Dilettantes at the end of the coal pit

Comment on Jo Mitchell on ‘Dilettantes shouldn’t get excited’

Blog-Reference and Blog-Reference on Nov 20 and Blog-Reference on Nov 21

As Hume said, “... when the road ends at a coal-pit, he [the traveler] doesn’t need much judgment to know that he has gone wrong, and perhaps to find out what has led him astray.”

With DSGE, Walrasian economics has, after 150+ years, reached the end of the coal pit. Lacking sound scientific judgment, though, Christiano/Eichenbaum/Trabandt maintain: “People who don’t like dynamic stochastic general equilibrium (DSGE) models are dilettantes. By this, we mean they aren’t serious about policy analysis…”

Science is NOT about like/dislike but about true/false. The fact is that DSGE is provably false. Because of this, all policy proposals that have ever been derived from DSGE models lack sound scientific foundations.

Science is about the true theory. The characteristic of science is the insistence on consistency: “Research is in fact a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant)

Economics pretends to be a science but is what Feynman called a cargo cult science “They’re doing everything right. The form is perfect. ... But it doesn’t work. ... So I call these things cargo cult science because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential.”

Economists lack genuine scientific instinct/ambition: “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. (Schumpeter, 1946)

Theory construction started 2300+ years ago with clearly stated premises #1 and “To Senior belongs the signal honor of having been the first to make the attempt to state, consciously and explicitly, the postulates that are necessary and sufficient in order to build up … that little analytic apparatus commonly known as economic theory, or to put it differently, to provide for it an axiomatic basis.” (Schumpeter) #2

Not only has DSGE failed at constructing the Simple Ur-Model. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got the foundational economic concept of profit wrong.

At the end of the coal pit, the lethal methodological blunder of DSGE is quite obvious: microfoundations are false since Jevons/Walras/Menger. And Keynes’s attempt to move from microfoundations to macrofoundations failed. #3

The methodologically correct action in the given situation is the Paradigm Shift. False Walrasian microfoundations and false Keynesian macrofoundations have to be replaced by true macrofoundations.

Economics is a failed/fake science. At the end of the coal pit, it is now quite obvious that scientific dilettantism leads the representative orthodox/heterodox economist astray for 200+ years.

Egmont Kakarot-Handtke


#1 “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)
#2 Microfoundations are given with this verbalized axiom set: “HC1 economic agents have preferences over outcomes; HC2 agents individually optimize subject to constraints; HC3 agent choice is manifest in interrelated markets; HC4 agents have full relevant knowledge; HC5 observable outcomes are coordinated, and must be discussed with reference to equilibrium states.” (Weintraub)
#3 How Keynes got macro wrong and Allais got it right

Related 'Yes, economics is a bogus science' and 'From false microfoundations to true macrofoundations' and 'Heterodoxy and Pluralism, too, are proto-scientific garbage' and 'First Lecture in New Economic Thinking' and '10 steps to leave cargo cult economics behind for good'. For details of the big picture, see cross-references Scientific Incompetence and cross-references Failed/Fake Scientists.

The simple Ur-Model is given with the Economics God Equation Graphic AXEC25.

The Economics God Equation

For this equation, Computational Irreducibility in the sense of Stephen Wolfram, A New Kind of Science, Wolfram Media, 1959, pp. 737 ff. holds.

NOTE on Lars Syll’s ‘DSGE models are missing the point’ on Nov 23

“Macroeconomics needs models which work to guide the interventions of government policy.” (Silsonwy)

“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 Orthodoxy nor Heterodoxy has the true theory. See Dilettantes at the end of the coal pit.

Scientists do NOT predict the future (II)

Comment on Lars Syll on ‘On the irrelevance of Milton Friedman’

Blog-Reference and Blog-Reference on Aug 19

The representative economist has no idea of what science is all about. First of all, science does NOT ‘predict the future’ simply because, as a genuine scientist said: “The future is unpredictable.” (Feynman, 1992)

What is called prediction in science is categorically different from the commonsensical meaning of ‘predicting the future’. The sole criterion of science is true/false and not predicting the next crash or any other extraordinary event. This is the occupation of prophets, fear mongers, astrologers, psychics, poultry entrails readers, sensationalists, half-witted journalists, etcetera. In marked contrast, science is about invariants or eternal laws.

So, scientists do not predict when the next apple will fall from the tree. What they indeed predict is position and velocity at any point in time once the apple has started to fall. The commonsenser’s view of reality is entirely DIFFERENT from the scientist’s view. The commonsenser’s view is practical, trivial, and false but utterly convincing for other commonsensers. This is why false worldviews/theories that have no immediate grave negative practical consequences can survive for an indefinite time.

Each falling apple is a unique historical event. There are an arbitrary many proximate causes for an apple to fall: a hailstorm, playing children, an exploding meteorite, material fatigue, an earthquake, and so on. In almost all cases, the singular event is uncertain and unpredictable. That is so OBVIOUS that no physicist ever lost many words about the historicity and uncertainty of falling apples. Not more can be reiterated about uncertainty than five words: “We simply do not know.” (Keynes)

A SCIENTIFIC prediction is a conditional proposition that presupposes: (i) the exact knowledge of initial conditions, (ii) the knowledge of one or more universal laws, (iii) the absence of disturbances. (Popper, 1994)

Where do we get the universal laws from? They follow from a mental construct called theory. A theory, in turn, must satisfy TWO criteria: material consistency and formal consistency (Klant, 1994). The former is established by observation/testing, the latter by the axiomatic-deductive method, which in turn only works when the axioms/premises are true, or as Aristotle said: “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.” #1

Now it is pretty obvious that the behavioral premises/axioms of economics (agents individually optimize subject to constraints; agents have full relevant knowledge, etc.) are NOT certain, true, and primary. And this means that the whole analytical superstructure of orthodox economics is false, even if each intermediate logical step is correct.

Neither Friedman nor Samuelson nor the rest of the scientifically incompetent orthodox and heterodox crowd got this elementary methodological point. And this is why Walrasianism, Keynesianism, Marxianism, and Austrianism are provably false. The common underlying error of these approaches consists of the naive commonsensical belief that economics is a social science. This quite naturally leads to the acceptance of silly assumptions about human nature/behavior/action as premises/axioms.

Egmont Kakarot-Handtke


#1 For more details, see the exhibit on Graphic. AXEC77.

Related 'Economics is NOT a social science' and 'How to get rid of an obsolete theory' and 'Prediction/Forecasting' and 'Scientists do not predict' and 'Behavioral economics ― forever stuck at the proto-scientific level' and 'True macrofoundations: the reset of economics'

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COMMENT on Thornton Hall on Aug 19

You quote Hume: “... but when the road ends at a coal-pit, he [the traveler] doesn’t need much judgment to know that he has gone wrong, and perhaps to find out what has led him astray.” And conclude: “Syll, et al, choose to debate the size, scope, and shape of the coal pit.”

This, though, misses the crucial point: “There is no evidence to suggest that economists abandon degenerating programs in the absence of a progressive alternative.” (Weintraub, 1985, p. 148)

Economists know quite well that they are in the coal pit. The point is that they have no clue how to get out. So Orthodoxy and Heterodoxy entertain the public with the grand coal-pit-wrestling-in-the-dark sitcom.

What is needed is the “progressive alternative”, i.e., a new Paradigm. Indeed, the failure of traditional Heterodoxy consists in endlessly debating the “size, scope, and shape of the coal pit” or, as Feyerabend put it: “... we may say that the ... omnipresence of a certain point of view is not a sign of excellence or an indication that the truth or part of the truth has at last been found. It is, rather, the indication of a failure of reason to find suitable alternatives which might be used to transcend an accidental intermediate stage of our knowledge.” (2004, p. 72)

The real task, then, is to define the new foundations of a materially and formally consistent economic paradigm. This, obviously, is beyond the means of the adherents of both Orthodoxy and traditional Heterodoxy. #1 These folks will end their wasted scientific lives in the coal pit.


References
Feyerabend, P. K. (2004). Problems of Empiricism. Cambridge: Cambridge University Press.
Weintraub, E. R. (1985). Joan Robinson’s Critique of Equilibrium: An Appraisal. American Economic Review, Papers and Proceedings, 75(2): 146–149. URL

#1 ‘From Orthodoxy to Heterodoxy to Metadoxy’and ‘How to get rid of an obsolete theory’ and cross-references Paradigm shift and 'Prediction does not work? Try retrodiction first' and 'What is dead certain in an uncertain world: economists’ abysmal incompetence'

Modern macro moronism

Comment on David Glasner on ‘Roger Farmer’s Prosperity for All’

Blog-Reference

David Glasner summarizes: “Modern macroeconomics, of which Roger’s model is one of the more interesting examples, flatters itself by claiming to be grounded in the secure microfoundations of the Arrow-Debreu-McKenzie general equilibrium model. But the great achievement of the ADM model was to show the logical possibility of an equilibrium of the independently formulated, optimizing plans of an unlimited number of economic agents producing and trading an unlimited number of commodities over an unlimited number of time periods. To prove the mutual consistency of such a decentralized decision-making process coordinated by a system of equilibrium prices was a remarkable intellectual achievement.” (See intro)

It is misleading to depict the history of economic thought as progressive. It is definitely not: “... we know little more now about ‘how the economy works,’ ... than we knew in 1790, after Adam Smith completed the last revision of The Wealth of Nations.” (Clower). The fact of the matter is as Hume aptly put it: “... when the road ends at a coal-pit, he [the traveler] doesn’t need much judgment to know that he has gone wrong, and perhaps to find out what has led him astray.” Yet, the representative economist lacks even this little judgment.

General equilibrium theory is one of the most embarrassing failures in the history of the sciences: “At long last, it can be said that the history of general theory from Walras to Arrow-Debreu has been a journey down a blind alley, and it is historians of economic thought who seem to have finally hammered down the nails in this coffin. … General  theory is simply a research program that has run into the sands.” (Blaug).

Ingrao et al. conclude: “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.”#1

So, there are some economists who have realized that, in order to get out of the bottom of the coal-pit, nothing less than a Paradigm Shift is necessary. Roger Farmer is NOT one of them. Instead of abandoning and fully replacing the current paradigm, he merely rearranges the crappy components of a crappy construct.

Roger Farmer’s version of modern macro consists of three major components:

• The Walrasian framework, which is given with this axiom set: “HC1 economic agents have preferences over outcomes; HC2 agents individually optimize subject to constraints; HC3 agent choice is manifest in interrelated markets; HC4 agents have full relevant knowledge; HC5 observable outcomes are coordinated, and must be discussed with reference to equilibrium states.” (Weintraub)
  The representative economist has not realized it, but methodologically, these premises are forever unacceptable. It should be pretty obvious that the Walrasian axiom set contains THREE NONENTITIES: (i) constrained optimization HC2, (ii) rational expectations HC4, (iii) equilibrium HC5. Every model that contains a nonentity is a priori false.
• “… an investment equals saving equilibrium condition (IS curve) describing the optimal consumption/savings decision of the representative individual …”. Every I=S/IS-LM model since Keynes and Hicks is false. #2
• “… a short-run Phillips Curve that expresses actual inflation as a function of expected future inflation and the output gap.”. Every Phillips Curve since Phillips’ original is misspecified.#3

Keynes already realized that the classical microfoundations approach had led to the coal-pit and therefore switched to macrofoundations. This was, in principle, the right first step towards a Paradigm Shift, except for the fact that Keynes messed up the macrofoundations. #4

Economics is not only in need of a Paradigm Shift from false Walrasian microfoundations but also from false Keynesian macrofoundations. The whole of economics has to be put on consistent macrofoundations.

David Glasner concludes: “There are few economists better equipped than Roger Farmer to lead macroeconomics onto a new and more productive path.” What the representative economist at the bottom of the coal-pit has not understood until this day is this: If it isn’t macro-axiomatized, it isn’t economics. Roger Farmer, that much is sure, has not understood anything, which, indeed, has always been the main qualification of the fake innovators of economics.

Egmont Kakarot-Handtke


#1 Ingrao, B., and Israel, G. (1990). The Invisible Hand. Economic Equilibrium in the History of Science. Cambridge, MA, London: MIT Press.
#2 Getting out of IS-LM = Getting out of despair
#3 NAIRU and the scientific incompetence of Orthodoxy and Heterodoxy
#4 How Keynes got macro wrong and Allais got it right

Related 'Walras, Keynes, Samuelson, DSGE, IS-LM ― R.I.P.' and 'Macroeconomics without Keynes' and 'The futile synthesis of neoclassical rubbish and Keynesian garbage' and 'Economics: the pathetic story of two failures' and 'Macroeconomics ― dead since Keynes' and 'Rethinking deficit spending' and 'Causa finita: the end of I=S/IS-LM' and 'Neo-Paleo-Stupidicism' and 'Heterodoxy’s biggest mistake is to repeat Orthodoxy’s biggest mistake' and 'Joan Robinson and the ‘throng of superfluous economists’ and 'I=S: Mark of the Incompetent' and 'Fundamentally flawed' and 'Economics: The greatest scientific hoax in modern times' and 'True macrofoundations: the reset of economics' and 'The canonical macroeconomic model'.

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AXEC121g

The end of traditional Heterodoxy in the Malmö coal pit

Comment on Lars Syll on ‘The Bourbaki-Debreu delusion of axiomatic economics’

Blog-Reference

“... but when the road ends at a coal-pit, he [the traveler] doesn’t need much judgment to know that he has gone wrong, and perhaps to find out what has led him astray.” (Hume)

It is known for a long time now that Orthodoxy is a degenerate research program. The problem is (i) that Heterodoxy spotted a myriad of faults and flaws but never the crucial foundational defect, and (ii), that Heterodoxy never inaugurated an independent and self-reliant PROGRESSIVE research program.

So traditional Heterodoxy followed as the at-all-times critical sidekick faithfully behind the orthodox Rocinante towards the end of the coal pit. To the quite natural question of what has gone wrong, the Malmö branch of traditional Heterodoxy answers that axiomatics had been the original sin of economics: “Mathematical axiomatic systems lead to analytic truths, which do not require empirical verification, since they are true by virtue of definitions and logic. It is a startling discovery of the twentieth century that sufficiently complex axiomatic systems are undecidable and incomplete.” (Asad Zaman)

This is as far beside the point as one can get because every methodologist knows that: “Formal axiomatic systems must be interpreted in some domain ... to become an empirical science.” (Boylan et al., 1995, p. 198)

And: “... a theory should be accurate within its domain, that is, consequences deducible from a theory should be in demonstrated agreement with the results of existing experiments and observations.” (Kuhn, quoted in Redman, 1993, p. 3)

Exactly at this critical juncture Debreu’s foundational error/mistake is located, viz. the complete DISCONNECT from the economic domain: “Allegiance to rigor dictates the axiomatic form of the analysis where the theory, in the strict sense, is logically entirely disconnected from its interpretations.” (1959, p. x)

Debreu’s application of axiomatics lacks a deeper understanding of the scientific method. There is some irony/absurdity in the fact that the great heterodox economist Georgescu-Roegen had been quite clear about the relationship between axioms and reality: “What particular reality is described by a given theory can be ascertained only from that theory’s axiomatic foundation.” (1966, p. 361)

Debreu missed the crucial point of Bourbaki’s axiomatics. “From the axiomatic point of view, mathematics appears thus as a storehouse of abstract forms — the mathematical structures; and it so happens — without our knowing why — that certain aspects of empirical reality fit themselves into these forms, as if through a kind of preadaptation. ... It is only in this sense of the word ‘form’ that one can call the axiomatic method a ‘formalism’.” (Bourbaki, 2005, p. 1276)

It was quite clear to Bourbaki that NOT ALL mathematical structures incorporate ‘… certain aspect of empirical reality’, which means, that there is a “... whole crop of monster-structures, entirely without application” (Bourbaki, 2005, p. 1275, fn. 9).

Hence, Debreu’s axiomatization of Walrasian General Equilibrium is a monster structure that is due to Debreu’s misunderstanding of Bourbaki. It is NOT the axiomatic-deductive method that is wrong, it is the neo-Walrasian axioms that are false.#1

“My opinion continues to be that axiomatics, like every other tool of science, is no better than its user, and not all users are skilled.” (Clower, 1995, p. 308)

‘Unskilled’ needs here be taken as a euphemism for utter scientific incompetence. It is this incompetence that brought Orthodoxy and its sidekick traditional Heterodoxy to the end of the coal pit.

Let us leave them there in their hopeless darkness.

Egmont Kakarot-Handtke


References
Bourbaki, N. (2005). The Architecture of Mathematics. In W. Ewald (Ed.), From Kant to Hilbert. A Source Book in the Foundations of Mathematics, Volume II, 1265–1276. Oxford, New York: Oxford University Press. (1948).
Boylan, T. A., and O’Gorman, P. F. (1995). Beyond Rhetoric and Realism in Economics. Towards a Reformulation of Economic Methodology. London: Routledge.
Clower, R. W. (1995). Axiomatics in Economics. Southern Economic Journal, 62(2): 307–319. URL
Debreu, G. (1959). Theory of Value. An Axiomatic Analysis of Economic Equilibrium. New Haven, London: Yale University Press.
Georgescu-Roegen, N. (1966). Analytical Economics, chapter Economic Theory and Agrarian Economics, 359–397. Cambridge: Harvard University Press.
Redman, D. A. (1993). Economics and the Philosophy of Science. New York, Oxford: Oxford University Press.

#1 The whole theoretical superstructure of Orthodoxy is based upon this forever unacceptable set of hardcore propositions a.k.a. axioms:
HC1 There exist economic agents.
HC2 Agents have preferences over outcomes.
HC3 Agents independently optimize subject to constraints.
HC4 Choices are made in interrelated markets.
HC5 Agents have full relevant knowledge.
HC6. Observable economic outcomes are coordinated, so they must be discussed
with reference to equilibrium states. (Weintraub, 1985)

The mission of constructive Heterodoxy is to fully REPLACE this set with a superior set, i.e. to perform the Paradigm Shift.

Related 'From Orthodoxy to Heterodoxy to Metadoxy' and 'Economists and the economy ― a nonstarter since 200 years' and 'How incompetent are economic methodologists? Very!' and 'Macroeconomics: Economists are too stupid for science' and 'The canonical macroeconomic model'.

Occasional Tweets: Keynesianism is not at the crossroads but at the end of the coal pit

 

#Economics#FailedScience#FakeScience

The history of economic thought is the history of scientific failure. Keynesianism, in ALL variants, is proto-scientific garbage

Keynesians ― terminally stupid or worse?https://t.co/ATeWugUnOl pic.twitter.com/XxLVJtSltP

— E.K-H (@AXECorg) February 3, 2022

For more about the methodological coal pit see AXECquery. 

Nick Rowe: Bury me at the end of coal pit

Comment on Nick Rowe on ‘Why I=S is a bad place to start doing macro, again’

Blog-Reference

Economics is a failed science and this is the current state in Hume’s apt metaphor: “... when the road ends at a coal-pit, he [the traveler] doesn’t need much judgment to know that he has gone wrong, and perhaps to find out what has led him astray.”

So, let us find out what has led economics astray.

Nick Rowe says: “National Income Accounting identities then tell us: C+S=Y=C+I, and therefore S=I”

Just for the record (there is no hope for Nick Rowe to ever understand it):

• Because of a conceptual error/mistake/blunder, these equations are false since Keynes.#1
• National accounting replicates the conceptual error/mistake/blunder and is false, too.#2
• All After-Keynesians, except Allais, were too stupid to identify the foundational error/mistake/blunder of macro.#3

Egmont Kakarot-Handtke


#1 For the formal proof and more details see cross-references Refutation of I=S
#2 See working paper ‘The Common Error of Common Sense: An Essential Rectification of the Accounting Approach’
#3 See working paper ‘Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It’ and post ‘How Keynes got macro wrong and Allais got it right’

Related 'The false foundations of economics' and 'Why economists know nothing' and 'How to end the Punch and Judy show about profit' and 'Getting out of IS-LM = Getting out of despair' and 'Worthless Canadian model bricolage' and 'I is never equal S and even Nick Rowe will eventually grasp it'.

Economics: 200+ years of scientific incompetence and fraud

Comment on Noah Smith on ‘Is economics a science?’

Blog-Reference

“In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum)

The fact of the matter is that economists do NOT have the true theory. More precisely, economists do not know how the price and profit mechanism works. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got profit wrong.#1 With the pluralism of provably false theories economics sits squarely at the proto-scientific level.

The representative economist either does not realize it or cannot officially admit it. In this dire situation, the Pavlovian reaction is always and everywhere to muddy the waters and to retreat deeper into the swamp. Noah Smith is no exception, he rhetorically asks: “What the heck is a ‘science’?” and answers “No one knows.”

This is patently false. Science is ― since the ancient Greeks made the distinction between opinion (= doxa) and knowledge (= episteme) ― well-defined by material and formal consistency: “Research is, in fact, a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant)

The first question to Noah Smith: if no one knows what science is how does it come that we have a prize with the title “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.#2 And how does it come that economics is since Adam Smith/Karl Marx explicitly defined as science? And what does every economist learn in Econ 101?: “Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.” (Robbins)

The fact is that economics claims to be a science but is what Feynman called a cargo cult science: “They’re doing everything right. The form is perfect. ... But it doesn’t work. ... So I call these things cargo cult science because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential.”

What is missing is the true theory. Economics is a failed science because none of the major approaches satisfies the criteria of material and formal consistency. When this is pointed out economists immediately retract and fire their barrage of brain-dead excuses.#3 Noah Smith applies the same old defense maneuvers. Needless to emphasize that every single of these excuses has been refuted long ago.

Economists have found a way to deal with the problem of manifest failure: they simply ignore and violate scientific standards. Or, as Blaug put it, they are playing tennis with the net down. Morgenstern reminded his fellow economists back in 1941: “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.”

This is why Walrasianism is still around although it has already been dead in the cradle 150+ years ago. Standard economics has been based on provably false axioms but economists proudly cling to them until this day: “most of what I and many others do is sorta-kinda neoclassical because it takes the maximization-and-equilibrium world as a starting point.” (Krugman) Note in passing that maximization and equilibrium are NONENTITIES like angels or the Easter Bunny. Time for Krugman and the rest to end stubborn self-delusion: all equilibrium models are a priori false and this starts with textbook supply-demand-equilibrium.#4

Economics is a failed science because economists (i) are scientifically incompetent, and (ii), violate scientific standards/ethics on a daily basis. Since Adam Smith, economic policy guidance has never had sound scientific foundations. Both, orthodox and heterodox economists sell proto-scientific garbage in the bluff package of science.

In order to become a science, economics needs a Paradigm Shift.#5 Nothing less will do.

Egmont Kakarot-Handtke


#1 First Lecture in New Economic Thinking
#2 The real problem with the economics Nobel
#3 Failed economics: The losers’ long list of lame excuses
#4 The father of modern economics and his imbecile kids
#5 The identification problem and the dumping of the old guard

Related 'Yes, economics is a bogus science' and 'Media-fake-farce-fraud-storytelling-macro' and 'Schizonomics' and 'The miracle cure of economists’ micro-macro schizo'. For details of the big picture see cross-references Scientific Incompetence and cross-references Proto-Science/Cargo Cult Science/Science and cross-references Failed/Fake Scientists.

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REPLY to Jake Thompson on Jun 18

You argue: “It’s certainly, by a long shot, the most scientific of the social sciences.”

Your lethal methodological blunders are:
(i) The underlying binary code of science is true/false with NOTHING in between. Because of this, economics is either a science or not. The statement, that economics is more scientific than X, is entirely devoid of meaning. (Just like the statement, Jake Thompson is by a long shot more innocent than Lee Harvey Oswald. Guilty/not guilty is also binary with NOTHING in between.)
(ii) Scientific truth is well-defined by material and formal consistency. It is not an easy task to establish scientific truth but from these practical difficulties cannot be concluded that it does not exist or that anything goes.
(iii) The major approaches ― Walrasianism, Keynesianism, Marxianism, and Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the pivotal economic concept of profit wrong.

Conclusion: Economics is NOT a science.

In order to rise above the proto-scientific level, economics needs a Paradigm Shift.#1 What failed economists first of all have to understand is that economics is NOT a social science but a systems science. To define economics as a social science has been the foundational blunder 200+ years ago. Being scientifically incompetent, though, economists will not understand this. It is Catch 22 and the representative economist is trapped in the scientific coal pit.#2


#1 For details see Redefining economics and cross-references Paradigm Shift
#2 “... but when the road ends at a coal-pit, he [the traveler] doesn’t need much judgment to know that he has gone wrong, and perhaps to find out what has led him astray.” (Hume) Obviously, you lack even this tiny quantity of judgment.

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REPLY to Anonymous on Jun 20

You argue: “Some parts of Econ are a science (game theory and I’d argue basic macro in simple markets) while the rest is more of an art (everything else).”

You are trying to evade a clear-cut conclusion and your argument is way beside the point.
(i) Economics is either a science or not. That some parts of it are acceptable is irrelevant. Every false theory has acceptable parts. Even the flat earth theory has some content that is true. False theories are always partially and commonsensically true. This is exactly why they can survive.
(ii) Game theory is NOT economics because economics does not deal with human behavior but with the behavior of the economic system. Economics is a systems science and all Human Nature/behavior issues belong to psychology, sociology, anthropology, and so on. To define economics as a social science has been the foundational blunder 200+ years ago.
(iii) Basic macro is provably false.#1
(iv) To call economics an art is simply a euphemism.

The conclusion is inescapable: Economics is NOT a science.


#1 For details see Textbooks and the mental cloning of dumb economists and Why Post Keynesianism Is Not Yet a Science.

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REPLY to Anonymous on Jun 24

You say: “Tell me your definition of science and we can debate this further.”

(i) Science is well-defined for 2300+ years. There is NO such thing as “my” or “your” definition. Because of this, there is NOTHING to debate.
(ii) Either one complies with the well-defined and well-known scientific standards or one is outside of science.
(iii) Economics is materially and formally inconsistent and therefore outside of science.#1
(iv) The definition of science has been given in the post above.#2 It seems that your attention span is less than that of a fruit fly.
(v) You say “I thought rational choice theory and behavioral economics was a thing.” Yes, this is the defining characteristic of the scientifically incompetent economist.#3
(vi) All of your arguments show that you are trying to play silly semantic games.


#1 “… suppose they [the economists] did reject all theories that were empirically falsified … Nothing would be left standing; there would be no economics.” (Hands)
#2 See here or here
#3 Confused Confusers: How to Stop Thinking Like an Economist and Start Thinking Like a Scientist

Economics is NOT about Human Nature but the economic system

Comment on Bill Mitchell on ‘Humans are intrinsically anti neo-liberal’

Blog-Reference and Blog-Reference

For little children, the primary layer of reality is the social here-and-now ― mom, pop, family, and neighborhood. The insight that the tiny social bubble is embedded in the non-social reality of the region, earth, universe, and their past and future development comes later. Most people do not get far beyond the infantile layer of reality: “Perhaps it is because their horizons are limited in this way that some people are able to imagine that the centre of the universe is man.” (Feynman)

In the myopic human-centered worldview, learning and knowledge relate primarily to the properties/motives/behavior/actions of other humans. In the universe-centered worldview, learning and knowledge relate primarily to the properties/‘behavior’ of Non-human Nature. In very general terms, this gives us two fundamentally different realms: politics and science. It is of utmost importance to keep both realms separated because they are governed by mutually exclusive principles. The accepted currency in the political realm is opinion (= doxa), and the accepted currency in the scientific realm is knowledge (= episteme).

In economics, the proper separation never took place. There have always been two economixes, political economics, and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, and the goal of theoretical economics is to successfully explain how the actual economy works (= true theory). (ii) In political economics, anything goes; in theoretical economics, scientific standards are observed. The fact is that (i) theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers), and (ii) political economics has produced NOTHING of scientific value in the last 200+ years.

The underlying worldview of political economics is, of course, human-centered. Accordingly, the issues have been folk-psychological, folk-sociological, and folk-biological: self-interest, greed, utility maximization, profit maximization, rent-seeking, moral hazard, bounded rationality, animal spirits, honesty/trust/corruption, power/freedom/oppression, individualism/collectivism, competition/cooperation, the survival of the fittest, and so on.

ALL definitions of economics implicitly or explicitly contain a Human-Nature core.

• “It is a touchstone of accepted economics that all explanations must run in terms of the actions and reactions of individuals. Our behavior in judging economic research, in peer review of papers and research, and in promotions, includes the criterion that in principle the behavior we explain and the policies we propose are explicable in terms of individuals, not of other social categories.” (Arrow)
• “Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.” (Robbins)
• “The science which traces the laws of such of the phenomena of society as arise from the combined operations of mankind for the production of wealth, in so far as those phenomena are not modified by the pursuit of any other object.” (Mill)

The common denominator of the different schools of economics is human-centric. This is the ultimate axiom of economics and defines it as a so-called social science. Where the schools differ is what true Human Nature is or should be.

It is also obvious that ALL definitions of economics contain the commitment to science.

The fact is, though, that economics is a failed science. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and ALL got the foundational economic concept of profit wrong. #1 After 200+ years, economics is still at the level of a proto-science or what Feynman called a cargo cult science.

What neither orthodox nor heterodox economists have realized is that their definition of the subject matter is methodologically unacceptable. All Human-Nature issues are the subject matter of other disciplines, that is, Psychology, Sociology, Political Science, Anthropology, History, Biology, etc. The subject matter of economics is the structure/ behavior of the economic system, which is an objective non-human entity. The outstanding characteristic of the representative economist is that he dabbles for 200+ years in all Human-Nature disciplines but has NO idea how the economic system works. The fact is that the representative economist does not even know what profit is. #2 

Because economic theory has NEVER been true, economic policy guidance NEVER had sound scientific foundations. The scientific incompetence of economists consists in the fact that they have defined economics as a so-called social science instead of systems science and that they have not realized their fundamental methodological blunder to this day. #3 Since Adam Smith/Karl Marx, economics has been political economics, and ALL political economics is scientifically worthless.

Egmont Kakarot-Handtke


#1 Including MMT see Where MMT got macro wrong
#2 Essentials of Constructive Heterodoxy: Profit
#3 The Science-of-Man fallacy

Related 'If we only had classes' and 'Economics is NOT about what Happiness is but about what Profit is' and 'MMTers: too much thought-reading, too little thinking' and 'From Keynes’ fatal blunder to the true economic model'. For details of the big picture, see cross-references Not a Science of Behavior and cross-references Political Economics/Stupidity/Corruption.

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Graphic AXEC121g

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COMMENT on Tom Hickey on May 23

You say: “Training children in this is part of the socialization process, and those that don't get become life-long brats that are always taking and never give, or when they give it is not really reciprocating. They get a reputation for being assholes.”

This is a fine piece of folk psychology/sociology. The question is, is it relevant to economics? Not at all! The insight that there are assholes in the world ― to which everybody can readily agree from their own experience ― does NOT advance our understanding of how the actual economy works. Just the opposite. Psychology/sociology are NOT the subject matter of economics but a distraction from the real issues, which, as we all know by now, have led economics into the coal pit of cargo cult science. #1

Keynes, famously, gave a definition of what the centerpiece of economics is: the monetary theory of production. Note that this definition of the subject matter eliminates a lot of garbage that has always been dear to mentally retarded economists. Barter, for example. But, more importantly, it eliminates ALL psychological and sociological issues. In contradistinction to the neoclassical utility maximizers, Keynes correctly defined economics as a systems science.

In order not to fall behind Keynes, the PsySoc-Ban has to be issued as one of the Ten Commandments of Economics: Leave all psychological, sociological, anthropological, biological, etc. issues to psychology, sociology, anthropology, biology, etc.

The PsySoc-Ban has tremendous consequences because standard economics is built upon this set of behavioral axioms: “HC1 economic agents have preferences over outcomes; HC2 agents individually optimize subject to constraints; HC3 agent choice is manifest in interrelated markets; HC4 agents have full relevant knowledge; HC5 observable outcomes are coordinated, and must be discussed with reference to equilibrium states.” (Weintraub)

The PsySoc-Ban bans the neoclassical approach from economics ― completely from supply-demand-equilibrium to DSGE. So, there is absolutely NO need to reenact Groundhog Day and to moralize again and again about constrained optimization, greed, or individualism.

The PsySoc-Ban, though, has one important methodological implication: “The problem is not just to say that something might be wrong, but to replace it by something ― and that is not so easy.” (Feynman)

So, the all-decisive question is: is MMT the replacement of obsolete neoclassical economics?

No! MMT, just like PsySoc standard economics, is axiomatically false.#2 This brings us to the question, why does Bill Mitchell waste so much time kicking a dead horse instead of correcting the provably false formal foundations of MMT?


#1 “... but when the road ends at a coal-pit, he [the traveler] doesn’t need much judgment to know that he has gone wrong, and perhaps to find out what has led him astray.” (Hume)
#2 See also Going beyond Wicksell, Keynes and MMT.

Failed/Fake Scientists: cross-references

Posts

• The GDP-death-blow for the economics profession
• The tragedy of economics: stupid/corrupt economists
• No False-Hero-Memorials (II)
• MMT: fraudsters united
• All behavior-based economic textbooks are false
• Disgrace again ― is economics really that bad?
• Economists can hardly wait for their burial at the Flat-Earth-Cemetery
• Economics is a disgrace ― now more than ever
• Economics is a disgrace
• The question economists could not answer for 200+ years
• #HallOfScientificShame
• Economists: at the end of the wrong track
• Failed economics and the losers’ closed circle of mutual promotion
• Wikipedia, economics, scientific knowledge, or political agenda pushing?
• Your economics is refuted on all counts: here is the real thing
• MMTers: too stupid for simple math
• Mindfuck or the Eternal Return of dead economic theories
• There are NO crank scientists in economics because economics is NOT a science
• Economics: Not a pretty story
• Economics, MMT, and the corruption of science
• Mainstream vs MMT ― another clown show
• Mission accomplished: Economists as useful idiots of the Oligarchy
• Economics ― the science that never was
• Get it econ suckers: behavioral microfoundations ⇒ false, systemic macrofoundations ⇒ true
• Economics, philosophy, and the crapification of science
• Econogenics: economists pose a hazard to their fellow citizens
• Scrap the EconNobel
• Keynes ― the poster boy for the weakness of the economist’s mind
• Links on Karl Marx
• No False-Hero-Memorials (I)
• Bill Mitchell’s dishonorable discharge from the sciences
• Links on Diane Coyle
• Links on Alfred Marshall
• Stephanie Kelton: MMT’s public farce
• The apocalypse of stupidity
• Bill Mitchell ― Wall Street’s hitman keeps an eye on MMT defeatists
• The right and the wrong way to bring money into the economy
• Profit analysis ― another exercise in economic deception
• Lars Syll ― a particularly stupid/corrupt fake scientist
• Asad Zaman marches with the Zeitgeist down a blind alley
• How to spot economics trolls
• How incompetent are economic methodologists? Very!
• MMT and the woes of useful political idiots
• Econ 101: Economists flunk the intelligence test at the first hurdle
• Macro ignorance: Why Simon Wren-Lewis does not come to grips with the plain MMT-fraud
• Are economics professors really that incompetent? Yes!
• G. L. S. Shackle: Not such a #GreatThinker
• Thomas Sargent, fake scientist
• Links on Michael Roberts’ ‘Keynes: socialist, liberal, or conservative?’
• Stephanie Kelton sells children into debt slavery
• Finally, the embarrassment of economics is over
• Links on McKinsey’s ‘A new look at the declining labor share of income in the United States’
• You know you are in the political Circus Maximus when economists talk about Democracy or Liberty
• Economists’ silly kindergarten games
• Economics debate ― just another variant of hardcore wrestling
• Economics a science? Surely you are joking, Mr. Cochrane
• Economics ― nothing but claptrap, twaddle, drivel, slip-slop, wish-wash, waffle, and proto-scientific garbage
• Economics: The greatest scientific fraud in modern times
• Mad but true: 200+ years after Adam Smith economists still have no idea what profit is
• Links on ‘Who are You Calling Chumps?’
• Macroeconomics: Economists are too stupid for science
• Heterodox economics ― stupidity, masochism, or disinformation?
• The CCC ― a monument of economists’ utter scientific incompetence
• Yes, economists are really that stupid
• How a Swedish professor cares about the Oligarchy’s financial well-being
• From Keynes’ fatal blunder to the true economic model
• Dear idiots, MMTers are Wall Street’s agenda pushers
• Dear idiots, government deficits do NOT fund private savings
• Economists: “a bevy of camp-following whores”
• The public-debt and private-profit pushers
• To this day, economists have produced NOT ONE textbook that satisfies scientific standards
• Economics: The proto-scientific mob embroiled in just another gang war
• The retirement of a fake scientist and real agenda pusher
• Links on capital-T Truth, stupidity, corruption
• Refuting MMT’s Macroeconomics Textbook
• The clock runs down on economics
• Austrians, too, are either stupid or corrupt or both
• Paul’s and Stephanie’s economic delirium talk
• Economists: Either stupid or corrupt or both
• Dear idiots, time to get saving and investment straight (II)
• Economists: Trolls with a mortarboard
• Economics as a cover for agenda pushing
• What it takes to become a great economist
• Dear idiots, Marx got profit and exploitation wrong
• Still beyond the reach of economists: The Holy Grail of Science
• Who is really a scientist?
• Economists/MMTers: agenda pushers, distractors, blockers, muters, censors
• Fraud comes always in the cloak of charity, salvation, or threat of doom
• What and where is profit?
• A clueless MMTer explains macroeconomics to clueless beginners
• Economics as storytelling and entertainment for the masses
• Here is the long overdue scientific death certificate for Marx and Marxists
• There is NO such thing as “smart, honest, honorable economists”
• Profit and macrofoundations
• What is wrong with MMT? and What is wrong with Brad DeLong?
• MMT: From science to agenda-pushing to story-telling to fraud
• Warren Mosler: scientific dilettante and political fraudster
• False economic theory makes bad economic policy
• Stephanie Kelton’s legendary Plain-Sight-Ink-Trick
• Econogenics in action
• Economics: A failed/fake science for 200+ years
• The end of political economics (II)
• Trust in economics as a science?
• #DrainTheScientificSwamp
• The failure of Post-Keynesianism
• MMT sucks
• MMT Progressives: The knife in the back of WeThePeople
• Economists: Time to say goodbye
• Economics: A pointless left-right wrestling show
• Fake religion, fake science, fake news, and false complaints
• Macroeconomics: Drain the scientific swamp
• MMT: A free lunch for the Oligarchy
• Kalecki and Keynes: The double macroeconomic false start
• Keynes, Kalecki, MMT, and the accidental invention of the perpetual profit machine
• Economics should never be a substitute for thinking
• More on economists’ sticky brains
• Oxford economics — still at the proto-scientific level
• MMT and the overall political corruption of economics
• Where economics went wrong (II)
• If we only had classes
• Legitimacy lost
• Heterodox economics: When stupidity becomes a public danger
• Why the MMT benefactors of humanity never talk about profit
• Both Mainstreamer and MMTer are either stupid or corrupt or both
• MMT and the single most stupid physicist
• Economists simply don’t get it
• Lock them up
• The biggest scientific mistake of the last centuries, and it has much to do with academic economists
• The economist as useful political idiot
• MMT, Bill Mitchell, and the lack of basic scientific integrity
• Economics, too, is pre-truth
• Economics: Math is NOT the problem, scientific incompetence is
• The Magic Money Tree is real ― too bad that the magic is fraud
• The present non-existence of economics
• What’s the use of economists?
• The inexorable paradigm shift in economics
• There is no soft science only soft brains
• Wikipedia and the promotion of economists’ idiotism (II)
• And the answer is NCND ― economics after 200+ years of Glomarization
• MMT: How mathematical incompetence helps the Kelton-Fraud
• The Kelton-Fraud
• Hooray! The formalization issue is finally settled
• Wrapping up the MMT narrative
• Nick Rowe’s soapbubbling about money
• Richard Murphy: the MMT fraudster dressed up as realist
• Is Lars Syll’s stupidity really infinite?
• The demise of phony experts: macroeconomics is provably false
• Austerity and the political games Progressives play
• Both orthodox and heterodox economists are cargo cult scientists
• How MMT enlightens Washington
• Marx’s bicentennial ― nothing to discuss, nothing to celebrate
• 200 years in the dark ― how Marx got it wrong
• Did economics fail? No! Yes, and everybody knows it!
• Why is economics a total scientific failure?
• Profit and the Private-Property-Irrelevance Theorem
• Profit: after 200+ years still elusive
• Neoclassical growth theory: modeling gone nuts
• Economics between misguided and lethal critique
• Overreach: Economists have their fingers in every pie except real economics
• Knowledge is attainable ― even in economics
• Economics is NOT about what Happiness is but about what Profit is
• Economics has arrived at the bottom of the proto-scientific shithole
• MMT is dead: An unfriendly critique of Bill Mitchell
• Bill Mitchell, MMT’s fake scientist
• Paul Krugman and economic poultry entrails reading
• Forget Keynes
• Ricardo and the invention of class war
• Ricardo, too, got profit theory wrong
• Economics: a comedy of errors full of intrigue and aberration
• Econblogosphere: The flawed Top 101
• Cryptoeconomics ― the best of Lars Syll’s spam folder
• Cryptoeconomics ― the best of Bill Mitchell’s spam folder
• Cryptoeconomics ― the best of Real-World Economics Review’s spam folder
• Cryptoeconomics ― the best of Mark Thoma’s spam folder
• Cryptoeconomics ― the best of Nick Rowe’s spam folder
• Time to retire political economists
• Lars Syll, fake scientist
• MMT = proto-scientific garbage + deception of the 99-percenters
• Keynes’ intellectual nonexistence
• Dani Rodrik, fake scientist
• The economist as amateur journalist
• Rethinking the Phillips curve (II)
• Lethal criticism of economics? Here it is!
• Economics: stories, narratives, and disinformation
• Everything you know about MMT is wrong
• Economists understand neither Capitalism nor Socialism
• Why does Heterodoxy not abolish the fake Nobel?
• The economics Cargo Cult Prize
• Saving NEVER equals investment
• Gov-Deficits do NOT cause inflation
• John Hicks, fake scientist
• Forget Friedman, forget the Quantity Theory
• The Death of Keynesianism
• Robert Solow and Lars Syll, fake scientists
• Karl Marx, fake scientist
• Barkley Rosser, fake scientist
• Sending Solow’s growth model to the dump of proto-scientific history
• The five pathetic blunders of Roger Farmer
• Fact of life: your econ prof is scientifically incompetent
• Milton Friedman, fake scientist
• Refutation of Asad Zaman’s heterodox methodology
• Forget Friedman, forget Keynes
• Forget Hayek
• You are fired!
• Don Lars and the axiomatic windmill
• Marginal madness
• Marx, the moron
• Note on Marshall's Magic Wand
• Macro imbeciles
• Hayek and other informationally retarded proto-economists
• The Krugman curse
• How Arrow pushed economics over the cliff
• Leaving Lucas behind for good
• Walras, Keynes, Samuelson, DSGE, IS-LM ― R.I.P.
• The key to macro and Keen's debt-employment model
• Paul the Menace
• Macroeconomics without Keynes
• Friedman and the cluelessness of fake scientists
• Delusions of useful idiots
• Say hello to Lars Syll, Keynes’s last parrot
• Will economics ever become a science?
• Let Keynes rest in peace
• Why Hayek was not a scientist
• The futile attempt to recycle Sraffa
• Macroeconomics ― dead since Keynes
• Ground Control to David Glasner
• Nick Rowe: Bury me at the end of coal pit
• Who or what exactly did Keynes save?
• Economists: The Trumps of science
• The economist as standup comedian
• There is NO such thing as an economic expert
• The father of modern economics and his imbecile kids
• Tobin, the tragedy of After-Keynesians, and the indelible mark of incompetence
• How economists murdered the economy and got away with it
• Economics: a science without scientists
• Hobson got full employment policy almost right
• Wicksell’s misplaced critique of mathematics
• New Economic Thinking ― false promises and hopes
• The bigots of common sense
• A basket of scientific deplorables
• The choice between Friedmanian pest and Keynesian cholera
• How Keynes got macro wrong and Allais got it right
• Solow and the ludicrousness of economics
• Out of science
• Scientists and science actors
• Soapbox economics
• Marshall and the Cambridge school of plain economic gibberish
• The end of traditional Heterodoxy in the Malmö coal pit
• Economists: No legitimacy whatever
• Krugman is not an economist
• Sumner’s proto-scientific garbage
• Samuelson or Who is the smartest smartie?
• Post Keynesianism, science, and universal idiocy
• The unfinished Keynes (III)
• Economics: The chief demerit is inconsistency
• Enough! Economists, retire now!
• What’s wrong with Econ 101? Economists, of course!
• Economics is locked in idiocy: How could this happen?
• Forget Chicago, and also Cambridge
• Keynes, the methodologist
• The scientific self-elimination of Heterodoxy
• False theory makes wrong policy: economics as loose cannon
• The mad flip-floppers
• Cranks? What cranks? That’s economics!
• What Keynes really meant but could not really prove
• Hayek, or, How economists miss their subject matter for 200+ years
• Keynes, too, got the general theory of employment wrong
• A science without scientists
• Mathiness is NOT the problem — scientific incompetence is
• Indeed, Keynesianism and Monetarism are basically the same proto-scientific garbage
• Austrian blather
• Stanley Fischer: Rewarding scientific incompetence
• Hayek was not an economist
• Lucas: Confession of a scientific write-off
• Finalizing the Keynesian Revolution
• Lawson’s fundamental methodological error and the failure of Heterodoxy
• Krugman and the scientific implosion of economics
• Wren-Lewis’s methodological double whammy
• Incompetence — the original sin in economics
• End of a storyteller
• Lousy scientists
• Is Paul Krugman necessary?
• Economics as a fool’s paradise
• Fundamentally flawed
• Heterodoxy, too, is proto-scientific garbage

Related Cross-references Political Economics/Stupidity/Corruption and cross-references  Paradigm Shift.

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