Comment on Lars Syll on ‘Paul Krugman — nothing but a die-hard neoclassical economist’
Blog-Reference
The Battle of Frogs and Mice, a.k.a. Orthodoxy vs. Heterodoxy, has become rather stagnant, so let us shorten the agony with some clear-cut arbitral awards.
Syll: “Despite all his radical rhetoric, Krugman is — where it really counts — nothing but a die-hard neoclassical economist.”
Krugman says on his blog, “most of what I and many others do is sorta-kinda neoclassical because it takes the maximization-and-equilibrium world as a starting point.”
Judgment :#1 Krugman is a neoclassical economist, always was, and always said so, and everybody got it. Stop being surprised, Lars Syll. The point at issue is NOT that Krugman is a Neoclassical but that his starting point, i.e., the neoclassical axiom set, is false.
Krugman: “... this is exactly the kind of situation in which words alone can create an illusion of logical coherence that dissipates when you try to do the math.” In other words, formalization and modeling can be helpful to clarify the issue.
Georgescu-Roegen: “Lest this position is misinterpreted again by some casual reader, let me repeat that my point is not that arithmetization of science is undesirable. Whenever arithmetization can be worked out, its merits are above all words of praise. My point is that wholesale arithmetization is impossible, that there is valid knowledge even without arithmetization, and that mock arithmetization is dangerous if peddled as genuine.”
Syll: “That’s a methodological reductionist straightjacket.”
Judgment: Krugman and Georgescu-Roegen are right. Lars Syll is wrong.
Syll: “The only economic analysis that Krugman and other mainstream economists accept is the one that takes place within the analytic-formalistic modeling strategy that makes up the core of mainstream economics.”
Krugman on several occasions: “where’s your model?” and “what’s your alternative?”
Lewis: “There is no example, not even a vague outline, of what Prof. Syll might regard as a satisfactory economic analysis of 'an open system where complex and relational structures and agents interact'. Because it is devoid of any such substance, Prof. Syll’s argument provides no understanding of how Krugman’s many errors could have been avoided.
Judgment: Lars Syll has never presented an alternative. His advice: “I would rather suggest you read Keynes, Minsky, Polanyi, Galbraith, Myrdal, Hodgson, Keen, Mirowski, Lawson, Davidson, Kalecki, Chick, Dow” is hand waving and does not count as an alternative because Keynes’, Minsky’s, Kalecki’s, Keen’s, Davidson’s and other heterodox economists’ models are also defective, i.e. provably false. Lawson, Chick, Dow are failed methodologists because they cannot even spot elementary logical blunders, which are entirely sufficient for the refutation of a theory/model.
Syll: “That isn’t pluralism.”
Judgment: Science is about clear-cut true/false and the very opposite of the pluralism of false theories. Either Orthodoxy is true, or Heterodoxy is true; then either Orthodoxy is thrown out of science or Heterodoxy. Except that both are false, then both are thrown out of science.
Syll: “Validly deducing things from patently unreal assumptions — that we all know are purely fictional — makes most of the modeling exercises pursued by mainstream economists rather pointless. It’s simply not the stuff that real understanding and explanation in science is made of.”
Aristotle: “When the premises are certain, true, and primary, and the conclusion formally follows from them, this is demonstration, and produces scientific knowledge of a thing.”
Judgment: Lars Syll and Aristotle are right. Economics is currently based on false axioms. Both Walrasian and Keynesian axioms have to be fully replaced in order to produce scientific knowledge of the economy. After more than 200 years of producing scientific garbage, this task has top priority. Concrete proposals are urgently needed. Lars Syll has none.
Hickey: “There is nothing wrong with using a simple IS-LM approach in some cases as a gadget.”
Judgment: IS-LM has already died in the cradle (2014a). You are way behind the curve.
Pontus: “Banks are only intermediary in a certain sense: Any loan that is granted implies that someone’s spending exceeds his or her income. That does necessarily imply that someone else’s spending must fall short of his or her income.”
Judgment: You are way behind the curve (2014b).
Wilder: “National income accounting identifies a category it calls 'saving' that it opposes in its double‑entry scheme to 'investment'. Honestly, I have to say it does not make a lot of sense: while investment is spending and transactional, saving is not.”
Judgment: This matter has already been settled (2012). You are way behind the curve.
Nanikore: “Samuelson’s project has ultimately reached its inevitable end — but the subject which has invested so much in it is finding reality hard to swallow. I don’t know what it is going to take to finally kill the beast.”
Judgment: Yes, you are in dire straits. But could you now stop repeating it over and over again and proceed to the inescapable Paradigm Shift?
Mellechman: “True, setting out such a model would imply accepting the core assumptions of what you call the ur-model.”
Judgment: Nonsense of the worst sort. Nobody is obliged to accept the core assumptions, a.k.a. neoclassical axioms. Just the opposite, as Keynes told his fellow economists long ago: “The classical theorists resemble Euclidean geometers in a non-Euclidean world who, discovering that in experience straight lines apparently parallel often meet, rebuke the lines for not keeping straight — as the only remedy for the unfortunate collisions which are occurring. Yet, in truth, there is no remedy except to throw over the axiom of parallels and to work out a non-Euclidean geometry. Something similar is required to-day in economics.”
So, let us end the Froschmäusekrieg and start doing real science.
Egmont Kakarot-Handtke
References
Kakarot-Handtke, E. (2012). The Common Error of Common Sense: An Essential Rectification of the Accounting Approach. SSRN Working Paper Series, 2124415: 1–23. URL
Kakarot-Handtke, E. (2014a). Loanable Funds vs. Endogenous Money: Krugman is Wrong, Keen is Right. SSRN Working Paper Series, 2389341: 1–17. URL
Kakarot-Handtke, E. (2014b). Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It. SSRN Working Paper Series, 2392856: 1–19. URL
#1 All judgments are backed in greater detail, see blog or working papers before jumping to silly conclusions.
For the details about the definitive resolution of the I=S/IS-LM issue, see cross-references.
Showing posts sorted by relevance for query Syll. Sort by date Show all posts
Showing posts sorted by relevance for query Syll. Sort by date Show all posts
July 14, 2016
Economics: The Battle of Frogs and Mice is over
Comment on Lars Syll on ‘Paul Krugman — nothing but a die-hard neoclassical economist’ and on some beside-the-point comments on the parallel thread (large overlap with preceding version)
Blog-Reference
The Battle of Frogs and Mice,#1 a.k.a. Heterodoxy vs. Orthodoxy, has become rather stagnant, so let us shorten the agony with some clear-cut arbitral awards.
Syll: “Despite all his radical rhetoric, Krugman is — where it really counts — nothing but a die-hard neoclassical economist.”
Krugman says on his blog “... most of what I and many others do is sorta-kinda neoclassical because it takes the maximization-and-equilibrium world as a starting point.”
Judgment:* Krugman is a neoclassical economist, always was, and always said so, and everybody got it. However, the decisive point is not that Krugman is a bad person because he is a Neoclassical but that his starting point, i.e. the neoclassical axiom set, is FALSE. This invalidates the neoclassical approach as a whole. Not to realize the blatant blunder is the very fault of ALL neoclassical economists.
Krugman: “... this is exactly the kind of situation in which words alone can create an illusion of logical coherence that dissipates when you try to do the math.” In other words, formalization and modeling can be helpful to clarify the issue.
Georgescu-Roegen: “Lest this position is misinterpreted again by some casual reader, let me repeat that my point is not that arithmetization of science is undesirable. Whenever arithmetization can be worked out, its merits are above all words of praise. My point is that wholesale arithmetization is impossible, that there is valid knowledge even without arithmetization, and that mock arithmetization is dangerous if peddled as genuine.”
Syll: “That’s a methodological reductionist straightjacket.”
Judgment: Krugman and Georgescu-Roegen are right. Lars Syll is wrong. From the fact that formal neoclassical models are indeed false does NOT follow that formalization is wrong, only that economists in general and Neoclassicals, in particular, are incompetent formalizers and model builders.
Syll: “The only economic analysis that Krugman and other mainstream economists accept is the one that takes place within the analytic-formalistic modeling strategy that makes up the core of mainstream economics.”
Krugman on several occasions to Syll: “where’s your model?” and “what’s your alternative?”
Judgment: Neither Heterodoxy in general nor Lars Syll, in particular, has ever presented a viable alternative, a.k.a. progressive research program, as a replacement for the degenerated orthodox program. This is why economics is stuck in the proto-scientific swamp.
Syll: “That isn’t pluralism.”
Judgment: Science is about clear-cut true/false and the very opposite of the pluralism of false theories. Either Orthodoxy is true or Heterodoxy is true, then either Orthodoxy is thrown out of science or Heterodoxy. Except both are false, then both are thrown out of science.
Syll: “Validly deducing things from patently unreal assumptions — that we all know are purely fictional — makes most of the modeling exercises pursued by mainstream economists rather pointless.”
Aristotle: “When the premises are certain, true, and primary, and the conclusion formally follows from them, this is demonstration, and produces scientific knowledge of a thing.”
Judgment: Lars Syll and Aristotle are right. Economics is currently based upon false axioms. Both Walrasian and Keynesian axioms have to be fully REPLACED in order to produce scientific knowledge of the economy. After more than 200 years of churning out scientific garbage, this task has top priority. Concrete proposals are urgently needed. Lars Syll has none. Without sound heterodox axioms, no Paradigm Shift can ever happen.
Hickey: “There is nothing wrong with using a simple IS-LM approach in some cases as a gadget.”
Judgment: IS-LM has been already dead in the cradle 80 years ago. I=S is false since Keynes but neither Krugman nor Post Keynesians have gotten it until this day (2014).
Syll: “No matter how many thousands of ‘technical working papers’ or models mainstream economists come up with, ... they will not take us one single inch closer to giving us relevant and usable means to further our understanding and explanation of real economies.”
Judgment: True, but neither will repetitive heterodox critique of the Swedish ilk further our understanding of how the actual economy works.
The Battle of Frogs and Mice is over. From the standpoint of science BOTH Krugman and Syll lost. So, forget them and start NOW doing REAL science.
Egmont Kakarot-Handtke
References
Kakarot-Handtke, E. (2014). Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It. SSRN Working Paper Series, 2392856: 1–19. URL
#1 Wikipedia
#2 All judgments are backed in greater detail. In case of doubt, see blog or working papers before jumping to silly conclusions/comments
Blog-Reference
The Battle of Frogs and Mice,#1 a.k.a. Heterodoxy vs. Orthodoxy, has become rather stagnant, so let us shorten the agony with some clear-cut arbitral awards.
Syll: “Despite all his radical rhetoric, Krugman is — where it really counts — nothing but a die-hard neoclassical economist.”
Krugman says on his blog “... most of what I and many others do is sorta-kinda neoclassical because it takes the maximization-and-equilibrium world as a starting point.”
Judgment:* Krugman is a neoclassical economist, always was, and always said so, and everybody got it. However, the decisive point is not that Krugman is a bad person because he is a Neoclassical but that his starting point, i.e. the neoclassical axiom set, is FALSE. This invalidates the neoclassical approach as a whole. Not to realize the blatant blunder is the very fault of ALL neoclassical economists.
Krugman: “... this is exactly the kind of situation in which words alone can create an illusion of logical coherence that dissipates when you try to do the math.” In other words, formalization and modeling can be helpful to clarify the issue.
Georgescu-Roegen: “Lest this position is misinterpreted again by some casual reader, let me repeat that my point is not that arithmetization of science is undesirable. Whenever arithmetization can be worked out, its merits are above all words of praise. My point is that wholesale arithmetization is impossible, that there is valid knowledge even without arithmetization, and that mock arithmetization is dangerous if peddled as genuine.”
Syll: “That’s a methodological reductionist straightjacket.”
Judgment: Krugman and Georgescu-Roegen are right. Lars Syll is wrong. From the fact that formal neoclassical models are indeed false does NOT follow that formalization is wrong, only that economists in general and Neoclassicals, in particular, are incompetent formalizers and model builders.
Syll: “The only economic analysis that Krugman and other mainstream economists accept is the one that takes place within the analytic-formalistic modeling strategy that makes up the core of mainstream economics.”
Krugman on several occasions to Syll: “where’s your model?” and “what’s your alternative?”
Judgment: Neither Heterodoxy in general nor Lars Syll, in particular, has ever presented a viable alternative, a.k.a. progressive research program, as a replacement for the degenerated orthodox program. This is why economics is stuck in the proto-scientific swamp.
Syll: “That isn’t pluralism.”
Judgment: Science is about clear-cut true/false and the very opposite of the pluralism of false theories. Either Orthodoxy is true or Heterodoxy is true, then either Orthodoxy is thrown out of science or Heterodoxy. Except both are false, then both are thrown out of science.
Syll: “Validly deducing things from patently unreal assumptions — that we all know are purely fictional — makes most of the modeling exercises pursued by mainstream economists rather pointless.”
Aristotle: “When the premises are certain, true, and primary, and the conclusion formally follows from them, this is demonstration, and produces scientific knowledge of a thing.”
Judgment: Lars Syll and Aristotle are right. Economics is currently based upon false axioms. Both Walrasian and Keynesian axioms have to be fully REPLACED in order to produce scientific knowledge of the economy. After more than 200 years of churning out scientific garbage, this task has top priority. Concrete proposals are urgently needed. Lars Syll has none. Without sound heterodox axioms, no Paradigm Shift can ever happen.
Hickey: “There is nothing wrong with using a simple IS-LM approach in some cases as a gadget.”
Judgment: IS-LM has been already dead in the cradle 80 years ago. I=S is false since Keynes but neither Krugman nor Post Keynesians have gotten it until this day (2014).
Syll: “No matter how many thousands of ‘technical working papers’ or models mainstream economists come up with, ... they will not take us one single inch closer to giving us relevant and usable means to further our understanding and explanation of real economies.”
Judgment: True, but neither will repetitive heterodox critique of the Swedish ilk further our understanding of how the actual economy works.
The Battle of Frogs and Mice is over. From the standpoint of science BOTH Krugman and Syll lost. So, forget them and start NOW doing REAL science.
Egmont Kakarot-Handtke
References
Kakarot-Handtke, E. (2014). Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It. SSRN Working Paper Series, 2392856: 1–19. URL
#1 Wikipedia
#2 All judgments are backed in greater detail. In case of doubt, see blog or working papers before jumping to silly conclusions/comments
January 11, 2020
Lars Syll, MMT, and the other failures of New Economic Thinking
Comment on Lars Syll/Tom Hickey on ‘Does it — really — take a model to beat a model?’*
Blog-Reference and Blog-Reference
Lars Syll is in a trap. He is known as a sharp refuter of orthodox economics and one tends to think that if he knows what is wrong with Orthodoxy he would eventually come up with something better. This is NOT the case. During his whole career, Lars Syll never came up with any insights into how the actual economy works. He does not even acknowledge that this is his duty as a scientist and academic teacher.
“A critique yours truly sometimes encounters is that as long as I cannot come up with some own alternative model to the failing mainstream models, I shouldn’t expect people to pay attention. This is, however, to totally and utterly misunderstand the role of philosophy and methodology of economics!”
No, dear critics of Heterodoxy, Lars Syll does not suffer from the hubris to create a superior economic theory, he is merely a humble under-labourer like John Locke: “’tis Ambition enough to be employed as an Under-Labourer in clearing Ground a little, and removing some of the Rubbish, that lies in the way to Knowledge.”
How can anyone be so absurd as to think that the self-defined task of scientists is to contribute to the growth of scientific knowledge? In fact, it comes from methodologists, Lars Syll’s colleagues: “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)#1-#4
And this is the trap the under-labourer is in: he has no new theory. However, Lars Syll cannot admit failure and so he quotes Jo Michell approvingly: “It takes a model to beat a model has to be one of the stupider things, in a pretty crowded field, to come out of economics. … I don’t get it. If a model is demonstrably wrong, that should surely be sufficient for rejection. I’m thinking of bridge engineers: ‘look I know they keep falling down but I’m gonna keep building em like this until you come up with a better way, OK?’”
NO, dear methodological imbeciles, surely you can waste your own and everybody else’s time by endlessly repeating that neoclassical economics is rubbish, but take notice that this is known already for a long time and NOT any longer the key issue: “There is another alternative: to formulate a completely new research program and conceptual approach. As we have seen, this is often spoken of, but there is still no indication of what it might mean.” (Ingrao et al., 1990)
Here is the real crux of the matter: “... 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 ...” (Feyerabend)#5, #6
What gets entirely lost in the Syll/Michell smoke-blowing exercise is that Heterodoxy, too, is rubbish. Lars Syll is a proponent of Keynes and the Post-Keynesians including MMT. He has not realized to this day that Keynes messed up the Paradigm Shift from microfoundations to macrofoundations.#7 So, Lars Syll is NOT merely a humble under-labourer but an active participant in the scientific failure of economics.
Nobody believes in earnest that folks like Lars Syll, Tom Hickey, Jo Michell, Stephanie Kelton, Bill Mitchell, etcetera have any ambition to come up with a scientifically valid new economic theory/model.#8 What they have produced this far proves that they are stupid/corrupt under-labourers of the Oligarchy or, in the metaphor of John Locke “Rubbish, that lies in the way to Knowledge”.#9
Egmont Kakarot-Handtke
* Lars P. Syll Blog
#1 Caught in secular intellectual stagnation
#2 Unfit in all dimensions
#3 Throwing soap bubbles at time wasters
#4 Complexity, scientific incompetence, and the art of asking the right questions
#5 How Heterodoxy keeps the Naked-Emperor-Zombie alive
#6 Economics is a scientific zombie waiting to be put down
#7 Get it econ suckers: behavioral microfoundations ⇒ false, systemic macrofoundations ⇒ true
#8 “The highest ambition an economist can entertain who believes in the scientific character of economics would be fulfilled as soon as he succeeded in constructing a simple model displaying all the essential features of the economic process by means of a reasonably small number of equations connecting a reasonably small number of variables. Work on this line is laying the foundations of the economics of the future …” (Schumpeter, 1946)
#9 Economists: scientists or political clowns?
Blog-Reference and Blog-Reference
Lars Syll is in a trap. He is known as a sharp refuter of orthodox economics and one tends to think that if he knows what is wrong with Orthodoxy he would eventually come up with something better. This is NOT the case. During his whole career, Lars Syll never came up with any insights into how the actual economy works. He does not even acknowledge that this is his duty as a scientist and academic teacher.
“A critique yours truly sometimes encounters is that as long as I cannot come up with some own alternative model to the failing mainstream models, I shouldn’t expect people to pay attention. This is, however, to totally and utterly misunderstand the role of philosophy and methodology of economics!”
No, dear critics of Heterodoxy, Lars Syll does not suffer from the hubris to create a superior economic theory, he is merely a humble under-labourer like John Locke: “’tis Ambition enough to be employed as an Under-Labourer in clearing Ground a little, and removing some of the Rubbish, that lies in the way to Knowledge.”
How can anyone be so absurd as to think that the self-defined task of scientists is to contribute to the growth of scientific knowledge? In fact, it comes from methodologists, Lars Syll’s colleagues: “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)#1-#4
And this is the trap the under-labourer is in: he has no new theory. However, Lars Syll cannot admit failure and so he quotes Jo Michell approvingly: “It takes a model to beat a model has to be one of the stupider things, in a pretty crowded field, to come out of economics. … I don’t get it. If a model is demonstrably wrong, that should surely be sufficient for rejection. I’m thinking of bridge engineers: ‘look I know they keep falling down but I’m gonna keep building em like this until you come up with a better way, OK?’”
NO, dear methodological imbeciles, surely you can waste your own and everybody else’s time by endlessly repeating that neoclassical economics is rubbish, but take notice that this is known already for a long time and NOT any longer the key issue: “There is another alternative: to formulate a completely new research program and conceptual approach. As we have seen, this is often spoken of, but there is still no indication of what it might mean.” (Ingrao et al., 1990)
Here is the real crux of the matter: “... 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 ...” (Feyerabend)#5, #6
What gets entirely lost in the Syll/Michell smoke-blowing exercise is that Heterodoxy, too, is rubbish. Lars Syll is a proponent of Keynes and the Post-Keynesians including MMT. He has not realized to this day that Keynes messed up the Paradigm Shift from microfoundations to macrofoundations.#7 So, Lars Syll is NOT merely a humble under-labourer but an active participant in the scientific failure of economics.
Nobody believes in earnest that folks like Lars Syll, Tom Hickey, Jo Michell, Stephanie Kelton, Bill Mitchell, etcetera have any ambition to come up with a scientifically valid new economic theory/model.#8 What they have produced this far proves that they are stupid/corrupt under-labourers of the Oligarchy or, in the metaphor of John Locke “Rubbish, that lies in the way to Knowledge”.#9
Egmont Kakarot-Handtke
* Lars P. Syll Blog
#1 Caught in secular intellectual stagnation
#2 Unfit in all dimensions
#3 Throwing soap bubbles at time wasters
#4 Complexity, scientific incompetence, and the art of asking the right questions
#5 How Heterodoxy keeps the Naked-Emperor-Zombie alive
#6 Economics is a scientific zombie waiting to be put down
#7 Get it econ suckers: behavioral microfoundations ⇒ false, systemic macrofoundations ⇒ true
#8 “The highest ambition an economist can entertain who believes in the scientific character of economics would be fulfilled as soon as he succeeded in constructing a simple model displaying all the essential features of the economic process by means of a reasonably small number of equations connecting a reasonably small number of variables. Work on this line is laying the foundations of the economics of the future …” (Schumpeter, 1946)
#9 Economists: scientists or political clowns?
July 12, 2019
Lars Syll ― a particularly stupid/corrupt fake scientist
Comment on Lars Syll/Imad Moosa on ‘Econometrics ― a con art with no relevance whatsoever to real world economics’
Blog-Reference
A closer look at the history of economic thought reveals that there are TWO economixes: 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.
The historical fact is 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: Walrasianism, Keynesianism, Marxianism, Austrianism, MMT are mutually contradictory, axiomatically false, and materially/formally inconsistent. Political economists are NOT scientists but clowns/useful idiots in the political Circus Maximus. #1, #2, #3
Economics claims to be science and, by consequence, the economist has to uphold scientific standards. Scientific standards are well-defined since antiquity: “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)
Scientific knowledge is embodied in the true theory. The true theory is the human's best mental representation of reality. This defines the economist’s task: “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)
This translates into the methodological basics: logical consistency is secured by applying the axiomatic-deductive method, and empirical consistency is secured by applying state-of-the-art econometric testing.
So, there are the hard rocks of true or false, and there is the vast swamp between them. The swamp is where stupid/corrupt political economists thrive since Adam Smith/Karl Marx. Swampiness is what Popper called an immunizing stratagem because: “Another thing I must point out is that you cannot prove a vague theory wrong.” (Feynman)#4 It is, therefore, quite understandable that the political economist is mainly occupied with producing a methodological smoke screen which consists of vague concepts, anything-goes, pluralism of false theories, alleged complexity, ontological uncertainty, unreliable data, the faux humility of ‘I know that I know nothing’, and the post-modern replacement of true theory by storytelling.#5
The stupid/corrupt political agenda pushers try to defend the swamp where “nothing is clear and everything is possible” (Keynes) by arguing that the axiomatic-deductive method and state-of-art testing does not work in economics and by denouncing the adherence to the scientific method as “physics envy” and by intimating that physics is just as crappy as the so-called social sciences, i.e. “physics too is really about arbitrary and fickle social consensus”. (R. S. Mitchell)
The popular swampie arguments are
• “Economics is a social science where the behaviour of decision makers is not governed purely by economic considerations but also by social and psychological factors, which are not amenable to econometric testing. This is why no economic theory holds everywhere all the time.” (Moosa)
• “And just as Moosa, Keynes certainly did not misunderstand the crucial issues at stake in his critique of econometrics. Quite the contrary. He knew them all too well ― and was not satisfied with the validity and philosophical underpinnings of the assumptions made for applying its methods.” (Syll)
• “Tinbergen’s model assumes that all relevant factors are measurable. Keynes questions if it is possible to adequately quantify and measure things like expectations and political and psychological factors. And more than anything, he questioned ― both on epistemological and ontological grounds ― that it was always and everywhere possible to measure real-world uncertainty with the help of probabilistic risk measures.” (Syll)
• “In his critique of Tinbergen, Keynes points us to the fundamental logical, epistemological and ontological problems of applying statistical methods to a basically unpredictable, uncertain, complex, unstable, interdependent, and ever-changing social reality.” (Syll)
The lethal blunders of Lars Syll/Imad Moosa are: (i) economics is NOT a social science but a systems science, and (ii) Keynes was a political agenda pusher and cannot by any stretch of the imagination be taken seriously as a scientist. #6
Keynes famously stated in the General Theory: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63) This two-liner is conceptually and logically defective because Keynes never came to grips with profit. “His Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson et al.)
Let this sink in: the economist Keynes NEVER understood profit, i.e., the fundamental concept of economics. Because he was too stupid for the elementary mathematics that underlies macroeconomics, the whole of Keynesian theory and methodology is proto-scientific garbage. Instead of I=S, Q≡I−S is true with Q as macroeconomic profit (formal summary on AXEC143d).
So, Keynes got it wrong 80+ years ago, but Lars Syll/Imad Moosa have not figured it out to this day and instead blather about methodology. That’s how the swampies of political economics have been for 200+ years now: stupid or corrupt or both. Lars Syll is both.#7
All political economists have to be expelled from the sciences. This applies also to Lars Syll’s Sweden, where fake scientists/political agenda pushers are to this day rewarded with the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”. What a farce: economists are the swampies that have, in 200+ years, not figured out what profit is. Neither Orthodoxy nor traditional Heterodoxy has any scientific content.
Egmont Kakarot-Handtke
#1 Economics: failure, fake, fraud
#2 Economics: A science without scientists
#3 Economics: The greatest scientific hoax in modern times
#4 Getting out of the economics swamp
#5 The economist as storyteller
#6 Marshall and the Cambridge School of plain economic gibberish
#7 For the full-spectrum refutation of Lars Syll, see the label zLPS on AXEC
Related 'How to spot economics trolls' and 'How incompetent are economic methodologists? Very!' and 'Economics: Math is NOT the problem, scientific incompetence is'. For details of the big picture, see cross-references Political Economics/Stupidity/Corruption and cross-references Methodology and cross-references Math/Mathiness.
For more about Lars Syll, see AXECquery.
Blog-Reference
A closer look at the history of economic thought reveals that there are TWO economixes: 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.
The historical fact is 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: Walrasianism, Keynesianism, Marxianism, Austrianism, MMT are mutually contradictory, axiomatically false, and materially/formally inconsistent. Political economists are NOT scientists but clowns/useful idiots in the political Circus Maximus. #1, #2, #3
Economics claims to be science and, by consequence, the economist has to uphold scientific standards. Scientific standards are well-defined since antiquity: “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)
Scientific knowledge is embodied in the true theory. The true theory is the human's best mental representation of reality. This defines the economist’s task: “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)
This translates into the methodological basics: logical consistency is secured by applying the axiomatic-deductive method, and empirical consistency is secured by applying state-of-the-art econometric testing.
So, there are the hard rocks of true or false, and there is the vast swamp between them. The swamp is where stupid/corrupt political economists thrive since Adam Smith/Karl Marx. Swampiness is what Popper called an immunizing stratagem because: “Another thing I must point out is that you cannot prove a vague theory wrong.” (Feynman)#4 It is, therefore, quite understandable that the political economist is mainly occupied with producing a methodological smoke screen which consists of vague concepts, anything-goes, pluralism of false theories, alleged complexity, ontological uncertainty, unreliable data, the faux humility of ‘I know that I know nothing’, and the post-modern replacement of true theory by storytelling.#5
The stupid/corrupt political agenda pushers try to defend the swamp where “nothing is clear and everything is possible” (Keynes) by arguing that the axiomatic-deductive method and state-of-art testing does not work in economics and by denouncing the adherence to the scientific method as “physics envy” and by intimating that physics is just as crappy as the so-called social sciences, i.e. “physics too is really about arbitrary and fickle social consensus”. (R. S. Mitchell)
The popular swampie arguments are
• “Economics is a social science where the behaviour of decision makers is not governed purely by economic considerations but also by social and psychological factors, which are not amenable to econometric testing. This is why no economic theory holds everywhere all the time.” (Moosa)
• “And just as Moosa, Keynes certainly did not misunderstand the crucial issues at stake in his critique of econometrics. Quite the contrary. He knew them all too well ― and was not satisfied with the validity and philosophical underpinnings of the assumptions made for applying its methods.” (Syll)
• “Tinbergen’s model assumes that all relevant factors are measurable. Keynes questions if it is possible to adequately quantify and measure things like expectations and political and psychological factors. And more than anything, he questioned ― both on epistemological and ontological grounds ― that it was always and everywhere possible to measure real-world uncertainty with the help of probabilistic risk measures.” (Syll)
• “In his critique of Tinbergen, Keynes points us to the fundamental logical, epistemological and ontological problems of applying statistical methods to a basically unpredictable, uncertain, complex, unstable, interdependent, and ever-changing social reality.” (Syll)
The lethal blunders of Lars Syll/Imad Moosa are: (i) economics is NOT a social science but a systems science, and (ii) Keynes was a political agenda pusher and cannot by any stretch of the imagination be taken seriously as a scientist. #6
Keynes famously stated in the General Theory: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63) This two-liner is conceptually and logically defective because Keynes never came to grips with profit. “His Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson et al.)
Let this sink in: the economist Keynes NEVER understood profit, i.e., the fundamental concept of economics. Because he was too stupid for the elementary mathematics that underlies macroeconomics, the whole of Keynesian theory and methodology is proto-scientific garbage. Instead of I=S, Q≡I−S is true with Q as macroeconomic profit (formal summary on AXEC143d).
So, Keynes got it wrong 80+ years ago, but Lars Syll/Imad Moosa have not figured it out to this day and instead blather about methodology. That’s how the swampies of political economics have been for 200+ years now: stupid or corrupt or both. Lars Syll is both.#7
All political economists have to be expelled from the sciences. This applies also to Lars Syll’s Sweden, where fake scientists/political agenda pushers are to this day rewarded with the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”. What a farce: economists are the swampies that have, in 200+ years, not figured out what profit is. Neither Orthodoxy nor traditional Heterodoxy has any scientific content.
Egmont Kakarot-Handtke
#1 Economics: failure, fake, fraud
#2 Economics: A science without scientists
#3 Economics: The greatest scientific hoax in modern times
#4 Getting out of the economics swamp
#5 The economist as storyteller
#6 Marshall and the Cambridge School of plain economic gibberish
#7 For the full-spectrum refutation of Lars Syll, see the label zLPS on AXEC
Related 'How to spot economics trolls' and 'How incompetent are economic methodologists? Very!' and 'Economics: Math is NOT the problem, scientific incompetence is'. For details of the big picture, see cross-references Political Economics/Stupidity/Corruption and cross-references Methodology and cross-references Math/Mathiness.
For more about Lars Syll, see AXECquery.
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Graphic AXEC144c
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#PointOfProof
Jul 14
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Twitter Mar 18, 2021
January 14, 2018
Lars Syll, fake scientist
Comment on Lars Syll on ‘Is economics ― really ― a science?’
Blog-Reference and Blog-Reference
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.
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
It is rather comical when folks that have produced nothing but proto-scientific garbage talk about scientific methodology. Economic methodology is even more absurd than economics itself. Economic methodologists have not even spotted blatant methodological blunders like petitio principii or inconsistent definitions which are entirely sufficient to refute every approach on purely methodological grounds.#2, #3
The self-appointed methodologist Lars Syll is a case in point. He has one valid point, that is, Walrasian economics in the current incarnation of DSGE is false on all counts. That’s all. He never advanced to the insight that Keynesianism ― the approach he propagates ― is not significantly better. It cannot be said that he understands what science is all about and how this applies to economics.#4
To recall, the objective of economics is the true theory which, in turn, is the humanly best mental representation of reality: “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)
Walrasian economics is materially and formally inconsistent, true but this holds also for Keynesianism, Marxianism, Austrianism ― and this is why economics is a failed science.#5
Lars Syll’s arguments against Walrasian Orthodoxy are rather silly:
• “… manifest inability to foresee the latest financial and economic crises.” To predict the future is, as a matter of principle, not the business of science but of charlatans.#6
• “Neither the economist nor the deciding individual, can fully pre-specify how people will decide when facing uncertainties and ambiguities that are ontological facts of the way the world works.” Economics, properly understood, does NOT deal with the behavior of people but with the behavior of the economic system. Human Nature/motives/behavior/action is the business of Psychology/Sociology and other so-called social sciences. Economics is a systems science.#7
• “There are no universal laws in economics.” There are no universal behavioral laws in economics. This is true but irrelevant because economics is NOT a science of behavior but a systems science. To be sure, there are systemic laws but economists have not figured them out because they wasted 200+ years with folk psychology, i.e. with waffling about rationality, selfishness, utility maximization, rational expectations, or uncertainty.
• “We have to build our models on assumptions that are not so blatantly in contradiction to reality.” Trivially true, but if Lars Syll knows how to do it why don’t he apply his superior methodology and show the results? As J. S. Mill told the slyboots who never rose above the level of vacuous methodological blather “Doubtless, the most effectual mode of showing how the sciences of Ethics and Politics may be constructed, would be to construct them …”
At some point, though, orthodox and heterodox incompetence turns into self-deception and deception of the general public. This point is reached with the false claim that economics is a science as expressed in the title “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.
At present, economics is not a science but what Feynman called a cargo cult science. Make no mistake, BOTH orthodox AND heterodox economics is an integral part of the fake. One of the best examples is the scientific failure and methodological loudspeaker Lars Syll.#8
Egmont Kakarot-Handtke
#1 Economics: a science without scientists
#2 Economics, methodology, morals ― a creepy freak-show
#3 Axiomatized nonentities and the failure of methodologists
#4 The irrelevance of economics
#5 Economists, stupid or corrupt or both?
#6 Science does NOT predict the future
#7 If it isn’t macro-axiomatized, it isn’t economics
#8 Nothing to choose between Orthodoxy and traditional Heterodoxy
Related 'Shocking: methodology is a tricky business' and 'Addendum to ‘Musings on Whether We Consciously Know More or Less than What Is in Our Models’ and 'Economics is NOT a misunderstanding but cargo cultic crap' and 'No trade-off, Kant said' and 'Methodological wrong-way drivers' and 'Refutation of Asad Zaman’s heterodox methodology: all arguments you ever need' and 'Why does Heterodoxy not abolish the fake Nobel?'. For details of the big picture see cross-references Failed/Fake scientists and cross-references Scientific Incompetence.
NOTE on Lars Syll’s ‘Neoclassical economics is great — if it wasn’t for all the caveats!’ on Jan 15 and Blog-Reference LPS
Lars Syll is a one-trick pony. The sum of his insight is that Neoclassical economics is a failure and Keynesianism is superior because its core assumption is ontological uncertainty which reduces economic knowledge ultimately to I know that I know nothing and anything goes, or, as Keynes put it, to “nothing is clear and everything is possible.”
Lars Syll never understood that science is not about unknown and unknowable unknowns but about certain knowledge. His hero is not Archimedes who figured out the Law of the Lever or Euclid who figured out that a2+b2= c2 but the waffling philosopher Socrates with his shallow wisdom and false humbleness of I know that I know nothing ― which, of course, is true of philosophers and heterodox economists.
For details see:
► Lars Syll, fake scientist
► Fact of life: your econ prof is scientifically incompetent
► Say hello to Lars Syll, Keynes’ last parrot
► Don Lars and the axiomatic windmill
► Economics — the fly that cannot see the glass
► Heterodoxy, too, is proto-scientific garbage
► Throw them out! Orthodox and heterodox economists are unfit for science
You say “Hi Egmont, what do you think of Single Payer and Britain’s National Health Service? … Do you think the government should renationalise the railways, and highly regulate or renationalise the energy industries?”
I think this is for the Legitimate Sovereign to decide. There is the political realm and the scientific realm and the economist qua scientist must uphold the strict separation of politics and science. This point has been made abundantly clear by J. S. Mill: “A scientific observer or reasoner, merely as such, is not an adviser for practice. His part is only to show that certain consequences follow from certain causes, and that to obtain certain ends, certain means are the most effectual. Whether the ends themselves are such as ought to be pursued, and if so, in what cases and to how great a length, it is no part of his business as a cultivator of science to decide, and science alone will never qualify him for the decision.”#1
For non-economists, the most important thing to realize is 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. This applies also to MMT. MMT policy proposals have no sound scientific foundation.#2
I have no truck with the political program of MMT. National Health, clearly, is a matter for the UK population to discuss and to decide and no economist has any mandate to interfere in the political process. Political economists like Krugman, Varoufakis, or Kelton have not to be praised for taking political sides but condemned for corrupting science.
The issue with MMT is not about good/bad politics but about true/false economic theory. MMTers do either not understand how the monetary economy works or they deceive their fellow citizens about the fact that Public Deficit = Private Profit and that, therefore, MMT policy ultimately benefits the one-percenters, contrary to the political claim that MMT is the champion of the ninety-nine-percenters.#4
The political economist = fake scientist is one of the most disgusting creeps in the Circus Maximus.
#1 The end of political economics
#2 MMT: The one deadly error/fraud of Warren Mosler
#3 MMT = proto-scientific garbage + deception of the 99-percenters
#4 MMT and grassroots movements
Blog-Reference and Blog-Reference
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.
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
It is rather comical when folks that have produced nothing but proto-scientific garbage talk about scientific methodology. Economic methodology is even more absurd than economics itself. Economic methodologists have not even spotted blatant methodological blunders like petitio principii or inconsistent definitions which are entirely sufficient to refute every approach on purely methodological grounds.#2, #3
The self-appointed methodologist Lars Syll is a case in point. He has one valid point, that is, Walrasian economics in the current incarnation of DSGE is false on all counts. That’s all. He never advanced to the insight that Keynesianism ― the approach he propagates ― is not significantly better. It cannot be said that he understands what science is all about and how this applies to economics.#4
To recall, the objective of economics is the true theory which, in turn, is the humanly best mental representation of reality: “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)
Walrasian economics is materially and formally inconsistent, true but this holds also for Keynesianism, Marxianism, Austrianism ― and this is why economics is a failed science.#5
Lars Syll’s arguments against Walrasian Orthodoxy are rather silly:
• “… manifest inability to foresee the latest financial and economic crises.” To predict the future is, as a matter of principle, not the business of science but of charlatans.#6
• “Neither the economist nor the deciding individual, can fully pre-specify how people will decide when facing uncertainties and ambiguities that are ontological facts of the way the world works.” Economics, properly understood, does NOT deal with the behavior of people but with the behavior of the economic system. Human Nature/motives/behavior/action is the business of Psychology/Sociology and other so-called social sciences. Economics is a systems science.#7
• “There are no universal laws in economics.” There are no universal behavioral laws in economics. This is true but irrelevant because economics is NOT a science of behavior but a systems science. To be sure, there are systemic laws but economists have not figured them out because they wasted 200+ years with folk psychology, i.e. with waffling about rationality, selfishness, utility maximization, rational expectations, or uncertainty.
• “We have to build our models on assumptions that are not so blatantly in contradiction to reality.” Trivially true, but if Lars Syll knows how to do it why don’t he apply his superior methodology and show the results? As J. S. Mill told the slyboots who never rose above the level of vacuous methodological blather “Doubtless, the most effectual mode of showing how the sciences of Ethics and Politics may be constructed, would be to construct them …”
At some point, though, orthodox and heterodox incompetence turns into self-deception and deception of the general public. This point is reached with the false claim that economics is a science as expressed in the title “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.
At present, economics is not a science but what Feynman called a cargo cult science. Make no mistake, BOTH orthodox AND heterodox economics is an integral part of the fake. One of the best examples is the scientific failure and methodological loudspeaker Lars Syll.#8
Egmont Kakarot-Handtke
#1 Economics: a science without scientists
#2 Economics, methodology, morals ― a creepy freak-show
#3 Axiomatized nonentities and the failure of methodologists
#4 The irrelevance of economics
#5 Economists, stupid or corrupt or both?
#6 Science does NOT predict the future
#7 If it isn’t macro-axiomatized, it isn’t economics
#8 Nothing to choose between Orthodoxy and traditional Heterodoxy
Related 'Shocking: methodology is a tricky business' and 'Addendum to ‘Musings on Whether We Consciously Know More or Less than What Is in Our Models’ and 'Economics is NOT a misunderstanding but cargo cultic crap' and 'No trade-off, Kant said' and 'Methodological wrong-way drivers' and 'Refutation of Asad Zaman’s heterodox methodology: all arguments you ever need' and 'Why does Heterodoxy not abolish the fake Nobel?'. For details of the big picture see cross-references Failed/Fake scientists and cross-references Scientific Incompetence.
***
NOTE on Lars Syll’s ‘Neoclassical economics is great — if it wasn’t for all the caveats!’ on Jan 15 and Blog-Reference LPS
Lars Syll is a one-trick pony. The sum of his insight is that Neoclassical economics is a failure and Keynesianism is superior because its core assumption is ontological uncertainty which reduces economic knowledge ultimately to I know that I know nothing and anything goes, or, as Keynes put it, to “nothing is clear and everything is possible.”
Lars Syll never understood that science is not about unknown and unknowable unknowns but about certain knowledge. His hero is not Archimedes who figured out the Law of the Lever or Euclid who figured out that a2+b2= c2 but the waffling philosopher Socrates with his shallow wisdom and false humbleness of I know that I know nothing ― which, of course, is true of philosophers and heterodox economists.
For details see:
► Lars Syll, fake scientist
► Fact of life: your econ prof is scientifically incompetent
► Say hello to Lars Syll, Keynes’ last parrot
► Don Lars and the axiomatic windmill
► Economics — the fly that cannot see the glass
► Heterodoxy, too, is proto-scientific garbage
► Throw them out! Orthodox and heterodox economists are unfit for science
***
REPLY to Kaivey on Jan 16You say “Hi Egmont, what do you think of Single Payer and Britain’s National Health Service? … Do you think the government should renationalise the railways, and highly regulate or renationalise the energy industries?”
I think this is for the Legitimate Sovereign to decide. There is the political realm and the scientific realm and the economist qua scientist must uphold the strict separation of politics and science. This point has been made abundantly clear by J. S. Mill: “A scientific observer or reasoner, merely as such, is not an adviser for practice. His part is only to show that certain consequences follow from certain causes, and that to obtain certain ends, certain means are the most effectual. Whether the ends themselves are such as ought to be pursued, and if so, in what cases and to how great a length, it is no part of his business as a cultivator of science to decide, and science alone will never qualify him for the decision.”#1
For non-economists, the most important thing to realize is 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. This applies also to MMT. MMT policy proposals have no sound scientific foundation.#2
I have no truck with the political program of MMT. National Health, clearly, is a matter for the UK population to discuss and to decide and no economist has any mandate to interfere in the political process. Political economists like Krugman, Varoufakis, or Kelton have not to be praised for taking political sides but condemned for corrupting science.
The issue with MMT is not about good/bad politics but about true/false economic theory. MMTers do either not understand how the monetary economy works or they deceive their fellow citizens about the fact that Public Deficit = Private Profit and that, therefore, MMT policy ultimately benefits the one-percenters, contrary to the political claim that MMT is the champion of the ninety-nine-percenters.#4
The political economist = fake scientist is one of the most disgusting creeps in the Circus Maximus.
#1 The end of political economics
#2 MMT: The one deadly error/fraud of Warren Mosler
#3 MMT = proto-scientific garbage + deception of the 99-percenters
#4 MMT and grassroots movements
For more about Lars Syll see AXECquery.
November 14, 2018
Causality in economics
Comment on Lars Syll on ‘In search of causality’
Blog-Reference and Blog-Reference and Blog-Reference on Nov 19
Lars Syll summarizes: “In a time when scientific relativism is expanding, it is important to keep up the claim for not reducing science to a pure discursive level. We have to maintain the Enlightenment tradition of thinking of reality as principally independent of our views of it and of the main task of science as studying the structure of this reality. Perhaps the most important contribution a researcher can make is revealing what this reality that is the object of science actually looks like. Science is made possible by the fact that there are structures that are durable and are independent of our knowledge or beliefs about them.”
These structures (invariances in Nozick’s terminology) relate to the economic system and NOT to economic behavior. Hence, the lethal methodological blunder consists of thinking of economics as a social science instead of a systems science. #1 The blunder started with Adam Smith, and this explains why economists have achieved nothing of scientific value in the past 200+ years. Economics is a cargo cult science; economists have misspecified their subject matter from the very beginning. #2
The heterodox economist Lars Syll is no exception and part of the wholesale failure.
Systemic laws are invariances much like physical laws, but do not entail the physicists’ specific notion of causality. So, the concept of causality has to be redefined for the economic system. There is no use in turning to philosophy and seeking help from Aristotle.
The elementary version of the economic system is formally given with the First Economic Law, as shown under the label of Graphic. #3
As it stands, the Law as a whole is deterministic but causality-free. Systemic causality consists of the fact that if one variable is altered, the others must change such that the equation is satisfied. However, it is NOT predetermined which of the other variables is altered and to what extent. The First Economic Law is an invariance with undetermined multiple inner causalities. The inner causalities can be said to be opportunistic or to follow the path of least resistance.
In order to establish a simple unidirectional causality, it is necessary that two of the four variables are fixed by the policymaker. So if, for example, ρE and ρX are fixed and ρD is changed, then the change of ρF is causally determined with absolute precision by the systemic interrelations. The problem is that the four ratios ρF, ρE, ρX, ρD consist, in turn, of multiple variables, ρF, for example, is given as the quotient of wage rate W, price P, and productivity R, i.e, ρF≡W/PR. This multiplies the number of variables to be controlled.
So, causality in economics is real but consists of undetermined multiple inner systemic causalities. As far as the required number of variables can be controlled, a politically defined causality can be established. Without knowledge of the systemic laws, this is impossible.
It holds: “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)
To this day, neither orthodox nor heterodox economists have more to offer than common sense blather. #4, #5
Egmont Kakarot-Handtke
#1 Economics is NOT a science of behavior (III)
#2 The economics Cargo Cult Prize
#3 Graphic AXEC06b First Economic Law
#4 The Law of Economists’ Increasing Stupidity
#5 A brief history of soapbox economics
You ask, “… what would your ‘system’ imply should be done to make wellbeing higher?”
The axiomatically correct economic theory implies that the well-being of humanity is greatly increased if all stupid/corrupt political agenda pushers are expelled from economics. Draining the economic swamp is the precondition for scientific progress and should be done immediately. Scientific progress is, as everybody remembers from the Neanderthal, the only way to increase the physical and cultural well-being of humanity.
Political, religious, psychological, sociological, and philosophical blather has produced nothing positive throughout human history.
What has become of Lars Syll? He writes: “I can’t but agree with Clint Ballinger on the so called ‘comments’ with which E.K-H pollutes this and other blog sites. E.K-H is a troll. He should be banned.”
What has become of the man who does not get tired of praising unconquerable freedom fighters on his own blog site?#1
What has become of the man whose evening prayer is Rosa Luxemburg’s “Freedom is always, and exclusively, freedom for the one who thinks differently.”
What has become of the tireless fighter for pluralism in economics?#2, #3
What has become of the man who has been refuted on all counts with regard to Keynesianism, Post-Keynesianism, and methodology?#4
What has become of the man who has quietly censored/manipulated his own blog site for a long time?#5
This man now forgets himself and desperately demands that E.K-H be banned from Mike Norman Economics.
In fact, nothing has changed. Behind the idealistic kitsch, Lars Syll has always been a scientifically incompetent political agenda pusher. #6
#1 Nelson Mandela — the captain of my soul
Nelson Mandela In Memoriam
The captain of an unconquerable soul
An unconquerable soul
Edward Snowden — unbroken and unconquerable
Unbroken and unconquerable
For my unconquerable soul
#2 Heterodoxy and pluralism in economics
#3 On the importance of pluralism
#4 Kalecki and Keynes: The double macroeconomic false start
#5 Cryptoeconomics ― the best of Lars Syll’s spam folder
#6 Feynman Integrity, fake science, and the econblogosphere
Again: “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)
Neither you nor Lars Syll has the true economic theory. You do not even get the elementary mathematics that underlies macroeconomics right. You have not produced one tiny bit of sound economics.
Next time you board an airplane with the expectation to land safely at a distant place, be aware that this is possible due to the work of scientists/engineers and not to political, religious, psychological, sociological, and philosophical blather, and certainly not to the brain-dead agenda pushing of stupid/corrupt economists since Smith/Marx.
Your and Lars Syll’s contribution to the welfare of humanity is less than zero.
Blog-Reference and Blog-Reference and Blog-Reference on Nov 19
Lars Syll summarizes: “In a time when scientific relativism is expanding, it is important to keep up the claim for not reducing science to a pure discursive level. We have to maintain the Enlightenment tradition of thinking of reality as principally independent of our views of it and of the main task of science as studying the structure of this reality. Perhaps the most important contribution a researcher can make is revealing what this reality that is the object of science actually looks like. Science is made possible by the fact that there are structures that are durable and are independent of our knowledge or beliefs about them.”
These structures (invariances in Nozick’s terminology) relate to the economic system and NOT to economic behavior. Hence, the lethal methodological blunder consists of thinking of economics as a social science instead of a systems science. #1 The blunder started with Adam Smith, and this explains why economists have achieved nothing of scientific value in the past 200+ years. Economics is a cargo cult science; economists have misspecified their subject matter from the very beginning. #2
The heterodox economist Lars Syll is no exception and part of the wholesale failure.
Systemic laws are invariances much like physical laws, but do not entail the physicists’ specific notion of causality. So, the concept of causality has to be redefined for the economic system. There is no use in turning to philosophy and seeking help from Aristotle.
The elementary version of the economic system is formally given with the First Economic Law, as shown under the label of Graphic. #3
As it stands, the Law as a whole is deterministic but causality-free. Systemic causality consists of the fact that if one variable is altered, the others must change such that the equation is satisfied. However, it is NOT predetermined which of the other variables is altered and to what extent. The First Economic Law is an invariance with undetermined multiple inner causalities. The inner causalities can be said to be opportunistic or to follow the path of least resistance.
In order to establish a simple unidirectional causality, it is necessary that two of the four variables are fixed by the policymaker. So if, for example, ρE and ρX are fixed and ρD is changed, then the change of ρF is causally determined with absolute precision by the systemic interrelations. The problem is that the four ratios ρF, ρE, ρX, ρD consist, in turn, of multiple variables, ρF, for example, is given as the quotient of wage rate W, price P, and productivity R, i.e, ρF≡W/PR. This multiplies the number of variables to be controlled.
So, causality in economics is real but consists of undetermined multiple inner systemic causalities. As far as the required number of variables can be controlled, a politically defined causality can be established. Without knowledge of the systemic laws, this is impossible.
It holds: “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)
To this day, neither orthodox nor heterodox economists have more to offer than common sense blather. #4, #5
Egmont Kakarot-Handtke
#1 Economics is NOT a science of behavior (III)
#2 The economics Cargo Cult Prize
#3 Graphic AXEC06b First Economic Law
#4 The Law of Economists’ Increasing Stupidity
#5 A brief history of soapbox economics
***
REPLY to Clint Ballinger on Nov 15You ask, “… what would your ‘system’ imply should be done to make wellbeing higher?”
The axiomatically correct economic theory implies that the well-being of humanity is greatly increased if all stupid/corrupt political agenda pushers are expelled from economics. Draining the economic swamp is the precondition for scientific progress and should be done immediately. Scientific progress is, as everybody remembers from the Neanderthal, the only way to increase the physical and cultural well-being of humanity.
Political, religious, psychological, sociological, and philosophical blather has produced nothing positive throughout human history.
***
REPLY to Lars Syll on Nov 16What has become of Lars Syll? He writes: “I can’t but agree with Clint Ballinger on the so called ‘comments’ with which E.K-H pollutes this and other blog sites. E.K-H is a troll. He should be banned.”
What has become of the man who does not get tired of praising unconquerable freedom fighters on his own blog site?#1
What has become of the man whose evening prayer is Rosa Luxemburg’s “Freedom is always, and exclusively, freedom for the one who thinks differently.”
What has become of the tireless fighter for pluralism in economics?#2, #3
What has become of the man who has been refuted on all counts with regard to Keynesianism, Post-Keynesianism, and methodology?#4
What has become of the man who has quietly censored/manipulated his own blog site for a long time?#5
This man now forgets himself and desperately demands that E.K-H be banned from Mike Norman Economics.
In fact, nothing has changed. Behind the idealistic kitsch, Lars Syll has always been a scientifically incompetent political agenda pusher. #6
#1 Nelson Mandela — the captain of my soul
Nelson Mandela In Memoriam
The captain of an unconquerable soul
An unconquerable soul
Edward Snowden — unbroken and unconquerable
Unbroken and unconquerable
For my unconquerable soul
#2 Heterodoxy and pluralism in economics
#3 On the importance of pluralism
#4 Kalecki and Keynes: The double macroeconomic false start
#5 Cryptoeconomics ― the best of Lars Syll’s spam folder
#6 Feynman Integrity, fake science, and the econblogosphere
***
REPLY to Clint Ballinger on Nov 17Again: “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)
Neither you nor Lars Syll has the true economic theory. You do not even get the elementary mathematics that underlies macroeconomics right. You have not produced one tiny bit of sound economics.
Next time you board an airplane with the expectation to land safely at a distant place, be aware that this is possible due to the work of scientists/engineers and not to political, religious, psychological, sociological, and philosophical blather, and certainly not to the brain-dead agenda pushing of stupid/corrupt economists since Smith/Marx.
Your and Lars Syll’s contribution to the welfare of humanity is less than zero.
January 31, 2018
Cryptoeconomics ― the best of Lars Syll’s spam folder
Comment on Lars Syll on ‘Truth and knowledge’
Blog-Reference
Science is about truth and knowledge. Science is binary true/false and nothing in between. Non-science is the swamp between true and false, where ‘nothing is clear and everything is possible’ (Keynes). The distinction between science and non-science corresponds to the ancient Greeks’ distinction between episteme (= knowledge) and doxa (= opinion).
Science has been defined for 2300+ years by material and formal consistency. Logical consistency is secured by applying the axiomatic-deductive method, and empirical consistency is secured by applying state-of-the-art testing. #1
The fact is that about ninety-nine percent of people are satisfied with opinion, and only one percent is devoted to episteme. Economists do NOT belong to the latter group. Economics is a cargo cult science, and both orthodox and heterodox economists are fake scientists.
Until this day, in their research and communication, economists in general and heterodox economists, in particular, are not guided by the principles of Science but by the principles of Circus Maximus. As a consequence, in the econblogosphere, the best stuff is hidden in the spam folders, and what is openly recycled ad nauseam is soft soap, blather, gossip, propaganda, disinformation, and proto-scientific garbage.
It is long known that economists routinely violate scientific standards and simply suppress/ ignore refutation “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)
It is anybody’s guess to what extent the econblogosphere is corrupted. The problem, of course, is that spam folders are invisible to the general public. Private censorship is built into the blogging software and works without any traces.
Occasionally, there are exceptions. For those who appreciate the privilege of casting a glance into Lars Syll’s spam folder, here is a sample of posts he suppressed over the last three months.
It is a defining characteristic of the topsy-turvy world of economics ― which has, to bear in mind, produced NOTHING of scientific value in the last 200+ years ― that incompetent/ corrupt scientists and methodologists cannot stop blathering about truth and knowledge ― issues that they have not for one moment understood properly.*
Egmont Kakarot-Handtke
#1 Success is the best method
Related 'Feynman Integrity, fake science, and the econblogosphere' and 'Needed: The Worst of the Worst of economics blogs' and 'On econblogosphere bias' and 'Economics between cargo cult, farce, and fraud' and 'What is so great about cargo cult science? or, How economists learned to stop worrying about failure' and 'Economics: 200+ years of scientific incompetence and fraud' and 'Economists: Incompetent? Stupid? Corrupt?' and 'Economics: a hereditary mental disease with scientific incompetence as father and political fraud as mother' and 'Economics, methodology, morals ― a creepy freak-show' and 'Fact of life: your econ prof is scientifically incompetent' and 'Heterodoxy ― an axiomatic failure just like Orthodoxy'.
* 2018 membership badge
For details of the big picture, see Econblogosphere: The flawed Top 101
Blog-Reference
Science is about truth and knowledge. Science is binary true/false and nothing in between. Non-science is the swamp between true and false, where ‘nothing is clear and everything is possible’ (Keynes). The distinction between science and non-science corresponds to the ancient Greeks’ distinction between episteme (= knowledge) and doxa (= opinion).
Science has been defined for 2300+ years by material and formal consistency. Logical consistency is secured by applying the axiomatic-deductive method, and empirical consistency is secured by applying state-of-the-art testing. #1
The fact is that about ninety-nine percent of people are satisfied with opinion, and only one percent is devoted to episteme. Economists do NOT belong to the latter group. Economics is a cargo cult science, and both orthodox and heterodox economists are fake scientists.
Until this day, in their research and communication, economists in general and heterodox economists, in particular, are not guided by the principles of Science but by the principles of Circus Maximus. As a consequence, in the econblogosphere, the best stuff is hidden in the spam folders, and what is openly recycled ad nauseam is soft soap, blather, gossip, propaganda, disinformation, and proto-scientific garbage.
It is long known that economists routinely violate scientific standards and simply suppress/ ignore refutation “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)
It is anybody’s guess to what extent the econblogosphere is corrupted. The problem, of course, is that spam folders are invisible to the general public. Private censorship is built into the blogging software and works without any traces.
Occasionally, there are exceptions. For those who appreciate the privilege of casting a glance into Lars Syll’s spam folder, here is a sample of posts he suppressed over the last three months.
- Lars Syll, fake scientist
- Keynes, Lerner, MMT, Trump and exploding profit
- Economics: Defending the indefensible
- Keynes’ intellectual nonexistence
- Dear philosophers, economics is a systems science
- Dilettantes at the end of the coal-pit
- Why Heterodoxy is no real alternative to mainstream economics
- From false microfoundations to true macrofoundations
- This is New Economic Thinking? Give me a break!
It is a defining characteristic of the topsy-turvy world of economics ― which has, to bear in mind, produced NOTHING of scientific value in the last 200+ years ― that incompetent/ corrupt scientists and methodologists cannot stop blathering about truth and knowledge ― issues that they have not for one moment understood properly.*
Egmont Kakarot-Handtke
#1 Success is the best method
Related 'Feynman Integrity, fake science, and the econblogosphere' and 'Needed: The Worst of the Worst of economics blogs' and 'On econblogosphere bias' and 'Economics between cargo cult, farce, and fraud' and 'What is so great about cargo cult science? or, How economists learned to stop worrying about failure' and 'Economics: 200+ years of scientific incompetence and fraud' and 'Economists: Incompetent? Stupid? Corrupt?' and 'Economics: a hereditary mental disease with scientific incompetence as father and political fraud as mother' and 'Economics, methodology, morals ― a creepy freak-show' and 'Fact of life: your econ prof is scientifically incompetent' and 'Heterodoxy ― an axiomatic failure just like Orthodoxy'.
* 2018 membership badge
 |
| Source: Lars P. Syll blog |
For details of the big picture, see Econblogosphere: The flawed Top 101
***
April 9, 2019
How a Swedish professor cares about the Oligarchy’s financial well-being
Comment on Lars Syll on ‘Sweden as a case of MMT’
Blog-Reference and Blog-Reference and Blog-Reference on Apr 11
Lars Syll argues: “What the Swedish experience shows is that a government’s ability to conduct an ‘optimal’ public debt policy may be negatively affected if public debt becomes too small. To guarantee a well-functioning secondary market in bonds it is essential that the government has access to a functioning market. If turnover and liquidity in the secondary market become too small, increased volatility and uncertainty will, in the long run, lead to an increase in borrowing costs. Ultimately there’s even a risk that market makers would disappear, leaving bond market trading to be operated solely through brokered deals. As a kind of precautionary measure against this eventuality, it may be argued – especially in times of financial turmoil and crises ― that it is necessary to increase government borrowing and debt to ensure ― in a longer run ― good borrowing preparedness and a sustained (government) bond market.”
This is one of the lousiest pieces of economics ever produced in Sweden. In order to see this, one has to do some elementary macroeconomics.
The MMT cure-all is deficit-spending/money-creation. The process goes schematically as follows#1, #2
(i) The initial economic configuration is the elementary production-consumption economy. The initial state is characterized by budget-balancing of the household sector C=Yw, i.e. consumption expenditures C are equal to wage income Yw, and zero profit of the business sector Q≡C−Yw=0.
(ii) The government deficit spends. Deficit D is defined as public spending G minus taxes T, i.e. D≡(G−T). Deficit spending on current production causes a one-off price hike (NO inflation) and the business sector ends up with macroeconomic profit Q≡(G−T). The government creates a free lunch for the Oligarchy.
(iii) The business sector fully distributes profit. The distributed profit Yd goes to the Oligarchy and takes initially the form of deposits at the Central Bank. The CB’s balance sheet shows government overdrafts on the asset side and the Oligarchy’s deposits on the liability side. Both sides are equal to the penny.
(iv) The interest rates on both sides of the CB’s balance sheet are for a starter set to zero.
(v) If the government's deficit spending continues deposits grow. Since deposits bear no interest the Oligarchy’s desire for a safe investment opportunity becomes more urgent.
(vi) Now, the government consolidates its overdrafts by selling interest-bearing bonds. The bonds are bought by the Oligarchy and paid for with the deposits. The CB’s balance sheet shrinks again. The Oligarchy’s portfolio consists of bonds and money = deposits at the CB. After issuance, the bonds are traded on the secondary market which grows continuously.
(vii) In order to pay the interest on bonds, the government taxes the household sector and hands the money over to the bondholders, i.e. the Oligarchy. The disposable income of the taxpayers' decreases and that of the bondholders' increases.
(viii) This income redistribution from WeThePeople to the Oligarchy goes on as long as the debt is rolled over.
So, Lars Syll’s MMT policy of permanent deficit-spending/money-creation entails some real benefits for the Oligarchy, i.e. (i) a free lunch because of Public Deficit = Private Profit, (ii) permanent ultra-safe interest income on a growing public debt, (iii) a liquid secondary bond market.
It is really astonishing how an academic who calls himself a Progressive and pretends to be committed to the public interest pushes the agenda of the Oligarchy and deceives the Swedish people.#3
Egmont Kakarot-Handtke
#1 The new macroeconomic Paradigm
#2 From MMT misunderstandings to the true Theory of Money
#3 Deficit-spending/money-creation is ALWAYS a bad deal for WeThePeople
Related 'The public-debt and private-profit pushers' and 'Dear idiots, it is deficit spending that creates the distribution people complain about' and 'MMT is an economic policy fraud' and 'Where MMT goes off the rails' and 'The public-debt and private-profit pushers' and 'How Keynesians, Lernerians, MMTers make the Oligarchy great' and 'Lars Syll, fake scientist'.
You say: “Are for advocating a type of free market communism, Egmont.”
Fine, but first get out of economics. Economics is a science and there is NO place for political agenda pushers. The mission of economics is to figure out how the monetary economy works and nothing else.
And this brings us back to the point at issue.
You have NO idea how the economy works. Neither has Lars Syll and neither has the rest of MMTers. But all are advocating deficit-spending/money-creation. Because the macroeconomic Profit Law implies Public Deficit = Private Profit, Lars Syll and the rest of MMT academics are actually pushing the agenda of the Oligarchy. Worse, they are telling people that the MMT policy is for the benefit of the ninety-nine-percenters.
This is a political fraud.
Clearly, what I am advocating is NOT free market communism but to expel Lars Syll and all the other political agenda pushers and fraudsters from the scientific community.
Blog-Reference and Blog-Reference and Blog-Reference on Apr 11
Lars Syll argues: “What the Swedish experience shows is that a government’s ability to conduct an ‘optimal’ public debt policy may be negatively affected if public debt becomes too small. To guarantee a well-functioning secondary market in bonds it is essential that the government has access to a functioning market. If turnover and liquidity in the secondary market become too small, increased volatility and uncertainty will, in the long run, lead to an increase in borrowing costs. Ultimately there’s even a risk that market makers would disappear, leaving bond market trading to be operated solely through brokered deals. As a kind of precautionary measure against this eventuality, it may be argued – especially in times of financial turmoil and crises ― that it is necessary to increase government borrowing and debt to ensure ― in a longer run ― good borrowing preparedness and a sustained (government) bond market.”
This is one of the lousiest pieces of economics ever produced in Sweden. In order to see this, one has to do some elementary macroeconomics.
The MMT cure-all is deficit-spending/money-creation. The process goes schematically as follows#1, #2
(i) The initial economic configuration is the elementary production-consumption economy. The initial state is characterized by budget-balancing of the household sector C=Yw, i.e. consumption expenditures C are equal to wage income Yw, and zero profit of the business sector Q≡C−Yw=0.
(ii) The government deficit spends. Deficit D is defined as public spending G minus taxes T, i.e. D≡(G−T). Deficit spending on current production causes a one-off price hike (NO inflation) and the business sector ends up with macroeconomic profit Q≡(G−T). The government creates a free lunch for the Oligarchy.
(iii) The business sector fully distributes profit. The distributed profit Yd goes to the Oligarchy and takes initially the form of deposits at the Central Bank. The CB’s balance sheet shows government overdrafts on the asset side and the Oligarchy’s deposits on the liability side. Both sides are equal to the penny.
(iv) The interest rates on both sides of the CB’s balance sheet are for a starter set to zero.
(v) If the government's deficit spending continues deposits grow. Since deposits bear no interest the Oligarchy’s desire for a safe investment opportunity becomes more urgent.
(vi) Now, the government consolidates its overdrafts by selling interest-bearing bonds. The bonds are bought by the Oligarchy and paid for with the deposits. The CB’s balance sheet shrinks again. The Oligarchy’s portfolio consists of bonds and money = deposits at the CB. After issuance, the bonds are traded on the secondary market which grows continuously.
(vii) In order to pay the interest on bonds, the government taxes the household sector and hands the money over to the bondholders, i.e. the Oligarchy. The disposable income of the taxpayers' decreases and that of the bondholders' increases.
(viii) This income redistribution from WeThePeople to the Oligarchy goes on as long as the debt is rolled over.
So, Lars Syll’s MMT policy of permanent deficit-spending/money-creation entails some real benefits for the Oligarchy, i.e. (i) a free lunch because of Public Deficit = Private Profit, (ii) permanent ultra-safe interest income on a growing public debt, (iii) a liquid secondary bond market.
It is really astonishing how an academic who calls himself a Progressive and pretends to be committed to the public interest pushes the agenda of the Oligarchy and deceives the Swedish people.#3
Egmont Kakarot-Handtke
#1 The new macroeconomic Paradigm
#2 From MMT misunderstandings to the true Theory of Money
#3 Deficit-spending/money-creation is ALWAYS a bad deal for WeThePeople
Related 'The public-debt and private-profit pushers' and 'Dear idiots, it is deficit spending that creates the distribution people complain about' and 'MMT is an economic policy fraud' and 'Where MMT goes off the rails' and 'The public-debt and private-profit pushers' and 'How Keynesians, Lernerians, MMTers make the Oligarchy great' and 'Lars Syll, fake scientist'.
***
REPLY to Kaivey on Apr 10You say: “Are for advocating a type of free market communism, Egmont.”
Fine, but first get out of economics. Economics is a science and there is NO place for political agenda pushers. The mission of economics is to figure out how the monetary economy works and nothing else.
And this brings us back to the point at issue.
You have NO idea how the economy works. Neither has Lars Syll and neither has the rest of MMTers. But all are advocating deficit-spending/money-creation. Because the macroeconomic Profit Law implies Public Deficit = Private Profit, Lars Syll and the rest of MMT academics are actually pushing the agenda of the Oligarchy. Worse, they are telling people that the MMT policy is for the benefit of the ninety-nine-percenters.
This is a political fraud.
Clearly, what I am advocating is NOT free market communism but to expel Lars Syll and all the other political agenda pushers and fraudsters from the scientific community.
***
#PointOfProof
Apr 9
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.
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.
***
Twitter/X Nov 14, 2025 The meaning of Compression and Abstraction is methodologically roughly the same
July 20, 2017
Intellectual deficit spending
Comment on Lars Syll on ‘The balanced budget paradox’
Blog-Reference and Blog-Reference on Jul 24
Lars Syll gives a vivid description of the utterly confused state economists are in for 200+ years: “The pros and cons of public debt have been put forward for as long as the phenomenon itself has existed, but it has, notwithstanding that, not been possible to reach anything close to consensus on the issue — at least not in a long time-horizon perspective. One has as a rule not even been able to agree on whether public debt is a problem, and if — when it is or how to best tackle it. Some of the more prominent reasons for this non-consensus are the complexity of the issue, the mingling of vested interests, ideology, psychological fears, the uncertainty of calculating ad estimating inter-generational effects, etc., etc.”
Lars Syll gives the catch-all reason for the failure of economists — complexity of issue#1 — and thus remains true to the custom of solidarity among fellow economists to avoid the real issue, which is general scientific incompetence.
It is not only the question of public debt which is stuck in the swamp where ‘nothing is clear and everything is possible’ (Keynes), it is ALL of the economics. The fact is that the four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the pivotal economic concept of profit wrong.
Isn’t it curious that in Lars Syll’s comprehensive discussion of public deficit spending and functional finance the word profit does not appear once? The simple reason is that the profit theory is false since Adam Smith, therefore profit either does not at all appear in the models or in misspecified form.
The problem is that economists in general and Lars Syll, in particular, do not understand the elementary mathematics of macroeconomic accounting.#2 Let us make matters short here. The balances of the business sector, the household sector, the government sector, and the rest of the world are interrelated as follows: Qm≡−Sm+I+Yd+(G−T)+(X−M). This boils down to Qm≡−Sm+(G−T) for I, Yd, X, M = 0.
So, there are two limiting cases: (i) If the household sector’s saving Sm goes up and the government’s deficit (G−T) goes up by the same amount the monetary profit of the business sector Qm remains unchanged. (ii) If the household sector’s saving Sm remains unchanged and the government’s deficit (G−T) goes up the profit of the business sector Qm goes up by the same amount.
So, the counterpart of an increased public deficit is either increased saving of the households or increased profits of the firms, or some combination of the two. Therefore, to say that the counterpart of an increased public deficit is an increased surplus of the ‘private sector’ obscures important real-world differences.
What is entirely missing in Lars Syll’s discussion of public debt is that public deficit spending is, first of all, a profit machine.#3 This is not different from private deficit spending. In the past decades the US households increased their debt, that is, they were dissaving. So, the private and public households ran deficits. From the formula above follows that this boosts profit Qm TWICE. And this is exactly what has been observed and criticized as a catastrophic deterioration of the income distribution.
The interrelation between changes in public debt and profit is obscured by lumping together the business sector and the household sector to the ‘private sector’ and repeating the abysmal idiocy: "We owe the debt to ourselves".
Egmont Kakarot-Handtke
#1 Failed economics: The losers’ long list of lame excuses
#2 Macro for dummies
#3 Keynesianism as ultimate profit machine
Related 'New Economic Thinking: the 10 crucial points' and 'You are fired!' and 'Austerity and the idiocy of political economists' and 'Replacing sand by granite' and 'First Lecture in New Economic Thinking' and 'Macrofounded labor market theory' and 'The minimum wage debate: a showpiece of economists’ hereditary idiocy'
Blog-Reference and Blog-Reference on Jul 24
Lars Syll gives a vivid description of the utterly confused state economists are in for 200+ years: “The pros and cons of public debt have been put forward for as long as the phenomenon itself has existed, but it has, notwithstanding that, not been possible to reach anything close to consensus on the issue — at least not in a long time-horizon perspective. One has as a rule not even been able to agree on whether public debt is a problem, and if — when it is or how to best tackle it. Some of the more prominent reasons for this non-consensus are the complexity of the issue, the mingling of vested interests, ideology, psychological fears, the uncertainty of calculating ad estimating inter-generational effects, etc., etc.”
Lars Syll gives the catch-all reason for the failure of economists — complexity of issue#1 — and thus remains true to the custom of solidarity among fellow economists to avoid the real issue, which is general scientific incompetence.
It is not only the question of public debt which is stuck in the swamp where ‘nothing is clear and everything is possible’ (Keynes), it is ALL of the economics. The fact is that the four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the pivotal economic concept of profit wrong.
Isn’t it curious that in Lars Syll’s comprehensive discussion of public deficit spending and functional finance the word profit does not appear once? The simple reason is that the profit theory is false since Adam Smith, therefore profit either does not at all appear in the models or in misspecified form.
The problem is that economists in general and Lars Syll, in particular, do not understand the elementary mathematics of macroeconomic accounting.#2 Let us make matters short here. The balances of the business sector, the household sector, the government sector, and the rest of the world are interrelated as follows: Qm≡−Sm+I+Yd+(G−T)+(X−M). This boils down to Qm≡−Sm+(G−T) for I, Yd, X, M = 0.
So, there are two limiting cases: (i) If the household sector’s saving Sm goes up and the government’s deficit (G−T) goes up by the same amount the monetary profit of the business sector Qm remains unchanged. (ii) If the household sector’s saving Sm remains unchanged and the government’s deficit (G−T) goes up the profit of the business sector Qm goes up by the same amount.
So, the counterpart of an increased public deficit is either increased saving of the households or increased profits of the firms, or some combination of the two. Therefore, to say that the counterpart of an increased public deficit is an increased surplus of the ‘private sector’ obscures important real-world differences.
What is entirely missing in Lars Syll’s discussion of public debt is that public deficit spending is, first of all, a profit machine.#3 This is not different from private deficit spending. In the past decades the US households increased their debt, that is, they were dissaving. So, the private and public households ran deficits. From the formula above follows that this boosts profit Qm TWICE. And this is exactly what has been observed and criticized as a catastrophic deterioration of the income distribution.
The interrelation between changes in public debt and profit is obscured by lumping together the business sector and the household sector to the ‘private sector’ and repeating the abysmal idiocy: "We owe the debt to ourselves".
Egmont Kakarot-Handtke
#1 Failed economics: The losers’ long list of lame excuses
#2 Macro for dummies
#3 Keynesianism as ultimate profit machine
Related 'New Economic Thinking: the 10 crucial points' and 'You are fired!' and 'Austerity and the idiocy of political economists' and 'Replacing sand by granite' and 'First Lecture in New Economic Thinking' and 'Macrofounded labor market theory' and 'The minimum wage debate: a showpiece of economists’ hereditary idiocy'
December 13, 2015
Neither impressive nor hopeful
Comment on Lars Syll of Dec 6 on ‘The model of all economic models’
Blog-Reference
Everybody easily agrees that the statement “Lars Syll is a green Martian living in New York” is false and that the statement “Lars Syll is a green Martian living in Malmö” is not a very impressive improvement. But “Lars Syll is a confused economist living in Malmö” is a correct assertion.
Everybody easily agrees that Lars Syll’s critique of standard economics is valid and that all models from Jevons/Walras/Menger to DSGE that take the ‘maximization-and-equilibrium world as a starting point’ are provable false.#1 The methodological incompetence of neoclassical economists consists in not recognizing that the axiomatic foundations of their Ur-Model are indefensible.
Thus far the matter is settled, now the hard part starts with finding an alternative because Keynesianism as the challenger of neoclassics is also defective and untenable.
The fact of the matter is that all authors who have written about Keynes, this includes Lars Syll#2, have overlooked that Keynes had messed up the formal foundation of the General Theory which is given with this two-liner “Income = value of output = consumption + investment. Saving = income - consumption. Therefore saving = investment.” (1973, p. 63)#3
The fatal flaw of Keynesianism is that the underlying profit theory is false. And it should be beyond the slightest doubt that if one gets the pivotal concept of economics wrong all the rest of one’s theory is for the birds. From this follows that Keynesian policy proposals have no sound theoretical foundation — just like neoclassical policy advice.
Science is defined by material and logical consistency. Not to realize the logical inconsistency in the elementary formalism of Keynesianism is a reliable indicator of scientific incompetence.
The state of economics is this: Orthodoxy is methodologically forever unacceptable but what Heterodoxy has delivered until now is ‘not very impressive or hopeful.’
Egmont Kakarot-Handtke
References
Keynes, J. M. (1973). The General Theory of Employment Interest and Money. The Collected Writings of John Maynard Keynes Vol. VII. London, Basingstoke: Macmillan.
#1 Scientific Cave men with a daunting message and ‘The U-Blunder of economics and its rectification and How economists became the scientific laughing stock
#2 See Book
#3 For details of the big picture see cross-references Refutation of I=S
Blog-Reference
Everybody easily agrees that the statement “Lars Syll is a green Martian living in New York” is false and that the statement “Lars Syll is a green Martian living in Malmö” is not a very impressive improvement. But “Lars Syll is a confused economist living in Malmö” is a correct assertion.
Everybody easily agrees that Lars Syll’s critique of standard economics is valid and that all models from Jevons/Walras/Menger to DSGE that take the ‘maximization-and-equilibrium world as a starting point’ are provable false.#1 The methodological incompetence of neoclassical economists consists in not recognizing that the axiomatic foundations of their Ur-Model are indefensible.
Thus far the matter is settled, now the hard part starts with finding an alternative because Keynesianism as the challenger of neoclassics is also defective and untenable.
The fact of the matter is that all authors who have written about Keynes, this includes Lars Syll#2, have overlooked that Keynes had messed up the formal foundation of the General Theory which is given with this two-liner “Income = value of output = consumption + investment. Saving = income - consumption. Therefore saving = investment.” (1973, p. 63)#3
The fatal flaw of Keynesianism is that the underlying profit theory is false. And it should be beyond the slightest doubt that if one gets the pivotal concept of economics wrong all the rest of one’s theory is for the birds. From this follows that Keynesian policy proposals have no sound theoretical foundation — just like neoclassical policy advice.
Science is defined by material and logical consistency. Not to realize the logical inconsistency in the elementary formalism of Keynesianism is a reliable indicator of scientific incompetence.
The state of economics is this: Orthodoxy is methodologically forever unacceptable but what Heterodoxy has delivered until now is ‘not very impressive or hopeful.’
Egmont Kakarot-Handtke
References
Keynes, J. M. (1973). The General Theory of Employment Interest and Money. The Collected Writings of John Maynard Keynes Vol. VII. London, Basingstoke: Macmillan.
#1 Scientific Cave men with a daunting message and ‘The U-Blunder of economics and its rectification and How economists became the scientific laughing stock
#2 See Book
#3 For details of the big picture see cross-references Refutation of I=S
November 8, 2018
Economics should never be a substitute for thinking
Comment on Lars Syll on ‘Econometrics: The Keynes―Tinbergen controversy’
Blog-Reference and Blog-Reference
Lars Syll’s fatal blunder consists of maintaining that economics is a social science while, in fact, it is a systems science. #1 And while there is, of course, no such thing as a behavioral law, there are systemic laws.
Walrasian economics is based on behavioral axioms. #2 Because these axioms are provably false, the whole theoretical superstructure of mainstream economics is false. Therefore, it comes as no surprise that econometrics does not yield valid results. This, though, does not support the conclusion that the statistical methods/tools of econometrics are worthless, but confirms the long-known fact that economic theory in all variants from Walrasianism, Keynesianism, Marxianism, to Austrianism is worthless.
Economists have not figured out the systemic laws to this day. In fact, they are too stupid for the elementary mathematics that underlies macroeconomics.
Keynes’ scientific incompetence can be exactly located in the GT: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63)
Keynes got macroeconomic profit wrong: “His Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson et al.)
Let this sink in: the economist Keynes NEVER understood the foundational concept of his subject matter. Because profit is ill-defined, the complete theoretical superstructure of Keynesianism is false. Keynesian policy guidance NEVER had valid scientific foundations.
The elementary version of the axiomatically correct macroeconomic Profit Law, which is measurable with the precision of two decimal places, reads Qm≡I−Sm, with Qm as monetary profit and Sm as monetary saving. And this means that since Keynes/Hicks ALL I=S/IS-LM models are false.#3 Macroeconomics is proto-scientific garbage. Microeconomics is even worse.
Lars Syll summarizes Keynes’ critique of Tinbergen’s econometrics in great detail. Keynes argues: “The fallacy, of which ignorance of organic unity is a particular instance, may perhaps be mathematically represented thus: suppose f(x) is the goodness of x and f(y) is the goodness of y. It is then assumed that the goodness of x and y together is f(x) + f(y) when it is clearly f(x + y), and only in special cases will it be true that f(x + y) = f(x) + f(y).”
This, of course, is pure idiocy because goodness is a NONENTITY just like utility or equilibrium. The example proves that Keynes had no idea what economics is all about. He never understood the foundational concept of profit, and he was obviously too stupid for the elementary mathematics that underlies macroeconomics.
Trivially true: “Econometric modelling should never be a substitute for thinking.” and, because there is, to begin with, no substitute for thinking, this applies also to Keynesianism. Nobody, except cargo cult scientists, can take seriously what Keynes has said about probability or econometrics or, for that matter, about profit or employment theory.#4
After 80+ years of storytelling/blather, Keynesians, Post-Keynesians, Anti-Keynesians, New Keynesians, MMTers, heterodox and pluralist retards, Lars Syll and the rest of stupid/ corrupt political agenda pushers, together with all their peer-reviewed articles/textbooks/blog-posts, have finally to be flushed down the scientific toilet.
Egmont Kakarot-Handtke
#1 Economics is NOT a social science
#2 Where economics went wrong
#3 Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It
#4 Go! ― test the Profit and Employment Law
LINKS on Lars Syll's 'P-values are no substitute for thinking' on Nov 26
#DrainTheScientificSwamp
Scientists do NOT manipulate research with P-value, only the stupid/corrupt agenda pushers of orthodox and heterodox economics.
► Stop beating mainstream economics ― it is long dead
► The stupidity of Heterodoxy is the life insurance of Orthodoxy
► How Heterodoxy became the venue for science’s scum
► Lars Syll, fake scientist
Blog-Reference and Blog-Reference
Lars Syll’s fatal blunder consists of maintaining that economics is a social science while, in fact, it is a systems science. #1 And while there is, of course, no such thing as a behavioral law, there are systemic laws.
Walrasian economics is based on behavioral axioms. #2 Because these axioms are provably false, the whole theoretical superstructure of mainstream economics is false. Therefore, it comes as no surprise that econometrics does not yield valid results. This, though, does not support the conclusion that the statistical methods/tools of econometrics are worthless, but confirms the long-known fact that economic theory in all variants from Walrasianism, Keynesianism, Marxianism, to Austrianism is worthless.
Economists have not figured out the systemic laws to this day. In fact, they are too stupid for the elementary mathematics that underlies macroeconomics.
Keynes’ scientific incompetence can be exactly located in the GT: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63)
Keynes got macroeconomic profit wrong: “His Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson et al.)
Let this sink in: the economist Keynes NEVER understood the foundational concept of his subject matter. Because profit is ill-defined, the complete theoretical superstructure of Keynesianism is false. Keynesian policy guidance NEVER had valid scientific foundations.
The elementary version of the axiomatically correct macroeconomic Profit Law, which is measurable with the precision of two decimal places, reads Qm≡I−Sm, with Qm as monetary profit and Sm as monetary saving. And this means that since Keynes/Hicks ALL I=S/IS-LM models are false.#3 Macroeconomics is proto-scientific garbage. Microeconomics is even worse.
Lars Syll summarizes Keynes’ critique of Tinbergen’s econometrics in great detail. Keynes argues: “The fallacy, of which ignorance of organic unity is a particular instance, may perhaps be mathematically represented thus: suppose f(x) is the goodness of x and f(y) is the goodness of y. It is then assumed that the goodness of x and y together is f(x) + f(y) when it is clearly f(x + y), and only in special cases will it be true that f(x + y) = f(x) + f(y).”
This, of course, is pure idiocy because goodness is a NONENTITY just like utility or equilibrium. The example proves that Keynes had no idea what economics is all about. He never understood the foundational concept of profit, and he was obviously too stupid for the elementary mathematics that underlies macroeconomics.
Trivially true: “Econometric modelling should never be a substitute for thinking.” and, because there is, to begin with, no substitute for thinking, this applies also to Keynesianism. Nobody, except cargo cult scientists, can take seriously what Keynes has said about probability or econometrics or, for that matter, about profit or employment theory.#4
After 80+ years of storytelling/blather, Keynesians, Post-Keynesians, Anti-Keynesians, New Keynesians, MMTers, heterodox and pluralist retards, Lars Syll and the rest of stupid/ corrupt political agenda pushers, together with all their peer-reviewed articles/textbooks/blog-posts, have finally to be flushed down the scientific toilet.
Egmont Kakarot-Handtke
#1 Economics is NOT a social science
#2 Where economics went wrong
#3 Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It
#4 Go! ― test the Profit and Employment Law
***
#DrainTheScientificSwamp
Scientists do NOT manipulate research with P-value, only the stupid/corrupt agenda pushers of orthodox and heterodox economics.
► Stop beating mainstream economics ― it is long dead
► The stupidity of Heterodoxy is the life insurance of Orthodoxy
► How Heterodoxy became the venue for science’s scum
► Lars Syll, fake scientist
August 21, 2019
Economics: No method to the madness
Comment on Lars Syll/Tom Hickey on ‘Econometrics and the problem of unjustified assumptions’
Blog-Reference
Neither Lars Syll nor Tom Hickey is known for having contributed anything of substance to the scientific progress of economics, yet they cannot stop waffling about methodology.
Lars Syll tells us: “Econometrics is basically a deductive method. Given the assumptions, it delivers deductive inferences. The problem, of course, is that we almost never know when the assumptions are right. Conclusions can only be as certain as their premises ― and that also applies to econometrics.”
Wake up, Lars Syll, this is a truism for about 2300 years: “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)
J. S. Mill was well aware of the pivotal question of methodology: “What are the propositions which may reasonably be received without proof? That there must be some such propositions all are agreed, since there cannot be an infinite series of proof, a chain suspended from nothing. But to determine what these propositions are is the opus magnum of the more recondite mental philosophy.”
Now, what are the foundational propositions of mainstream economics? The verbalized Walrasian axiom set reads: “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)
Because these foundational propositions are shock-full of NONENTITIES, all mainstream models that are based upon them are methodological garbage, and therefore, econometric testing cannot possibly work. This does NOT mean that econometrics has to be thrown on the muck heap. Lars Syll’s conclusion “Econometrics doesn’t establish the truth value of facts. Never has. Never will.” is plain methodological nonsense. What is called for is a Paradigm Shift, i.e., the replacement of the Walrasian axiom set.#1
Keynes understood that microfoundations are false, but he messed up macrofoundations. The historical fact is that Keynes was too stupid for the elementary math that underlies macroeconomics. To this day, Keynesians, Post-Keynesians, and MMTers use the sectoral balances equation (I−S)+(G−T)+(X−M)=0, which is provably false because it lacks the balance of the business sector, i.e., macroeconomic profit.
Macroeconomic profit is determined by macroeconomic accounting, which is nothing but elementary math. The philosopher Tom Hickey maintains: “Accounting is a formal method that is proto-scientific in the sense that double entry it is made up of tautologies. But the entries can be checked for substance against journals and inventories. … When accounting tautologies (identities) are interpreted causally, then causal explanation demands empirical corroboration through data, e.g., measurable changes in stocks and flows.”
The point is that economists are too stupid to get macroeconomic accounting right and to determine macroeconomic profit: “His [Keynes’] Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT, but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson et al.)#2, #3
To this day, economists do not get the pivotal economic magnitude of profit right. Econometric testing cannot work when applied to misspecified models by folks who fail already at the level of the elementary mathematics of macroeconomic accounting.
There is no point in expecting Lars Syll/Tom Hickey or any other orthodox/heterodox methodological loser to ever produce the true macrofoundations or even to see them when they are just before their eyes. #4
Egmont Kakarot-Handtke
#1 For details of the big picture, see cross-references Methodology
#2 For details of the big picture, see cross-references Accounting
#3 For details of the big picture, see cross-references Profit
#4 The axiomatically correct balances equation reads (I−S)+(G−T)+(X−M)−(Q−Yd)=0 with Q as macroeconomic profit. See also Wikipedia and the promotion of economists’ idiotism (II)
Related 'Economics ― not science, not ideology, just useful idiocy' and 'How to get out of the swamp of ignorance' and 'Warning: Einstein can be hazardous to heterodox methodology' and 'Heterodoxy, you have a problem' and 'The inexorable Paradigm Shift in economics' and 'True macrofoundations: the reset of economics' and 'Show first your economic axioms or get out of the discussion'.
Blog-Reference
Neither Lars Syll nor Tom Hickey is known for having contributed anything of substance to the scientific progress of economics, yet they cannot stop waffling about methodology.
Lars Syll tells us: “Econometrics is basically a deductive method. Given the assumptions, it delivers deductive inferences. The problem, of course, is that we almost never know when the assumptions are right. Conclusions can only be as certain as their premises ― and that also applies to econometrics.”
Wake up, Lars Syll, this is a truism for about 2300 years: “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)
J. S. Mill was well aware of the pivotal question of methodology: “What are the propositions which may reasonably be received without proof? That there must be some such propositions all are agreed, since there cannot be an infinite series of proof, a chain suspended from nothing. But to determine what these propositions are is the opus magnum of the more recondite mental philosophy.”
Now, what are the foundational propositions of mainstream economics? The verbalized Walrasian axiom set reads: “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)
Because these foundational propositions are shock-full of NONENTITIES, all mainstream models that are based upon them are methodological garbage, and therefore, econometric testing cannot possibly work. This does NOT mean that econometrics has to be thrown on the muck heap. Lars Syll’s conclusion “Econometrics doesn’t establish the truth value of facts. Never has. Never will.” is plain methodological nonsense. What is called for is a Paradigm Shift, i.e., the replacement of the Walrasian axiom set.#1
Keynes understood that microfoundations are false, but he messed up macrofoundations. The historical fact is that Keynes was too stupid for the elementary math that underlies macroeconomics. To this day, Keynesians, Post-Keynesians, and MMTers use the sectoral balances equation (I−S)+(G−T)+(X−M)=0, which is provably false because it lacks the balance of the business sector, i.e., macroeconomic profit.
Macroeconomic profit is determined by macroeconomic accounting, which is nothing but elementary math. The philosopher Tom Hickey maintains: “Accounting is a formal method that is proto-scientific in the sense that double entry it is made up of tautologies. But the entries can be checked for substance against journals and inventories. … When accounting tautologies (identities) are interpreted causally, then causal explanation demands empirical corroboration through data, e.g., measurable changes in stocks and flows.”
The point is that economists are too stupid to get macroeconomic accounting right and to determine macroeconomic profit: “His [Keynes’] Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT, but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson et al.)#2, #3
To this day, economists do not get the pivotal economic magnitude of profit right. Econometric testing cannot work when applied to misspecified models by folks who fail already at the level of the elementary mathematics of macroeconomic accounting.
There is no point in expecting Lars Syll/Tom Hickey or any other orthodox/heterodox methodological loser to ever produce the true macrofoundations or even to see them when they are just before their eyes. #4
Egmont Kakarot-Handtke
#1 For details of the big picture, see cross-references Methodology
#2 For details of the big picture, see cross-references Accounting
#3 For details of the big picture, see cross-references Profit
#4 The axiomatically correct balances equation reads (I−S)+(G−T)+(X−M)−(Q−Yd)=0 with Q as macroeconomic profit. See also Wikipedia and the promotion of economists’ idiotism (II)
Related 'Economics ― not science, not ideology, just useful idiocy' and 'How to get out of the swamp of ignorance' and 'Warning: Einstein can be hazardous to heterodox methodology' and 'Heterodoxy, you have a problem' and 'The inexorable Paradigm Shift in economics' and 'True macrofoundations: the reset of economics' and 'Show first your economic axioms or get out of the discussion'.
***
AXEC121f
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