Occasional Xs: Economics ― just disinfotainment and self-hype (XXXVIII)

 

#Econ#DisInfoTainment#Economics claims to be #Science but is NOT. The representative #Economist is NOT a #Scientist but an #AgendaPusher / #Clown in the political #CircusMaximus. pic.twitter.com/acx0Hj2xIN

— E.K-H (@AXECorg) January 5, 2024

Occasional X: Economics ― just disinfotainment and self-hype (XLV)

 

#Economics#DisInfoTainment#Prizes

The #PulitzerPrize is just #SelfHype of the #Press, the #Oscar is just #SelfHype of #Hollywood, the #EconNobel is #SelfHype of #AcademicEconomics, etcetera. Prizes are a #Marketing / #PR / #Propaganda tool to shape #PublicOpinion and an…

— E.K-H (@AXECorg) May 7, 2024

Occasional Xs: Economics ― just disinfotainment and self-hype (XXXII)

 

#Econ#FailedFakeScience#DisInfoTainment

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

— E.K-H (@AXECorg) November 28, 2023

Occasional Tweets: Economics ― just disinfotainment and self-hype (X)

 

#Economics is #FailedFakeScience. The representative #Economist is NOT a #Scientist but an #AgendaPusher / #UsefulIdiot / #Clown in the political #CircusMaximus. #EconomicPolicyGuidance has NEVER had sound scientific foundations. There is NO such thing as a #Wirtschaftsweiser.

— E.K-H (@AXECorg) July 10, 2023

Related 'The economist as amateur journalist' 

Occasional X: The foul spirit of political economics (CCCXXXV)

“I cannot stand the AI generated posts from economicst here anymore. ” (Ivan Werning)

Economics has been failed/fake science before AI. ⇓ Social Media/AI change the form, not the substance. Scientifically, the representative economist is still a bad actor.

The major approaches… pic.twitter.com/6AnPgz31Lw

— AXEC (@EgmontHandtke) July 30, 2026

Occasional X: The foul spirit of political economics (CCLXXXVII)

 

“We are not governed by the people—that’s a myth that carries over from Abraham Lincoln’s day. We don’t have government of the people, by the people, for the people.”

“We have government of the people, by the bureaucrats, for the bureaucrats.” (Milton Friedman Quotes)

Whatever… pic.twitter.com/kiC9sYzIpq

— AXEC (@EgmontHandtke) June 21, 2026

Occasional Xs: What economists really do (XLIII)

 

#FailedFakeScience#Economics claims to be #Science but is NOT. The representative #Economist is NOT a #Scientist but an #AgendaPusher / #UsefulIdiot / #Clown in the political #CircusMaximus. This holds from Adam Smith onward to the #EconomicsMustServeHumantity folks. pic.twitter.com/FXx1JX22VK

— E.K-H (@AXECorg) October 5, 2023

Occasional Tweets: Economics ― just disinfotainment and self-hype (V)

 

#Econ#FailedFakeScience#Walrasianism, #Keynesianism, #Marxianism, #Austrianism et al. are axiomatically false & materially/formally inconsistent & ALL got #Profit wrong. #EconomicPolicyGuidance has NEVER had sound scientific foundations. Any victory laps are unwarranted. pic.twitter.com/4JoQxBNxNT

— E.K-H (@AXECorg) June 10, 2023

MMT: The fusion of Wall Street and Academia

Comment on Bill Mitchell on ‘When two original MMT developers get together to discuss their work’

Blog-Reference and Blog-Reference

Bill Mitchell summarizes: “Last week, Warren Mosler and I had one of our regular catchups and we discussed at length the state of play in Modern Monetary Theory (MMT). We are quite protective of it. We mused about how we started out on this Project and where it has gone. As old stagers do when they get together. We also reflected and compared notes on what the state of MMT is now, given the increasing visibility of the ideas in the mainstream media all around the world and the proliferation of social media activists who have chosen to identify and promote our ideas. There were aspects of that development that we identified as being of concern for us and other aspects which we considered to be a cause for optimism (celebration is too strong a word).”

In other words, the two MMT chief propagandists congratulated themselves and laid down the 2019 communication strategy for the foot soldiers, a.k.a social media activists, “who have chosen to identify and promote our ideas”. Unfortunately, these activists a.k.a trolls/operatives/shills/salespeople, impair the reputation of MMT because they “use the term MMT as a slogan rather than relating to it as a coherent and body of academic work in economic theory and practice that has been meticulously developed over more than 25 years.”

In order to restore reputation and credibility and to raise the low standards of social media communication, #1 and #2, Bill Mitchell took it upon himself to lay down the joint list of essential talking points of MMT propaganda.

What appears to be a bit strange at first glance is that Bill Mitchell and Warren Mosler do not address once the lethal critique of MMT, that is, that MMT’s policy of deficit-spending/money-creation is nothing but a free lunch for the Oligarchy. The word profit does not appear at all in the whole article. As the old quip says, Economics without profit is like Hamlet without the Prince of Denmark.

So, Bill Mitchell’s (Academia) and Warren Mosler’s (Wall Street) joint propaganda directive talks about everything between heaven and earth except MMT’s real political agenda, that is, money-making for the Oligarchy. #3 Obviously, it is intended as a user manual for disinformation and political fraud.

Accordingly, the basic principles of MMT, as laid down by the Oligarchy’s spokespersons, do not deal with how the monetary economy works but with how the state works.

Basic Principle 1: “The state, from inception, as the sole supplier of the funds needed to pay taxes or buy the debt issued by the state, must necessarily impose tax liabilities on the non-government sector before it can spend.”

This is NOT correct. A monetary economy with zero taxes is a real possibility. #4, #5, #6 So, the whole MMT “money story” breaks down already in the first sentence.

There is no need to waste time with the rest of the story. #7

MMT is simply poor science. “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) MMTers do NOT have the true theory.

This is the fact of the matter. The axiomatically correct macroeconomic Profit Law reads Q_m≡Y_d+(I−S_m)+(G−T)+(X−M). With regard to the government’s budget, it boils down to Public Deficit = Private Profit, i.e., (G−T)≡Q_m. This piece of pure economic analysis translates into the scientific insight that MMT’s foundational sectoral balances equation is false, and into the political insight that MMT’s policy of deficit-spending/money-creation is nothing but a free lunch for the Oligarchy. In other words, “progressive” MMT policy is a political fraud. #8

The fraud is exactly located in this assertion: “In accounting terms, the government’s deficit (surplus) is exactly equal at all times to the non-government sector’s surplus (deficit).” #9

MMT is a refuted economic theory, and its proponents are either stupid or corrupt or both. Bill Mitchell’s and Warren Mosler’s joint propaganda directive is the incontrovertible proof.

The general public, a.k.a. WeThePeople is accustomed to the idea that the state is in the hands of the Oligarchy but upholds the idea of the independence, objectivity, and impartiality of science. Economics has never been a science, but what Feynman called a cargo cult science. It is NOT a coincidence that both Adam Smith’s Wealth of Nations and the United States Declaration of Independence were published in 1776. Together, they constitute the birth certificate of the US Oligarchy.

MMT stands firmly in this tradition. Its scientific content is zero, and its scientific ethics is zero. #10

Egmont Kakarot-Handtke


#1 You are fighting for life? On all fronts? MMT can save you! Or maybe not?
#2 The Kelton-Fraud
#3 MMT: A free lunch for the Oligarchy
#4 The Third Way: Towards the Happy Zero-Tax economy
#5 The ultimate ― analytical ― origin of money
#6 Nick Rowe’s soapbubbling about money
#7 For the full-spectrum refutation of MMT see cross-references MMT
#8 Economics: A pointless left-right wrestling show
#9 MMT and the magical profit disappearance
#10 MMT: Time to say goodbye

Related 'MMT, Warren Mosler, and the little helpers from Wall Street and Academia' and 'Deficit-spending/money-creation is ALWAYS a bad deal for WeThePeople' and 'MMT and the promotion of Wall Street's idea of social policy' and 'MMT: The one deadly error/fraud of Warren Mosler' and 'Cryptoeconomics ― the best of Bill Mitchell’s spam folder'. For details of the big picture, see cross-references Scientific Incompetence.

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REPLY to Joe on Dec 14

You say: “Imo, Principle 3 should be principle 1, as the sectoral balances is the most important economic principle, by far. It’s the basis of every single economic transaction, monetary or barter, ever done. I gained what you lost and you gained what I lost. We may decide we’re both better off but nevertheless, the zero-sum nature of it remains. This principle alone rules out much of mainstream economic thought, especially in the European continental context. Everyone can’t be in surplus simultaneously.”

Mathematically true: Everyone can’t be in surplus simultaneously.

MMTers, though, got the math wrong. The blunder is exactly located in this assertion: “In accounting terms, the government’s deficit (surplus) is exactly equal at all times to the non-government sector’s surplus (deficit).”

The axiomatically correct 3-sector relation reads (G−T)≡Q_m+S_m, #1 i.e., the government’s deficit (surplus) is exactly equal at all times to the SUM of the business sector’s surplus (deficit) and the household sector’s surplus (deficit).

The business sector’s surplus Q_m is called profit, and the household sector’s surplus S_m is called saving. The business sector’s deficit is called loss, and the household sector’s deficit is called dissaving. All combinations of the business sector’s profit/loss and the household sector’s saving/dissaving that are equal to (G−T) are possible.

The blunder of Principle 3 invalidates the WHOLE of MMT. The two storytellers, Bill Mitchell and Warren Mosler, are too stupid for the elementary mathematics that underlies macroeconomic accounting. #2 Needless to emphasize that the “social media activists who have chosen to identify and promote” their ideas understand even less. They are brain-dead agenda pushers, as the posts of S400 and Clint Ballinger clearly demonstrate.


#1 Causally speaking, it reads Q_m⇐(G−T)−S_m, but this is not the point at the moment. The point is that one has 3 sectors (government, business, household) and NOT 2 (government, “non-government”). The inadmissible collapsing of the business sector and household sector to the “non-government” sector makes profit disappear. This operation, the Humpty Dumpty Fallacy, is absolutely disqualifying for an academic economist.
#2 Wikipedia and the promotion of economists’ idiotism

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REPLY to Kaivey on Dec 14

You say: “Egmont says they when the government deficit spends it creates inflation …”

No, I prove the exact opposite: deficit spending per se does NOT cause inflation. #1


#1 MMT and the inflation-red-herring

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REPLY to Kaivey on Dec 15

You say: “… when the government deficit spends … the rich capture the money, but they capture most of people’s money in the end anyway. If people borrow from the banks, they capture this money as well when they buy goods and services. ”

The answer is in the mathematical truth: Everyone can’t be in surplus simultaneously.

So, if the balance of the government sector (G−T) is zero, and the balance of the household sector Sm is zero, the business sector as a whole cannot make any profit, i.e., Qm=0. This follows from the macroeconomic Profit Law Qm≡(G−T)−Sm.

So, “the rich” can capture NOTHING, i.e., cannot be in surplus, if the other sectors together are not in deficit. Profit for the economy as a whole does NOT depend on greediness or grabbiness or profit maximization or other psychological/behavioral factors, but solely on the macroeconomic balances.

While it is true that one firm can increase profit by increasing productivity or lowering wages, this does NOT hold for the economy as a whole. This is the Fallacy of Composition.

“WeThePeople” can effortlessly prevent “the rich” from “capturing” profit by setting the sectoral balances right. #1 With deficit-spending/money-creation, though, MMTers do the exact OPPOSITE.


#1 How the 99 percent can bring overall profit of the 1 percent legally down to zero in 2017

Occasional Tweets: Close cousins ― economics and literary forgery

 

#Economics#FakeScience

Economic history and the history of economic thought are tightly interconnected literary forgeries. Their scientific content is zero bc of the lack of true (materially/formally consistent) theory.
The economist as storyteller (II)https://t.co/1XnmKQexei

— E.K-H (@AXECorg) September 7, 2022

Economists: scientists or political clowns?

Comment on Barkley Rosser on ‘Comments on Profit and Capital’

Blog-Reference

If you do not like Desai’s assessment of theoretical economics, take Mirowski’s: “... one of the most convoluted and muddled areas in economic theory: the theory of profit.” Or take Wood: “Profit is a subject to which economists have addressed themselves for at least two hundred years but without much success. For there is at the moment no general theory of profits which commands anything approaching universal acceptance either among academic economists or among men of affairs.” Or take Obrinsky: “Nor do the modern variants add anything whatever on this score. For Debreu, profits are simply a non-issue, while Arrow and Hahn make only passing reference to profits ― and that only as a historical introduction. Whatever may be the usefulness of these idealized theoretical constructs, they cannot be said to throw any light on the profit issue; surely, therefore, they fail to capture the essence of a capitalist market economy.”

Repeat: The representative economist fails to this day to capture the essence of a capitalist market economy. And these scientific nullities dare to open their mouths and give economic policy advice.

Your question “You think that Desai agrees with you and supports your views” is entirely beside the point. The only question is this: is the structural-systemic-macroeconomic Profit Law true or false, with truth defined as formal and material consistency. Scientific truth is NOT established by an opinion poll among economists.

The structural-systemic-macroeconomic Profit Law consists of measurable variables and is readily testable. There is no need at all to second-guess what commonsensers think about it, just as there is no need to second-guess what commonsensers think about the Law of the Lever. Everybody who thinks the structural-systemic-macro Profit Law is false can try to logically/empirically refute it. This is how science works. Only proof counts.

The opinion of commonsensers is traditionally the last thing a scientist is interested in: “People fancied they saw the sun rise and set, the stars revolve in circles round the pole. We now know that they saw no such thing; what they really saw was a set of appearances, equally reconcileable with the theory they held and with a totally different one. It seems strange that such an instance as this, …, should not have opened the eyes of the bigots of common sense, and inspired them with a more modest distrust of the competency of mere ignorance to judge the conclusions of cultivated thought.” (Mill)

What commonsensers or myopic capitalists and workers or incompetent economists hallucinate about profit is scientifically irrelevant. Overall monetary profit is given with Qm≡−Sm in the most elementary case. This tiny formula turns whole economic libraries into waste paper.

You say about the heap of crappy profit theories: “That is my view. All of them have some degree of truth to them, all of them see different aspects, but indeed none of them are fully satisfactory.” It is a well-known fact that all false theories, including the flat earth theory, have “some truth” to them. Some truth is the same thing as worthless commonsensical plausibility which is the very opposite of scientific truth.

You will never hear a scientist saying that we have numerous concepts of energy and “all of them have some degree of truth to them”.

This is the defining difference between a cargo cult scientist and a scientist: the former tries to keep everything in the swamp of wish-wash where ‘nothing is clear and everything is possible’ (Keynes). A scientist drives every question to a final clear-cut true/false decision. This is what rigorous means and this is what all blatherers and storytellers and swamp creatures abhor and denounce most.

The pluralism of false profit theories has always been and will always be scientifically indefensible. Barkley Rosser’s methodologically confused anything-goes wish-wash is self-disqualifying.

The main issue of this thread is profit and not capital and not distribution. It should be immediately clear that traditional distribution theory falls apart because the underlying profit theory is provably false. So, there is absolutely no need to deal here in any detail with the marginal theory of distribution (the second-worst construct right after supply-demand-equilibrium) or with Piketty. #1

The profit theory is false since Adam Smith. Whether the representative economist understands the unassailable mathematical proof and its vast implications is a matter of indifference. The representative economist has always been outside of science and will never be admitted to it. Not knowing what profit is, is scientifically lethal to an economist, and degrades him to a clown in the political Circus Maximus. Barkley Rosser is a living example.

Egmont Kakarot-Handtke


#1 For more details about these issues see
► Non-existence of economic science
► A particularly silly critique
► The universal Profit Law and the multitude of unique historical circumstances
► First Fundamental Law vs. Fundamental theorem of income distribution
► The profit theory is false since Adam Smith. What can you expect from distribution theory?
► Economic policy has gone wrong because economic theory has gone wrong

Immediately preceding Profit and stupidity.

***

REPLY to Barkley Rosser on Jun 30

There are TWO issues:
(i) Desai, Mirowski, Wood, Obrinsky, you, and I agree that the profit theory is false for 200+ years, that is, the representative economist fails until this day to capture the essence of a capitalist market economy.
(ii) Whether the elementary objective-structural-systemic-behavior-free-macroeconomic Profit Law, i.e. Qm≡−Sm, is scientifically true, i.e. materially and formally consistent.

Let us be content with the agreement on (i) and not get distracted by (ii). From (i) follows: the four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent, #1, and ALL got profit wrong. With the pluralism of provable false theories, economics sits squarely at the proto-scientific level. Economics is NOT a science and neither orthodox nor heterodox economists qualify as scientists. #2

#1 “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)
#2 Economics: 200+ years of scientific incompetence and fraud

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REPLY to Barkley Rosser on Jun 30

Isn’t it curious that in economics NOT ONE of the basic concepts ― profit, income, capital, money, etcetera ― is properly defined. A fact that did not escape the notice of von Neumann: “I think it is the lack of quite sharply defined concepts that the main difficulty lies, and not in any intrinsic difference between the fields of economics and other sciences.”

Needless to emphasize that economists have an explanation=excuse for their failure in general and in every particular case. #1 The Pavlovian argument is that in “other sciences”, too, things are not defined precisely (meteorology, biology, psychology etcetera). Stupid as they are, economists have never realized that with these excuses they catapult themselves out of science. Feynman killed this silly argument long ago: “By having a vague theory it is possible to get either result. ... It is usually said when this is pointed out, ‘When you are dealing with psychological matters things can’t be defined so precisely’. Yes, but then you cannot claim to know anything about it.”

Rule #1: When you cannot define your subject matter precisely you are a priori OUTSIDE of science. This applies to the so-called social sciences which Feynman re-categorized as cargo cult sciences. And this is why economics has to be re-defined as systems science.

This is the current state of economics: “economists cannot claim to know anything about it” or as Clower put it: “... 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.” What has been produced instead of scientific knowledge is endless blather, political hot air, folk philosophy=utilitarianism, folk psychology, folk sociology, silly semantic games, sitcom stories, and white noise.

Ask an economist what profit is and you get these answers: Smith: Wages, profit, and rent, are the three original sources of all revenue as well as of all exchangeable value. Ricardo: … profits would be high or low in proportion as wages were low or high. Senior: In the second class we have the words Capital, Capitalist, and Profit. These terms express the instrument, the person who employs or exercises it, and his remuneration; but there is no familiar term to express the act, the conduct of which profit is the reward, and which bears the same relation to profit which labour does to wages. To this conduct we have already given the name of Abstinence. Mill: The cause of profit is, that labour produces more than is required for its support. Marx: Hence, if a commodity is sold at its value, a profit is realized, which is equal to the excess of its value over its cost-price, or equal to the entire surplus-value incorporated in the value of the commodity. Jevons: I think that in the equation Produce=profit+wages, the quantity of produce is essentially variable, and that profit is the part to be first determined. Marshall: The normal earnings of management are of course high in proportion to the capital, and therefore the rate of profits per annum on the capital is high, when the work of management is heavy in proportion to the capital. Knight: The presence of true profit, therefore, depends on an absolute uncertainty in the estimation of the value of judgment, or on the absence of the requisite organization for combining a sufficient number of instances to secure certainty through consolidation. Schumpeter: And since the new combinations which are carried out if there is ‘development’ are necessarily more advantageous than the old, total receipts must in this case be greater than total costs. von Mises: The ultimate source from which entrepreneurial profit and losses are derived is the uncertainty of the future constellation of demand and supply. Keynes: Thus the factor cost and the entrepreneur’s profit make up, between them, what we shall define as the total income resulting from the employment given by the entrepreneur. Hicks: The curve IS can therefore be drawn showing the relation between Income and interest which must be maintained in order to make saving equal to investment. Harrod: The relevant propositions may be stated in the form of truisms or tautologies, such as that the price of an article is equal to the sum of rewards to all persons contributing to its production, ... Shackle: Thus it seems that we might select decision-making and uncertainty-bearing as the economic roles to perform which men come forward because of the prize of profit in the sense we have been discussing. Samuelson: GDP, or gross domestic product, can be measured in two different ways: (1) as the flow of final products, or (2) as the total costs or earnings of inputs producing output. Because profit is a residual, both approaches will yield exactly the same total GDP. Debreu: … the consumers own the resources and control the producers. Thus, the ith consumer receives the value of his resources … and the shares … of the profit of the 1st, …, jth, …, nth producer. … Consider a private ownership economy E . When the price system is p, the jth producer tries to maximize his profit on Yj. Suppose that yj does this; the profit pj(p) = p • yj is distributed to shareholders. Arrow and Hahn: Given a set of prices for all commodities, it is possible to calculate for each activity its profit, the excess of the values of its outputs over the value of its inputs; … The assumptions of perfect competition imply that … each firm chooses an activity that yields it at least as much profit as any other possible. Kaldor: Income may be divided into two broad categories, Wages and Profits (W and P), where the wage-category comprises not only manual labour but salaries as well, and Profits the income of property owners generally, and not only of entrepreneurs; Kalecki: Gross profits = Gross private investment + Capitalists’ consumption. Sraffa: This is because the surplus (or profit) must be distributed in proportion to the means of production (or capital) advanced in each industry; and such a proportion between two aggregates of heterogeneous goods (in other words, the rate of profits) cannot be determined before we know the prices of the goods. Boland: The Walrasian prices correspond to the Marshallian long-run equilibrium prices where every producer is making zero excess profits. Thus, since in the short-run non-zero profit is possible, the actual short-run prices cannot always be used for aggregation. But, from the macro perspective of Walrasian general equilibrium, the total profits in this case cannot be other that zero (otherwise, we would need a Santa Claus to provide the aggregated positive profit) but this does not preclude the possibility of short-run profits and losses of individual firms canceling each other out. Minsky: The simple equation ‘profit equals investment’ is the fundamental relation for a macroeconomics that aims to determine the behavior through time of a capitalist economy with a sophisticated, complex financial structure. Barro: Households receive income in four forms: profit …, wage income, rental income, and interest income. Wickens: Implicit measure of profits Πt = −kt+1 +(1+θ)kt. Ljungqvist and Sargent: In each period, the representative firm takes (rt, wt) as given, rents capital and labor from the households, and maximizes profits: Π=F(kt, nt)−rtkt−wtnt. Nadal: ... the budget constraint of consumers may be undetermined because it incorporates their share of firms’ profits, which may not be defined. Keen: … net annual income in this simple model equals the sum of wages plus profits.

ALL, repeat ALL, these authors got it wrong and nothing proves the idiocy of economists better than the endless list of provably false profit definitions.

Overall profit is with the precision of two decimal places given by the macrofounded Profit Law, which reads in the most elementary case Qm≡−Sm. This formula immediately tells anyone who can read and think that the monetary economy is NOT an equilibrium system but will break down with mathematical necessity ― not because of human errors/mistakes/ misbehavior but BECAUSE of the inescapable Profit Law.


#1 Failed economics: The losers’ long list of lame excuses

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REPLY to Barkley Rosser on Jul 1

(i) The ancient Greeks introduced the distinction between opinion (= doxa) and knowledge (= episteme).

(ii) Scientific knowledge is defined by material AND formal consistency. Accordingly, refutation consists of proof of empirical or logical inconsistency.

(iii) The guiding principle for establishing knowledge is the distinction true/false: “There are always many different opinions and conventions concerning any one problem or subject-matter (such as the gods). This shows that they are not all true. For if they conflict, then at best only one of them can be true. Thus it appears that Parmenides ... was the first to distinguish clearly between truth or reality on the one hand, and convention or conventional opinion (hearsay, plausible myth) on the other.” (Popper)

(iv) Knowledge takes the form of a materially/formally consistent theory which is the best mental representation of reality that is humanly possible.

(v) Barkley Rosser has never understood what science is all about. This, he has in common with the vast majority of economists who are 2000+ years behind the curve.

(vi) All human beings are born into an intellectual swamp. The vast majority stays there for the rest of their lives, only the tiny intellectual elite of scientists tries to get out: “We are lost in a swamp, the morass of our ignorance. … We have to find the roots and get ourselves out! … Braids or bootstraps are necessary for two purposes: to pull ourselves out of the swamp and, afterwards, to keep our bits and pieces together in an orderly fashion.” (Schmiechen) #1

(vii) The methodological bootstraps of science are formal and material consistency. Logical consistency is secured by applying the axiomatic-deductive method and empirical consistency is secured by applying state-of-the-art testing.

(viii) ALL profit theories since Adam Smith are logically/empirically false. Strictly speaking, this proto-scientific rubbish does not deserve the title theory. Laypeople constantly confound hypothesis (= guess, start of the process) with theory (= truth, end of the process). Profit theory never rose above the guessing stage. #2

(ix) There is only ONE true theory. The pluralism of false theories is scientifically indefensible: “It is, rather, the indication of a failure of reason to find suitable alternatives which might be used to transcend an accidental intermediate stage of our knowledge.” (Feyerabend)

(x) In their defense of the comfort zone of stupidity ‘where nothing is clear and everything is possible’ (Keynes) swampies regularly invoke Heisenberg’s uncertainty principle, Schrödinger’s cat, or Gödel’s proof. #3 Barkley Rosser is no exception. Needless to emphasize that his understanding of physics and logic is even worse than his understanding of profit.

(xi) By invoking quantum mechanics in order to defend the logical inconsistency of economics he again makes a fool of himself. Schrödinger’s cat is “The most misunderstood thought experiment in all of Science. The cat is used as an illustration of the fallacy in applying quantum mechanical principles to macroscopic objects. Cats cannot exist in a superposition of alive and dead.” #4

(xii) Because economics cannot exist in a superposition of true and false, all false profit theories have to be eliminated. Economists have failed at this task until this day. The four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the pivotal economic concept profit wrong.

(xiii) Barkley Rosser is defending the indefensible. He always was and still is outside of science. #5


#1 Getting out of the economics swamp
#2 Economics: a science without scientists
#3 How economists shoot themselves non-stop in the methodological foot
#4 Source
#5 Economists: The Trumps of science

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REPLY to anne on Jul 2

Economics in its four incarnations ― Walrasianism, Keynesianism, Marxianism, Austrianism ― is one of the worst scientific scandals in human history and you and Barkley Rosser are part of it. #1

#1 For details of the big picture see cross-references Incompetence

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REPLY to Dennis Pickard on Jul 3

You say: “It seems to me your equation relates to changes in inventory, not profits.”

This is NOT the case. Changes of inventory have been explicitly excluded with the condition X=O in footnote 2 above. #1 Inventories have been dealt with at length elsewhere. #2

Note that there is monetary profit and nonmonetary profit. In order to keep the discussion FOCUSED, inventories, nonmonetary profit, distributed profit, retained profit and related phenomena have ALL been left out here. Of course, they have been dealt with elsewhere. This is why references are given.

The sole point to PROVE here is that profit/loss is (in the most elementary case) the mirror image of dissaving/saving and that it has NOTHING to do with what capitalists, workers, laypeople, commonsensers, or scientifically incompetent economists have hallucinated since Adam Smith/Karl Marx it is.

Profit is NOT the income of capital.

Your attempt to de-focus the issue again by taking in a ‘surplus of utility’ and then making a measurement problem out of it is futile. Monetary profit is (in the most elementary case) tangible cash in the box and measurable with the precision of two decimal places. Qm≡−Sm is a testable proposition #3, utility is a NONENTITY. To mix the two concepts is the sure way to scientific failure. #4 By putting utility into the Walrasian axioms=microfoundations economists are for 150+ years on the way to the inescapable final delirium.


#1 Link to footnote 2
#2 Primary and Secondary Markets
#3 The Common Error of Common Sense: An Essential Rectification of the Accounting Approach’
#4 Confused Confusers: How to Stop Thinking Like an Economist and Start Thinking Like a Scientist

***

LINKS at Angry Bear on Jul 4

The profit theory is false since Adam Smith. This is one of the greatest embarrassments in the history of the sciences. For the proof see:
Profit and stupidity
Economists: scientists or political clowns?
and cross-references Profit

***

LINKS at Mike Norman Blog on Jul 4

The profit theory is false since Adam Smith. This is one of the greatest embarrassments in the history of the sciences. For the proof see:
Profit and stupidity
Economists: scientists or political clowns?
and cross-references Profit

***

COMMENT on John Vertegaal, Dennis Pickard on Jul 5

Barkley Rosser takes it upon him to explain the macrofoundations approach. Needless to emphasize that he fails.

(i) He argues: “This implies certain things that neither you nor he mention, that such a firm would have enormous monopoly power, hence an ability to arbitrarily change price, and price certainly matters for all this.”

This is inaccurate. In the most elementary case, the conditions of market clearing and budget-balancing hold and in this case the price as the DEPENDENT variable is given as P=W/R. For details see True macrofoundations: the reset of economics.

If the firm sets any other price then the quantity becomes the dependent variable. In this case, the market does NOT clear and inventory changes happen. Note that the macrofoundations approach deals with the systemic properties and the behavior of the economy. There is NO vacuous second-guessing of human behavior at all. This is the whole point of the paradigm shift.

(ii) He asserts: “Egmont claims inventories are irrelevant.” This is NOT the case. Inventories have been dealt with at length elsewhere. See for example Essentials of Constructive Heterodoxy: The Market.

(iii) He asserts: “His accounting and axioms imply equilibrium conditions that he does not admit he is doing”. This is NOT the case. Equilibrium, clearly, is a NONENTITY and all theories/models that apply the equilibrium concept are a priori false. For details see Equilibrium and the violation of a fundamental principle of science.

To apply the condition of market-clearing or budget balancing has NOTHING to do with equilibrium. It is the other way round, equilibrium implies market clearing and budget balancing. This is hard to understand for confused confusers.

(iv) He mentions: “… just as in fact the NIPA of the US simply impose the accounting identity that savings equal investment.” The proof has been given that the IS-identity is false. See The Common Error of Common Sense: An Essential Rectification of the Accounting Approach and The Three Fatal Mistakes of Yesterday Economics: Profit, I=S, Employment.

Barkley Rosser is lost in yesterday's economics and simply cannot get his head around the methodological imperative that economics has to be macrofounded.

***

COMMENT John Vertegaal, Dennis Pickard on Jul 5

Barkley Rosser does not get the simplest of all economic configurations. These three axioms constitute the macrofoundations: (A1) Yw=WL, (A2) O=RL, (A3) C=PX. For a start, two conditions hold: market-clearing X=O and budget-balancing C=Yw. This yields the price as dependent variable P=W/R. Monetary profit is defined as Qm≡C−Yw and is ZERO under the condition of budget balancing. Changes in the wage rate change the market-clearing price in the same direction but do NOT affect monetary profit. This is an unassailable mathematical fact that can be checked by national accounting. Note that ALL variables of the axioms are measurable.

The start configuration is a limiting case and the two conditions are lifted in the course of further analysis. Who does not understand the simplest case, though, is unfit for understanding the general case with non-market-clearing (= inventory changes) and non-budget-balancing (= saving/dissaving).

The interesting thing is that the two conditions market-clearing X=O and budget-balancing C=Yw also appear in equilibrium models and this means that equilibrium models are zero profit models. The representative economist is seldom aware of this implication.

“The Walrasian prices correspond to the Marshallian long-run equilibrium prices where every producer is making zero excess profits. Thus, since in the short-run non-zero profit is possible, the actual short-run prices cannot always be used for aggregation. But, from the macro perspective of Walrasian general equilibrium, the total profits, in this case, cannot be other than zero (otherwise, we would need a Santa Claus to provide the aggregated positive profit) but this does not preclude the possibility of short-run profits and losses of individual firms canceling each other out. (Boland)

“Some economists hold that although the profit motive is necessary in a business economy, actual profit is unnecessary, and that in fact pure profits are zero in a competitive economy.” (Murad)

Needless to emphasize that the manifest CONTRADICTION between zero profit in equilibrium models and non-zero macroeconomic profit/loss, in reality, has been buried under a gigantic heap of confused blather. In the real world, macroeconomic profit is NON-ZERO for hundreds of years because of the Profit Law which says Qm≡−Sm in the most elementary case.

Because the profit theory is false since Adam Smith ALL economics textbooks from Samuelson to Mankiw and Rodrik are false. #1 The logical blunder is right before everybody’s eyes. As Barkley Rosser recommends: “Look at any Principles of economics textbook.”

Because the profit theory is false Econ 101 is false. #2 Economics students, though, swallow this proto-scientific garbage generation after generation without turning a hair. This gives one a reliable and precise metric of the abysmal stupidity of the folks that populate the universities.


#1 The father of modern economics and his imbecile kids
#2 For details see cross-references Econ 101

***

REPLY to Barkley Rosser on Jul 6

(i) Barkley Rosser misquotes: “So he identifies ‘market clearing’ which (ahem) he assumes, as being given by X=0.” Actually, it is X=O, that is, quantity bought X = output O. Barkley Rosser should have immediately recognized that X=0 makes NO sense at all. Obviously, he does NOT understand what he is commenting on.

(ii) The condition of market-clearing X=O does NOT imply equilibrium, while equilibrium implies market clearing. The idea of equilibrium entails that the system moves towards this end-state. Nothing of the sort happens in the economic system as defined by macrofoundations.

Equilibrium is a NONENTITY. The economic system evolves but neither towards a short-run nor a long-run equilibrium. In fact, the proof has been given that the market economy is INHERENTLY UNSTABLE. #1 There is NO such thing as general supply-demand-equilibrium. The whole of equilibrium economics from Marshall to DSGE is PROVABLE false. #2

(iii) I have NOT “discovered that profits are zero (in equilibrium)”. This is a feature of Walrasianism. I have indeed discovered that monetary profit is ALWAYS non-zero, i.e. Qm≡−Sm in the most elementary case. Profit is zero in the analytical limiting case of household sector’s exact budget balancing, i.e. C=Yw, which practically never happens.

(iv) Barkley Rosser summarizes: “To close this out, aggregate profits in the US are currently about $1,8 trillion, about 10% of US GDP, and far above Egmont’s zero.” I NOWHERE said that profit is zero in the US or elsewhere. Just the contrary. The macrofounded profit theory unambiguously states that total monetary profit is given by Qm≡Yd+(I−Sm)+(G−T)+(X−M). #2 This is a testable formula that holds also for the US.

In sum: Barkley Rosser cannot get out of his self-created confusion. Who cannot handle three simple equations (Yw=WL, O=RL, C=PX), two conditions (X=O, C=Yw) and the definition of total monetary profit (Qm≡C−Yw) is forever outside of economics. Note that ALL variables in ALL equations are unambiguous and measurable. There is NO room for interpretation and blather.


#1 The market economy is inherently unstable and economists never grasped it
#2 First Lecture in New Economic Thinking

***

REPLY to Barkley Rosser on Jul 7

You say: “I find it weird that you seem to think it is a big mystery or might be extremely unusual that wages and profits might be inversely related.”

Now, this is as old as Ricardo: “… profits would be high or low in proportion as wages were low or high” and it is FALSE. It is the old mistake of mentally retarded economists to generalize the results of partial analysis. For a single firm, it is true that a reduction of the wage rate increases profit but for the economy as a whole this does NOT hold. #1

It is the Fallacy of Composition all over again.

The most elementary economy is given with three equations Yw=WL, O=RL, C=PX, two conditions X=O, C=Yw and the definition of total monetary profit Qm≡C−Yw. #2 This yields P=W/R (1), i.e. the market-clearing price is equal to unit wage costs. This is equivalent to W/P=R (2), i.e. the real wage is equal to productivity. This holds, no matter how the wage rate is set. A wage reduction leads to a proportional fall in the market-clearing price. Profit Qm does NOT change because the budget is balanced, i.e. C=Yw, and from this follows Qm=0.

So Ricardo was wrong: from a lower wage rate does NOT follow a higher profit for the economy as a whole. There is NO inverse relationship between wages and total profit in the most elementary economy. Where, then, does profit come from? Not from higher productivity either! Productivity changes lead to inverse changes in the market-clearing price according to (1).

It was Marx who asked the right question: “How can they continually draw 600 p. st. out of circulation, when they continually throw only 500 p. st. into it? From nothing comes nothing. The capitalist class as a whole cannot draw out of circulation what was not previously in it.”

Trivially true. #3 As long as the budget is balanced, i.e. C=Yw, total monetary profit Qm is zero. Because we know already that the macroeconomic Profit Law states Qm≡−Sm it is quite obvious that the business sector as a whole can only draw more out of the circulation, i.e. C greater Yw, if the household sector throws more into the circulation, in other words, if the household sector dissaves, i.e. if Sm≡Yw−C is negative, i.e. if C is greater than Yw.

From nothing comes nothing, even economists understand this.

So, Marx asked the right question but gave the wrong answer because he was fixated on the labor theory of value and not very good at logic and math. #1 Those who came after he was even worse.


#1 Profit for Marxists
#2 For details see Profit theory in less than 5 minutes
#3 How the Intelligent Non-Economist Can Refute Every Economist Hands Down

***

REPLY to Anonymous on Jul 8

Your conclusion: “I’d hazard a guess that it’s founded on differences of subjective opinion rather than facts” is entirely beside the point. First of all, science is NOT a matter of opinion (= doxa) but of knowledge (= episteme). Scientific knowledge is well-defined by material and formal consistency.

Now, every economist knows the following:
(i) Economics is a failed science, that is, the four main approaches Walrasianism, Keynesianism, Marxianism, Austrianism are materially/formally inconsistent.
(ii) The foundational concept profit is ill-defined (see Desai and others)
(iii) The concept of capital is ill-defined (see Cambridge Capital Controversy)
(iv) The concept of equilibrium is ill-defined: “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.” (Blaug), see also (Ingrao et al.), (Ackerman et al.)

Therefore, ALL theories/models that apply the traditional concepts of profit, capital, equilibrium are A PRIORI false. And this provides the implicit consensus of every worthwhile economic discussion: there is NO USE at all to stir this 200+-year-old rotten soup one more time. The only worthwhile task for the economist/scientist has been defined by Joan Robinson: “Scrap the lot and start again.”

Clearly, a paradigm shift is the last thing Barkley Rosser wants. Being a lifelong loudspeaker in the economics swamp where “nothing is clear and everything is possible” (Keynes) he attempts to defend his natural habitat with the tried and tested rhetorical means of a confused confuser.

What has been accomplished in this thread is:
(1) A paradigm shift from obsolete microfoundations to correct macrofoundations.
(2) The consistent derivation of total monetary profit from the most elementary set of macroeconomic axioms.
(3) The clarification of the OBJECTIVE nature of profit and the refutation of the familiar SUBJECTIVE interpretations.
(4) The irreversible final debunking of Barkley Rosser.
(5) The presentation of the complete macrofounded Profit Law Qm≡Yd+(I−Sm)+(G−T)+(X−M). This is a testable equation that holds for all countries. Theoretical economics has done its job, now national econometricians can do theirs.

Everybody who wants to refute the macrofounded profit theory ― which fully replaces all profit theories since Adam Smith/Karl Marx ― has a straightforward task: to prove that the Profit Law is either logically or empirically inconsistent.

Science is NOT a matter of opinion but of proof. Everything else is brain-dead blather of soapbox economists.

***

REPLY to Barkley Rosser on Jul 9

(i) You say: “So, when Qm = Sm, they are positively related, but when you provide your more general equation, it is (1−Sm) that is entering on the right-hand side. This implies a negative relationship. So, are they positively related or negatively related, …”

This is a typo of your OWN making. It always holds and I always write Qm=−Sm. #1 As usual, the contradiction is only in your muddled head.

(ii) You say: “And that more complicated equation is very close to a Keynesian formulation, but, of course, you have denounced Keynesian economics as totally and utterly false.”

I have not only “denounced Keynesian economics as totally and utterly false” but I have PROVED it. #2 Allais has done this before #3: “Toutes ses [Keynes’s] deductions, à notre avis, manquent absolument de rigeur. … L’intuition de Keynes lui a fait sentir où se trouvaient les difficultés, mais son insuffisance logique ne lui a pas permis de résoudre les problèmes que son intuition lui avait fait entrevoir.” In plain English: Keynes was scientifically incompetent. Among economists, though, this defect is rarely noticed because it is the old normal since Adam Smith.

(iii) Standard economics is based on the Walrasian axiom set = microfoundations: “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)

Everybody knows by now that equilibrium is a NONENTITY: “Just as classical General Equilibrium Theory has never been able to provide a definitive account of how equilibrium prices come to be established, so Rational Expectation Theory has not shown how, starting from relative ignorance, everything that can be learned comes to be learned.” (Hahn)

Because of this, microfoundations have to be fully replaced by macrofoundations. The most elementary version consists of the three axioms (A1) Yw=WL, (A2) O=RL, (A3) C=PX. It is as clear as the day, except for the muddled head of Barkley Rosser, that macrofoundations (A1) to (A3) do NOT contain the concept of equilibrium in marked contrast to microfoundations HC1 to HC5.

So: “Because equilibrium is a NONENTITY, ALL equilibrium models fly out of the window, no matter whether they are Walrasian or Keynesian equilibrium models. From the fact that equilibrium is a NONENTITY follows logically that disequilibrium, too, is a NONENTITY. Because of this, all disequilibrium models, too, fly out of the window. The economy is an evolving system and neither the concept of equilibrium nor disequilibrium is applicable.” #4

Walrasianism and Keynesianism are materially/formally inconsistent proto-scientific garbage, and it is nowadays only defended by a rearguard of incorrigible muddleheads.


#1 You can check this with Ctrl+F and entering Qm in the search field
#2 For more details, see Keynesianism ― the economists’ senile dementia
#3 How Keynes got macro wrong and Allais got it right
#4 Productivity and the zombie apocalypse

***

REPLY to Barkley Rosser on Jul 10

You say: “… but they are what get you from your three empty accounting identities to your wonderful condition of Qm = Sm, …”

Again. This is a typo of your OWN making. It always holds and I always write Qm≡−Sm. The minus sign is easy to overlook, so perhaps this helps Qm = ―Sm.

But the real issue is not the typo; the issue is UNDERSTANDING. The verbalization of the equation reads: “It always holds Qm+Sm=0 or Qm=−Sm, in other words, at the heart of national income accounting is an identity — the business sector’s deficit (surplus) equals the household sector’s surplus (deficit). Put bluntly, loss is the counterpart of saving and profit is the counterpart of dissaving. This is the most elementary form of the Profit Law.”

Barkley Rosser cannot get out of his self-created muddle. Who cannot handle three macro axioms (Yw=WL, O=RL, C=PX), two conditions (X=O, C=Yw), and two definitions (Qm≡C−Yw, Sm≡Yw−C), and UNDERSTAND IMMEDIATELY that Qm≡−Sm, i.e., that business profit and household saving are NEGATIVELY related, is OUTSIDE of economics.

When the pivotal concept of profit is not properly understood, the rest of the analytical superstructure of economics falls apart, and there is NO use at all to filibuster about capital and equilibrium. The best the representative economist can do for the welfare of humanity is to get out of the way.

***

WRAP-UP for Barkley Rosser on Jul 13

Rewarding to see that you have drawn the consequence of a rare flash of insight and left economics altogether. #1

Your true competence has always been insightful comments on the sex life of the House of Sa’ud and other celebrities, as demonstrated in two recent pieces:

• Muhammed Bin Nayef Bin Abdulaziz Al Sa’ud Confined To His Palace
• Was Thomas Jefferson A Monstrous Rapist?

Economics has never been your thing. Good for society to learn that you have left profit, capital, equilibrium, and other NONENTITIES behind for good and dedicate your talent now fully to Sexual Research.

May the rest of the scientifically failed economists follow your example.

#1 Economists: scientists or political clowns?

***

REPLY to Barkley Rosser, vertegaa, Anonymous on Jul 14

Barkley Rosser argues: “You can read about this stuff in the book I already cited by me, as well as several of my other books, and also in standard grad level micro theory textbooks like Varian or Mas-Colell, Whinston, and Green.”

Note that standard economics is axiomatically false, and because of this, the textbooks mentioned are scientifically worthless. #1

The standard axiom set #2 consists of blatant nonentities, but each student generation has swallowed it for 150+ years without turning an eyelid. In order to be applicable HC2, which translates formally into calculus, requires a lot of auxiliary assumptions, most prominently a well-behaved production function. Taken together, all axioms and auxiliary assumptions crystallize to SS-DD-equilibrium or what Leijonhufvud famously called the Totem of Micro/Macro.

Needless to stress that ALL THREE elements of the standard tool (SS-function, DD-function, equilibrium) are NONENTITIES. Any discussion about forward- or backward-bending supply curves or stable/unstable equilibria is as vacuous and ridiculous as any discussion about dancing-angels-on-a-pinpoint. #3

All standard textbooks are false because microfoundations and the definition of profit/income are provably false ― there is NO NEED AT ALL to read or quote this stuff.

This is the challenge of economics: “There is another alternative: to formulate a completely new research program and conceptual approach. As we have seen, this is often spoken of, but there is still no indication of what it might mean.” (Ingrao et al.)


#1 The father of modern economics and his imbecile kids
#2 “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 All models are false because all economists are stupid

***

REPLY to Anonymous on Jul 15

There is the quantity produced per period = output O. There is the quantity sold per period X. These two quantities are different. But it is logically and practically possible that they are equal. If they are not equal the stock of hitherto unsold output of the business sector (= inventory) changes.

To write down X=O is to say that the market is cleared in the given period. For the purpose of analysis, X=O can also be used as a condition.

The concept of the equality of two quantities is different from the concept of equilibrium. Equilibrium, IN ADDITION, implies that there is some force (= Invisible Hand) that makes the quantities eventually become equal.

This, though, is NOT the case for the economic system. It has NEVER been proven that the monetary economy is an equilibrium system. #1 The fixpoint theorem is an existence proof (i.e. it is possible that X = O) but does NOT prove that X = O is realizable.

Time to take notice that equilibrium is a dead concept; in fact, it has already been dead in the Jevons/Walras/Menger cradle 150+ years ago. This is common knowledge.

“The mathematical failure of general equilibrium is such a shock to established theory that it is hard for many economists to absorb its full impact.” (Ackerman)

“To conclude, the proof of existence concerns a state of the economy that cannot be attained by the individual actions of the self-aggrandizing and decentralized agents originally specified for the general equilibrium model.” (Nadal)

“Gerard Debreu in his classic Theory of Value states that his theory is concerned with the explanation of prices. Others as distinguished as Kenneth Arrow and Frank Hahn deny that general equilibrium theories are explanatory. Moreover, some prominent economists and philosophers have argued that work in general equilibrium theory is not empirical science at all.” (Hausman)

“The fact that it has not been possible to build a process for the formation of equilibrium prices is disastrous when it is recalled that the fundamental task of theory is precisely to make coordination in the market intelligible.” (Benetti et al.)

“Just as classical General Equilibrium Theory has never been able to provide a definitive account of how equilibrium prices come to be established, so Rational Expectation Theory has not shown how, starting from relative ignorance, everything that can be learned comes to be learned.” (Hahn)

Equality X = O is NOT the same as equilibrium. Equality is logically and practically possible, but equilibrium is a NONENTITY. No competent economist applies it any longer. Somehow, this seems to have escaped Barkley Rosser and you.


#1 Just the contrary, see Could we, please, all focus on the key question of economics?.

***

REPLY to Anonymous on Jul 16

PROVABLY false
• profit theory, for 200+ years,
• Walrasian microfoundations (including equilibrium), for 150+ years,
• Keynesian macrofoundations (including I=S, IS-LM), for 80+ years.

ALL theories/models that contain profit, maximization-and-equilibrium, or I=S/IS-LM are a priori false and this is more than 90 percent of the content of peer-reviewed economic quality journals and 100 percent of textbooks of renowned authors since 1948.

By implication, ALL posts that contain these concepts are proto-scientific garbage. This includes your exchange with Barkley Rosser.

You may not have heard it, but Barkley Rosser has now left economics for good and dedicates his talent to sexual research, gossiping about academic celebrities, name-dropping, and reputation management.

How to spot economics trolls

Comment on Craig Murray on ‘How To Spot A Twitter Troll’*

Blog-Reference

Craig Murray summarizes: “It is a matter of simple fact that the British government employs a very large number of people whose full time job is to influence the political narrative on social media. The 77th Brigade of the British Army, the Integrity Initiative, MI5 and MI6 and GCHQ all run major programmes of covert online propaganda. These information warriors operate on Twitter, Facebook, and in comments sections across the internet. I have long been fascinated by the disconnect by which people, who do know and understand that the security services employ tens of thousands of people and have budgets of billions, nevertheless find it hard to accept that they may come personally into contact with their operations.”

Does this come as a surprise? No: “Plato has Socrates describe a group of people who have lived chained to the wall of a cave all of their lives, facing a blank wall. The people watch shadows projected on the wall from objects passing in front of a fire behind them, and give names to these shadows. The shadows are the prisoners’ reality. Socrates explains how the philosopher is like a prisoner who is freed from the cave and comes to understand that the shadows on the wall are not reality at all, for he can perceive the true form of reality rather than the manufactured reality that is the shadows seen by the prisoners. The inmates of this place do not even desire to leave their prison; for they know no better life.” #1

The situation has not fundamentally changed since the ancient Greeks. Newspapers, radio, TV, and social media only multiply the shadows on the blank wall. The communicative situation is schematically summarized with a graphic AXEC153. #2

So, we have three elements reality-medium-consciousness. Who controls the medium manufactures reality as it appears in consciousness. The British government has been a major player in this business since around WWI, and social media added merely a new facet to the communication mix, which consisted originally of rumor, horror stories (enemy), hero stories (own), disinformation, and censorship.

While everybody knows since George Orwell that history and actuality are, for the most part, literary fiction and medial stagings of scribes/Ministry of Truth/entertainment industry, one tends to think that science is non- and anti-hallucinatory.

The task of science is to eliminate all distortions between reality and consciousness. A materially/formally consistent theory is the best mental representation of reality that is humanly possible. Science is binary, i.e., true/false with nothing in between. The ultimate goal of science is the true theory.

This, of course, also holds for economics: “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, though, is this: The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, etc. ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got profit ― the foundational concept of the subject matter ― wrong. Economics is not a coherent body of certain knowledge but a heap of provably false theories.

So, economics has no scientific content but is propaganda in a scientific bluff package. There has been no scientific progress for 200+ years. False theories are not replaced by true theories but simply repeated. Oskar Morgenstern criticized his academic peers 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 this follows that the vast majority of economists were already trolls long before the launch of the econblogosphere. The characteristic of economics is that production and distribution of communicative content have traditionally not so much been under the control of the government as of the Oligarchy. Well-known examples are pivotal institutions like the London School of Economics, #3 the Cowles Commission, #4, or the University of Chicago. #5 This, though, is only the historical tip of the iceberg. The conclusion is not too far-fetched that, in the meantime, academia and the greater part of economics publication/ communication are orchestrated and sponsored by a handful of activist billionaires. This carries quite naturally over to the econblogosphere.

Since the scientific failures of Adam Smith/Karl Marx, who both did not understand profit and how the monetary economy works, economics has not been science but political agenda pushing. This starts with econ textbooks and ends with the EconNobel.

Spotting economics trolls is easy, they identify themselves by waving their camp flag (Walrasian, Keynesian, Marxian, Austrian, MMTer, Pluralist), announcing to improve/save the world, hype their current bellwether (excellent article, Paul), stubbornly repeat proto-scientific garbage, utter their silly left/center/right opinion, stage their pointless debates, gossip extensively about their private lives, and play their dirty tricks in the background. #6, #7, #8. There is not the slightest idea of scientific truth, i.e. of material/formal consistency, in what they produce. An economist is the epitome of a useful political idiot.

James Buchanan, himself a billionaire-funded economic agenda-pusher, called his colleagues “a bevy of camp-following whores” and more cannot be said about the academic and non-academic folks that populate the econblogosphere. It is troll business as usual.

Egmont Kakarot-Handtke


* Craig Murray
#1 Wikipedia Allegory of the Cave
#2 Graphic AXEC153 Allegory of the Cave
#3 “The London School of Economics was founded in 1895 by Beatrice and Sidney Webb, initially funded by a bequest of £20,000 from the estate of Henry Hunt Hutchinson. Hutchinson, a lawyer and member of the Fabian Society, left the money in trust, to be put ‘towards advancing its [The Fabian Society's] objects in any way they [the trustees] deem advisable.’
“In 1895, he [Sidney Webb] helped to establish the London School of Economics, using a bequest left to the Fabian Society. He was appointed Professor of Public Administration in 1912, a post he held for fifteen years. In 1892, Webb married Beatrice Potter, who shared his interests and beliefs. The money she brought with her enabled him to give up his clerical job and concentrate on his other activities. Sidney and Beatrice Webb founded the New Statesman magazine in 1913.” (Wikipedia)
#4 “Alfred Cowles III … was an American economist, businessman and founder of the Cowles Commission. He graduated from Yale in 1913, where he was a member of Skull and Bones. He was the grandson of Alfred Cowles, Sr., who was a founder of the Chicago Tribune.” (Wikipedia)
#5 “Veblen’s first job was at the University of Chicago, the university bought and paid for by John D. Rockefeller the classic robber baron, …. Rockefeller called the university ‘the best investment’ he ever made, since he intended to use it to advance the interests of his class and suppress opposition.” (Zimmermann)
#6 The economist as storyteller
#7 Economics as storytelling and entertainment for the masses
#8 Economists/MMTers: agenda pushers, distractors, blockers, muters, censors

Related 'Economics, Plato’s Cave and the Silver Blaze Case' and 'MMT and the woes of useful political idiots' and 'The end of political economics (I)' and 'The end of political economics (II)' and 'Are economics professors really that incompetent? Yes!' 'Marshall and the Cambridge School of plain economic gibberish' and 'Oxford economics — still at the proto-scientific level' and 'Economists: Jacks-of-all-trades ― except economics' and 'Mad but true: 200+ years after Adam Smith economists still have no idea what profit is' and 'Economics debate ― just another variant of hardcore wrestling' and 'Economics: The greatest scientific fraud in modern times' and 'Right troll left troll pack your bag and get out of economics'. For details of the big picture, see cross-references Political Economics/Stupidity/Corruption.

***

Graphic AXEC139d

***

Also, to keep an eye on 'Trolls of a feather flock together' see for example Wikipedia for history

Political Economy Club

Cambridge Apostles

Mont Pelerin Society

Colloque Walter Lippmann

Economics societies

Nobel Memorial Prize in Economic Sciences

or BuzzFeed News for present-day “Science Philanthropy”.

***

Twitter/X Feb 10, 2024, The media watershed moment

Economics: A pointless left-right wrestling show

Comment on Tom Hickey on ‘Tim Worstall ― The End Game Of Modern Monetary Theory’

Blog-Reference

Economics has claimed to be a science since Adam Smith/Karl Marx, but it is NOT. Actually, it is political agenda-pushing that abuses the prestige of science. #1 However, in the political dogfight, the appeal to science can be counter-productive because a political argument must necessarily appeal to emotions and thus cut scientific thinking short.

So, the easiest method of ‘refutation’ is to take some bad examples from history and simply associate them with the other side. This is how Tim Worstall ‘refutes’ MMT: “And then we’ve this cautionary little tale about how the end game plays out. There’re more than just the one of those cautionary tales of course, Zimbabwe and Venezuela come to mind. Or perhaps Argentina.” #2

This annoys Tom Hickey: “This passes for serious criticism now? In addition, Tim Worstall doesn’t seem to realize that MMT is not a policy proposal but rather based on how the existing monetary system operates currently.”

In other words, MMT is a pure experience-based practice in the here and now. Here is the story of how Warren Mosler created what later became known as MMT: “The origin of MMT is ‘Soft Currency Economics’… which I wrote after spending an hour in the steam room with Don Rumsfeld at the Racquet Club in Chicago,… I had never read or even heard of Lerner, Knapp, Inness, Chartalism, and only knew Keynes by reading his quotes published by others. I ‘created’ what became known as ‘MMT’ entirely independently of prior economic thought. It came from my direct experience in actual monetary operations, much of which is also described in the book.” #3

The general public likes this steam-room approach and dislikes theory. Accordingly, the MMT propagandist Richard Murphy tries to make some bonus points by introducing himself as a practical realist who suffers from a false image: “Modern Monetary Theory does suffer from being called a theory.” #4

This annoys Bill Mitchell: “Specifically, there is a current out there that considers MMT to be incorrectly labeled because according to the argument, there is no theory involved. It’s hard to imagine why anyone would think that but the fact that they do tells me that I should write this blog post. As I noted yesterday, our Macroeconomics textbook … is full of theory. It has a lot of description, taxonomy, accounting, history, and philosophy, but also a lot of theory that ties some of those other components together in a meaningful way. The T in MMT is not a misnomer.” #5

Clearly, MMTers want to have it both ways. The salespeople say that MMT is operationally true and is nothing but a common-sense policy; the academics insist that MMT is a superior scientific approach. And they prove this by relentlessly exposing the idiotism and failure of mainstream economics.

Clearly, MMT has to be judged according to well-established scientific criteria. Worstall’s attempt to ‘refute’ MMT by referring to recent historical examples of inflation is silly polemics. Unfortunately, more cannot be expected from the Senior Fellow of the Adam Smith Institute.

MMT has to be refuted scientifically by proving that it is materially or formally inconsistent. This has already happened. #6, #7

Retarded folks like Tim Worstall always argue politically and never can get out of their tiny left-right box. In his utter ignorance, Tim Worstall swallows the MMTers’ self-description as Progressives hook, line, and sinker: “As we know Modern Monetary Theory is the latest great new plan from the left.”

Tim Worstall does not realize that MMT is, in fact, “the latest great new plan” from Wall Street. #8 If he had done his scientific homework, he would know how the monetary economy works and that the macroeconomic Profit Law implies Public Deficit = Private Profit. In other words, MMT is not left/progressive at all. MMT policy does not benefit WeThePeople but the Oligarchy. That is, the noisy left-right wrestling show distracts from the plain fact that MMT and the Adam Smith Institute push the same agenda.

Egmont Kakarot-Handtke


#1 The real problem with the economics Nobel
#2 Continental Telegraph The End Game Of Modern Monetary Theory
#3 The Johnsville News, Modern Monetary Theory (MMT) in a Nutshell
#4 Richard Murphy: the MMT fraudster dressed up as realist
#5 Understanding what the T in MMT involves
#6 The final implosion of MMT
#7 MMT = Modern Monetary Trash
#8 How MMT enlightens Washington

Related 'MMT = Trumponomics' and 'MMT: for the record' and 'How MMT makes everybody happy' and 'MMT in a nutshell' and 'Fake religion, fake science, fake news, and false complaints' and 'Economics debate ― just another variant of hardcore wrestling' and 'Economists: Time to say goodbye'. For the full-spectrum refutation of MMT, see cross-references MMT.

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Graphic AXEC106o Scientists are occupied with the Paradigm Shift

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REPLY to Tim Worstall, Joe, Bob Roddis, etc on Nov 28

This thread started with the debt-inflation red-herring and ended with the allocation/calculation red-herring. Economists’ main function in society has always been to keep the audience entertained with angels-on-a-pinpoint talk shows and to prevent any economic issue from ever getting settled.

The lethal argument against the “guvmint can’t do nuthin right” imbeciles is that the business sector cannot exist without the government’s production of profit which shows itself empirically in the permanently growing public debt. In other words, the profitability of the business sector is NOT an indicator of productivity/efficiency but of deficit-spending/money-creation.

From the axiomatically correct macroeconomic Profit Law Qm≡Yd+(I−Sm)+(G−T)+(X−M) follows that Public Deficit = Private Profit if all other variables are taken out of the picture for a moment.

So, it is the public deficit that produces macroeconomic profit and NOT any allegedly superior allocation of resources or the smartness/greed of capitalists or the alleged self-regulation by supply-demand-equilibrium. These factors influence merely the DISTRIBUTION of macroeconomic profit BETWEEN firms and NOT the overall volume.

In the early phase of capitalism, growth, i.e., the excess of the business sector’s investment expenditures I over the household sector's saving Sm, produces macroeconomic profit Qm. In late capitalism, the government sector provides the life support of the business sector with deficit-spending, i.e., with G greater than T.

What the US government has done, in fact, for many years, is artificially prolonging the lifetime of an imploding economic system by steadily increasing the public debt. One collateral damage is that this also prolongs the blather-time of the “guvmint can’t do nuthin right” imbeciles.

The ongoing brain-dead blah blah of both MMTers and mainstreamers is incontrovertible proof that economists NEVER understood how the monetary economy works.

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REPLY to Detroit Dan, Bob Roddis on Nov 28

Detroit Dan maintains: “Private businesses have brought us all sorts of marvelous technology, …”

This is the Waiter Fallacy. It is the cook who has produced a delicious meal; the waiter only transported it with more or less elegance to the table. The generous tip, though, goes to the smiling fool who cannot even prepare scrambled eggs.

All the marvelous things of civilization come from scientists/engineers and not from businessmen.

It was Tesla who invented AC and not businessmen: “The investors showed little interest in Tesla’s ideas for new types of alternating current motors and electrical transmission equipment. After the utility was up and running in 1886, they decided that the manufacturing side of the business was too competitive and opted to simply run an electric utility. They formed a new utility company, abandoning Tesla’s company and leaving the inventor penniless.” (Wikipedia)

The idea that “private businesses have brought us all sorts of marvelous technology” is the classical case of cultural misappropriation.

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REPLY to Magpie, Tim Worstall on Nov 29

Now comes Magpie: “No red herrings. No bullshit. Forbes may accept that, we don’t. That’s no allowable critique here. You came here voluntarily, you play by our rules. Show us you know what you are talking about.”

As they say in Britain: “Keep your breath to cool your porridge”. The Senior Fellow of the Adam Smith Institute is not here for an exchange of profound economic knowledge but for another asinine dog and pony exercise.

Tim Worstall remains firmly in the tradition of the paradigmatic economist Adam Smith: “Smith ... disliked whatever went beyond plain common sense. He never moved above the heads of even the dullest readers. He led them on gently, encouraging them by trivialities and homely observations, making them feel comfortable all along.” (Schumpeter)

Nothing has changed since the founding fathers. The mission of the Senior Fellow of the Adam Smith Institute is to sell this message: The market economy/capitalism is the best of all possible economic worlds. Yes, there are crises, and unemployment, and corruption, and exploitation, and the distribution is perhaps a little biased, but, as everybody knows, the Soviets tried to implement a better system, and it didn’t work. End of mantra.

Now, Magpie tells Tim Worstall that he cannot sell his bullshit to the audience of MNE, here, “you play by our rules”.

What are those rules? At MNE, “we” sell the message that deficit-spending/money-creation benefits WeThePeople and that MMTers are Progressives who care for the unemployed, the environment, humanity, in particular, the health and happiness of children, the elderly, and the poor. Arguing against this amounts to self-exclusion from the worldwide community of good people.

“Our” rules include the small print that anyone who proves that  MMT is, in fact, proto-scientific garbage and that the MMT sales team does not promote knowledge about how the monetary economy works but pushes the agenda of the Oligarchy in the cloak of social policy will be stopped in the tracks by a sky-high heap of political BS.

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REPLY to Tim Worstall on Nov 29

You have been introduced as a Senior Fellow of the Adam Smith Institute: “The Adam Smith Institute is a neoliberal think tank and lobbying group based in the United Kingdom and named after Adam Smith, a Scottish moral philosopher and classical economist.” (Google profile)

A think tank has NOTHING to do with thinking. But, of course, nobody wants to characterize his type of business as brainwashing.

Everyone who rallies behind the False-Hero Memorial of Adam Smith exposes himself as an incompetent scientist. Adam Smith did not get the foundational concept of economics ― profit ― right, and this means that his final resting place in the history of scientific thought is a hole in the darkest corner of the Flat-Earth Cemetery. #1, #2

The fact of the matter is that, in 200+ years, economists have not made any progress towards an understanding of how the economy works. The Profit Theory is still false, and this means that the rest of the analytical superstructure is false. This holds for Classical Economics, Walrasianism, Keynesianism, Marxianism, Austrianism, and MMT. #3

So, the political proposals/solutions of both late-Smithians and MMTers lack sound scientific foundations. In the final analysis, both are political frauds.

This is the difference between scientific thinking and think-tank thinking: “A genuine inquirer aims to find out the truth of some question, whatever the color of that truth. … A pseudo-inquirer seeks to make a case for the truth of some proposition(s) determined in advance. There are two kinds of pseudo-inquirer, the sham and the fake. A sham reasoner is concerned, not to find out how things really are, but to make a case for some immovably-held preconceived conviction. A fake reasoner is concerned, not to find out how things really are, but to advance himself by making a case for some proposition to the truth-value of which he is indifferent.” (Haack)

You say, “How amazing that you know what I think.” I don’t know what you think. But I know that you cannot think.

#1 The Profit Theory is False Since Adam Smith

#2 New economic thinking = old political fake

#3 Down with idiocy!

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REPLY to Tim Worstall on Nov 29

You say: “Seriously, don’t you people read any standard economics at all? Inflation from spending is just Keynes, inflation from increased money supply is Friedman.”

Are you really this far behind the curve? Keynes and Friedman are not quotable in an economic argument because they are scientifically long dead. #1, #2, #3

Take notice that there is NO relation between a growing public debt and inflation. #4, #5 The lethal consequence of MMT policy is NOT on inflation but on distribution.

#1 Forget Keynes

#2 Milton Friedman, fake scientist

#3 Forget Friedman, forget Keynes

#4 MMT and the inflation-red-herring

#5 Economics as tireless production of proto-scientific garbager: inflation theory as an example

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REPLY to Tim Worstall on Nov 30

You say: “MMT says that, in certain circumstances, you should run a surplus. As does Keynes, as does Friedman.”

That’s not the point. The point is Zimbabwe, i.e., your argument that the MMT policy of deficit-spending/money-creation causes inflation. That is not the case. MMT policy causes the metrics of macroeconomic distribution, i.e. share of profit/financial wealth, to increase. In other words, MMT policy is money-making for the Oligarchy in the bluff package of social policy. #1

Both Keynes’ and Friedman’s inflation, distribution, employment, and profit theories are provably false. So, they are scientifically dead and only ignoramuses still quote them.

#1 Keynes, Lerner, MMT, Trump and exploding profit

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REPLY to Calgacus on Nov 30

Calgacus feels the urge to emphasize: “By the way, AXEC / E.K-H Egmont Kakarot-Handtke is not an MMTer, but a critic of MMT with his own theories.”

This is correct but irrelevant. In science, people are not much interested in membership cards or in opinions or in collecting likes/followers, or self-presentation, but rather in contributions to the growth of knowledge. The identity proof of a scientist is that he has something to say that helps to understand how the universe or a subdomain of it works.

So, it does not matter at all whether and why a person belongs to the MMT community or not. As Schumpeter put it: “Remember: occasionally, it may be an interesting question to ask why a man says what he says; but whatever the answer, it does not tell us anything about whether what he says is true or false.”

True, I am NOT a member/follower of MMT, I am NOT a mere critic of MMT, but have proved that MM-Theory does NOT satisfy the scientific criteria of material/formal consistency. #1 What I in addition say is that MMTers are too stupid for the elementary mathematics that underlies macroeconomics and that they have no idea of what science is all about. And I never forget to say that MMT is just another political fraud.

#1 For the full-spectrum refutation of MMT, see cross-references MMT

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REPLY to Clint Ballinger, Tim Worstall on Dec 1

Clint Ballinger advises Tim Worstall: “Do the hard accounting, and you will see currency issuers don’t borrow their own tax credits, there is no money multiplier (and why that matters), why interest rate manipulation does not do what you think it does, and on and on.”

Yes, evidently, MMT is superior to the think-tank economics of the Senior Weasel of the Adam Smith Institute. In fact, anything is superior to mainstream economics because, in scientific terms, mainstream economics is absolute zero. You just cannot go deeper.

But, although better, MMT is still not good enough. MMT, too, gets the foundational macroeconomic relations wrong. It does not matter whether this is because of stupidity or fraud; MMT’s sectoral balances equation is provably false. #1 This is lethal to the whole approach.

So, the MMT Weasel Clint Ballinger has to be advised in turn: “Do the hard accounting, and you will see that Public Deficit = Private Profit #2, and why MMT policy guidance benefits the one-percenters and NOT the ninety-nine-percenters.” Effectively, that is, behind the theatrical hostilities, the MMT Weasel Clint Ballinger and the Senior Weasel Tim Worstall are on the same Oligarchy page.

For those who have suspected for a long time that Clint Ballinger is an incompetent scientist who suffers from multiple self-delusions, here is the proof. #3

#1 MMT and the magical profit disappearance

#2 Rectification of MMT macro accounting

#3 How MMT makes everybody happy

MMT: A free lunch for the Oligarchy

Twitter-Threads here and here

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REPLY to Detroit Dan, Tim Worstall, Andrew Anderson, Joe, Calgacus, etc. on Dec 2

You can blather on until you are blue in the face. This does not alter the fact that Walrasianism, Keynesianism, Marxianism, Austrianism, and MMT are mutually contradictory, axiomatically false, materially/formally inconsistent, and that all got the foundational concept of the subject matter ― profit ― wrong.

As a consequence, the policy guidance of all economic schools lacks sound scientific foundations. This makes it plain to the general public that economics is nothing more than political agenda pushing and economists are nothing more than useful political idiots.

Therefore, the first thing to do for the salvation of humanity is to flush failed economics and blather economists down the scientific drain.

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REPLY to Clint Ballinger on Dec 2

Clint Ballinger parrots the foundational blunder of economics, i.e., that the “… distribution between households and business is _fundamentally_ political.”

What Clint Ballinger does not get is that Profit Theory is false and, by consequence, Distribution Theory. #1, #2

What Clint Ballinger does not get is that economics is a systems science. Retarded economists still think it is a social science. #3 The so-called social sciences are what Feynman called cargo cult science. Economics has been hijacked and corrupted by the agenda pushers of Political Economy. #4 Since Adam Smith/Karl Marx, economics has not risen above the proto-scientific level.

The axiomatically correct macrofoundations approach is NOT for low-life political economists. They are beyond hope. For them, it is FLUSH. #5

#1 The Profit Theory is False Since Adam Smith. What About the True Distribution Theory?

#2 Essentials of Constructive Heterodoxy: Profit

#3 The Science-of-Man fallacy

#4 “We have sunk very low”

MMT and the overall political corruption of economics

Legitimacy lost

For details of the big picture, see cross-references Political Economics/Stupidity/Corruption

#5 The end of political economics

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REPLY to Clint Ballinger on Dec 3

That is the actual state of economics, messed up

• profit theory, for 200+ years,

• microfoundations, for 150+ years,

• macrofoundations, for 80+ years,

• the application of elementary logic and mathematics since the founding fathers.

The representative economist has swallowed the micro-crap supply-demand-equilibrium and the macro-crap I=S hook, line, and sinker and does not know what profit is. #1

MMTers are too stupid for the elementary mathematics that underlies macro-accounting.

Come on, Clint Ballinger, prove that you are not one of this sorry bunch of political idiots and tell the blog audience which of the two macroeconomic sectoral balances equations is true/false:

(i) (I−S)+(G−T)+(X−M)=0

(ii) (I−S)+(G−T)+(X−M)−(Qm−Yd)=0?

#1 How the intelligent non-economist can refute every economist hands down

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REPLY to S400 on Dec 3

You say: “Take notice that EKHs answers always follows the same script: you’re too stupid....”

That is not quite correct. I say that MMTers are stupid or corrupt or both. For all with a deeper interest, links to the proofs are provided.

Your silly post confirms that the conclusion about MMTers is accurate. Therefore, it cannot often enough be repeated.

Try to refute the macroeconomic Profit Law, and if you cannot, you are out of economics.

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REPLY to Detroit Dan, Clint Ballinger, Tim Worstall, S400 on Dec 4

You cannot answer the question of which of the sectoral balances equations is true/false

(i) (I−S)+(G−T)+(X−M)=0

(ii) (I−S)+(G−T)+(X−M)−(Qm−Yd)=0?

Obviously, you have no idea of how the monetary economy works and have never heard of the Ancient Greek Philosopher’s Rule of Human Communication: If you know nothing, say nothing.

Time for you to say goodbye.

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Chronological insertion Economists: Time to say goodbye Dec 4

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REPLY to Detroit Dan, Tim Worstall, Clint Ballinger, Joe on Dec 5

“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 Walrasians, Keynesians, Marxians, Austrians, nor MMTers have the true theory. Just the opposite, these approaches are provably false. Economics is scientifically unacceptable.

With your continuing blather, you perfectly fit the definition of an economist as a person who talks out of his ass about things he does not know.

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REPLY to Clint Ballinger on Dec 6

You say: “Give us an article of REAL criticism of MMT.”

Here it is.

MMT is scientifically worthless because it is based on a provably false sectoral balances equation. Because the foundational equation is false, the whole analytical superstructure is false. The MMT balances equation obscures the macroeconomic fact that Public Deficit = Private Profit. As a consequence, the MMT policy of deficit-spending/money-creation benefits the Oligarchy and NOT WeThePeople. The claim of MMTers to be the real Progressives is, therefore, a political fraud. #1

#1 For details, see cross-references MMT

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REPLY to Tim Worstall on Dec 6

There is the political sphere, and there is the scientific sphere. The political sphere is about agenda-pushing, and the scientific sphere is about knowledge.

In the political sphere, every imbecile is entitled to climb on a soapbox and vomit the contents of his dysfunctional brain all over the place.

In the scientific sphere, people are supposed to contribute something to the growth of knowledge. Scientific knowledge, in turn, is well-defined by material and formal consistency. Confused off-topic blather is NOT appreciated in the scientific sphere.

The most important thing is to keep the political and scientific spheres strictly apart. The mixing of politics and science always corrupts science. This starts with Smith/Marx and continues over the whole right/left spectrum from Hayek, Keynes, Friedman, Krugman, Keen, Mosler, Kelton, to Clint Ballinger, and Tim Worstall.

Take notice that in the political sphere, the Legitimate Sovereign makes the ultimate decision. The Spartans, for example, asked their Oracle whether they should go to war or not. If the Oracle said no, they simply went home. So, for them, the Oracle was the Legitimate Sovereign. To figure out who the Legitimate Sovereign is in a given historical situation is the business of Political Science and NOT of Economics.

You say: “We’ll end up with 45, 55% of GDP going through government. … Now, politically, I’d oppose this, I think that’s far too much of everything to be running through the political decision-making process.”

This statement, clearly, belongs to the political sphere. And it is as good as any other opinion. However, if the Legitimate Sovereign decides that the state’s share is 50% of GDP, then that’s it. That is what sovereignty means. It is a matter of indifference whether those who maintain that 10% is in order and those that 90% is in order are dissatisfied.

The task of economists as scientists is to figure out how the economy works and how the decisions of the Legitimate Sovereign can best be implemented. The task of economists is, metaphorically, to figure out the principles of flying and how to get something heavier than air off the ground and safely to a remote destination. The economist as a scientist has no more to say than anybody else about what the destination should be. #2

Needless to emphasize that blathering economists have got nothing off the ground in the past 200+ years. What they have produced instead is 1001 stories about flying carpets.

#1 Legitimacy lost

#2 For details, see cross-references Political Economics

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REPLY to Clint Ballinger on Dec 6

Learn reading. It has been explicitly stated above: “To figure out, who the Legitimate Sovereign is in a given historical situation is the business of Political Science and NOT of Economics.”

The task of economists as scientists is to figure out how the actual economy works. On this score, you are as bad a failure as one can get.

If you have not realized it, your so-called debate with Tim Worstall is absolutely vacuous. Re-read your own stuff and weep.

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REPLY to Clint Ballinger on Dec 6

You detract from the point at issue and ask: “Yes, but why is the food so bad? And why can’t I get an upgrade to 1st class? And WHY do I always have to go though Atlanta!?”

Surely, the Freakonomics guy can easily answer those questions. But neither he nor you know 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.

And this means that you cannot answer the fundamental question of how the monetary economy works. But lack of competence does not prevent you from blathering with the Senior Ignoramus of the Adam Smith Institute about economic policy.

Get it, the right policy depends on true theory. And both microfounded Neoclassics and macrofounded MMT are axiomatically false.

This is why economists’ policy advice is lethal, which did not go unnoticed: “Late in life, moreover, he [Napoleon] 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)

And this is why economists are only admitted as clowns to the political Circus Maximus, where they keep the audience entertained with a profound debate about why everybody always has to go through Atlanta.

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REPLY to Clint Ballinger on Dec 7

You again try to detract from the point at issue: “Tim ― totally agree that the important thing to look at in already developed countries are the details of taxation. Sure, a lot can be learned from Sweden, a lot seems to be about localism v national gov, but anyway, these are the issues we should be talking about.”

No, we should be talking about how MMTers are stupid and corrupt agenda pushers who sell a free-lunch policy for the Oligarchy in the bluff package of social policy, and how we can sue economists for 200+ years of economic damages, and how we can get rid of these failed/fake scientists, and how we can make economics a science.

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REPLY to Clint Ballinger on Dec 7

You know nothing, and I know that you cannot tell 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.

And you suffer from multiple self-delusions. For example, you hallucinate: “And I know for a fact that you cannot disprove the Cambridge UK position, nor the work of Pasinetti.”

The fact is that Cambridge, UK’s distribution theory has already been thoroughly disproved. #1

The Profit Theory is false from Smith/Ricardo #2, #3/Marx #4 onward to Keynes/Kaldor/ Kalecki/Pasinetti. All these sorry members of Cambridge School #5 go down the scientific drain. FLUSH. Oh, I forgot Clint Ballinger. FLUSH.

#1 Income Distribution, Profit, and Real Shares

#2 Ricardo and the invention of class war

#3 When Ricardo Saw Profit, He Called It Rent: On the Vice of Parochial Realism

#4 Profit for Marxists

#5 Marshall and the Cambridge School of plain economic gibberish

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REPLY to Clint Ballinger on Dec 8

“Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (Keynes, GT, p. 63) The formal core of the GT has been provably false for 80+ years, and this tells one all about economists’ scientific incompetence in general and the Cambridge School, in particular. #1

Pasinetti’s idiocy consists of not having realized Keynes’ foundational blunder. The Cambridge distribution theories are all predicated on “Investment = Savings”. #2

There is no escape for you, Clint Ballinger. FLUSH. 

#1 For details of the big picture, see cross-references Refutation of I=S

#2 Wikipedia Pasinetti, The Cambridge equation and Pasinetti’s theorem

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REPLY to Clint Ballinger on Dec 8

I am waiting until you give me the PRECISE summary of Pasinetti’s refutation of the axiomatically correct macroeconomic Profit Law. It should be an easy copy-paste for you.

In the meantime, I summarize your contribution to the point at issue: zero.

The point at issue is MMT and the unassailable proof of the stupidity/corruption of MMTers. #1

Because it is a sure bet that nobody will ever see your pertinent summary of Pasinetti, it's FLUSH for you, NOW.

#1 For the full-spectrum refutation of MMT, see cross-references MMT

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REPLY to Clint Ballinger on Dec 8

This thread is about MMT. You have NOT realized that the foundational MMT sectoral balances equation (I−S)+(G−T)+(X−M)=0 is false and that the AXEC equation (I−S)+(G−T)+(X−M)−(Qm−Yd)=0 is true.

So you are out of any serious debate before it even starts.

In order to deflect from this embarrassment, you throw up the name of Pasinetti. But, of course, you cannot give a summary that proves that Pasinetti has said something sensible concerning the point at issue. In order to deflect from this embarrassment, you throw up the name of Sraffa without giving a summary that proves that Sraffa has said anything sensible concerning the point at issue.

Looks a bit desperate, your argumentation. But what is really bad for you is that Sraffa, too, has already been refuted. #1

You have not realized to this day that the Cambridge School of Loose Verbal Reasoning has NOT produced one piece of sound science, #2, so there is no hope for you. Perhaps in your next incarnation, you will be endowed with more than two brain cells. Then, perhaps, you could be admitted to serious debate.

#1 The futile attempt to recycle Sraffa

#2 Quixotic Keynes exegesis

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REPLY to Clint Ballinger and the rest of the political agenda pushers on Dec 9

Clint Ballinger parrots Pasinetti’s paper: “It shows that it is impossible to axiomatize distribution and ‘demonstrated conclusively that there is no relationship between the productivity of various factors of production ― capital, labour, materials ― and the distribution of income in society’ as one comment summarizes it.”

Remember G. B. Shaw’s dictum: “People who say it cannot be done should not interrupt those who are doing it.”

I have derived the macroeconomic Profit Law Qm≡Yd−Sm+I+(G−T)+(X−M) from consistent macrofoundations a.k.a. axioms. Note that the Law is testable with an accuracy of two decimal places. With regard to the government’s budget, the Profit Law boils down to Public Deficit = Private Profit. This piece of pure economic analysis translates into the scientific insight that the MMT sectoral balances equation is false and into the political insight that MMT’s policy of deficit-spending/money-creation is nothing but a free lunch for the Oligarchy. In other words, that “progressive” MMT policy is a political fraud.

Everyone is free to try to empirically refute the Profit Law, which is the scientifically correct way to settle the matter.

Needless to emphasize that MMTers cannot refute the proof of political fraud, so they desperately try to bury it under a sky-high heap of BS about capitalism/communism, the healthcare systems in Sweden, the USA, Hong Kong, and elsewhere, chemical processes in the brain, property taxation in the OECD, social democracy and democratic socialism, Sanders, Corbyn, Lenin, carbon tax, plastic pollution, and finally the CCC, which is long known to have been nothing but a laughable dancing-angels-on-a-pinpoint debate. What the CCC has made unmistakably clear to everyone is that economists are, after 200+ years, still confused about the foundational concepts of their subject matter, i.e., profit and capital.

Obviously, MMTers’ mission has never been to contribute to scientific knowledge but to produce false promises, disinformation, misinformation, never-ending filibusters, silly claims, vacuous assertions, and talk show entertainment in order that everything remains where it has been since Adam Smith, that is, in the bottomless proto-scientific swamp of inconclusive blather. #1, #2

MMT is provably false, and that is the end of MMT ― except MMTers can empirically disprove the macroeconomic Profit Law. Everyone knows by now that this will never happen.

Political economists have never produced and will never produce anything of scientific value. So here is the final FLUSH for Clint Ballinger and the rest of the proto-scientific dumbshits, #3 useful political idiots, agenda pushers, and fraudsters.

It is high time to drain the swamp.

#1 It is better to be precisely right than roughly wrong

#2 And the answer is NCND ― economics after 200+ years of Glomarization

#3 MMT: How mathematical incompetence helps the Kelton-Fraud

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Graphic AXEC143d Macroeconomic profit with increasing complexity

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Chronological insertion MMT: Time to say goodbye Dec 10

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REPLY to Clint Ballinger on Dec 11

The point at issue is the proof that MMT is materially and formally inconsistent. Instead of accepting a clear-cut falsification, as a scientist is supposed to do, you desperately try to change the issue. This, basically, is the corrupt methodology of economics since the founding fathers: “In economics we should strive to proceed, wherever we can, exactly according to the standards of the other, more advanced, sciences, where it is not possible, once an issue has been decided, to continue to write about it as if nothing had happened.” (Morgenstern, 1941)

MMT stands firmly in this bad tradition with Walrasianism, Keynesianism, Marxianism, and Austrianism as precursors. This is why economics is still stuck at the proto-scientific level and merely recycles the same old topics without definitive conclusions and consequences. Economics is not a science but a heap of falsified theories.

There can be no progress when falsified theories are not discarded and replaced by superior theories, and there effectively has been no progress, as everyone can see when the fake science of economics is compared to the genuine sciences. Supply-demand-equilibrium, what idiocy for 200+ years!

Needless to emphasize that the traditional anti-scientific corruption of economists gained a new life in the econblogosphere. MMT academics are no exception with regard to censorship/suppression/disinformation/manipulation. #1, #2

After being back on track, the answer to your distracting question about taxation is: Any kindergartner can google it. #3

#1 Cryptoeconomics ― the best of Bill Mitchell’s spam folder

#2 “We have sunk very low”

#3 The Third Way: Towards the Happy Zero-Tax economy

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#DrainTheScientificSwamp

Photographic evidence of the glorious self-debunking of MMT.

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REPLY to Clint Ballinger on Dec 11

You ask, “So how do you know that ‘the Oligarchy’ is not the ‘Legitimate Sovereign’??”

This is NOT a question for economists to clarify, but for Political Science in a scientific way and for the people in a practical way.

You say, “Glad I asked the tax question.” Not really.

The Zero-Tax Economy* is the logical endpoint of the MMT agenda pushing. Behind the social smokescreen and the operational nitty-gritty, MMT policy guidance boils down to deficit-spending/money-creation. Zero-Tax means maximum deficit-spending. Because Public Deficit = Private Profit, Zero-Tax means maximum profit for the economy as a whole. If the economy is in the hands of the Oligarchy, then Zero-Tax means maximum profit for the Oligarchy, which is perfectly in order if the Oligarchy is the Legitimate Sovereign.

My guess is that up to this point, you are enthusiastic about the idea of a Zero-Tax economy. I understand that you are not at all enthusiastic about full profit distribution to the owner of the firm if the legitimate owner is not private but public. This would be a bit too “progressive” for an MMTer. After all, MMT’s fight for the cause of WeThePeople was never meant to be taken literally.

* Notice: The concept of a Zero-Tax Economy is protected by Copyright © and Trademark ®.

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