Comment on Tom Hickey/Tony Wikrent on ‘How are you going to pay for it? Why Understanding Monetary Theory and Policy Is Critical For the Left’
Blog-Reference
The journalist’s qualification consists of only one skill, and that is how to write an emotion-catcher. First, the you-can-trust-me personality frame: I am from Racine, Wisconsin, then comes Auntie with her heart-warming practical wisdom: “She [my aunt] used to say, ‘You know, during the Depression there wasn’t any money around. Then they decided to run a war, and there was all kinds of money around. Why can’t we do that when we want to do that?” Gotcha, politicians, Auntie from Wisconsin sees through your shenanigans!
The educated answer to the apparently dumb question How are you going to pay for it? is nobody pays because in a fiat money system, WeThePeople/Government/Central Bank can easily produce money in any quantity. This MMT standard answer is, of course, true, but only technically. #1
Let us come back from journalism to reality. The correct answer is Dear questioner, it is WeThePeople who pays for it through stealth taxation, and economically it does not matter at all whether the government’s deficit-spending is for military or social purposes. The first thing to grasp is: YOU pay in real terms, either through open or stealth taxation.
But that’s not all. Because of the macroeconomic Profit Law, it holds always and everywhere: Public Deficit = Private Profit. So, it does not matter how the deficit money is spent; in any case, it increases macroeconomic profit by the same amount ― to the penny. #2 WeTheOligarchs say thank you to WeThePeople!
There is one correct way for the central bank to inject out-of-thin-air money into the economy, and that is by financing a growing wage bill. The false way is the counterfeit-money-printer’s way, that is, to spend the additional money on current output. This leads to stealth taxation via the price mechanism or, as the euphemism goes, via the invisible hand.
Why do MMTers always laugh at the question How are you going to pay for it? Because they know that it is always the asking sucker who pays. Yes, it’s a rigged game, and journalists, economists, and MMTers are part of the plot. #3 That’s rather funny, as any Auntie from Wisconsin can tell you.
Egmont Kakarot-Handtke
#1 For the full-spectrum refutation of MMT see cross-references MMT
#2 Keynes, Lerner, MMT, Trump and exploding profit
#3 The Kelton-Fraud
Related 'The Magic Money Tree is real ― too bad that the magic is fraud' and 'MMT: Academic snake oil for the people' and 'MMT and grassroots movements' and 'Criminals and the Monetary Order'.
July 24, 2018
July 21, 2018
The present non-existence of economics
Comment on Lars Syll/Kingsley Lewis on ‘The present state of economics’
Blog-Reference
You say: “While (S−I+T−G+M−X=0) is always necessarily true, it is merely a tautology based on accounting definitions.”
This is one of the oldest and most imbecilic slogans in the history of economics blather and proof that economists have produced NOTHING of scientific value for 200+ years. The equation is logically/mathematically false, which is a testament to both orthodox AND heterodox economists’ abysmal stupidity.
Suggested links:
Egmont Kakarot-Handtke
AXEC143d Profit Law (with increasing complexity) and Balances Equation
Blog-Reference
You say: “While (S−I+T−G+M−X=0) is always necessarily true, it is merely a tautology based on accounting definitions.”
This is one of the oldest and most imbecilic slogans in the history of economics blather and proof that economists have produced NOTHING of scientific value for 200+ years. The equation is logically/mathematically false, which is a testament to both orthodox AND heterodox economists’ abysmal stupidity.
Suggested links:
- Wikipedia and the promotion of economists’ idiotism
- What’s the use of economists?
- There is no soft science only soft brains
- All models are false because all economists are stupid
- Keynesians ― terminally stupid or worse?
- Why Post Keynesianism Is Not Yet a Science
- The profit theory is false since Adam Smith
- cross-references Failed/Fake Scientists
- cross-references Scientific Incompetence
- cross-references Keynesianism
***
AXEC143d Profit Law (with increasing complexity) and Balances Equation
July 19, 2018
What’s the use of economists?
Comment on Lars Syll on ‘What’s the use of economics?’
Blog-Reference and Blog-Reference and Blog-Reference on Jul 21
Lars Syll summarizes: “Much work done in mainstream theoretical economics is devoid of any explanatory interest. And not only that. Seen from a strictly scientific point of view, it has no value at all. It is a waste of time.”
True. 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.
Economics, though, is not alone orthodox economics but also heterodox economics. The fact is that Heterodoxy has been complicit in the failure. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got the foundational concept of the subject matter ― profit ― wrong. As a result of the utter scientific incompetence of the representative economist, what has been achieved is the pluralism of provably false theories. #1, #2
The simple fact of the matter is that economists ― orthodox or heterodox do not matter ― are either stupid or corrupt or both. Take note:
(i) Economics is not a science but what Feynman called a cargo cult science.
(ii) To maintain that economics is a social science is the foundational blunder. Economics is a systems science. #3
(iii) Economists have not figured out to this day how the price and profit mechanism works. #4
(iv) Economists have not even figured out what profit is. #5
(v) Economists are too stupid for the elementary mathematics of macroeconomic accounting. #6
(vi) Walrasian Micro and Keynesian Macro are both built upon false premises/axioms. #7 Because of this, the whole analytical superstructure is scientifically worthless. The same holds for Marxianism and Austrianism.
(vii) Economic policy guidance has no sound scientific foundations since Adam Smith/Karl Marx.
(viii) Economists have been political agenda pushers/useful political idiots from day one onward.
Economists are storytellers. Economics is a failed science. All microfounded (Walrasian) and macrofounded (Keynesian) models are provably false. Economists do not know how the economy works. Economics is a cargo cult science. The ‘Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel’ is a fraud. Heterodoxy has always been complicit in the fraud.
What’s the use of scientifically incompetent economists? Ask those who use them.
Egmont Kakarot-Handtke
#1 Economics: a science without scientists
#2 And the answer is NCND ― economics after 200+ years of Glomarization
#3 For details of the big picture, see cross-references Not a Science of Behavior
#4 For details of the big pictur,e see cross-references Failed/Fake Scientists
#5 Profit: after 200+ years, economists are still in the woods
#6 Wikipedia and the promotion of economists’ idiotism
#7 The miracle cure of economists’ micro-macro schizo
REPLY to Andrew Anderson on Jul 20
You say: “I’d first ask what’s the use of the Fundamental Accounting Equation, Assets=Equity+Liabilities, with Liabilities that are largely a sham?”
The Fundamental Accounting Equation Assets=Equity+Liabilities is methodological garbage that proves only one thing: economists are too stupid for the elementary logic/ mathematics that underlies macroeconomic accounting. The formally correct equation reads Equity≡Assets−Liabilities.#1
For 200+ years, economists do not understand what science is all about and what the subject matter of economics is. This includes Orthodoxy, Heterodoxy, Walrasianism, Keynesianism, Marxianism, Austrianism, MMTers, Lars Syll, Tom Hickey, Matt Franko, and you.
#1 Wikipedia and the promotion of economists’ idiotism (II)
REPLY to Matt Franko on Jul 20
What’s the use of economists?
It would certainly be a good thing if economists could increase scientific knowledge about how the monetary economy works. They have done nothing of the sort in the last 200+ years.
Do Tom Hickey’s and Matt Franko’s blather about methodology and the curriculum at Wharton and elsewhere contribute to anything that is of interest to anybody?
No, not at all, as far as scientific knowledge is concerned. But to filibuster about God, his wife, his poor qualification, and the rest of the world is a tried and tested method to distract from the point at issue. The point at issue is that MMTers are failed/fake scientists and that MMT is (i) proto-scientific garbage, and (ii), a political fraud.
While economists are useless for science, even the dumbest moron is useful as a sand sack in political warfare.
REPLY to Matt Franko on Jul 20
Questions for Matt Franko and other certified cargo cult scientists.
From the axiomatically correct Profit Law for the open economy with government and profit distribution follows the AXEC balances equation (i) (I−S)+(G−T)+(X−M)−(Q−Yd)=0 #1, which compares directly to the MMT balances equation (ii) (I−S)+(G−T)+(X−M)=0.#2
(a) Which of the equations satisfies the scientific criteria of material and formal consistency?
(b) Why do economists/mathematicians with university training not know the correct answer?#3
(c) How could it happen that academics propagate a provably false balances equation in their seminars and in public?
#1 AXEC143d Profit Law and Balances Equation
#2 Down with idiocy!
#3 Truth by definition? The Profit Theory has been axiomatically false for 200+ years
The objective of economics is the true theory about how the economic system works, with truth well-defined as material/formal consistency. Instead of filibustering about the right methodology, it would be more effective to practically apply it and to report what new insights you have achieved. As J. S. Mill said: “Doubtless, the most effectual mode of showing how the sciences of Ethics and Politics may be constructed, would be to construct them . . . “
Instead of doing serious scientific work, you are promoting already falsified theories and scientifically incompetent economists.
A philosopher is supposed to contribute to the growth of scientific knowledge. As a soapbox philosopher (= Sophist in Plato’s terms), you are only heightening the already outsized heap of proto-scientific BS.
AXEC144
Blog-Reference and Blog-Reference and Blog-Reference on Jul 21
Lars Syll summarizes: “Much work done in mainstream theoretical economics is devoid of any explanatory interest. And not only that. Seen from a strictly scientific point of view, it has no value at all. It is a waste of time.”
True. 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.
Economics, though, is not alone orthodox economics but also heterodox economics. The fact is that Heterodoxy has been complicit in the failure. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got the foundational concept of the subject matter ― profit ― wrong. As a result of the utter scientific incompetence of the representative economist, what has been achieved is the pluralism of provably false theories. #1, #2
The simple fact of the matter is that economists ― orthodox or heterodox do not matter ― are either stupid or corrupt or both. Take note:
(i) Economics is not a science but what Feynman called a cargo cult science.
(ii) To maintain that economics is a social science is the foundational blunder. Economics is a systems science. #3
(iii) Economists have not figured out to this day how the price and profit mechanism works. #4
(iv) Economists have not even figured out what profit is. #5
(v) Economists are too stupid for the elementary mathematics of macroeconomic accounting. #6
(vi) Walrasian Micro and Keynesian Macro are both built upon false premises/axioms. #7 Because of this, the whole analytical superstructure is scientifically worthless. The same holds for Marxianism and Austrianism.
(vii) Economic policy guidance has no sound scientific foundations since Adam Smith/Karl Marx.
(viii) Economists have been political agenda pushers/useful political idiots from day one onward.
Economists are storytellers. Economics is a failed science. All microfounded (Walrasian) and macrofounded (Keynesian) models are provably false. Economists do not know how the economy works. Economics is a cargo cult science. The ‘Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel’ is a fraud. Heterodoxy has always been complicit in the fraud.
What’s the use of scientifically incompetent economists? Ask those who use them.
Egmont Kakarot-Handtke
#1 Economics: a science without scientists
#2 And the answer is NCND ― economics after 200+ years of Glomarization
#3 For details of the big picture, see cross-references Not a Science of Behavior
#4 For details of the big pictur,e see cross-references Failed/Fake Scientists
#5 Profit: after 200+ years, economists are still in the woods
#6 Wikipedia and the promotion of economists’ idiotism
#7 The miracle cure of economists’ micro-macro schizo
***
REPLY to Andrew Anderson on Jul 20
You say: “I’d first ask what’s the use of the Fundamental Accounting Equation, Assets=Equity+Liabilities, with Liabilities that are largely a sham?”
The Fundamental Accounting Equation Assets=Equity+Liabilities is methodological garbage that proves only one thing: economists are too stupid for the elementary logic/ mathematics that underlies macroeconomic accounting. The formally correct equation reads Equity≡Assets−Liabilities.#1
For 200+ years, economists do not understand what science is all about and what the subject matter of economics is. This includes Orthodoxy, Heterodoxy, Walrasianism, Keynesianism, Marxianism, Austrianism, MMTers, Lars Syll, Tom Hickey, Matt Franko, and you.
#1 Wikipedia and the promotion of economists’ idiotism (II)
***
REPLY to Matt Franko on Jul 20
What’s the use of economists?
It would certainly be a good thing if economists could increase scientific knowledge about how the monetary economy works. They have done nothing of the sort in the last 200+ years.
Do Tom Hickey’s and Matt Franko’s blather about methodology and the curriculum at Wharton and elsewhere contribute to anything that is of interest to anybody?
No, not at all, as far as scientific knowledge is concerned. But to filibuster about God, his wife, his poor qualification, and the rest of the world is a tried and tested method to distract from the point at issue. The point at issue is that MMTers are failed/fake scientists and that MMT is (i) proto-scientific garbage, and (ii), a political fraud.
While economists are useless for science, even the dumbest moron is useful as a sand sack in political warfare.
***
REPLY to Matt Franko on Jul 20
Questions for Matt Franko and other certified cargo cult scientists.
From the axiomatically correct Profit Law for the open economy with government and profit distribution follows the AXEC balances equation (i) (I−S)+(G−T)+(X−M)−(Q−Yd)=0 #1, which compares directly to the MMT balances equation (ii) (I−S)+(G−T)+(X−M)=0.#2
(a) Which of the equations satisfies the scientific criteria of material and formal consistency?
(b) Why do economists/mathematicians with university training not know the correct answer?#3
(c) How could it happen that academics propagate a provably false balances equation in their seminars and in public?
#1 AXEC143d Profit Law and Balances Equation
#2 Down with idiocy!
#3 Truth by definition? The Profit Theory has been axiomatically false for 200+ years
***
REPLY to Tom Hickey on Jul 21The objective of economics is the true theory about how the economic system works, with truth well-defined as material/formal consistency. Instead of filibustering about the right methodology, it would be more effective to practically apply it and to report what new insights you have achieved. As J. S. Mill said: “Doubtless, the most effectual mode of showing how the sciences of Ethics and Politics may be constructed, would be to construct them . . . “
Instead of doing serious scientific work, you are promoting already falsified theories and scientifically incompetent economists.
A philosopher is supposed to contribute to the growth of scientific knowledge. As a soapbox philosopher (= Sophist in Plato’s terms), you are only heightening the already outsized heap of proto-scientific BS.
***
AXEC144
The inexorable Paradigm Shift in economics
Comment on Asad Zaman on ‘Radical paradigm shifts’
Blog-Reference
If you can read this statement on the RWER blog
REAL-WORLD ECONOMICS REVIEW BLOG BLOCKS/DELETES ALL UNDESIRED COMMENTS
then it is NOT true.
However, if you CAN NOT read the statement on the RWER blog, then it is true. #1
For further details related to the ongoing Paradigm Shift in economics, see the suggested links:
#1 This is what one can actually read on the RWER blog of Jul 22 in case one is a researcher of economic methodology and needs a documented example of how traditional Heterodoxy finally hit the bottom of idiocy/corruption.
Related 'The present non-existence of economics' and 'What’s the use of economists?' and 'Heterodoxy ― an axiomatic failure just like Orthodoxy' and 'Lars Syll, fake scientist' and 'Demarcation works, but it takes longer in economics' and 'Economists ― blinded by political balloons' and 'Real-World Economics: The sanctuary of stupidity and corruption' and 'Asad Zaman marches with the Zeitgeist down a blind alley' and 'Does Asad Zaman fly with POL or SCI Airlines?' and 'Economics: Not a pretty story'.
You summarize: “With all that in mind I will leave the reader with a quote from Joan Robinson and John Eatwell’s excellent classroom book An Introduction to Modern Economics in which they clearly realise the problem that the idea of a static equilibrium between savings and investment has caused in the minds of economists since Keynes put it forward in his General Theory. What’s more, they also realise this problem in properly Myrdalian terms:
In the early days of the exposition of Keynes’ General Theory, it was usual to argue as follows:
Y = C + I
Y = C + S
Therefore, I = S
But, since net investment and net saving are accounting identities, this was not a legitimate argument; it allowed hostile critics to create confusion. An ex-post accounting identity, which records what happened over, say, the past year, cannot explain causality; rather, it shows what has to be explained. Keynes’ theory did not demonstrate that the rate of saving is equal to the rate of investment, but explained through what mechanism this is brought about.”
The so-called “ex-post accounting identity” is provably false, to begin with. #1 The correct relationship reads Q≡I−S, with Q signifying the monetary profit of the business sector as a whole. This axiomatically correct equation tells everyone:
Keynes’ I=S, including all variants of IS-LM up to the present, is a harrowing testament to economists’ utter scientific incompetence. #5
Asad Zaman urges a radical Paradigm Shift. So be it. Walrasianism, Keynesianism, Marxianism, and Austrianism have to be buried at the Flat-Earth Cemetery.
First of all: Asad Zaman, Prof Dr. James Beckman, Dave Marsay, Vladimir A. Masch, Edward K Ross, Frank Salter, Craig, Helen Sakho, John Vertegaal, Jan Milch, Calgacus alias Some Guy, dingo342014, Robert Locke, and all others with a substandard IQ #6 simply get out of economics ― NOW.
#1 Wikipedia and the promotion of economists’ idiotism (II)
#2 Keynes’s Missing Axioms
#3 How Keynes got macro wrong and Allais got it right
#4 Why Post Keynesianism Is Not Yet a Science
#5 Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It
#6 How the Intelligent Non-Economist Can Refute Every Economist Hands Down
This is what the RWER blog looks like on Jul 23: a black hole of idiocy.
REPLY to Asad Zaman on Jul 24
Take notice: Economics is a failed science for 200+ years. Economists are storytellers. All microfounded (Walrasian) and macrofounded (Keynesian) models are provably false, and that is the greater part of the peer-reviewed literature. All textbooks are false because economists got the foundational concept of profit wrong. To this day, economists do not know how the economy works. Economics is a cargo cult science. The ‘Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel’ is a fraud. Walrasians, Keynesians, Marxians, Austrians, and Pluralists are complicit in the failure/fake/fraud. Economic policy guidance has had no sound scientific foundations since Adam Smith. Economists are clowns/useful idiots in the political Circus Maximus.
Your whole discussion of methodology is proto-scientific garbage. #1 Science is about true/false and NOTHING else. And the truth is established by logical/empirical proof and NOT by faith, belief, tolerance, pluralism, love of paradox, moralizing, appeal to the masses, appeal to common sense, populism, prophesy of doom, scapegoating, folk psychology/ sociology, historical storytelling, appeal to emotion “I feel therefore I am”, outright blather, and disinformation. These are the tools and tricks of political rhetoric since the Sophists.
Science is about what is materially/logically provable; all else is non-science. Non-science is 99 percent of human communication, and it consists of vacuous gossip, silly propaganda, and senseless blather.
All of human civilization and material progress has been produced by scientists/engineers. Economic/mental/spiritual misery of the world is NOT and NEVER has been attributable to binary logic, science, rigorous proof, and the genuine scientist’s commitment to scientific ethics.
Your assertion: “Attempting to universalize application of logic to ALL domains of human knowledge has been truly catastrophic …” is, therefore, a smear of the worst sort. What is truly catastrophic is the stupidity/corruption of non- and anti-scientists.
Yes, mainstream economics is false and refuted on all counts. But, at some point, dead-horse-beating becomes counter-productive: “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)
A Paradigm Shift consists of moving from the set of axioms that constitutes the false paradigm to a new set of axioms. #2, #3 So, stop waffling about “the blood flowing in my veins, the tingling of my skin, and a thousand other bodily sensations” and simply show what you think the new economic axioms are. #4 Or, even better, get out of economics and focus on feeling the farts in your brain.
#1 Does Asad Zaman fly with POL or SCI Airlines?
#2 For details of the big picture, see cross-references Paradigm Shift
#3 True macrofoundations: the reset of economics
#4 Show first your economic axioms or get out of the discussion
This is what the RWER blog looks like on Jul 24.
REPLY to Asad Zaman on Jul 25
With regard to economics, the most important thing is to keep political and theoretical economics apart. The main differences are: (i) The goal of political economics is to successfully push an agenda, and 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.
The objective of theoretical economics is the TRUE theory: “In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum)
The most important thing is to realize that 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. Orthodox AND heterodox economics is proto-scientific garbage to this day.
Agenda pushers ― right-wing, left-wing, progressive, conservative, liberal, communist, fascist, socialist, Christian/Muslim/Hindu/others, LGBTQ+, etc. ― are the very antithesis of scientists. Agenda pushers have a disturbed relationship with the truth, more specifically with scientific truth, which is well-defined by material/formal consistency and established by rigorous proof.
Political agenda pushers are stupid and corrupt, and they identify themselves with a typical set of slogans: #1
Aristotle put it in rather simple terms: “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 methodological term for the premises of a theory is axioms. Hence, a Paradigm Shift consists of moving from the set of axioms that constitutes the obsolete paradigm to a superior set of axioms. #2 The change of axioms changes the whole analytical superstructure. The critique of isolated assertions of the superstructure changes not much, if anything. Heterodoxy criticizes Orthodoxy for 150+ years, yet the methodological madness of constrained optimization and equilibrium is still around. The reason why economics is the worst failure in the history of modern science is that BOTH orthodox and heterodox economists are incompetent scientists.
The very characteristic of political economists is that they avoid clearly stating their axioms and instead apply all rhetorical tricks of the Sophist’s toolbox to keep the discourse in the swamp where “nothing is clear and everything is possible” (Keynes).
Vagueness/inconclusiveness/filibuster keeps the stupid and corrupt agenda pusher in his proto-scientific business because: “Another thing I must point out is that you cannot prove a vague theory wrong.” (Feynman)
This leaves us with the pluralism of false economic theories, i.e., Walrasianism, Keynesianism, Marxianism, and Austrianism. But not all hope is lost: “I have made substantial progress towards developing an alternative paradigm within an Islamic framework.” (Asad Zaman)
Orthodox economics has committed suicide with DSGE, and Heterodoxy is currently setting a new record of idiocy.
#1 Failed economics: The losers’ long list of lame excuses
#2 For the correct set of axioms, see the label Graphic.
This is what the RWER blog looks like on Jul 25.
REPLY to Asad Zaman on Jul 26
Economics started as Political Economy. Neither Adam Smith nor Karl Marx had any grasp of science, but in accordance with the Zeitgeist, they had to dress their agenda-pushing up as science. Neither Adam Smith nor Karl Marx nor their respective followers figured out how the economy works. What Walrasians, Keynesians, Marxians, and Austrians have put forward as theories do not satisfy the scientific criteria of material and formal consistency.
For 200+ years, economists have made policy proposals that have no sound scientific foundations. They are too stupid for the elementary mathematics of National Accounting, but claim to change society for the better or even to save humanity. The fact is that economists have always been a hazard to their fellow citizens. #1
Economics is a failed science, and what is urgently needed is a Paradigm Shift. Being political agenda pushers, heterodox economists do not understand what a Paradigm Shift is and think that it is, in essence, the replacement of one political clique by another.
Accordingly, Asad Zaman makes it clear that the whole point of a Paradigm Shift is not developing the true theory but developing an effective marketing strategy: “Before investing time to understand the world-according-to-Salter or according-to-Shiozawa, I would want the answer to two questions: [1] is this easy to communicate to others and to persuade others? If NOT, then there is no point in investing time in it, because we will not be able to build consensus on it. Judging by Salter’s own statements, he has not been able to find many takers, which means that he does not have a good strategy for persuasion. If the creator of the truth cannot market it, it does not seem that I would be able to market it better, and if there is Salter-truth that is valuable, but we cannot create consensus for it, then it would be useless as an instrument to create social change.”
Clearly, Asad Zaman is not interested in the truth value of a theory but in its propaganda value. Clearly, the soapbox economist Asad Zaman, as the methodological loudspeaker of Heterodoxy, stands firmly in the tradition of the founding fathers, whose business was political agenda pushing.
Just like Orthodoxy, Heterodoxy has ZERO scientific value. Asad Zaman’s claim to bring about a Paradigm Shift is laughable. Heterodox economists do not know how the economy works. #2 This Radical-Paradigm-Shifts-thread proves beyond all doubt that heterodox economists are as stupid and corrupt as orthodox economists.
Needless to emphasize that it is perfectly legitimate to push an agenda. The economists’ fraud consists NOT of spreading propaganda but of telling the general public that they are doing science. To throw both orthodox and heterodox economists out of science is not a restriction of free speech but the overdue implementation of well-defined scientific standards.
The mission of economics as a science is to produce the true theory ― not more, not less. What has been co-produced hitherto by Orthodoxy and Heterodoxy is nothing but proto-scientific garbage.
#1 Mass unemployment: The joint failure of orthodox and heterodox economics
#2 For details of the big picture, see cross-references Heterodoxy
This is what the RWER blog looks like on Jul 26.
REPLY to Asad Zaman on Jul 27
There are revolutions in the political realm, and there are Paradigm Shifts in the scientific realm. Kuhn associated the two concepts in his book The Structure of Scientific Revolutions. #1
The analogy is a good one because it thrills the general reader. Needless to emphasize that the title The Structure of Paradigm Shifts would have turned off everybody except three specialists in the methodology field.
While the association revolution/Paradigm-Shift is good from the marketing standpoint, it is bad from the methodological standpoint. Science and politics are entirely different realms, and they run on incompatible principles. Both realms have to be kept strictly apart because politics always and everywhere corrupts science. This happened in economics.
Theoretical economics (= science) had been captured from the very beginning by political economists (= agenda pushers). Political economics has produced NOTHING of scientific value in the last 200+ years. Walrasianism, Keynesianism, Marxianism, and Austrianism are nothing but thinly disguised propaganda.
You retain the modus operandi of Political Economy. What you are proposing is to gear up the propaganda and organize the necessary political revolution. I have NO qualms with this.
In order to make a revolution, though, nobody needs to study economics first, nor is a deeper knowledge of scientific methodology required, and least of all a critique of Positivism. All that is needed is a Manifesto (Craig has already produced the raw version), revolutionary furor, and a sufficient number of guillotines. What is NOT needed is the zillionth critique of homo oeconomicus.
What is not quite logical is that you want a revolution, but work yourself up with a Paradigm Shift. This is curious because everyone understands that the last thing the masses need to get into revolutionary action is a revelation about the catastrophe of binary logic.
The ultimate cause of the indisputable scientific failure of orthodox AND heterodox economics is that it has been captured from the very beginning by political agenda pushers. These moronic trolls kept economics for 200+ years in the proto-scientific swamp.
In order to make progress in economics, politics, and science have to be strictly separated. So, the agenda pushers = fake scientists get out of economics and focus on the Revolution, and the genuine scientists get out of the useful-idiot business and focus on the Paradigm Shift.
You try to be ironic: “Well Egmont Kakarot-Handtke — as far as I understand it, you have ALREADY produced a true theory, succeeding where everyone else, major thinkers as well as minor, has failed. So the job of finding the truth is done. Well done!! now we can all go home.”
Not quite. You have to decide here and now between Revolution and Paradigm Shift. If you chose the latter, stop filibustering about methodology and present what you think are the true axioms of the new economic Paradigm. Communicatively, this can easily be done on a quarter of a page. #2
#1See also the chapter How Kuhn Unwittingly Saved Social Science From A Radical Future, Fuller, S. (2000). Thomas Kuhn. University of Chicago Press, pp. 227 ff.
#2 For the benchmark, see New Foundations of Economics AXEC137 at Graphic.
This is what the RWER blog looks like on Jul 27
For a SUMMARY of ‘Radical paradigm shifts’ on Jul 30, see
Real-World Economics: The sanctuary of stupidity and corruption
REPLY to John Vertegaal, Calgacus, Craig on Jul 31
What neither orthodox nor heterodox economists have figured out since Keynes is that I=S is NEITHER an accounting identity #1 nor an equilibrium condition but proto-scientific garbage. #2
As a consequence, not only Keynesianism and Post-Keynesianism but also Walrasianism, Marxianism, Austrianism, and MMT have always been outside of science.
The correct equation reads Q≡I−S. Do NOT try to understand it because it will explode your fruit-fly brains. #3
#1 Wikipedia and the promotion of economists’ idiotism (II)
#2 For details of the big picture, see cross-references Refutation of I=S and cross-references Accounting and cross-references MMT
#3 How Keynes got macro wrong and Allais got it right
This is what the RWER blog looks like on Aug 1
Graphic AXEC144
Blog-Reference
If you can read this statement on the RWER blog
REAL-WORLD ECONOMICS REVIEW BLOG BLOCKS/DELETES ALL UNDESIRED COMMENTS
then it is NOT true.
However, if you CAN NOT read the statement on the RWER blog, then it is true. #1
For further details related to the ongoing Paradigm Shift in economics, see the suggested links:
- Refutation of Asad Zaman’s heterodox methodology: all arguments you ever need
- And the answer is NCND ― economics after 200+ years of Glomarization
- All models are false because all economists are stupid
- Throw them out! Orthodox and heterodox economists are unfit for science
- There is no soft science only soft brains
- Profit: after 200+ years, economists are still in the woods
- How the intelligent non-economist can refute every economist hands down
- Wikipedia and the promotion of economists’ idiotism (II)
- Hooray! The formalization issue is finally settled
- Enough! Economists, retire now!
- cross-references Failed/Fake Scientists
- cross-references Scientific Incompetence
- cross-references Heterodoxy
- cross-references Paradigm Shift
#1 This is what one can actually read on the RWER blog of Jul 22 in case one is a researcher of economic methodology and needs a documented example of how traditional Heterodoxy finally hit the bottom of idiocy/corruption.
Related 'The present non-existence of economics' and 'What’s the use of economists?' and 'Heterodoxy ― an axiomatic failure just like Orthodoxy' and 'Lars Syll, fake scientist' and 'Demarcation works, but it takes longer in economics' and 'Economists ― blinded by political balloons' and 'Real-World Economics: The sanctuary of stupidity and corruption' and 'Asad Zaman marches with the Zeitgeist down a blind alley' and 'Does Asad Zaman fly with POL or SCI Airlines?' and 'Economics: Not a pretty story'.
***
#PointOfProof
***
REPLY to Jan Milch on Jul 22You summarize: “With all that in mind I will leave the reader with a quote from Joan Robinson and John Eatwell’s excellent classroom book An Introduction to Modern Economics in which they clearly realise the problem that the idea of a static equilibrium between savings and investment has caused in the minds of economists since Keynes put it forward in his General Theory. What’s more, they also realise this problem in properly Myrdalian terms:
In the early days of the exposition of Keynes’ General Theory, it was usual to argue as follows:
Y = C + I
Y = C + S
Therefore, I = S
But, since net investment and net saving are accounting identities, this was not a legitimate argument; it allowed hostile critics to create confusion. An ex-post accounting identity, which records what happened over, say, the past year, cannot explain causality; rather, it shows what has to be explained. Keynes’ theory did not demonstrate that the rate of saving is equal to the rate of investment, but explained through what mechanism this is brought about.”
The so-called “ex-post accounting identity” is provably false, to begin with. #1 The correct relationship reads Q≡I−S, with Q signifying the monetary profit of the business sector as a whole. This axiomatically correct equation tells everyone:
- Keynes never understood what profit is, which is disqualifying for an economist. #2
- Keynes was too stupid for the elementary mathematics of National Accounting. #3
- Because the conceptual foundations of the General Theory are defective, the whole analytical superstructure of Keynesianism is scientifically worthless. All this has NOTHING to do with the distinction ex-ante/ex-post or with equilibrium/disequilibrium.
- After-Keynesians, including the Stockholm School, Post-Keynesians, and other dim lights like G.L.S. Shackle, have not realized Keynes’s foundational blunder in the last 80+ years. #4
Keynes’ I=S, including all variants of IS-LM up to the present, is a harrowing testament to economists’ utter scientific incompetence. #5
Asad Zaman urges a radical Paradigm Shift. So be it. Walrasianism, Keynesianism, Marxianism, and Austrianism have to be buried at the Flat-Earth Cemetery.
First of all: Asad Zaman, Prof Dr. James Beckman, Dave Marsay, Vladimir A. Masch, Edward K Ross, Frank Salter, Craig, Helen Sakho, John Vertegaal, Jan Milch, Calgacus alias Some Guy, dingo342014, Robert Locke, and all others with a substandard IQ #6 simply get out of economics ― NOW.
#1 Wikipedia and the promotion of economists’ idiotism (II)
#2 Keynes’s Missing Axioms
#3 How Keynes got macro wrong and Allais got it right
#4 Why Post Keynesianism Is Not Yet a Science
#5 Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It
#6 How the Intelligent Non-Economist Can Refute Every Economist Hands Down
This is what the RWER blog looks like on Jul 23: a black hole of idiocy.
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REPLY to Asad Zaman on Jul 24
Take notice: Economics is a failed science for 200+ years. Economists are storytellers. All microfounded (Walrasian) and macrofounded (Keynesian) models are provably false, and that is the greater part of the peer-reviewed literature. All textbooks are false because economists got the foundational concept of profit wrong. To this day, economists do not know how the economy works. Economics is a cargo cult science. The ‘Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel’ is a fraud. Walrasians, Keynesians, Marxians, Austrians, and Pluralists are complicit in the failure/fake/fraud. Economic policy guidance has had no sound scientific foundations since Adam Smith. Economists are clowns/useful idiots in the political Circus Maximus.
Your whole discussion of methodology is proto-scientific garbage. #1 Science is about true/false and NOTHING else. And the truth is established by logical/empirical proof and NOT by faith, belief, tolerance, pluralism, love of paradox, moralizing, appeal to the masses, appeal to common sense, populism, prophesy of doom, scapegoating, folk psychology/ sociology, historical storytelling, appeal to emotion “I feel therefore I am”, outright blather, and disinformation. These are the tools and tricks of political rhetoric since the Sophists.
Science is about what is materially/logically provable; all else is non-science. Non-science is 99 percent of human communication, and it consists of vacuous gossip, silly propaganda, and senseless blather.
All of human civilization and material progress has been produced by scientists/engineers. Economic/mental/spiritual misery of the world is NOT and NEVER has been attributable to binary logic, science, rigorous proof, and the genuine scientist’s commitment to scientific ethics.
Your assertion: “Attempting to universalize application of logic to ALL domains of human knowledge has been truly catastrophic …” is, therefore, a smear of the worst sort. What is truly catastrophic is the stupidity/corruption of non- and anti-scientists.
Yes, mainstream economics is false and refuted on all counts. But, at some point, dead-horse-beating becomes counter-productive: “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)
A Paradigm Shift consists of moving from the set of axioms that constitutes the false paradigm to a new set of axioms. #2, #3 So, stop waffling about “the blood flowing in my veins, the tingling of my skin, and a thousand other bodily sensations” and simply show what you think the new economic axioms are. #4 Or, even better, get out of economics and focus on feeling the farts in your brain.
#1 Does Asad Zaman fly with POL or SCI Airlines?
#2 For details of the big picture, see cross-references Paradigm Shift
#3 True macrofoundations: the reset of economics
#4 Show first your economic axioms or get out of the discussion
This is what the RWER blog looks like on Jul 24.
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REPLY to Asad Zaman on Jul 25
With regard to economics, the most important thing is to keep political and theoretical economics apart. The main differences are: (i) The goal of political economics is to successfully push an agenda, and 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.
The objective of theoretical economics is the TRUE theory: “In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum)
The most important thing is to realize that 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. Orthodox AND heterodox economics is proto-scientific garbage to this day.
Agenda pushers ― right-wing, left-wing, progressive, conservative, liberal, communist, fascist, socialist, Christian/Muslim/Hindu/others, LGBTQ+, etc. ― are the very antithesis of scientists. Agenda pushers have a disturbed relationship with the truth, more specifically with scientific truth, which is well-defined by material/formal consistency and established by rigorous proof.
Political agenda pushers are stupid and corrupt, and they identify themselves with a typical set of slogans: #1
- “… there are no universal truths out there.” (Zaman)
- “… there is true-for-me and true-for-you because our subjective frameworks interact with the objective to produce the ‘facts’.” (Zaman)
- “Anything goes!” (Feyerabend)
- “… instead of displaying the truth … we have to think seriously about HOW we can create consensus on new ways of seeing reality. This is where the now forgotten and lost art of rhetoric is required.” (Zaman)
- “We can only create an illusion of certainty.” (Zaman)
- ‘… mathematical reasoning, i.e., quantifying the unquantifiable, results in completely absurd and ridiculous conclusions.’ (Zaman, paraphrase)
- Data are questionable, test results are open to interpretation.
- “BINARY logic is a catastrophe … [It] ignores the role of the subjective ― every empirical statement represents truth-to-me and if this can differ from truth-to-you, than the role of logic becomes very limited.” (Zaman)
- “… we need to create converts to a new paradigm.” (Zaman)
Aristotle put it in rather simple terms: “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 methodological term for the premises of a theory is axioms. Hence, a Paradigm Shift consists of moving from the set of axioms that constitutes the obsolete paradigm to a superior set of axioms. #2 The change of axioms changes the whole analytical superstructure. The critique of isolated assertions of the superstructure changes not much, if anything. Heterodoxy criticizes Orthodoxy for 150+ years, yet the methodological madness of constrained optimization and equilibrium is still around. The reason why economics is the worst failure in the history of modern science is that BOTH orthodox and heterodox economists are incompetent scientists.
The very characteristic of political economists is that they avoid clearly stating their axioms and instead apply all rhetorical tricks of the Sophist’s toolbox to keep the discourse in the swamp where “nothing is clear and everything is possible” (Keynes).
Vagueness/inconclusiveness/filibuster keeps the stupid and corrupt agenda pusher in his proto-scientific business because: “Another thing I must point out is that you cannot prove a vague theory wrong.” (Feynman)
This leaves us with the pluralism of false economic theories, i.e., Walrasianism, Keynesianism, Marxianism, and Austrianism. But not all hope is lost: “I have made substantial progress towards developing an alternative paradigm within an Islamic framework.” (Asad Zaman)
Orthodox economics has committed suicide with DSGE, and Heterodoxy is currently setting a new record of idiocy.
#1 Failed economics: The losers’ long list of lame excuses
#2 For the correct set of axioms, see the label Graphic.
This is what the RWER blog looks like on Jul 25.
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REPLY to Asad Zaman on Jul 26
Economics started as Political Economy. Neither Adam Smith nor Karl Marx had any grasp of science, but in accordance with the Zeitgeist, they had to dress their agenda-pushing up as science. Neither Adam Smith nor Karl Marx nor their respective followers figured out how the economy works. What Walrasians, Keynesians, Marxians, and Austrians have put forward as theories do not satisfy the scientific criteria of material and formal consistency.
For 200+ years, economists have made policy proposals that have no sound scientific foundations. They are too stupid for the elementary mathematics of National Accounting, but claim to change society for the better or even to save humanity. The fact is that economists have always been a hazard to their fellow citizens. #1
Economics is a failed science, and what is urgently needed is a Paradigm Shift. Being political agenda pushers, heterodox economists do not understand what a Paradigm Shift is and think that it is, in essence, the replacement of one political clique by another.
Accordingly, Asad Zaman makes it clear that the whole point of a Paradigm Shift is not developing the true theory but developing an effective marketing strategy: “Before investing time to understand the world-according-to-Salter or according-to-Shiozawa, I would want the answer to two questions: [1] is this easy to communicate to others and to persuade others? If NOT, then there is no point in investing time in it, because we will not be able to build consensus on it. Judging by Salter’s own statements, he has not been able to find many takers, which means that he does not have a good strategy for persuasion. If the creator of the truth cannot market it, it does not seem that I would be able to market it better, and if there is Salter-truth that is valuable, but we cannot create consensus for it, then it would be useless as an instrument to create social change.”
Clearly, Asad Zaman is not interested in the truth value of a theory but in its propaganda value. Clearly, the soapbox economist Asad Zaman, as the methodological loudspeaker of Heterodoxy, stands firmly in the tradition of the founding fathers, whose business was political agenda pushing.
Just like Orthodoxy, Heterodoxy has ZERO scientific value. Asad Zaman’s claim to bring about a Paradigm Shift is laughable. Heterodox economists do not know how the economy works. #2 This Radical-Paradigm-Shifts-thread proves beyond all doubt that heterodox economists are as stupid and corrupt as orthodox economists.
Needless to emphasize that it is perfectly legitimate to push an agenda. The economists’ fraud consists NOT of spreading propaganda but of telling the general public that they are doing science. To throw both orthodox and heterodox economists out of science is not a restriction of free speech but the overdue implementation of well-defined scientific standards.
The mission of economics as a science is to produce the true theory ― not more, not less. What has been co-produced hitherto by Orthodoxy and Heterodoxy is nothing but proto-scientific garbage.
#1 Mass unemployment: The joint failure of orthodox and heterodox economics
#2 For details of the big picture, see cross-references Heterodoxy
This is what the RWER blog looks like on Jul 26.
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REPLY to Asad Zaman on Jul 27
There are revolutions in the political realm, and there are Paradigm Shifts in the scientific realm. Kuhn associated the two concepts in his book The Structure of Scientific Revolutions. #1
The analogy is a good one because it thrills the general reader. Needless to emphasize that the title The Structure of Paradigm Shifts would have turned off everybody except three specialists in the methodology field.
While the association revolution/Paradigm-Shift is good from the marketing standpoint, it is bad from the methodological standpoint. Science and politics are entirely different realms, and they run on incompatible principles. Both realms have to be kept strictly apart because politics always and everywhere corrupts science. This happened in economics.
Theoretical economics (= science) had been captured from the very beginning by political economists (= agenda pushers). Political economics has produced NOTHING of scientific value in the last 200+ years. Walrasianism, Keynesianism, Marxianism, and Austrianism are nothing but thinly disguised propaganda.
You retain the modus operandi of Political Economy. What you are proposing is to gear up the propaganda and organize the necessary political revolution. I have NO qualms with this.
In order to make a revolution, though, nobody needs to study economics first, nor is a deeper knowledge of scientific methodology required, and least of all a critique of Positivism. All that is needed is a Manifesto (Craig has already produced the raw version), revolutionary furor, and a sufficient number of guillotines. What is NOT needed is the zillionth critique of homo oeconomicus.
What is not quite logical is that you want a revolution, but work yourself up with a Paradigm Shift. This is curious because everyone understands that the last thing the masses need to get into revolutionary action is a revelation about the catastrophe of binary logic.
The ultimate cause of the indisputable scientific failure of orthodox AND heterodox economics is that it has been captured from the very beginning by political agenda pushers. These moronic trolls kept economics for 200+ years in the proto-scientific swamp.
In order to make progress in economics, politics, and science have to be strictly separated. So, the agenda pushers = fake scientists get out of economics and focus on the Revolution, and the genuine scientists get out of the useful-idiot business and focus on the Paradigm Shift.
You try to be ironic: “Well Egmont Kakarot-Handtke — as far as I understand it, you have ALREADY produced a true theory, succeeding where everyone else, major thinkers as well as minor, has failed. So the job of finding the truth is done. Well done!! now we can all go home.”
Not quite. You have to decide here and now between Revolution and Paradigm Shift. If you chose the latter, stop filibustering about methodology and present what you think are the true axioms of the new economic Paradigm. Communicatively, this can easily be done on a quarter of a page. #2
#1See also the chapter How Kuhn Unwittingly Saved Social Science From A Radical Future, Fuller, S. (2000). Thomas Kuhn. University of Chicago Press, pp. 227 ff.
#2 For the benchmark, see New Foundations of Economics AXEC137 at Graphic.
This is what the RWER blog looks like on Jul 27
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For a SUMMARY of ‘Radical paradigm shifts’ on Jul 30, see
Real-World Economics: The sanctuary of stupidity and corruption
***
REPLY to John Vertegaal, Calgacus, Craig on Jul 31
What neither orthodox nor heterodox economists have figured out since Keynes is that I=S is NEITHER an accounting identity #1 nor an equilibrium condition but proto-scientific garbage. #2
As a consequence, not only Keynesianism and Post-Keynesianism but also Walrasianism, Marxianism, Austrianism, and MMT have always been outside of science.
The correct equation reads Q≡I−S. Do NOT try to understand it because it will explode your fruit-fly brains. #3
#1 Wikipedia and the promotion of economists’ idiotism (II)
#2 For details of the big picture, see cross-references Refutation of I=S and cross-references Accounting and cross-references MMT
#3 How Keynes got macro wrong and Allais got it right
This is what the RWER blog looks like on Aug 1
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Graphic AXEC144
July 18, 2018
MMTers make Capitalism work
Comment on John Atcheson on ‘Let’s Just Admit It: Capitalism Doesn’t Work’
Blog-Reference
John Atcheson summarizes: “In short, we are essentially creating debt for future generations and calling it wealth creation.”
That, of course, is true because Public Deficit = Private Profit. But who is “We”?
“We” that are the Deficit Owls on Twitter, that is Stephanie Kelton et al. in the yellow press,#1 Warren Mosler et al. in the financial community, #2 Bill Mitchell et al. in academia, #3 that is the philosopher Tom Hickey in the econblogosphere, one Konrad in the spiritual parallel universe, that are the deficit-spenders/money-creators from the history of economic thought, #4, and many others. “We” that is, first and foremost, the MMT agenda pushers. #5
Capitalism works because of the macroeconomic Profit Law Qm≡Yd+(I−Sm)+(G−T)+(X−M), which, oddly enough, economists do not understand since the founding fathers. #6, #7 The Profit Law tells “Us” also that Capitalism will eventually break down. #8
The MMTers’ assertion that debt does not matter and that the sovereign money creator cannot go bust is somewhat beside the point. Capitalism lives literally on borrowed time.
Egmont Kakarot-Handtke
#1 The Kelton-Fraud
#2 MMT: The one deadly error/fraud of Warren Mosler
#3 Bill Mitchell, MMT’s fake scientist
#4 Keynes, Lerner, MMT, Trump and exploding profit
#5 For the full-spectrum refutation of MMT, see cross-references MMT
#6 Truth by definition? The Profit Theory has been axiomatically false for 200+ years
#7 Wikipedia and the promotion of economists’ idiotism (II)
#8 Mathematical Proof of the Breakdown of Capitalism
“In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum)
The true theory states that macroeconomic profit is given by Qm≡Yd+(I−Sm)+(G−T)+(X−M).#1 Because all variables are measurable with the precision of two decimal places, the Profit Law is testable.
The Profit Law is free of all Human-Nature factors.
The minimum condition for the monetary economy to work ― Capitalist, Socialist, Communist does NOT matter ― is that macroeconomic profit is greater than zero. Otherwise, the monetary economy breaks down.
According to the axiomatically correct Profit Law, one way to produce profit is deficit-spending/money-creation, i.e., Qm=(G−T), i.e., Public Deficit = Private Profit.
• MMT’s economic policy guidance boils down to deficit-spending/money-creation.
• MMT agenda pushers promote the production of profit.
• Ultimately, MMT policy is causal for the unequal distribution of income/financial wealth.
It does not matter how MMTers see themselves or present themselves in public ― that’s all in the imagination ―, objectively, they secure the perpetual self-financing of the Oligarchy.
#1 Graphic AXEC143d Profit Law and Sectoral Balances Equation
Blog-Reference
John Atcheson summarizes: “In short, we are essentially creating debt for future generations and calling it wealth creation.”
That, of course, is true because Public Deficit = Private Profit. But who is “We”?
“We” that are the Deficit Owls on Twitter, that is Stephanie Kelton et al. in the yellow press,#1 Warren Mosler et al. in the financial community, #2 Bill Mitchell et al. in academia, #3 that is the philosopher Tom Hickey in the econblogosphere, one Konrad in the spiritual parallel universe, that are the deficit-spenders/money-creators from the history of economic thought, #4, and many others. “We” that is, first and foremost, the MMT agenda pushers. #5
Capitalism works because of the macroeconomic Profit Law Qm≡Yd+(I−Sm)+(G−T)+(X−M), which, oddly enough, economists do not understand since the founding fathers. #6, #7 The Profit Law tells “Us” also that Capitalism will eventually break down. #8
The MMTers’ assertion that debt does not matter and that the sovereign money creator cannot go bust is somewhat beside the point. Capitalism lives literally on borrowed time.
Egmont Kakarot-Handtke
#1 The Kelton-Fraud
#2 MMT: The one deadly error/fraud of Warren Mosler
#3 Bill Mitchell, MMT’s fake scientist
#4 Keynes, Lerner, MMT, Trump and exploding profit
#5 For the full-spectrum refutation of MMT, see cross-references MMT
#6 Truth by definition? The Profit Theory has been axiomatically false for 200+ years
#7 Wikipedia and the promotion of economists’ idiotism (II)
#8 Mathematical Proof of the Breakdown of Capitalism
***
REPLY to Tom Hickey on Jul 19“In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum)
The true theory states that macroeconomic profit is given by Qm≡Yd+(I−Sm)+(G−T)+(X−M).#1 Because all variables are measurable with the precision of two decimal places, the Profit Law is testable.
The Profit Law is free of all Human-Nature factors.
The minimum condition for the monetary economy to work ― Capitalist, Socialist, Communist does NOT matter ― is that macroeconomic profit is greater than zero. Otherwise, the monetary economy breaks down.
According to the axiomatically correct Profit Law, one way to produce profit is deficit-spending/money-creation, i.e., Qm=(G−T), i.e., Public Deficit = Private Profit.
• MMT’s economic policy guidance boils down to deficit-spending/money-creation.
• MMT agenda pushers promote the production of profit.
• Ultimately, MMT policy is causal for the unequal distribution of income/financial wealth.
It does not matter how MMTers see themselves or present themselves in public ― that’s all in the imagination ―, objectively, they secure the perpetual self-financing of the Oligarchy.
#1 Graphic AXEC143d Profit Law and Sectoral Balances Equation
***
Twitter/X Dec 15, 2024 Not bad, only six years behind the curve
July 17, 2018
There is no soft science only soft brains
Comment on Lars Syll on ‘Hard and soft science — a flawed dichotomy’
Blog-Reference and Blog-Reference
When economists are ridiculed for not having achieved anything of scientific value since Adam Smith they retort with the Cobden excuse: “Years ago I heard Mr. Cobden say at a League Meeting that ‘Political Economy was the highest study of the human mind, for that the physical sciences required by no means so hard an effort.’” (Bagehot, 1885)
Nothing has changed since 1885, economics is still a failed science, and the excuses are still the same: “The distinctions between hard and soft sciences are part of our culture … But the important distinction is really not between the hard and the soft sciences. Rather, it is between the hard and the easy sciences. Easy-to-do science is what those in physics, chemistry, geology, and some other fields do. Hard-to-do science is what the social scientists do and, in particular, it is what we educational researchers do. In my estimation, we have the hardest-to-do science of them all! We do our science under conditions that physical scientists find intolerable. We face particular problems and must deal with local conditions that limit generalizations and theory building-problems that are different from those faced by the easier-to-do sciences …” (Berliner)#1
The simple fact is that economists ― orthodox or heterodox do not matter ― are either stupid or corrupt or both. Take note:
(i) Economics is not a science but what Feynman called a cargo cult science.#2
(ii) To maintain that economics is a social science is a foundational blunder. Economics is a systems science.#3
(iii) Economists have not figured out to this day how the price and profit mechanism works.#4
(iv) Economists have not figured out what profit is.#5
(v) Economists are too stupid for the elementary mathematics of macroeconomic accounting.#6
(vi) Walrasian Micro and Keynesian Macro are both built upon false premises/axioms. Because of this, the whole analytical superstructure is scientifically worthless. The same holds for Marxianism and Austrianism.
(vii) Economic policy guidance has no sound scientific foundations since Adam Smith/Karl Marx.
(viii) Economists have been political agenda pushers/useful political idiots from day one and nothing has changed since.
Soapbox economics is easy, but science is hard. So, why should a utility-maximizing economist do science: “If the real world is fuzzy, vague and indeterminate, then why should our models build upon a desire to describe it as precise and predictable?” (Syll)
The first rule for soapbox economists is to never leave the swamp where “nothing is clear and everything is possible” (Keynes). Every half-witted agenda pusher knows that “With enough fog emitted, almost anything becomes possible.” (Mirowski) The foggy swamp of political economics is the natural habitat of confused confusers. And Lars Syll is obviously one of them.#7
Egmont Kakarot-Handtke
#1 Failed economics: The losers’ long list of lame excuses
#2 What is so great about cargo cult science? or, How economists learned to stop worrying about failure
#3 For details of the big picture see cross-references Not a Science of Behavior
#4 For details of the big picture see cross-references Failed/Fake Scientists
#5 Profit: after 200+ years, economists are still in the woods
#6 Wikipedia and the promotion of economists’ idiotism (II)
#7 Cryptoeconomics ― the best of Lars Syll’s spam folder
Related 'And the answer is NCND ― economics after 200+ years of Glomarization' and 'Econ 101: Economists flunk the intelligence test at the first hurdle' and 'Economics: The greatest scientific fraud in modern times' and 'The dirty secret of Capitalism: Economists have NO idea how the Capitalism works'.
Blog-Reference and Blog-Reference
When economists are ridiculed for not having achieved anything of scientific value since Adam Smith they retort with the Cobden excuse: “Years ago I heard Mr. Cobden say at a League Meeting that ‘Political Economy was the highest study of the human mind, for that the physical sciences required by no means so hard an effort.’” (Bagehot, 1885)
Nothing has changed since 1885, economics is still a failed science, and the excuses are still the same: “The distinctions between hard and soft sciences are part of our culture … But the important distinction is really not between the hard and the soft sciences. Rather, it is between the hard and the easy sciences. Easy-to-do science is what those in physics, chemistry, geology, and some other fields do. Hard-to-do science is what the social scientists do and, in particular, it is what we educational researchers do. In my estimation, we have the hardest-to-do science of them all! We do our science under conditions that physical scientists find intolerable. We face particular problems and must deal with local conditions that limit generalizations and theory building-problems that are different from those faced by the easier-to-do sciences …” (Berliner)#1
The simple fact is that economists ― orthodox or heterodox do not matter ― are either stupid or corrupt or both. Take note:
(i) Economics is not a science but what Feynman called a cargo cult science.#2
(ii) To maintain that economics is a social science is a foundational blunder. Economics is a systems science.#3
(iii) Economists have not figured out to this day how the price and profit mechanism works.#4
(iv) Economists have not figured out what profit is.#5
(v) Economists are too stupid for the elementary mathematics of macroeconomic accounting.#6
(vi) Walrasian Micro and Keynesian Macro are both built upon false premises/axioms. Because of this, the whole analytical superstructure is scientifically worthless. The same holds for Marxianism and Austrianism.
(vii) Economic policy guidance has no sound scientific foundations since Adam Smith/Karl Marx.
(viii) Economists have been political agenda pushers/useful political idiots from day one and nothing has changed since.
Soapbox economics is easy, but science is hard. So, why should a utility-maximizing economist do science: “If the real world is fuzzy, vague and indeterminate, then why should our models build upon a desire to describe it as precise and predictable?” (Syll)
The first rule for soapbox economists is to never leave the swamp where “nothing is clear and everything is possible” (Keynes). Every half-witted agenda pusher knows that “With enough fog emitted, almost anything becomes possible.” (Mirowski) The foggy swamp of political economics is the natural habitat of confused confusers. And Lars Syll is obviously one of them.#7
Egmont Kakarot-Handtke
#1 Failed economics: The losers’ long list of lame excuses
#2 What is so great about cargo cult science? or, How economists learned to stop worrying about failure
#3 For details of the big picture see cross-references Not a Science of Behavior
#4 For details of the big picture see cross-references Failed/Fake Scientists
#5 Profit: after 200+ years, economists are still in the woods
#6 Wikipedia and the promotion of economists’ idiotism (II)
#7 Cryptoeconomics ― the best of Lars Syll’s spam folder
Related 'And the answer is NCND ― economics after 200+ years of Glomarization' and 'Econ 101: Economists flunk the intelligence test at the first hurdle' and 'Economics: The greatest scientific fraud in modern times' and 'The dirty secret of Capitalism: Economists have NO idea how the Capitalism works'.
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AXEC139f
July 15, 2018
Wikipedia and the promotion of economists’ idiocy (II)
Comment on Wikipedia’s ‘Accounting identity’ #1
Own post, no external Blog-Reference
“In accounting, finance and economics, an accounting identity is an equality that must be true regardless of the value of its variables, or a statement that by definition (or construction) must be true.” and “The term accounting identity may be used to distinguish between propositions that are theories (which may or may not be true, or relationships that may or may not always hold) and statements that are by definition true.”
The first point to notice is that there is NO such thing as “true by definition”. #2 Truth has to be established by proof. Scientific truth is well-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)
The second point is that the term “accounting identity” shows that economists do not understand the elementary mathematics that underlies accounting.
The third point is that identities that are incompatible are declared “true by definition”. Simple logic tells everyone that wildly different accounting identities cannot all be “true by definition”.
Economists obviously have a serious problem with methodology. More specifically, they suffer badly from the Humpty Dumpty Fallacy, which is expressed in these familiar slogans:
• “You can define anything you want but as a sage once said ‘A rose by any other name will smell as sweet!’” (Davidson)
• “For, on principle, we may call things what we please.” (Schumpeter)
• “This is a tough question to adjudicate on scientific grounds since the issue is largely definitional and, as Lewis Carroll pointed out, everyone is entitled to his own definitions. (Blinder)
• “‘When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.’ ‘The question is,’ said Alice, ‘whether you can make words mean so many different things.’ ‘The question is,’ said Humpty Dumpty, ‘which is to be master — that’s all’.”
The point is that a single definition is indeed arbitrary, but one NEVER has only one definition. So, one has to make sure that the set of definitions that refer to one subject matter is internally consistent.
From methodology, it is known that “The often-heard rule that concepts are to be defined before they are used in a discussion is much too simple-minded pre-Hilbertian. The only way to arrive at coherent languages is to set up axiomatic systems implicitly defining the basic concepts.” (Schmiechen) The fact of the matter is that the foundational concepts of economics are ill-defined. And this is why economics never rose above the proto-scientific level.
For compelling methodological reasons, economics has to be built upon objective-systemic macrofoundations. #3, #4, #5
(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. For a start, the elementary production-consumption economy is given by three macroeconomic axioms.
(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) C=PX consumption expenditure C is equal to price P times quantity bought/sold X.
From the macroeconomic axioms follow models by specification. The Ur-Model is given by two conditions (X=O, C=Yw) and two definitions (monetary profit/loss Qm≡C−Yw, monetary saving/dissaving Sm≡Yw−C).
It always holds Qm≡−Sm, in other words, at the heart of the monetary economy is an identity: the business sector’s deficit (surplus) equals the household sector’s surplus (deficit). Put bluntly, loss is the counterpart of saving, and profit is the counterpart of dissaving. This is the most elementary form of the macroeconomic Profit Law.
The point to notice is that a definition is a one-way relation. The new term “monetary profit Qm” (= definiendum) is derived from the terms already given by the axioms, i.e., C and Yw (= definiens).
From the definition (≡) of the balance of the business sector Qm≡C−Yw, it follows that to write down the identity Qm+Yw=C is INADMISSIBLE. So, one is NOT permitted to say that “total income” is the “sum of profits and wages” and that “total income” is equal to household sector spending C, or that Income = Value of Output (Keynes). Economists, though, do not get it to this day. #6, #7
What should be quite clear is that profit Qm is a balance, i.e., a difference of flows, and wage income is a flow from the business to the household sector. So profit is NOT a sub-category of total income but a balance. A balance can either be positive or negative, while a flow, like wage income, is always greater than zero.
So, Qm+Yw=C is NOT a balance identity that is “true by definition” but plain methodological garbage. From Qm≡−Sm, in turn, follows immediately that the Keynesian accounting identity I=S and the MMT balances equation (I−S)+(G−T)+(X−M)=0 are methodological garbage by logical implication.
What holds for the flows of the Profit-and-Loss-Account holds also for Wikipedia’s “most basic identity in accounting”, that is, Assets=Liabilities+Equity. The correct definition for the Asset-and-Liability-Account of the business sector is the one-way relation Equity≡Assets−Liabilities.
The economic Ur-Model above tells us two important things: (i) under the condition of market-clearing X=O and budget-balancing C=Yw, macroeconomic profit is zero and independent of employment, productivity, wage rate, etc., and (ii), because of Qm≡−Sm, macroeconomic profit comes in the most elementary case from dissaving, i.e., the growth of household sector debt. #8
From the fact that the foundational concepts of economics ― profit and income ― are ill-defined follows (i) that the Wikipedia entry “Accounting identity” is proto-scientific garbage, and (ii) that all Wikipedia entries which directly or indirectly depend on the definition of profit/income are proto-scientific garbage by logical implication. #9, #10
Egmont Kakarot-Handtke
#1 Wikipedia Accounting identity
#2 Truth by definition? The Profit Theory has been axiomatically false for 200+ years
#3 For details of the big picture, see cross-references Axiomatization
#4 The Common Error of Common Sense: An Essential Rectification of the Accounting Approach
#5 Graphic AXEC137 Macrofoundations
#6 How the Intelligent Non-Economist Can Refute Every Economist Hands Down
#7 For details of the big picture, see cross-references Profit
#8 The Profit Theory is False Since Adam Smith. What About the True Distribution Theory?
#9 Wikipedia and the promotion of economists’ idiotism (I)
#10 Hooray! The formalization issue is finally settled
Related 'Humpty Dumpty is back again' and 'The Humpty Dumpty methodology' and 'Economics: 200+ years of scientific incompetence and fraud' and 'Economists: just too stupid for counting' and 'Keynes and the logical brilliance of Bedlam' and 'Yes, economists are really that stupid' and 'Keynes ― the poster boy for the weakness of the economist’s mind' and 'MMT and the canonical macroeconomic model'.
Own post, no external Blog-Reference
“In accounting, finance and economics, an accounting identity is an equality that must be true regardless of the value of its variables, or a statement that by definition (or construction) must be true.” and “The term accounting identity may be used to distinguish between propositions that are theories (which may or may not be true, or relationships that may or may not always hold) and statements that are by definition true.”
The first point to notice is that there is NO such thing as “true by definition”. #2 Truth has to be established by proof. Scientific truth is well-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)
The second point is that the term “accounting identity” shows that economists do not understand the elementary mathematics that underlies accounting.
The third point is that identities that are incompatible are declared “true by definition”. Simple logic tells everyone that wildly different accounting identities cannot all be “true by definition”.
Economists obviously have a serious problem with methodology. More specifically, they suffer badly from the Humpty Dumpty Fallacy, which is expressed in these familiar slogans:
• “You can define anything you want but as a sage once said ‘A rose by any other name will smell as sweet!’” (Davidson)
• “For, on principle, we may call things what we please.” (Schumpeter)
• “This is a tough question to adjudicate on scientific grounds since the issue is largely definitional and, as Lewis Carroll pointed out, everyone is entitled to his own definitions. (Blinder)
• “‘When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.’ ‘The question is,’ said Alice, ‘whether you can make words mean so many different things.’ ‘The question is,’ said Humpty Dumpty, ‘which is to be master — that’s all’.”
The point is that a single definition is indeed arbitrary, but one NEVER has only one definition. So, one has to make sure that the set of definitions that refer to one subject matter is internally consistent.
From methodology, it is known that “The often-heard rule that concepts are to be defined before they are used in a discussion is much too simple-minded pre-Hilbertian. The only way to arrive at coherent languages is to set up axiomatic systems implicitly defining the basic concepts.” (Schmiechen) The fact of the matter is that the foundational concepts of economics are ill-defined. And this is why economics never rose above the proto-scientific level.
For compelling methodological reasons, economics has to be built upon objective-systemic macrofoundations. #3, #4, #5
(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. For a start, the elementary production-consumption economy is given by three macroeconomic axioms.
(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) C=PX consumption expenditure C is equal to price P times quantity bought/sold X.
From the macroeconomic axioms follow models by specification. The Ur-Model is given by two conditions (X=O, C=Yw) and two definitions (monetary profit/loss Qm≡C−Yw, monetary saving/dissaving Sm≡Yw−C).
It always holds Qm≡−Sm, in other words, at the heart of the monetary economy is an identity: the business sector’s deficit (surplus) equals the household sector’s surplus (deficit). Put bluntly, loss is the counterpart of saving, and profit is the counterpart of dissaving. This is the most elementary form of the macroeconomic Profit Law.
The point to notice is that a definition is a one-way relation. The new term “monetary profit Qm” (= definiendum) is derived from the terms already given by the axioms, i.e., C and Yw (= definiens).
From the definition (≡) of the balance of the business sector Qm≡C−Yw, it follows that to write down the identity Qm+Yw=C is INADMISSIBLE. So, one is NOT permitted to say that “total income” is the “sum of profits and wages” and that “total income” is equal to household sector spending C, or that Income = Value of Output (Keynes). Economists, though, do not get it to this day. #6, #7
What should be quite clear is that profit Qm is a balance, i.e., a difference of flows, and wage income is a flow from the business to the household sector. So profit is NOT a sub-category of total income but a balance. A balance can either be positive or negative, while a flow, like wage income, is always greater than zero.
So, Qm+Yw=C is NOT a balance identity that is “true by definition” but plain methodological garbage. From Qm≡−Sm, in turn, follows immediately that the Keynesian accounting identity I=S and the MMT balances equation (I−S)+(G−T)+(X−M)=0 are methodological garbage by logical implication.
What holds for the flows of the Profit-and-Loss-Account holds also for Wikipedia’s “most basic identity in accounting”, that is, Assets=Liabilities+Equity. The correct definition for the Asset-and-Liability-Account of the business sector is the one-way relation Equity≡Assets−Liabilities.
The economic Ur-Model above tells us two important things: (i) under the condition of market-clearing X=O and budget-balancing C=Yw, macroeconomic profit is zero and independent of employment, productivity, wage rate, etc., and (ii), because of Qm≡−Sm, macroeconomic profit comes in the most elementary case from dissaving, i.e., the growth of household sector debt. #8
From the fact that the foundational concepts of economics ― profit and income ― are ill-defined follows (i) that the Wikipedia entry “Accounting identity” is proto-scientific garbage, and (ii) that all Wikipedia entries which directly or indirectly depend on the definition of profit/income are proto-scientific garbage by logical implication. #9, #10
Egmont Kakarot-Handtke
#1 Wikipedia Accounting identity
#2 Truth by definition? The Profit Theory has been axiomatically false for 200+ years
#3 For details of the big picture, see cross-references Axiomatization
#4 The Common Error of Common Sense: An Essential Rectification of the Accounting Approach
#5 Graphic AXEC137 Macrofoundations
#6 How the Intelligent Non-Economist Can Refute Every Economist Hands Down
#7 For details of the big picture, see cross-references Profit
#8 The Profit Theory is False Since Adam Smith. What About the True Distribution Theory?
#9 Wikipedia and the promotion of economists’ idiotism (I)
#10 Hooray! The formalization issue is finally settled
Related 'Humpty Dumpty is back again' and 'The Humpty Dumpty methodology' and 'Economics: 200+ years of scientific incompetence and fraud' and 'Economists: just too stupid for counting' and 'Keynes and the logical brilliance of Bedlam' and 'Yes, economists are really that stupid' and 'Keynes ― the poster boy for the weakness of the economist’s mind' and 'MMT and the canonical macroeconomic model'.
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