Asad Zaman marches with the Zeitgeist down a blind alley

Comment on Asad Zaman/Tom Hickey on ‘My Journey from Theory to Reality’

Blog-Reference

The philosopher Tom Hickey sketches the great trends of history: “Many of the traditional worldviews are embedded in a religious contexts that have become cultural. Even in secular China, President Xi is resurrecting Confucius as a cultural icon, and in the supposedly secular US, dominant religious groups are asserting influence more openly, with science itself subject to challenge when it is perceived to conflict with tradition. Asad Zaman’s post is good example of this rising trend, as well as what a highly educated person asking such questions might do about it. This process is an iteration of the historical dialectic as liberal and traditionalism interact to forge a complementary Zeitgeist that moves history forward a step.”

What are the new insights of the new Zeitgeist? “Since most fancy assumptions we make in statistics and econometrics are wrong, we need to learn how to do simple and basic inferences, which actually makes life much easier for students of the subject ― we need to teach them basic and intuitive things, not complex models and math …”

The problem with simple and intuitive things is that they regularly turned out to be false as science progressed. This is why J. S. Mill had no friendly word for the bigots and votaries of common sense: “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.”

Common sense has never been a convincing argument in the scientific sphere, but it has always been a very effective rhetorical tool in the political sphere. All religious and political fraud in the last 3000 years has been performed by telling simple stories and by appealing to elementary emotions.

Science is different. Scientific truth is defined by material and formal consistency and not by what makes life easier for students. Lazy students have not developed aircraft and life-saving heart surgery. Neither have retarded political economists produced anything of scientific value. Walrasianism, Keynesianism, Marxianism, Austrianism, and MMT are provably false. Economics is not a body of certain knowledge but a heap of inconsistent opinions.

Asad Zaman resumes: “Regarding social, political and economic thought, many if not most of the foremost authorities equate economic liberalism with Western capitalism as the dominant mode of production and also view political liberalism in the form of representative democracy being determined by capitalism as economic liberalism.”

Obviously, liberalism and democracy are political concepts or ideologies. They have nothing to do with science. Economics as a science does NOT deal with ideologies but with how the economic system works. Political agenda pushers like Adam Smith or Karl Marx cannot, by any stretch of the imagination, be accepted as scientists. They were nothing but brain-dead political storytellers.

Asad Zaman is correct in his criticism of political economics. It is fake science. However, as long as he teaches his students “basic and intuitive things” economics will not rise above the proto-scientific level.#2 To replace one BS with another BS does not count as scientific progress.

The macroeconomic Profit Law reads Q≡Yd+(I−S)+(G−T)+(X−M), and it holds for Capitalism, Communism, and Socialism independently of whether the dominant belief is Islamic, Christian, Hinduistic, Confucian, Atheistic, or Pagan. Science is universal.

History tells one that human progress comes alone from science and neither from religious beliefs nor from political economics nor from philosophical Zeitgeist blather.

Egmont Kakarot-Handtke


#1 Why J. S. Mill had no friendly word for the bigots and votaries of common sense
#2 Zamanomics

Occasional Xs: Clueless economists / Science (II)

 

#Econ#FailedFakeScience#Economics is about how the #Economy works. It is a #SystemsScience & NOT a #SocialScience i.e. NOT AT ALL about #HumanNature / #Motives / #Behavior / #Choice / #Incentives / #Expectations / #Rationality etc. Cross-ref ⇒https://t.co/qp0nGQdvVh

— E.K-H (@AXECorg) October 4, 2023

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

“There is no more important function of a first course in economics than to make the student see that the whole problem of social management is a value problem.” (Frank Knight) Wrong. 'There is no more important function of a first course in economics than to make the student see that the whole history of economic thought is the history of scientific failure and that either he is a scientist and performs the inevitable Paradigm Shift or he joins the ranks of brain-dead academic parrots.' (AXEC) This is the original scientific corruption of economics: “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) Economics has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory, axiomatically false, and materially/formally inconsistent. They all got profit wrong. When the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. The minimum requirement in science is logical consistency. Economists never rose above confused blather. To finally become a science, economics needs a Paradigm Shift from false behavioral microfoundations and false Keynesian macrofoundations to true macrofoundations.

— AXEC (@EgmontHandtke) October 17, 2026

Occasional Tweets: The futile attempt to recycle Keynesianism (XXIV)

 

#Economics#FailedFakeScience#Keynes got macroeconomic #Profit wrong because he was too stupid for elementary #Algebra. So, #MacroEconomics has been scientifically worthless from the beginning. Economic #PolicyGuidance is just brain-dead political agenda-pushing to this day. pic.twitter.com/anX8LjY2sL

— E.K-H (@AXECorg) July 13, 2023

Let's bury economics now

Comment on Lars Syll on ‘Michael Woodford on models’

Blog-Reference and Blog-Reference Aug 14

Lars Syll argues against Michael Woodford: “This is — sad to say — a rather typical view among mainstream economists today. Defending the use of unrealistic and unsubstantiated models with the argument that models make it ‘easy for others to see what assumptions have been relied upon, and hence to challenge them’ is rather far-fetched.”

Yes, “unrealistic and unsubstantiated models” are indefensible. Yes, mainstream economics is proto-scientific garbage. Yes, mainstreamer are in the “story-telling business”.#1

Yes, yes, yes. All this is known for 150+ years. Yes, economics is failed/fake science. Yes, economists are stupid or corrupt or both. Yes, this applies in equal measure to Orthodoxy and Heterodoxy. It applies to economics in general and to Lars Syll, in particular.#2

The most important thing to realize is that there are theoretical economics and political economics. Theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers). Political economics has produced NOTHING of scientific value in the last 200+ years. Economic policy NEVER has had sound scientific foundations.

Both orthodox and heterodox economists are NOT scientists but clowns and useful idiots in the political Circus Maximus.#3, #4

The representative economist does not understand to this day what science is all about. So, here are eleven plain facts about ‘economic sciences’

1. Science manifests itself in the form of the true theory. 2. Truth is well-defined by material and formal consistency. 3. Logical consistency is secured by applying the axiomatic-deductive method and material consistency is secured by applying state-of-the-art testing. 4. The true theory/model is the humanly best mental representation of reality. 5. “When the premises are certain, true, and primary, and the conclusion formally follows from them, this is demonstration, and produces scientific knowledge of a thing.” (Aristotle, 300 BC)  6. The main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational economic concept of profit wrong. 7. Because the foundations are false the analytical superstructure is false. 8. Economists are too stupid for elementary algebra. 9. Both orthodox and heterodox economics is failed/fake science. 10. Economic policy has no sound scientific foundations. 11. The EconNobel for ‘economic sciences’ is a fraud.

And this is the cause of the mess: economists have since the founding fathers consistently violated the separation of science and politics. In hashtags

#LawOfTheExcludedMiddle

#TheScientistIsNoActivist

#TheActivistIsNoScientist

#PoliticsCorruptsScience.

All this is known and needs no repetition. The consequence is: Economics and economists go directly to the Flat-Earth-Cemetery.

What next? Craig thinks he has a brilliant idea: “Paradigms, especially extremely relevant and urgently needed new paradigms are everything.” Yes, this is also known for a long time: “There is another alternative: to formulate a completely new research program and conceptual approach. As we have seen, this is often spoken of, but there is still no indication of what it might mean.” (Ingrao et al. 1990)

Except that the Paradigm Shift from provably false Walrasian microfoundations and provably false Keynesian macrofoundations to true macrofoundations is an accomplished fact.#5

And now, Lars Syll and all the other agenda-pushers/activists lead your own funeral cortege!

Egmont Kakarot-Handtke

#1 The economist as storyteller (II)

#2 Lars Syll is refuted on all counts. See blog query for details

#3 The tragedy of economics: stupid/corrupt economists

#4 Economics: The greatest scientific fraud in modern times

#5 Sovereign Economics BoD

Related 'Separation of politics and economics'.

***

AXEC136g

Economists’ scientific incompetence is worse than the plague

Comment on Michael Roberts on ‘Ending the pandemic slump — a return to Keynes?’

Blog-Reference and Blog-Reference

Michael Roberts summarizes the situation: “The Great Lockdown has tipped the global economy into recession in 2020 on a scale not witnessed since the 1930s.” And “UNCTAD economists note … that the world economy was already heading for a slump before the pandemic hit.”

This leads quite naturally to the question: “What economic policies should be adopted to end this ‘lockdown slump’ and avoid or reduce the hit to the livelihoods of billions? That depends on the analysis of the causes of the slump itself.”

Right, good policy depends on true theory. The problem of economics as a science is this: “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)

And here is the snag: to this day, economists do NOT have the true theory but many silly opinions. The major approaches — Walrasianism, Keynesianism, Marxianism, Austrianism, MMT — are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational economic concept of profit wrong. Economics is a failed science. As lousy scientists, economists are a hazard to their fellow citizens — not any different from quack doctors.#1

This has never hindered economists to give economic policy advice: “UNCTAD economists openly follow the Keynesian ‘explanation’ for the lost decade … since 2009. And their solution is a re-adoption of Keynesian policies to manage capitalism better. For UNCTAD, slumps start with a collapse in demand ie in investment spending and above all in household consumption.”

At this point, Michael Roberts begs to differ: “In a capitalist, profit-making, economy, it is profits and profitability that drive investment and when profitability drops, investment in the means of production and in labour will contract, leading to unemployment and loss of consumer incomes and demand.” And “Indeed, on occasion even Keynes recognised that profitability (which he called the ‘marginal efficiency of capital’) was an important factor in causing slumps.” As he said: “Unemployment … exists because employers have been deprived of profit. The loss of profit may be due to all sorts of causes. But, short of going over to Communism, there is no possible means of curing unemployment except by restoring to employers a proper margin of profit.”#2

And Michael Roberts continues: “You see, in the last 40 years, the share of profits in the national incomes of the major economies has risen at the expense of wages and so the crisis of capitalist production is ‘wage-led’ not ‘profit-led’.”

And then he finishes off UNCTAD: “There is no mention of profit or profitability in the whole of the long UNCTAD report. Instead we are asked to accept that slumps are caused by low wages and consumption and by low investment caused by a switch to financial speculation leading to ‘instability’.”

We can cut off the policy argument here because it is pointless. Obviously, there is something fatally wrong with the theoretical foundations and the concept of profit. The blunder is evident in the expression “share of profits in the national incomes”.

Because profit is NOT income (it is a difference of flows and not a flow like wage income) there is NO such thing as a “share of profits in the national incomes”.#3-#5

Because economists get the foundational economic concept of profit wrong the whole analytical superstructure of economics is false ― provably false. This means that economic policy NEVER has had sound scientific foundations. For 200+ years now political economics is nothing but brain-dead agenda-pushing. UNCTAD and Michael Roberts are no exception. Like the rest of the profession, both have no idea of what profit is.

Egmont Kakarot-Handtke

#1 Iatrogenic economics

#2 Keynes, too, got profit theory badly wrong. See Ch. 13, The indelible scientific disgrace of economics, in Sovereign Economics

#3 The Profit Law for the 3-sector economy is given by Qm≡Yd+(I−Sm)+(G−T)

#4 Wikipedia, economics, scientific knowledge, or political agenda pushing?

#5 Links on McKinsey’s ‘A new look at the declining labor share of income in the United States’

For more about iatrogenic economics, see AXECquery.

***

Source: Michael Robert's Blog

***

REPLY to Matt Franko on Oct 1

You say: “Yes... They have big problems recognizing Minuends, Subtrahends and Differences.”

Indeed, this is the Flow-Balance Inconsistency (not to be confused with the Stock-Flow Inconsistency). In simple terms, “they” are too stupid for the elementary algebra that underlies macroeconomics.#1, #2

The Flow-Balance Inconsistency makes that the whole of MMT is proto-scientific garbage ― only good for trolling and deceiving #WeThePeople.

#1 Is Nick Rowe stupid or corrupt or both?

#2 For more about the Humpty Dumpty Fallacy, see AXECquery.

***

AXEC172

Profit and the decline of workers’ nominal share (II)

Comment on Noah Smith on ‘Why Workers Are Losing to Capitalists’

Blog-Reference and Blog-Reference

Every economist knows from the Palgrave Dictionary that the profit theory is false (Desai, 2008). Or, as Mirowski put it, “... one of the most convoluted and muddled areas in economic theory: the theory of profit.” In other words, economists have NO clue about the foundational concept of their subject matter. #1

Without the true profit theory, there is no true distribution theory. The axiomatically correct macroeconomic  Profit Law is given as Q_m≡Y_d+(I−S_m)+(G−T)+(X−M) [1] and this reduces to Q_m=(I−S_m)+(G−T) [2] for Y_d, X, M=0; Legend: Q_m total monetary profit/loss, Y_d distributed profit, I investment expenditure, S_m monetary saving/dissaving, G government expenditures (consumptive), T taxes, X exports, M imports.

The nominal labor share λ is defined as the quotient of wage income Y_w and the sum of wage income and monetary profit Q_m, that is, λ≡Y_w/(Y_w+Q_m)≡1/(1+Q_m/Y_w) with Q_m given by [1] above.

Noah Smith concludes: “In other words, the two most conventional explanations for rising inequality and falling wages might both be correct. A perfect storm of robots and free trade … could be shifting power from the proletariat to the capitalists.” This conclusion is based on the traditional = false profit theory.

The fact is that market power and automation cannot account for a falling nominal labor share λ. The main drivers of increasing overall profit have been the increased deficit spending of the household and the government sector in the past decades. Market power and automation can only account for the distribution of overall profit Q_m among firms, but NOT for the total amount. #2

Traditional distribution theory is merely a stubborn Fallacy of Composition.

Egmont Kakarot-Handtke


#1 The Profit Theory is False Since Adam Smith. What About the True Distribution Theory?
#2 For details of the big picture, see cross-references Profi/Distribution.

Related 'How the Intelligent Non-Economist Can Refute Every Economist Hands Down' and 'Profit and the decline of labor’s nominal share (I)' and 'Austerity: Who takes the little man for a ride?' and 'The abject failure of orthodox and heterodox distribution theory' and 'Debunking Squared' and 'Intellectual deficit spending' and 'The GDP-death-blow for the economics profession'.

For more about the so-called wage/profit share, see AXECquery.

***

Graphic AXEC129d On closer inspection, it turns out that the concept of labor/share is formally/dimensionally defective because profit is a balance and wage income is a flow. This blunder is called Flow-Balance Inconsistency.

Occasional Tweets: The futile attempt to recycle Keynesianism (XI)

 

#Economics#FailedFakeScience

Logic tells one that the #SectoralBalances add up to zero. Bc #Keynesians are too stupid for elementary #Algebra, they don't get it right to this very day.

How Keynes got macroeconomics wrong and Allais got it righthttps://t.co/DaUHva6out

— E.K-H (@AXECorg) February 9, 2023.

For more about balances see AXECquery. 

Occasional Xs: The futile attempt to recycle Keynesianism (XXXIV)

 

#Economics#FailedFakeScience#Keynesianism#Keynes got macroeconomic #Profit wrong bc he was too stupid for elementary #Algebra. #MacroFoundations are provably false, so the whole of #MacroEconomics is scientifically worthless. #AfterKeynesians don't get it to this day. pic.twitter.com/2M1oOmfc07

— E.K-H (@AXECorg) November 11, 2023

Occasional Tweets: The futile attempt to recycle Keynesianism (XXII)

 

#Economics#FailedFakeScience#Keynes got macroeconomic #Profit wrong because he was too stupid for elementary #Algebra. So, #MacroEconomics has been scientifically worthless from the beginning. The representative #Economist doesn't get it to this day. pic.twitter.com/3dVjyf01KT

— E.K-H (@AXECorg) July 5, 2023

For details of the big picture see cross-references Keynesianism. 

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

Link to Article; scroll  for the comments

Comment on onebornfree

 

Occasional Xs: The futile attempt to recycle Keynesianism (XXVI)

 

#Economics

The history of #EconomicThought is the history of #ScientificFailure. #Keynes got macroeconomic #Profit wrong bc he was too stupid for elementary #Algebra. For 80+ yrs, #Economists have not realized that #MacroEconomics is provably false. pic.twitter.com/PWymCFLpEM

— E.K-H (@AXECorg) August 8, 2023

Occasional X: Clueless economists / Profit (CLXIX)

“This is a macroeconomic accounting identity: aggregate profits equal investment plus capitalist consumption, the government deficit, and net exports, minus workers’ savings. One sector’s profits are determined by spending and saving decisions across the economy.” (Khazbi Budunov) This is one of the dumbest pronouncements in economics: This is a macroeconomic accounting identity, implying that it is true by definition. Actually, economists are too stupid for the elementary algebra that underlies macroeconomic accounting. For details, see The Levy/Kalecki Profit Equation is false https://t.co/pkoZclG49K Reminder: For 200+ years, economics has claimed to be a science. But it still is not. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory & axiomatically false & materially/formally inconsistent. They all got profit wrong. If the subject's foundational concepts are inconsistent, the entire analytical superstructure is scientifically worthless. This also holds for the Levy/Kalecki profit equation. Khazbi Budunov has not been smart enough to figure out the macroeconomic basics. He goes down the scientific drain together with the rest of the Kalecki crowd.

— AXEC (@EgmontHandtke) November 8, 2026

How Keynes got macroeconomics wrong and Allais got it right

Comment on Lars Syll on ‘Good advice to aspiring economists’

Blog-Reference and Blog-Reference on Sep 28 and Blog-Reference on Nov 28, Blog-Reference on Dec 2, 2019, adapted to context, and Blog-Reference on Dec 4

Keynes based macroeconomics on logically and conceptually defective foundations and neither Post Keynesians nor New Keynesians nor Anti-Keynesians have realized his foundational blunder in 80+ years (2014).

Keynes defined the formal core of the General Theory as follows: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (1973, p. 63)

This syllogism is defective because Keynes never came to grips with profit: “His Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson et al., 2010, p. 12)

Keynes had NO idea of the fundamental concepts of economics, viz., profit and income. Because profit is ill-defined, the whole theoretical superstructure of macroeconomics is false, in particular, ALL I=S/IS-LM models (2011; 2013).

Allais clearly identified Keynes’s major fault: “... mais son [Keynes’] insuffisance logique ne lui a pas permis de résoudre les problèmes que son intuition lui avait fait entrevoir.” (1993, p. 70). In other words, Keynes saw the problems but could not solve them because of his logical insufficiency.

The correct relationship is given by Q_re≡I−S (Allais, 1993, p. 69). Legend: Q_re retained profit, S household sector's saving, I business sector's investment expenditures.

It is pretty obvious from this equation that I and S are NEVER equal, neither ex-ante nor ex-post. The argument that I=S is merely an accounting identity proves only that, as a general rule, economists are too stupid to understand the elementary mathematics of accounting (2012). Allais understood it.

Egmont Kakarot-Handtke


References
Allais, M. (1993). Les Fondements Comptables de la Macro-Économie. Paris: Presses Universitaires de France, 2nd edition.
Kakarot-Handtke, E. (2011). Squaring the Investment Cycle. SSRN Working Paper Series, 1911796: 1–25. URL
Kakarot-Handtke, E. (2012). The Common Error of Common Sense: An Essential Rectification of the Accounting Approach. SSRN Working Paper Series, 2124415: 1–23. URL
Kakarot-Handtke, E. (2013). Settling the Theory of Saving. SSRN Working Paper Series, 2220651: 1–23. URL
Kakarot-Handtke, E. (2014). The Three Fatal Mistakes of Yesterday Economics: Profit, I=S, Employment. SSRN Working Paper Series, 2489792: 1–13. URL
Keynes, J. M. (1973). The General Theory of Employment Interest and Money. London, Basingstoke: Macmillan.
Tómasson, G., and Bezemer, D. J. (2010). What is the Source of Profit and Interest? A Classical Conundrum Reconsidered. MPRA Paper, 20557: 1–34. URL

Related 'Wikipedia and the promotion of economists’ idiotism' and 'Macro for dummies' and 'Rectification of MMT macro accounting' and 'A tale of three accountants' and 'Review of the economics troops' and 'Keynesianism as ultimate profit machine' and 'Profit and the collective failure of economists' and 'Wikipedia and the promotion of economists’ idiotism (II)' and 'Flow-Balance-Inconsistency ― inscription on the gravestone of economics' and 'The GDP-death-blow for the economics profession'. For details of the big picture, see cross-references Refutation of I=S and cross-references Accounting.

***

Graphic AXEC172

Graphic AXEC143d

Occasional Tweets: Economics is at odds with scientific ethics (II)

 

#FailedFakeScience#Walrasianism, #Keynesianism, #Marxianism, #Austrianism et al. are axiomatically false & materially/formally inconsistent & ALL got #Profit wrong. Academic economics is a rigged institution & #PeerReview is the selection mechanism for its self-preservation. pic.twitter.com/ElubzvAT3H

— E.K-H (@AXECorg) May 26, 2023

Where MMT goes wrong

Comment on Bill Mitchell on ‘MMT economists do not seek to enumerate how many angels can dance on the head of a pin’

Blog-Reference

Bill Mitchell characterizes the New Keynesian paradigm: “The summary point … is that the mainstream macroeconomics paradigm claim they are rigourous because they begin with a set of first principles based on stylised assumptions of human behaviour that no psychologist or sociologist would recognise. These assumptions about rationality and maximising strategies, individually pursued (devoid of social influence) are mathematically specified to allow a ‘solution’.”

Bill Mitchell then shows in detail that New Keynesianism is proto-scientific garbage: “One of the major issues with this approach is that it is inherently dishonest ― persuading us that it is scientific and worthy of authority yet being so compromised as to be worthless.”

So, clearly, there is no use in criticizing mainstream economics for the umpteenth time. The task is, as Joan Robinson put it, “Scrap the lot and start again”. This is what Bill Mitchell does: “Modern Monetary Theory (MMT) economists are clearly developing a new paradigm, which we believe is incommensurate with the old New Keynesian approach.” and “It is not an imaginary approach that deals with imaginary problems. It is about the real world and starts with some basic macroeconomic principles like ― spending equals income.”

Now, this was also Keynes' macroeconomic starting point, and it is provably false. To recall: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (GT, 1973, p. 63)

Both Keynes and MMTers got the foundational concepts wrong and from this follows that the whole theoretical superstructure is false and from this follows that Keynesian and MMT policy prescriptions have NO sound scientific foundations.

Macroeconomics has to be based on a set of objective and consistent axioms:

(A0) The objectively given and most elementary systemic configuration of the economy consists of the household sector and the business sector, which in turn consists initially of one giant fully integrated firm.

(A1) Yw=WL wage income Yw is equal to wage rate W times working hours. L,

(A2) O=RL output O is equal to productivity R times working hours L,

(A3) C=PX consumption expenditure C is equal to price P times quantity bought/sold X.

The price P follows as the dependent variable under the conditions of budget-balancing, i.e., C=Yw, and market-clearing, i.e., X=O, as P=W/R, i.e., the market-clearing price is, for a start, equal to unit wage costs. This is the most elementary form of the macroeconomic Law of Supply and Demand.

By lifting the condition of budget-balancing (i.e., spending equals income) one gets the saving/dissaving of the household sector as S≡Yw−C and the profit/loss of the business sector as Q≡C−Yw. S and Q are the balances of two flows. It holds Q≡−S, that is, the profit of the business sector is equal to dissaving/deficit-spending of the household sector, and loss of the business sector is equal to saving of the household sector. This is the most elementary form of the macroeconomic Profit Law.

Profit Q is a balance, i.e., the difference of flows, and NOT a flow like wage income Yw. So, profit is NOT income. The Flow-Balance Inconsistency makes the whole of established economics proto-scientific garbage.

It is inadmissible to speak of profit/loss as a type of income. This blunder carries over to the concept of National Income and thus ruins National Accounting and the concept of GDP.#1

Because the foundational concepts of macroeconomics ― profit and income ― are ill-defined, the whole analytical superstructure is provably false. Economics is a failed science for 200+ years. MMT is no exception.

Egmont Kakarot-Handtke

#1 The GDP-death-blow for the economics profession

***

AXEC172

Occasional Xs: Clueless economists / Science (III)

 

#Walrasianism, #Keynesianism, #Marxianism, #Austrianism et al. are axiomatically false & materially/formally inconsistent & ALL got #Profit wrong. #Economics is scientifically worthless from Adam Smith onward.

The real problem with the economics Nobelhttps://t.co/kCwE4nptUQ pic.twitter.com/oloCgiXZ6g

— E.K-H (@AXECorg) October 5, 2023

Economics is a disgrace ― now more than ever

Comment on Claudia Sahm on ‘Economics is a disgrace’ * ‡

Blog-Reference

The true disgrace of economics is that it has been a failed/fake/cargo cult science for 200+ years. Walrasianism, Keynesianism, Marxianism, Austrianism, MMT, and Pluralism are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got the foundational economic concept of profit wrong. #1 As a consequence, economic policy guidance has never had sound foundations. This applies to left/center/right policy. Economists are a hazard to their fellow citizens. #2

This is why economics has to be burnt down to the ground. However, Claudia Sahm demands “Burn it down: economics failed us.” This is upside-down thinking. In the scientific realm, the question is, what have you done for science and not what has science done for you? However, economists are not scientists, and science is the last thing Claudia Sahm cares about.

Claudia Sahm is “privileged enough to hold a PhD” but has not realized to this day that economics is failed/fake science. #3 That means that she is part of it.

What she cares about primarily is to make the story of her martyrdom in a toxic institutional culture (painful appears 7 times in her post) and her psychic condition (bipolar disorder) as widely known as possible. She does this for herself and on behalf of other victims, in particular vulnerable students and women of color, but does not forget to mention the recent deaths of Krueger, Weitzman, Sandholm, and Farhi as proof of the psychological toxicity of economics.

Everybody knows that something is rotten in economics as a scientific discipline. However, Claudia Sahm does not deliver a material/formal refutation of mainstream economics but sends a letter to Janet Yellen, Ben Bernanke, and Peter Rosseau complaining about the toxic culture of the profession.

This, of course, is a farce. You cannot be an economist without realizing at some point that academic economics is not committed to the advancement of objective scientific truth but that it is a crucial propaganda outlet of the Oligarchy.

This is no secret. Arrow defined the rules of the game in his famous AEA address: “It is a touchstone of accepted economics that all explanations must run in terms of the actions and reactions of individuals. Our behavior in judging economic research, in peer review of papers and research, and in promotions, includes the criterion that in principle the behavior we explain and the policies we propose are explicable in terms of individuals, not of other social categories.”

So, either you subscribe to the ideology of methodological individualism and the peer-review gatekeepers let you in and thus help you to get on a financially attractive trajectory with the Bank of Sweden Nobel at the end of the rainbow, or you get problems ― psychological or otherwise.

All this is really old stuff. Economics started as Political Economy and J. S. Mill was on the payroll of the East India Company. Economics has, from the beginning, been the Oligarchy’s heavily promoted queen of the so-called social sciences.

The disgrace of economics is that economists have not produced much of genuine scientific value for 200+ years: “Thousands upon thousands of scholars, as well as thousands of statesmen and men of affairs, have contributed their efforts to the attempt to understand the course of events of the economic world. And today this field of investigation is being cultivated more extensively than ever before. How is it, then, that in all these years, and with all the undoubted talent that has been lavished upon it, the subject of economics has advanced so little? (Schoeffler)

Worse, economists still do not understand profit ― the foundational concept of their subject matter.#4 Worse, MMTers with academic credentials apply a provably false macroeconomic balances equation to camouflage that public deficit-spending/money-creation is to the disadvantage of WeThePeople and a free lunch for the Oligarchy.

Claudia Sahm does not address any scientific issues or the role of economists as useful idiots; she instead accuses academic economics of psychological cruelty, well knowing that this emotional issue will bring her immediate attention and the approval of the general public.

No doubt, the economics profession in the incarnation of the AEA will pledge guilt and promise betterment and reform, and rework their code of conduct.

This, of course, is the usual farce. Claudia Sahm wittingly or unwittingly helps to cover the real disgrace of economics. Economics ― orthodox and heterodox alike ― needs to be condemned for the corruption of science. The condemnation of toxic culture is justified but entirely beside the point. It is like a sociopathic mobster getting off cheaply by pleading guilty to having stolen a candy bar.

Egmont Kakarot-Handtke

* macromom

‡ Twitter

#1 Economics is a disgrace

#2 Econogenics: economists pose a hazard to their fellow citizens

#3 Section Exemplary proof of the inconsistency of economics in Wikipedia, economics, scientific knowledge, or political agenda pushing?

#4 Your economics is refuted on all counts: here is the real thing

Related 'Economists can hardly wait for their burial at the Flat-Earth-Cemetery' and 'Disgrace again ― is economics really that bad?'. For details of the big picture, see cross-references Political Economics/Stupidity/Corruption and cross-references Failed/Fake Scientists and cross-references Paradigm Shift.

***

Graphic AXEC106l

Graphic AXEC121i

Occasional Tweets: The futile attempt to recycle Keynesianism (XII)

 

#FailedFakeScience#Keynes got macroeconomic #Profit wrong bc he was too stupid for elementary #Algebra. As a consequence, #Keynesianism is scientifically worthless.

Also, Isabella Weber & Dirk Ehnts are #EconBlockers which is a strong indicator of #ScientificIncompetence. pic.twitter.com/dkTZQF0hpW

— E.K-H (@AXECorg) February 13, 2023

Occasional Xs: Clueless economists / Models (I)

 

#Economics#FailedFakeScience#ScientificIncompetence#Walrasianism, #Keynesianism, #Marxianism, #Austrianism etc. are axiomatically false & materially/formally inconsistent & ALL got #Profit wrong.

All models are false because all economists are stupidhttps://t.co/Uk1gI7FfD4

— E.K-H (@AXECorg) September 23, 2023