxy and cross-references Political Economics/Stupidity/Corruption.
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June 15, 2017

How Heterodoxy got lost in the methodological woods

Comment on Lars Syll on ‘What kind of realist am I?’

Blog-Reference

Lars Syll advertises his realist methodology: “Perhaps the most important contribution a researcher can make is reveal what this reality that is the object of science actually looks like.”

Translated into economics, this means in concrete terms that the most important contribution an economist can make is to reveal how the actual economy works. This contribution takes the form of the true theory with truth well-defined as material and formal consistency.

Sometimes it is necessary to reflect on methodology, but only as a stepping stone on the way to the true economic theory. The economist who thinks he is in the possession of a superior methodology is supposed ― NOT to run around and give good methodological advice but ― to directly apply it and show the results. As J. S. Mill put it: “Doubtless, the most effectual mode of showing how the sciences of Ethics and Politics [and Economics] may be constructed, would be to construct them.”

Lars Syll rightly criticizes the methodology of Orthodoxy, which comes under the umbrella heading of methodological individualism, always implying that his realist methodology is superior, yet he has never produced a solid piece of economic theory. He has not even realized that Keynesianism, his prototype of a superior approach, is logically defective. #1

The repetitive blunder of Heterodoxy consists in getting stuck with methodology: “As will become evident, there is more agreement on the defects of orthodox theory than there is on what theory is to replace it: but all agreed that the point of the criticism is to clear the ground for construction.” (Nell)

Heterodoxy in general and Lars Syll, in particular, talk much about how ‘the science of economics may be constructed’ but never get started.

The crucial step on the way to the true theory is to move from the naive description of reality to abstraction: “Since, therefore, it is vain to hope that truth can be arrived at, either in Political Economy or in any other department of the social science, while we look at the facts in the concrete, clothed in all the complexity with which nature has surrounded them, and endeavour to elicit a general law by a process of induction from a comparison of details; there remains no other method than the à priori one, or that of ‘abstract speculation’.” (J. S. Mill)

Needless to emphasize that abstraction can go badly wrong. Starting with the realistic description ‘the earth stands still and the sun goes up’, Ptolemy constructed the geocentric theory. With this, Ptolemy committed the Fallacy of Insufficient Abstraction. The later paradigm shift from geocentrism to Heliocentrism delivered the best-known example for successful abstraction: “I shall never be able to express strongly enough my admiration for the greatness of mind of these men who conceived this [heliocentric] hypothesis and held it to be true. In violent opposition to the evidence of their own senses and by sheer force of intellect, they preferred what reason told them to that which sense experience plainly showed them ... I repeat, there is no limit to my astonishment when I reflect how Aristarchus and Copernicus were able to let conquer sense, and in defiance of sense make reason the mistress of their belief.” (Galileo)

The realists never got the point: “Bacon, the philosopher of science, was, quite consistently, an enemy of the Copernican hypothesis. Don’t theorize, he said, but open your eyes and observe without prejudice, and you cannot doubt that the Sun moves and that the Earth is at rest.” This is how realists became the laughing stock of science, and the whole filibuster about realism/unrealism became pointless.

There are TWO pitfalls in the process of abstraction: (i) that the unknown ‘essential’ aspects of reality are unintentionally abstracted away, i.e., that reality gets lost, and (ii) that the ‘inessential’ aspects of reality are not abstracted away, i.e., that the analysis remains on the commonsensical surface. Accordingly, we have (i) the Fallacy of Lethal Abstraction, and (ii) the Fallacy of Insufficient Abstraction. Orthodox economics suffers from (i), heterodox economics from (ii). And this is why economics is a failed science and why economists never came to grips with reality.

Lars Syll’s realist methodology is good for criticism but worthless for the axiomatic reconstruction of economics and therefore prevents the necessary Paradigm Shift, i.e., genuine scientific progress.

The common blunder of Orthodoxy and Heterodoxy consists of defining economics as a social science. While it is quite obvious that human behavior plays an important role in how the economy develops, this is NOT the subject matter of economics but of psychology, sociology, anthropology, history, political science, social philosophy, biology/Darwinism/evolution theory, etcetera. Economics has to focus on the systemic aspect of the economy. That means economics is NOT a social science but a systems science. Put differently, the focus of the theory of flight is NOT on why crew and passengers are on a plane, what their ulterior motives are, how they behave, and whether they are happy or not. The focus is on what makes the plane fly, i.e., the laws of aerodynamics, thermodynamics, and so on. The theory of flight abstracts from the concrete human beings and leaves all Human Nature issues to social scientists, that is, to people who will NEVER get a plane off the ground.

Lars Syll argues: “The overarching flaw with methodological individualism and rational choice theory is basically that they reduce social explanations to purportedly individual characteristics. But many of the characteristics and actions of the individual originate in and are made possible only through society and its relations.”

This is a true example of the Fallacy of Insufficient Abstraction. The overarching blunder of BOTH orthodox and heterodox economists is that they dabble in psychology and sociology, which is NOT their proper business, and have until this day NOT figured out how the price and profit mechanism works. Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives are proto-scientific garbage, and the realist Lars Syll stands clueless right in the middle of it. #2

Egmont Kakarot-Handtke


#1 How Keynes got macro wrong and Allais got it right
#2 Economics: 200+ years of scientific incompetence and fraud

For details of the big picture, see cross-references Heterodoxy and cross-references Paradigm Shift.

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Twitter/X Nov 14, 2025 The meaning of Compression and Abstraction is methodologically roughly the same

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May 10, 2017

The Tragicomedy of Heterodoxy

Comment on Lars Syll on ‘The tragedy of pseudoscientific and self-defeatingly arrogant economics’

Blog-Reference and Blog-Reference

Lars Syll reminds us that back in 1991, a commission of well-respected economists reported that “… graduate programs may be turning out a generation with too many idiot savants skilled in technique but innocent of real economic issues.”

The well-respected economists (Krueger, Arrow, Leamer, Stiglitz et al.) were themselves participants in one of the most annoying failures in the history of the sciences ― idiots savants instead of scientists.

“Science is a process that does lead to a broadly shared consensus. It is arguably the only social process that does. Consensus forms around theoretical and empirical statements that are true.” (Romer)

This did and does not happen in economics because the representative economist is an incompetent scientist. Incompetence comes in two forms. This is due to the fact that scientific research consists of two essential and inseparably linked elements: “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)

Formal consistency is established by the axiomatic-deductive method. Material consistency is established by state-of-the-art testing. Accordingly, the incompetence of economists consists of two blunders: (i) of vacuous theory, and (ii), of blind application of statistical tools to poorly defined data sets.

From the undeniable fact that economists have messed up both elements of science cannot be concluded that scientific methodology does not apply to economics or, as J. S. Mill put it, that economics is a ‘separate’ science. There is no such thing. There are only science and non-science. #1

To this day, economics belongs to the category of what Feynman called cargo cult science, that is, the outer appearance is perfect, but somehow it simply does not work. Theory is vacuous without empirical content, and data analysis is blind without guidance from theory.

Despite all the political sound and fury, there is no real difference between Walrasians, Keynesians, Marxians, Austrians, and their derivatives. All these approaches fail to satisfy the two criteria of science. The tragedy of Heterodoxy is that it is well aware of all blunders but that it has no idea of how to get out of the proto-scientific cul-de-sac.

Debunking Orthodoxy is good, yet a Paradigm Shift is better: “The moral of the story is simply this: it takes a new theory, and not just the destructive exposure of assumptions or the collection of new facts, to beat an old theory.” (Blaug)

There is nothing to choose between obsolete-arrogant Orthodoxy and clueless-humble Heterodoxy. Both are destined for the wastebasket. The Paradigm Shift is overdue. #2

Egmont Kakarot-Handtke


#1 Failed economics: The losers’ long list of lame excuses
#2 For details of the big picture, see cross-references Paradigm Shift
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April 28, 2017

The stupidity of Heterodoxy is the life insurance of Orthodoxy

Comment on Lars Syll on ‘The dangers of neglecting methodology’

Blog-Reference and Blog-Reference on May 1 adapted to context

A theory is the best mental representation of reality that is humanly possible. As Kant put it in 1793: “There is nothing as practical as a good theory.” A good theory is defined by material and formal consistency: “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) A theory is the embodiment of knowledge. Knowledge is the very opposite of opinion. Knowledge is valuable, opinion is worthless. Knowledge is the currency in the realm of science, and opinion is the currency in the realm of politics. Both realms are disjunct. How does one eventually arrive at knowledge?: “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)

All this has been known for more than 2300 years ― except among economists. Economists have talked volumes about methodology but reality is the final arbiter in science. The reality of economics is that it is a failed science, and from this follows that what economists preach and practice as methodology, i.e. the proverbial ‘thinking like an economist’, #1 is plain proto-scientific garbage. The fact is that the major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, and materially/formally inconsistent.

Heterodoxy is NOT methodologically superior to Orthodoxy it merely talks more about methodology. #2 The bottom line of Heterodox methodology is the pluralism of false theories, which, of course, is scientifically forever unacceptable.

The methodological blunder of Orthodoxy and Heterodoxy is basically the same. Both suffer from social science delusion. The fundamental methodological error/mistake has been codified by Arrow: “… all explanations must run in terms of the actions and reactions of individuals”. Heterodoxy replaces classes for individuals, and that’s it. What the representative economist fails to realize is that NO way leads from the understanding of Human Nature/motives/interests/behavior/action/interaction to the understanding of how the economic system works.

The representative economist focuses on the wrong aspect of economic reality which is the result of human-system interaction. An example makes this clear.

Imagine someone is shown an airplane taking off for Paris. Now the person is asked to explain how it so happens that planes fly. The scientifically incompetent commonsenser explains that this flight takes place because the passengers have a variety of motives to go to Paris, and the crew and the pilot have theirs, and that the airline wants to make big profits, and so on. This is how the Human-Nature explanation of psychology and sociology works. It is proto-scientific garbage but people are perfectly happy with it.

The competent scientist, in contradistinction, avoids all Human-Nature blah blah and explains flight by the interaction of a bunch of physical laws, e.g. aerodynamics, thermodynamics, gravity, and so on. #3

Methodologically, the lethal blunder of Orthodoxy consists of starting from behavioral axioms: “… most of what I and many others do is sorta-kinda neoclassical because it takes the maximization-and-equilibrium world as a starting point.” (Krugman) #4

The heterodox critique of Orthodoxy (unrealism, mathiness, ignorance of uncertainty/ reflexivity, etcetera) is not false but remains on the surface. There is only ONE effective critique of a false paradigm and this is a new paradigm. As long as Heterodoxy is unable to provide the new paradigm the orthodox zombie cannot be buried. Because of proven scientific incompetence, though, the way forward is to bury BOTH Orthodoxy and Heterodoxy.
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