There are many chances for the unmasking of the so-called social sciences and the character of the ‘critical public intellectual’ after Feynman's exposure of #CargoCultSciencehttps://t.co/uGPMARut1u
— E.K-H (@AXECorg) September 19, 2021
See:
The representative economist ― a cargo cult clownhttps://t.co/3DhBWidGqQ
Showing posts sorted by relevance for query label:"Political Economics". Sort by date Show all posts
Showing posts sorted by relevance for query label:"Political Economics". Sort by date Show all posts
September 19, 2021
Occasional Tweets: Economists ― jesters of the Queen of Social Sciences
February 19, 2026
Occasional X: Clueless economists / Science (CCLIX)
“At its core, economics is political. It has never been — and never will be — a value-free science.” (Jostein Hauge)
— AXEC (@EgmontHandtke) February 19, 2026
Economists have never understood the difference between politics and science. This is why economics is failed/fake science to this day. At its core, economics is… pic.twitter.com/FrHkLKP9p1
October 22, 2025
Occasional X: The foul spirit of political economics (CLVII)
#Economics#AllYouNeedToKnow
— AXEC (@EgmontHandtke) October 22, 2025
“Conventional economics isnt conspiracy theory mate its just plain fucking DUMB!” (Phil Waller)
For 200+ years, economics has claimed to be a science. But it still is not. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism,…
January 7, 2016
Which breakdown?
Comment on Erik S. Reinert on ‘Capitalism collapses when money flows to the financial sector per se’
Blog-Reference
Capitalism breaks down because of immanent logical necessity (no crisis and no criminals and no banksters needed) as soon as private and/or public households start to redeem their debt in the aggregate (i.e. new credit, rollovers, and redemption netted out). See Mathematical Proof of the Breakdown of Capitalism.
This is a result of the correct profit theory. Profit theory has been messed up by economists (2014), including Marx. See Profit for Marxists.
How did Walrasians, Keynesians, Marxians, and Austrians mess up profit theory and with it the rest of theoretical economics? Because they have, in the main, been occupied with political economics. Schumpeter identified the ultimate cause of the failure of economics: “In this and many analogous cases, of which modern economics is another deplorable example, economists indulged their strong propensity to dabble in politics, to peddle political recipes, to offer themselves as philosophers of economic life, and in doing so neglected the duty of stating explicitly the value judgments that they introduced into their reasoning.” (1994, p. 19)
Agenda pushing is different from thinking. What political economists have delivered is plain scientific garbage. Obviously, the intellectual collapse of economists long precedes the factual breakdown of the market economy. Let’s face the fact: both orthodox and heterodox economists are natural-born scientific losers.
Egmont Kakarot-Handtke
References
Kakarot-Handtke, E. (2014). The Profit Theory is False Since Adam Smith. What About the True Distribution Theory? SSRN Working Paper Series, 2511741: 1–23. URL
Schumpeter, J. A. (1994). History of Economic Analysis. New York: Oxford University Press.
Related 'Time to get rid of political economics' and 'Free academia from economics' and 'The utter senselessness of political economics' and 'Political economics and intellectual corruption' and 'Hayek: mad, bad, or just another incompetent economist?' and 'Mathematical Proof of the Breakdown of Capitalism'.
Blog-Reference
Capitalism breaks down because of immanent logical necessity (no crisis and no criminals and no banksters needed) as soon as private and/or public households start to redeem their debt in the aggregate (i.e. new credit, rollovers, and redemption netted out). See Mathematical Proof of the Breakdown of Capitalism.
This is a result of the correct profit theory. Profit theory has been messed up by economists (2014), including Marx. See Profit for Marxists.
How did Walrasians, Keynesians, Marxians, and Austrians mess up profit theory and with it the rest of theoretical economics? Because they have, in the main, been occupied with political economics. Schumpeter identified the ultimate cause of the failure of economics: “In this and many analogous cases, of which modern economics is another deplorable example, economists indulged their strong propensity to dabble in politics, to peddle political recipes, to offer themselves as philosophers of economic life, and in doing so neglected the duty of stating explicitly the value judgments that they introduced into their reasoning.” (1994, p. 19)
Agenda pushing is different from thinking. What political economists have delivered is plain scientific garbage. Obviously, the intellectual collapse of economists long precedes the factual breakdown of the market economy. Let’s face the fact: both orthodox and heterodox economists are natural-born scientific losers.
Egmont Kakarot-Handtke
References
Kakarot-Handtke, E. (2014). The Profit Theory is False Since Adam Smith. What About the True Distribution Theory? SSRN Working Paper Series, 2511741: 1–23. URL
Schumpeter, J. A. (1994). History of Economic Analysis. New York: Oxford University Press.
Related 'Time to get rid of political economics' and 'Free academia from economics' and 'The utter senselessness of political economics' and 'Political economics and intellectual corruption' and 'Hayek: mad, bad, or just another incompetent economist?' and 'Mathematical Proof of the Breakdown of Capitalism'.
November 26, 2016
The thing with profit and exploitation
Comment on Peter Dorman on ‘It’s Red Friday and Time to Discuss the Role of Exploitation in Profit’
Blog-Reference and Blog-Reference on Nov 28
The Palgrave Dictionary summarizes: “A satisfactory theory of profits is still elusive.” (Desai, 2008)
This perhaps surprises the general public: economists do not know to this day what profit is. As a consequence, they have NO idea about how the monetary economy works. More specifically, economics consists of four main approaches, Walrasianism, Keynesianism, Marxianism, and Austrianism, and NONE of them gets profit right. #1
As a consequence, economic policy guidance has never had sound scientific foundations. Because economists never captured the essence of the market economy, whatever they have said for or against capitalism, communism, or socialism has been based upon provably false theories about how the monetary economy works.
Since Ricardo and Marx, both orthodox and heterodox economists believe that there is a fundamental antagonism between the firm’s owners (= capitalists) and the employees/workers.
The idea that antagonism between classes is built into the economic system, though, rests on an optical illusion. And this optical illusion ultimately derives from the theory of the firm. It is obviously true that an individual firm can increase profit by lowering the wage rate. But this is NOT true for the economy as a whole. To generalize what is true for an isolated part of a system is known in methodology as the Fallacy of Composition.
In the most elementary case, the interdependencies of the economic system have the unintended effect that if firm A makes a profit by lowering the wage rate, firm B (= the rest of the economy) makes a loss under the initial macroeconomic condition that total consumption expenditure is equal to total wage income. #2 And, by the same token, the real wage of the workers of firm A decreases and that of the workers of firm B increases. So, what happens is that a redistribution of profit between firms and a redistribution of output between households takes place.
In political terms, this means that there are NO CLASSES with a common interest. Put differently, what appears as an exploitation of the workers of firm A is only part of the complete picture of a REDISTRIBUTION of profits WITHIN the business sector and a REDISTRIBUTION of output WITHIN the household sector. In other words, the exploitation of workers in firm A benefits the workers in firm B. And the profit increase of firm A’s capitalists comes from firm B’s capitalists. Taking all capitalists together, their profit does not change. Taking all workers together, their real share of output does not change.
Conclusion: the naive concept of exploitation has to be replaced by the concept of crossover exploitation.
Economists are supposed to be experts on the economy. So it is quite natural to think that they know how the profit mechanism works; after all, this is the foundational phenomenon of their subject matter. Yet, this is definitely not the case. Economists are incompetent scientists, and after 200+ years, they are still stuck in the Fallacy of Composition. So, economists have NOTHING to contribute to the discussion about how the economy, markets, and firms should be organized.
Economists have discussed the role of exploitation and profit without ever coming to the core of the matter. It is Red Friday, and time for them to retire now for good.
Egmont Kakarot-Handtke
#1 How the Intelligent Non-Economist Can Refute Every Economist Hands Down and
The Profit Theory is False Since Adam Smith. What About the True Distribution Theory? and Profit for Marxists.
#2 Essentials of Constructive Heterodoxy: Profit
Related 'How to end the Punch and Judy show about profit'
There are three things that are intertwined but have to be analytically kept apart: (i) Theory of Value, (ii) Theory of Profit for the economy as a whole, (iii) Distribution of overall profit between sub-sectors (production, banking, land use, etc.) and individual firms.
The Law of Value says that relative prices are inverse to productivities. #1 This Law replaces the Labour Theory of Value.
The Profit Law for the pure consumption economy says that OVERALL profit depends on the expenditure ratio and the distributed profit ratio. #2
It holds in particular:
• Overall profit does neither depend upon the agents’ personal qualities, motives, their ideas about what profit is, nor on profit-maximizing behavior.
• In order that profit comes into existence for the first time in the elementary production-consumption economy, the household sector must run a deficit for at least in one period.
• Profit is, in the simplest case, determined by the increase and decrease of the household sector’s debt. There is a close relation between profit/loss and the expansion/contraction of credit for the economy as a whole.
• Wage income is the factor remuneration of labor input. Profit is NOT a factor income. Since capital is nonexistent in the elementary production-consumption economy, profit is not functionally attributable to capital.
• There is no relation at all between profit, capital, marginal, or average productivity.
• Profit has no real counterpart in the form of a piece of the output cake. Profit has a monetary counterpart.
• The existence and magnitude of overall profit do not depend on the ownership of the firms that comprise the business sector.
• The value of output is, in the general case, different from the sum of factor incomes. This is the defining property of the monetary economy.
• Profit is a factor-independent residual and qualitatively different from wage income. Therefore, it is an elementary mistake to maintain that total income is the sum of wages and profits. #3
• There is no antagonism between total wages and total profits, and the distribution of consumption goods output has nothing at all to do with profit.
• Innovation and efficiency are irrelevant for the profit of the business sector as a WHOLE. It is a Fallacy of Composition to trivially generalize what can be observed in an individual firm.
In sum, the classical/neoclassical and Keynesian/Post-Keynesian Theories of Value/Profit are provably false.
#1 The Pure Logic of Value, Profit, Interest
#2 Essentials of Constructive Heterodoxy: Profit
#3 When Ricardo Saw Profit, He Called It Rent: On the Vice of Parochial Realism
You say: “A very interesting thing to me is that in the Bible profit is good but profit taking ISN’T(!) good ...”
It is common knowledge that the Bible belongs to the sphere of religion/belief/storytelling and that economics belongs to the sphere of science/knowledge/proof.
Both spheres do not mix, never have, and never will. Your post is out of place.
It is common knowledge that the content and level of economic discussion are far below zero. There is NO need for you or anybody else to deliver more examples.
For details, see FakeNews, FakeScience: economics in the information age.
You say: “I do have an issue with ‘trust me, I’m a scientist’.”
There is NO issue at all; there is only your abysmal ignorance and confusion. Science is NOT about trust or credibility or belief or authority, but only about proof, more specifically, about the logical and empirical consistency of a theory. A theory, in turn, is the best humanly possible mental representation of reality.
Since the ancient Greeks introduced the distinction between opinion (= doxa) and knowledge (= episteme), NO scientist has ever said Believe me. As Popper put it: “... a critical discussion is well-conducted if it is entirely devoted to one aim: to find a flaw in the claim that a certain theory presents a solution to a certain problem.”
So, there is NO issue at all. I have given you the Profit Law, and if you have qualms about it, you are invited to refute it. Of course, you cannot. But you can endlessly waffle about Love, the Divine, your Australian aboriginal brothers, and all the other good vibration stuff.
Here is the ultimate test to practically find out the difference between doxa and episteme for yourself: You have the choice to board an aircraft that has been designed/constructed by your good vibration folks and one that has been designed/constructed by scientists/ engineers. Who do you REALLY trust?
OK, and now get out of economics.
Blog-Reference and Blog-Reference on Nov 28
The Palgrave Dictionary summarizes: “A satisfactory theory of profits is still elusive.” (Desai, 2008)
This perhaps surprises the general public: economists do not know to this day what profit is. As a consequence, they have NO idea about how the monetary economy works. More specifically, economics consists of four main approaches, Walrasianism, Keynesianism, Marxianism, and Austrianism, and NONE of them gets profit right. #1
As a consequence, economic policy guidance has never had sound scientific foundations. Because economists never captured the essence of the market economy, whatever they have said for or against capitalism, communism, or socialism has been based upon provably false theories about how the monetary economy works.
Since Ricardo and Marx, both orthodox and heterodox economists believe that there is a fundamental antagonism between the firm’s owners (= capitalists) and the employees/workers.
The idea that antagonism between classes is built into the economic system, though, rests on an optical illusion. And this optical illusion ultimately derives from the theory of the firm. It is obviously true that an individual firm can increase profit by lowering the wage rate. But this is NOT true for the economy as a whole. To generalize what is true for an isolated part of a system is known in methodology as the Fallacy of Composition.
In the most elementary case, the interdependencies of the economic system have the unintended effect that if firm A makes a profit by lowering the wage rate, firm B (= the rest of the economy) makes a loss under the initial macroeconomic condition that total consumption expenditure is equal to total wage income. #2 And, by the same token, the real wage of the workers of firm A decreases and that of the workers of firm B increases. So, what happens is that a redistribution of profit between firms and a redistribution of output between households takes place.
In political terms, this means that there are NO CLASSES with a common interest. Put differently, what appears as an exploitation of the workers of firm A is only part of the complete picture of a REDISTRIBUTION of profits WITHIN the business sector and a REDISTRIBUTION of output WITHIN the household sector. In other words, the exploitation of workers in firm A benefits the workers in firm B. And the profit increase of firm A’s capitalists comes from firm B’s capitalists. Taking all capitalists together, their profit does not change. Taking all workers together, their real share of output does not change.
Conclusion: the naive concept of exploitation has to be replaced by the concept of crossover exploitation.
Economists are supposed to be experts on the economy. So it is quite natural to think that they know how the profit mechanism works; after all, this is the foundational phenomenon of their subject matter. Yet, this is definitely not the case. Economists are incompetent scientists, and after 200+ years, they are still stuck in the Fallacy of Composition. So, economists have NOTHING to contribute to the discussion about how the economy, markets, and firms should be organized.
Economists have discussed the role of exploitation and profit without ever coming to the core of the matter. It is Red Friday, and time for them to retire now for good.
Egmont Kakarot-Handtke
#1 How the Intelligent Non-Economist Can Refute Every Economist Hands Down and
The Profit Theory is False Since Adam Smith. What About the True Distribution Theory? and Profit for Marxists.
#2 Essentials of Constructive Heterodoxy: Profit
Related 'How to end the Punch and Judy show about profit'
***
REPLY to Tom Hickey on Nov 27There are three things that are intertwined but have to be analytically kept apart: (i) Theory of Value, (ii) Theory of Profit for the economy as a whole, (iii) Distribution of overall profit between sub-sectors (production, banking, land use, etc.) and individual firms.
The Law of Value says that relative prices are inverse to productivities. #1 This Law replaces the Labour Theory of Value.
The Profit Law for the pure consumption economy says that OVERALL profit depends on the expenditure ratio and the distributed profit ratio. #2
It holds in particular:
• Overall profit does neither depend upon the agents’ personal qualities, motives, their ideas about what profit is, nor on profit-maximizing behavior.
• In order that profit comes into existence for the first time in the elementary production-consumption economy, the household sector must run a deficit for at least in one period.
• Profit is, in the simplest case, determined by the increase and decrease of the household sector’s debt. There is a close relation between profit/loss and the expansion/contraction of credit for the economy as a whole.
• Wage income is the factor remuneration of labor input. Profit is NOT a factor income. Since capital is nonexistent in the elementary production-consumption economy, profit is not functionally attributable to capital.
• There is no relation at all between profit, capital, marginal, or average productivity.
• Profit has no real counterpart in the form of a piece of the output cake. Profit has a monetary counterpart.
• The existence and magnitude of overall profit do not depend on the ownership of the firms that comprise the business sector.
• The value of output is, in the general case, different from the sum of factor incomes. This is the defining property of the monetary economy.
• Profit is a factor-independent residual and qualitatively different from wage income. Therefore, it is an elementary mistake to maintain that total income is the sum of wages and profits. #3
• There is no antagonism between total wages and total profits, and the distribution of consumption goods output has nothing at all to do with profit.
• Innovation and efficiency are irrelevant for the profit of the business sector as a WHOLE. It is a Fallacy of Composition to trivially generalize what can be observed in an individual firm.
In sum, the classical/neoclassical and Keynesian/Post-Keynesian Theories of Value/Profit are provably false.
#1 The Pure Logic of Value, Profit, Interest
#2 Essentials of Constructive Heterodoxy: Profit
#3 When Ricardo Saw Profit, He Called It Rent: On the Vice of Parochial Realism
***
COMMENT on Andrew Anderson on Nov 28You say: “A very interesting thing to me is that in the Bible profit is good but profit taking ISN’T(!) good ...”
It is common knowledge that the Bible belongs to the sphere of religion/belief/storytelling and that economics belongs to the sphere of science/knowledge/proof.
Both spheres do not mix, never have, and never will. Your post is out of place.
***
REPLY to jrbarch on Nov 29It is common knowledge that the content and level of economic discussion are far below zero. There is NO need for you or anybody else to deliver more examples.
For details, see FakeNews, FakeScience: economics in the information age.
***
REPLY to jrbarch on Nov 30You say: “I do have an issue with ‘trust me, I’m a scientist’.”
There is NO issue at all; there is only your abysmal ignorance and confusion. Science is NOT about trust or credibility or belief or authority, but only about proof, more specifically, about the logical and empirical consistency of a theory. A theory, in turn, is the best humanly possible mental representation of reality.
Since the ancient Greeks introduced the distinction between opinion (= doxa) and knowledge (= episteme), NO scientist has ever said Believe me. As Popper put it: “... a critical discussion is well-conducted if it is entirely devoted to one aim: to find a flaw in the claim that a certain theory presents a solution to a certain problem.”
So, there is NO issue at all. I have given you the Profit Law, and if you have qualms about it, you are invited to refute it. Of course, you cannot. But you can endlessly waffle about Love, the Divine, your Australian aboriginal brothers, and all the other good vibration stuff.
Here is the ultimate test to practically find out the difference between doxa and episteme for yourself: You have the choice to board an aircraft that has been designed/constructed by your good vibration folks and one that has been designed/constructed by scientists/ engineers. Who do you REALLY trust?
OK, and now get out of economics.
September 13, 2024
Occasional X: The foul spirit of political economics (LXXXVI)
#Economics#FailedFakeScience#Keynesianism
— E.K-H (@AXECorg) September 13, 2024
For 200+ years, economics has claimed to be #Science but is NOT. The major approaches (#Walrasianism, #Keynesianism, #Marxianism, #Austrianism, and their derivatives) are mutually contradictory & axiomatically false &… pic.twitter.com/oXh1wAFlA1
August 6, 2025
Occasional Tweets: How MMTers serve the Oligarchy (VII)
#MMT#BadScienceBadPolicyBadPeople
— AXEC (@EgmontHandtke) August 6, 2025
“I suspect the Soros-type people of the world created the marketing brand 'MMT' from post-Keynesian economists …” (Sahin Ashkiani quotes Richard Werner)
Yes, MMTers got macroeconomics wrong. This makes their monetary theory scientifically… pic.twitter.com/f0EoBXYUO7
Related 'The Dark-Matter Theory of Fiat Money'
November 2, 2022
Occasional Tweets: The futile attempt to recycle Austrianism (X)
#Economics cannot be based on a behavioral #Axiom. #Praxeology is methodologically unacceptable. Because the axiomatic foundations of #Austrianism are false the whole analytical superstructure is scientifically worthless.
— E.K-H (@AXECorg) November 2, 2022
Austrianism ― axiomatically falsehttps://t.co/luMh1CLitk pic.twitter.com/Fz4yzf4lRZ
October 21, 2023
Occasional Tweets: No false-hero memorials (XVIII)
“Economics is the study of the economy, not the study of economists.” (R. Reis)
— E.K-H (@AXECorg) October 21, 2023
The history of economic thought is the history of scientific failure. The major approaches are axiomatically false & materially/formally inconsistent & ALL got #Profit wrong. Jevons was NO exception.
For more about Jevons see AXECquery.
April 19, 2019
MMT: economics for suckers
Comment on Dylan Matthews on ‘Modern Monetary Theory, explained’*
Blog-Reference
Dylan Matthews frames his contribution as follows: “I’ll explain MMT theories about deficits, inflation, and employment, and what it all means for Democratic Party politics in 2020 and beyond.”
Clearly, Dylan Matthews delivers another example of political blather. He still has not realized that economics in general and MMT, in particular, cannot be taken seriously. #1 And he is obviously not aware that economics is a failed/fake science from Adam Smith onward to MMT.
The general public does not know that there are political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda; the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics, anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.
Economics consists of the major approaches, Walrasianism, Keynesianism, Marxianism, Austrianism, that are mutually contradictory, axiomatically false, and materially/ formally inconsistent. What can be observed is the pluralism of provably false theories.
Because MMT, too, is provably false, i.e., materially/formally inconsistent, MMT policy guidance has no sound scientific foundations. MMT does not provide a scientifically valid theory but is a political agenda pushing for the Oligarchy in a scientific/social bluff package. #2, #3
Dylan Matthews gives a fair account of the current state of the discussion, except for the fact that he does not mention that MMT is refuted on all counts.
The failure of MMT is due to the fact that its underlying macroeconomic foundations are false.#4 The lethal blunder of MMT is that it is built upon a provably false sectoral balances equation, i.e., upon (I−S)+(G−T)+(X−M)=0.#5 The axiomatically correct balances equation reads (I−S)+(G−T)+(X−M)−(Q−Yd)=0. Because all variables are measurable with the precision of two decimal places, the issue can be decided by mathematical proof and empirical test. However, NO MMTer has ever answered to the proof of material/formal inconsistency. MMTers are simply too busy pushing their political agenda. After all, in the political Circus Maximus, nobody cares about true/false.
Accordingly, this is Dylan Matthews’ political bottom line: “The rise of MMT could allow Democrats to embrace the de facto fiscal policy of Republican presidents, who tend to explode the deficit to finance pet initiatives like tax cuts and defense spending, leaving Democrats to clean up afterward. MMT could be Democrats’ way of saying, ‘We don’t want to be suckers anymore’.”#6
True, if Republicans can deceive voters, so can Democrats. And MMT is as good as any other economic approach for an academic con job.#7
Egmont Kakarot-Handtke
* Vox
#1 MMT sucks
#2 For the full-spectrum refutation of MMT, see cross-references MMT
#3 Economics, MMT, and the capture of science by the political mob
#4 Macroeconomics ― dead since Keynes
#5 From Keynes’ fatal blunder to the true economic model
#6 Dear idiots, it is deficit spending that creates the distribution people complain about
#7 Economists: “a bevy of camp-following whores”
LINKS on Sam Fleming/Chris Giles’ Why America is learning to love budget deficits on Apr 26
Sam Fleming and Chris Giles quote: “The winning formula for the Democrats is they are going to have to endorse some of these relatively fiscally extreme positions to get nominated,” says one Democratic strategist, speaking of the 2020 presidential contenders. “The threats of debt and deficits have not panned out. We have been running deficits and debt for 30 years and where is the crowding out, the inflation and the soaring interest rates?”
Of course, there was neither inflation nor soaring interest rates. This has never been more than hallucinations of scientifically incompetent economists. Instead, what the policy of deficit-spending/money-creation has produced is the insane distribution of income and financial wealth. For details see:
► Dear idiots, it is deficit spending that creates the distribution people complain about
► MMT: Distribution is the drawback NOT Inflation
► Keynes, Lerner, MMT, Trump, Biden, and exploding profit
► MMT: economics for suckers
► Dear idiots, MMTers are Wall Street’s agenda pushers
► Safe assets ― how the State pampers the Oligarchy
► MMT: fundamentally false
► Economics, MMT, and the capture of science by the political mob
► MMT is an economic policy fraud
► Macroeconomics: Economists are too stupid for science
► The canonical macroeconomic model
Blog-Reference
Dylan Matthews frames his contribution as follows: “I’ll explain MMT theories about deficits, inflation, and employment, and what it all means for Democratic Party politics in 2020 and beyond.”
Clearly, Dylan Matthews delivers another example of political blather. He still has not realized that economics in general and MMT, in particular, cannot be taken seriously. #1 And he is obviously not aware that economics is a failed/fake science from Adam Smith onward to MMT.
The general public does not know that there are political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda; the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics, anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.
Economics consists of the major approaches, Walrasianism, Keynesianism, Marxianism, Austrianism, that are mutually contradictory, axiomatically false, and materially/ formally inconsistent. What can be observed is the pluralism of provably false theories.
Because MMT, too, is provably false, i.e., materially/formally inconsistent, MMT policy guidance has no sound scientific foundations. MMT does not provide a scientifically valid theory but is a political agenda pushing for the Oligarchy in a scientific/social bluff package. #2, #3
Dylan Matthews gives a fair account of the current state of the discussion, except for the fact that he does not mention that MMT is refuted on all counts.
The failure of MMT is due to the fact that its underlying macroeconomic foundations are false.#4 The lethal blunder of MMT is that it is built upon a provably false sectoral balances equation, i.e., upon (I−S)+(G−T)+(X−M)=0.#5 The axiomatically correct balances equation reads (I−S)+(G−T)+(X−M)−(Q−Yd)=0. Because all variables are measurable with the precision of two decimal places, the issue can be decided by mathematical proof and empirical test. However, NO MMTer has ever answered to the proof of material/formal inconsistency. MMTers are simply too busy pushing their political agenda. After all, in the political Circus Maximus, nobody cares about true/false.
Accordingly, this is Dylan Matthews’ political bottom line: “The rise of MMT could allow Democrats to embrace the de facto fiscal policy of Republican presidents, who tend to explode the deficit to finance pet initiatives like tax cuts and defense spending, leaving Democrats to clean up afterward. MMT could be Democrats’ way of saying, ‘We don’t want to be suckers anymore’.”#6
True, if Republicans can deceive voters, so can Democrats. And MMT is as good as any other economic approach for an academic con job.#7
Egmont Kakarot-Handtke
* Vox
#1 MMT sucks
#2 For the full-spectrum refutation of MMT, see cross-references MMT
#3 Economics, MMT, and the capture of science by the political mob
#4 Macroeconomics ― dead since Keynes
#5 From Keynes’ fatal blunder to the true economic model
#6 Dear idiots, it is deficit spending that creates the distribution people complain about
#7 Economists: “a bevy of camp-following whores”
***
AXEC118d
***
Sam Fleming and Chris Giles quote: “The winning formula for the Democrats is they are going to have to endorse some of these relatively fiscally extreme positions to get nominated,” says one Democratic strategist, speaking of the 2020 presidential contenders. “The threats of debt and deficits have not panned out. We have been running deficits and debt for 30 years and where is the crowding out, the inflation and the soaring interest rates?”
Of course, there was neither inflation nor soaring interest rates. This has never been more than hallucinations of scientifically incompetent economists. Instead, what the policy of deficit-spending/money-creation has produced is the insane distribution of income and financial wealth. For details see:
► Dear idiots, it is deficit spending that creates the distribution people complain about
► MMT: Distribution is the drawback NOT Inflation
► Keynes, Lerner, MMT, Trump, Biden, and exploding profit
► MMT: economics for suckers
► Dear idiots, MMTers are Wall Street’s agenda pushers
► Safe assets ― how the State pampers the Oligarchy
► MMT: fundamentally false
► Economics, MMT, and the capture of science by the political mob
► MMT is an economic policy fraud
► Macroeconomics: Economists are too stupid for science
► The canonical macroeconomic model
***
#PointOfProof
Apr 26
September 12, 2024
Occasional X: What economists really do (CCCXXXVII)
#Economics#GeoPolitics#GeoEconomics
— E.K-H (@AXECorg) September 12, 2024
“Closing factories will not be enough to save Volkswagen”
No, because Volkswagen and other firms are caught in the geopolitical trap.
The ruin of the German #Economy and the impoverishment of #WeThePeople is the direct consequence of the…
September 30, 2021
Occasional Tweets: High time to finally bury von Mises
von Mises: “In the imaginary construction of a stationary economy the total sum of all entrepreneurs’ profit equals the total sum of all entrepreneurs’ losses.”
— E.K-H (@AXECorg) September 30, 2021
This is provably false. von Mises never understood #Profit. That's lethal for an #Economist.⇒https://t.co/9OOvd2cAqJ
For more about von Mises, see AXECquery.
September 26, 2024
Occasional X: What economists really do (CCCLIV)
#Economics#GeoPolitics#GeoEconomics
— E.K-H (@AXECorg) September 26, 2024
The ruin of the German #Economy and the impoverishment of #WeThePeople is the direct consequence of the #Ampel's foreign/domestic #ZeitenWende policy which has been supported from the beginning by the economic experts of the…
March 15, 2024
Occasional Xs: The futile attempt to recycle MMT (LXXXI)
#MMT#BadScienceBadPolicyBadPeople
— E.K-H (@AXECorg) March 15, 2024
MMT's foundational #BalancesEquation is provably false, so the whole approach is scientifically worthless.
The page where Stephanie Kelton gets macroeconomics wrong https://t.co/CNFDkXM1Ki
The fact that MMT is heavily promoted by #Movies /… pic.twitter.com/EhhA8zKogP
October 16, 2024
Occasional X: The foul spirit of political economics (XCVII)
#Economics#FailedFakeScience
— E.K-H (@AXECorg) October 16, 2024
Economics claims to be #Science but is NOT. The major approaches (#Walrasianism, #Keynesianism, #Marxianism, #Austrianism, and their derivatives) are mutually contradictory & axiomatically false & materially/formally inconsistent & ALL got #Profit… pic.twitter.com/YukaVm7BbC
September 14, 2023
Occasional Xs: The futile attempt to recycle Adam Smith (XXXVI)
#Economics#JustDisInfoTainment
— E.K-H (@AXECorg) September 14, 2023
The history of economic thought is the history of scientific failure. #AdamSmith NEVER understood what #Profit is and how the economic #System works. Economic #PolicyGuidance has NEVER had sound scientific foundations. pic.twitter.com/7L3NiBYNXP
September 15, 2017
Why is economics such a scientific embarrassment?
Comment on Christopher Snyder on ‘What are economists for?’
Blog-Reference and Blog-Reference
Economics is a failed science because economists are scientifically incompetent. This applies to both the orthodox and heterodox species. Heterodox economists persistently point at what they regard as the unacceptable portions of Orthodoxy but they have not come up with a valid alternative since Jevons/Walras/Menger.
Christopher Snyder defines economics thus: “One short answer is that economics is the social science focusing on people’s material well-being, the ‘business side’ of life.”
Christopher Snyder still clings to the fatal error of the founding fathers, i.e., that economics is a so-called social science. Obviously, he has not heard that Feynman has debunked the so-called social sciences wholesale as cargo cult sciences: “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, to begin with, lack a real understanding of science, they are cargo cult scientists. For the general public, it is important to know 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.
Economic policy presupposes knowledge of how the economic system works. This knowledge is embodied in the true theory: “In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum)
Because of the lack of the true theory the policy guidance of economists ― Walrasians, Keynesians, Marxians, Austrians, MMTers, and Pluralists ― has NO sound scientific foundations.#1
Economics had the bad luck to start as Political Economy. This means that the political agenda had been given and the argumentation had to support the agenda. Theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers). The methodological Ur-Blunder of economics consists of defining economics as a social science. Economics is a systems science.
Supply-demand-equilibrium economists are in a state of incorrigible self-delusion/idiocy/ corruption. They do not know what science is and ignore or even actively suppress refutation. As 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.”
From the standpoint of science, the economist is worse than the snake oil seller and fraudster because as a fake scientist he causes severe economic damages.#2 This is known since Napoleon: “Late in life… he claimed that he had always believed that if an empire were made of granite the ideas of economists if listened to, would suffice to reduce it to dust.” (Viner)
Economics is NOT a science. Both orthodox and heterodox economics is just storytelling. There is neither material nor formal consistency. The ultimate cause of failure is the scientific incompetence of economists since Adam Smith.
Egmont Kakarot-Handtke
#1 Why economists don’t know what profit is
#2 Mass unemployment: The joint failure of orthodox and heterodox economics
Related 'The economist as storyteller' and 'Solving Mill’s starting problem' and 'The new macroeconomic paradigm' and 'Economics: The greatest scientific fraud in modern times' and 'Finally, the embarrassment of economics is over' and 'Econogenics: economists pose a hazard to their fellow citizens' and 'Mission accomplished: Economists as useful idiots of the Oligarchy'.
Blog-Reference and Blog-Reference
Economics is a failed science because economists are scientifically incompetent. This applies to both the orthodox and heterodox species. Heterodox economists persistently point at what they regard as the unacceptable portions of Orthodoxy but they have not come up with a valid alternative since Jevons/Walras/Menger.
Christopher Snyder defines economics thus: “One short answer is that economics is the social science focusing on people’s material well-being, the ‘business side’ of life.”
Christopher Snyder still clings to the fatal error of the founding fathers, i.e., that economics is a so-called social science. Obviously, he has not heard that Feynman has debunked the so-called social sciences wholesale as cargo cult sciences: “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, to begin with, lack a real understanding of science, they are cargo cult scientists. For the general public, it is important to know 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.
Economic policy presupposes knowledge of how the economic system works. This knowledge is embodied in the true theory: “In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum)
Because of the lack of the true theory the policy guidance of economists ― Walrasians, Keynesians, Marxians, Austrians, MMTers, and Pluralists ― has NO sound scientific foundations.#1
Economics had the bad luck to start as Political Economy. This means that the political agenda had been given and the argumentation had to support the agenda. Theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers). The methodological Ur-Blunder of economics consists of defining economics as a social science. Economics is a systems science.
Supply-demand-equilibrium economists are in a state of incorrigible self-delusion/idiocy/ corruption. They do not know what science is and ignore or even actively suppress refutation. As 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.”
From the standpoint of science, the economist is worse than the snake oil seller and fraudster because as a fake scientist he causes severe economic damages.#2 This is known since Napoleon: “Late in life… he claimed that he had always believed that if an empire were made of granite the ideas of economists if listened to, would suffice to reduce it to dust.” (Viner)
Economics is NOT a science. Both orthodox and heterodox economics is just storytelling. There is neither material nor formal consistency. The ultimate cause of failure is the scientific incompetence of economists since Adam Smith.
Egmont Kakarot-Handtke
#1 Why economists don’t know what profit is
#2 Mass unemployment: The joint failure of orthodox and heterodox economics
Related 'The economist as storyteller' and 'Solving Mill’s starting problem' and 'The new macroeconomic paradigm' and 'Economics: The greatest scientific fraud in modern times' and 'Finally, the embarrassment of economics is over' and 'Econogenics: economists pose a hazard to their fellow citizens' and 'Mission accomplished: Economists as useful idiots of the Oligarchy'.
***
Graphic AXEC158 Economics is fake science
September 3, 2020
Occasional Tweets: Politics corrupts science, always and everywhere (I)
The strict separation of science and politics is long gone. Politics has steadily corrupted science. Now it's official. Make no mistake, science as founded 2300+ years ago by the Greeks has been captured. Scientists have become clowns and useful idiots in the political Circus Maximus. Henceforth, the appeal to science/knowledge/truth means NOTHING. For more details see Links on the Economics Nobel and cross-references Political Economics/ Stupidity/Corruption.
Remembrance Day: Official Capitulation/Sellout of Science, Sep 3, 2020.
#Science#NobelPrize#NoFalseHeroMemorials
— E.K-H (@AXECorg) September 3, 2020
Clearly, these 81 Nobelists are NOT aware of what science is all about and what scientific ethics implies. They are but clowns and useful idiots in the political Circus Maximus. Science, too, has become part of a clown show.
👎
— Rüdiger Kuhnke (@KuhnkeRuediger) September 16, 2020
24 winners of the Turing Award, sometimes called the Nobel Prize of computing, endorse Biden. They cite Trump's anti-immigrant policies that are keeping out students, scientists, inventors.
— Catherine Rampell (@crampell) September 20, 2020
First time Turing Award laureates have endorsed a candidatehttps://t.co/UWLJGw6xFM
Scientific American has never endorsed a presidential candidate in our 175-year history—until now.
— Scientific American (@sciam) September 15, 2020
The 2020 election is literally a matter of life and death. We urge you to vote for health, science and Joe Biden for President.https://t.co/8TlH7shjFn
13 Nobel Prize-winning economists back Bidenhttps://t.co/ARNANds60I
— Axios (@axios) September 22, 2020
I'm seeing a pattern:
— Erik Brynjolfsson (@erikbryn) September 25, 2020
"Thirteen Nobel Prize-winning economists said Tuesday they are backing Democratic presidential nominee Joe Biden’s economic agenda"https://t.co/89GH277LaW pic.twitter.com/pPXcIid5ko
***
For details of the big picture see cross-references Political Economics/Stupidity/Corruption
***
The Unz Review Sep 26
Twitter/X Jun 28, 2024 Worthless science, "worthless" Laureates
Twitter/X Sep 11, 2024, The separation of science and politics is gaining ground
November 22, 2018
MMT = Trumponomics
Comment on Bill Mitchell on ‘Japan still to slip in the sea under its central bank debt burden’
Blog-Reference
Bill Mitchell reports: “I took the UK Guardian’s ― How populist are you? ― quiz yesterday. I thought the quiz was an odd cultural artifact. The Tweet by Ronan Burtenshaw … summarised how these sorts of quizzes reflect underlying biases.
Anyway, I did the quiz and I won’t say who I was most alike because I am actually very much unalike the person (which just shows the categorisation errors in the exercise) but I felt relieved that I did score this outcome: You are least similar to Donald Trump.”
Now, this is curious at least with regard to economics because if one takes away the social populism, then MMT is economically identical to Trumponomics, that is to say, it produces exactly the same amount of macroeconomic profit for the Oligarchy. #1
In Bill Mitchell’s words, this “shows the categorisation errors in the exercise.” No, this shows how MMT’s social brainwashing works.
Egmont Kakarot-Handtke
#1 Keynes, Lerner, MMT, Trump, Biden, and exploding profit
Related 'MMT: A free lunch for the Oligarchy' and 'Stephanie and Noah ― economics at the intellectual zero lower bound' and 'MMTers are NOT Friends-of-the-People'.
REPLY to Calgacus, Matt Franko, André, Noah Way on Nov 24
Compared to microfounded mainstream economics, macrofounded MMT is a real improvement. While mainstream economics is absolutely false, MMT is half-true. So, Bill Mitchell correctly summarizes “that the Bank of Japan continues to demonstrate the categorical failure of mainstream macroeconomics …”
MMT is correct on these points:
• A growing public debt does NOT cause inflation.
• The limit of growth of public debt is further out than doom-merchants always claimed.
• Fiscal policy is the main game.
• The government has all the firepower it ever needs.
• The Central Bank (CB) can buy any amount of gov bonds without increasing the inflation rate.
• The CB can maintain yields on gov bonds “at whatever level it chooses, at whatever maturity range it targets, and for as long as it likes.”
But then comes the fraudulent MMT sales slogan: “… normally for most countries it will require continuous fiscal deficits of varying proportions of GDP as the overall saving desires of the private domestic sector vary over time.”
What MMTers never talk about are the distributional effects of a permanently growing public debt.
What exactly happens if the government runs a deficit in an elementary production-consumption economy?#1 From the general macroeconomic Profit Law Qm≡Yd+(I−S)+(G−T)+(X−M) follows that Public Deficit = Private Profit if all other variables are taken out of the picture.
So, at the end of the first period, the business sector’s deposits at the CB (= money) are exactly equal to the government’s overdrafts. If deficit spending is repeated period after period, then the government’s debt in the form of overdrafts grows permanently, and the same holds for the business sector’s deposits. Under the assumption that the interest rate is zero for overdrafts and deposits at the CB, there is NO interest effect and no interest burden on public debt. The stock of money increases, but there is no inflation.
However, things do not stop there. Basically, two liming cases are possible. The government issues bonds, and the business sector buys them. Then, gov overdrafts at the CB go to zero, and the business sector’s deposits go to zero and are replaced by the interest-bearing gov bonds. Both sides of the CB’s balance sheet return to zero. The additional money from deficit spending vanishes. The business sector now earns interest, which is taxed from the household sector. This is what Bill Mitchell calls corporate welfare.
The other limiting case is that the CB buys the gov bonds. Then, gov overdrafts at the CB go to zero, but the business sector’s deposits (= money) remain unchanged. The CB switches on the asset side from overdrafts to long-term interest-bearing bonds. This interest increases the profit of the CB and is later on recycled to the government. So, this variant is distributionally neutral with regard to interest.
Reality is between the limiting cases.
So, while MMT is descriptively correct with regard to many monetary phenomena, it lacks sound scientific foundations because it is based on a mathematically false sectoral balances equation. Both MMTers and mainstreamers get macroeconomic profit wrong. This is disqualifying for an economist.
#1 The elementary production-consumption economy is, for a start, defined by three macroeconomic axioms (Yw=WL, O=RL, C=PX), two conditions (X=O, C=Yw), and two definitions (profit/loss Q≡C−Yw, saving/dissaving S≡Yw−C). Legend: Yw wage income, W wage rate, L employment, O output, R productivity, C consumption expenditures, P price, X quantity bought/sold. It always holds Q≡−S. This is the most elementary form of the macroeconomic Profit Law. The market-clearing price is derived as P=W/R. This is the macroeconomic Law of Supply and Demand.
Related 'MMT and the inflation-red-herring' and 'MMT: agenda-pushing and money-making for the Oligarchy' and 'Why the MMT benefactors of humanity never talk about profit'.
I said: ‘But then comes the fraudulent MMT sales slogan: “… normally for most countries it will require continuous fiscal deficits of varying proportions of GDP as the overall saving desires of the private domestic sector vary over time.” What MMTers never talk about are the distributional effects of a permanently growing public debt.’
You disagree: “This is just not true. They do talk about that, I believe I have given you at least one reference. They just don’t wildly exaggerate them and remove them from context.”
When I talk about distributional effects, I refer to the core of distribution theory, that is, the relation of wages to profits or what is called the wage share/profit share. #1
The fact of the matter is that Bill Mitchell talks about the “overall saving desires of the private domestic sector” and by this, he makes the profit effect of deficit-spending/money-creation disappear. #2
There is NO such thing as the “private domestic sector”; there is the business sector and the household sector, and the balance of the household sector is saving/dissaving, and the balance of the business sector is profit/loss. And both cannot be lumped together to overall saving. Methodologically, this is called the Humpty Dumpty Fallacy; politically, this is plain fraud. #3
In the MMT balances equation (G−T)+(I−S)=0 for the closed economy, profit does not appear at all. So, MMT’s distribution theory is a priori false.
The axiomatically correct balances equation reads (G−T)+(I−S)−(Q−Yd)=0. It follows that Public Deficit = Private Profit. And this tells one that the relation between overall profits and wages, which is generally considered a distributional scandal, is produced by ― guess who? ― yes, by MMTers’ deficit-spending/money-creation.
MMTers NEVER speak about this pivotal distributional effect of their policy because underneath their butoxed social populism, they are agenda pushers for the Oligarchy.#4
#1 There is NO such thing as a “labor share of income”
#2 Rectification of MMT macro accounting
#3 Down with idiocy!
#4 Keynes, Lerner, MMT, Trump and exploding profit
AXEC128b The Humpty Dumpty Fallacy (V1)
Blog-Reference
Bill Mitchell reports: “I took the UK Guardian’s ― How populist are you? ― quiz yesterday. I thought the quiz was an odd cultural artifact. The Tweet by Ronan Burtenshaw … summarised how these sorts of quizzes reflect underlying biases.
Anyway, I did the quiz and I won’t say who I was most alike because I am actually very much unalike the person (which just shows the categorisation errors in the exercise) but I felt relieved that I did score this outcome: You are least similar to Donald Trump.”
Now, this is curious at least with regard to economics because if one takes away the social populism, then MMT is economically identical to Trumponomics, that is to say, it produces exactly the same amount of macroeconomic profit for the Oligarchy. #1
In Bill Mitchell’s words, this “shows the categorisation errors in the exercise.” No, this shows how MMT’s social brainwashing works.
Egmont Kakarot-Handtke
#1 Keynes, Lerner, MMT, Trump, Biden, and exploding profit
Related 'MMT: A free lunch for the Oligarchy' and 'Stephanie and Noah ― economics at the intellectual zero lower bound' and 'MMTers are NOT Friends-of-the-People'.
***
Compared to microfounded mainstream economics, macrofounded MMT is a real improvement. While mainstream economics is absolutely false, MMT is half-true. So, Bill Mitchell correctly summarizes “that the Bank of Japan continues to demonstrate the categorical failure of mainstream macroeconomics …”
MMT is correct on these points:
• A growing public debt does NOT cause inflation.
• The limit of growth of public debt is further out than doom-merchants always claimed.
• Fiscal policy is the main game.
• The government has all the firepower it ever needs.
• The Central Bank (CB) can buy any amount of gov bonds without increasing the inflation rate.
• The CB can maintain yields on gov bonds “at whatever level it chooses, at whatever maturity range it targets, and for as long as it likes.”
But then comes the fraudulent MMT sales slogan: “… normally for most countries it will require continuous fiscal deficits of varying proportions of GDP as the overall saving desires of the private domestic sector vary over time.”
What MMTers never talk about are the distributional effects of a permanently growing public debt.
What exactly happens if the government runs a deficit in an elementary production-consumption economy?#1 From the general macroeconomic Profit Law Qm≡Yd+(I−S)+(G−T)+(X−M) follows that Public Deficit = Private Profit if all other variables are taken out of the picture.
So, at the end of the first period, the business sector’s deposits at the CB (= money) are exactly equal to the government’s overdrafts. If deficit spending is repeated period after period, then the government’s debt in the form of overdrafts grows permanently, and the same holds for the business sector’s deposits. Under the assumption that the interest rate is zero for overdrafts and deposits at the CB, there is NO interest effect and no interest burden on public debt. The stock of money increases, but there is no inflation.
However, things do not stop there. Basically, two liming cases are possible. The government issues bonds, and the business sector buys them. Then, gov overdrafts at the CB go to zero, and the business sector’s deposits go to zero and are replaced by the interest-bearing gov bonds. Both sides of the CB’s balance sheet return to zero. The additional money from deficit spending vanishes. The business sector now earns interest, which is taxed from the household sector. This is what Bill Mitchell calls corporate welfare.
The other limiting case is that the CB buys the gov bonds. Then, gov overdrafts at the CB go to zero, but the business sector’s deposits (= money) remain unchanged. The CB switches on the asset side from overdrafts to long-term interest-bearing bonds. This interest increases the profit of the CB and is later on recycled to the government. So, this variant is distributionally neutral with regard to interest.
Reality is between the limiting cases.
So, while MMT is descriptively correct with regard to many monetary phenomena, it lacks sound scientific foundations because it is based on a mathematically false sectoral balances equation. Both MMTers and mainstreamers get macroeconomic profit wrong. This is disqualifying for an economist.
#1 The elementary production-consumption economy is, for a start, defined by three macroeconomic axioms (Yw=WL, O=RL, C=PX), two conditions (X=O, C=Yw), and two definitions (profit/loss Q≡C−Yw, saving/dissaving S≡Yw−C). Legend: Yw wage income, W wage rate, L employment, O output, R productivity, C consumption expenditures, P price, X quantity bought/sold. It always holds Q≡−S. This is the most elementary form of the macroeconomic Profit Law. The market-clearing price is derived as P=W/R. This is the macroeconomic Law of Supply and Demand.
Related 'MMT and the inflation-red-herring' and 'MMT: agenda-pushing and money-making for the Oligarchy' and 'Why the MMT benefactors of humanity never talk about profit'.
***
REPLY to Calgacus on Nov 25I said: ‘But then comes the fraudulent MMT sales slogan: “… normally for most countries it will require continuous fiscal deficits of varying proportions of GDP as the overall saving desires of the private domestic sector vary over time.” What MMTers never talk about are the distributional effects of a permanently growing public debt.’
You disagree: “This is just not true. They do talk about that, I believe I have given you at least one reference. They just don’t wildly exaggerate them and remove them from context.”
When I talk about distributional effects, I refer to the core of distribution theory, that is, the relation of wages to profits or what is called the wage share/profit share. #1
The fact of the matter is that Bill Mitchell talks about the “overall saving desires of the private domestic sector” and by this, he makes the profit effect of deficit-spending/money-creation disappear. #2
There is NO such thing as the “private domestic sector”; there is the business sector and the household sector, and the balance of the household sector is saving/dissaving, and the balance of the business sector is profit/loss. And both cannot be lumped together to overall saving. Methodologically, this is called the Humpty Dumpty Fallacy; politically, this is plain fraud. #3
In the MMT balances equation (G−T)+(I−S)=0 for the closed economy, profit does not appear at all. So, MMT’s distribution theory is a priori false.
The axiomatically correct balances equation reads (G−T)+(I−S)−(Q−Yd)=0. It follows that Public Deficit = Private Profit. And this tells one that the relation between overall profits and wages, which is generally considered a distributional scandal, is produced by ― guess who? ― yes, by MMTers’ deficit-spending/money-creation.
MMTers NEVER speak about this pivotal distributional effect of their policy because underneath their butoxed social populism, they are agenda pushers for the Oligarchy.#4
#1 There is NO such thing as a “labor share of income”
#2 Rectification of MMT macro accounting
#3 Down with idiocy!
#4 Keynes, Lerner, MMT, Trump and exploding profit
***
***
REPLY Calgacus on Nov 25
You say: “I have to say, I think this is the weirdest, most illogical, most anti-scientific thing ever said here. It is unimaginably, strangely, uniquely wrong.”
I have news for you. You cannot think, that’s merely self-delusion. To blather and to think are quite different things.
You maintain: “You’re saying that some particular way that some people decided to describe and divide up economic activity was engraved in stone AND even more incredibly, that there is some mystical problem with putting together what they happened to separate.”
No, I have proved that MMTers are too stupid for the elementary mathematics that underlies macroeconomics and that they got the foundational concepts of profit and income wrong. #1 In this, they follow in the footsteps of Keynes and the Post-Keynesians. #2, #3, #4
It is pretty obvious that if the concepts of macroeconomic profit and income are ill-defined, distribution theory runs straight into a dead end. This also happened to MMT.
Economists, including MMTers, are scientifically incompetent. Their foundational concepts lack consistency, and this is why this sorry bunch of blathering Humpty Dumpties was unable in the past 200+ years to rise above the proto-scientific level. #6, #7
Get out of wish-wash and answer the question of which of the two sectoral balances equations is true/false
(i) (I−S)+(G−T)+(X−M)=0
(ii) (I−S)+(G−T)+(X−M)−(Qm−Yd)=0
***
REPLY to Calgacus, Matt Franko on Nov 26
MMTers call themselves Progressives and are the first and loudest to condemn the distribution of income/financial wealth between the one-percenters and the ninety-nine-percenters as unjust, absurd, socially destructive, etcetera.
The MMT policy of government deficit-spending/money-creation is the very cause of this distributive outcome. Because in a three-sector economy, with the household sector’s budget balanced, the deficit of the government sector is exactly equal to the surplus of the business sector.
So, there is a logical contradiction in the position of MMTers.
This contradiction is papered over with a semantic shell game, that is, by calling the surplus of the business sector (= macroeconomic profit) surplus of the private sector. The term private sector falsely suggests that WeThePeople is part of it.#1
This semantic shell game is a political fraud to obscure the fact that Progressives are agenda pushers for the Oligarchy.
Academic MMTers are either stupid or corrupt or both. They have to be expelled from academia. This applies first of all to Bill Mitchell.
#1 For the general case, the axiomatically correct sectoral balances equation is given by (I−S)+(G−T)+(X−M)−(Qm−Yd)=0.
***
AXEC143d Macroeconomic Profit Law (with increasing complexity) and Balances Equation
November 28, 2023
Occasional Xs: Economics ― just disinfotainment and self-hype (XXXII)
#Econ#FailedFakeScience#DisInfoTainment
— E.K-H (@AXECorg) November 28, 2023
The major approaches are axiomatically false & materially/formally inconsistent & ALL got #Profit wrong. The representative #Economist is NOT a #Scientist but an #AgendaPusher/#Clown in the political #CircusMaximus. Who is the greatest? pic.twitter.com/PWj5kuHjVU
Subscribe to:
Posts (Atom)