Profit and the collective failure of economists

Comment on David Ruccio on ‘Accumulate, accumulate! Or not’

Blog-Reference

Economists do not understand how the economy works. The deeper reason is that neither the Walrasian, nor the Keynesian, nor the Marxian, nor the Austrian sect understands what profit is. What the general public can see and touch and smell and feel is that the representative economist does not understand the pivotal phenomenon of his subject matter. Economists are like astronomers before gravity was properly understood.

Marx was, like the Classicals, a political economist and mainly concerned with society and the underlying laws/trends of societal evolution. As a matter of fact, he was rather good at descriptive sociology but completely failed as an economist. Like Smith, Ricardo, and other classical economists he got the profit theory wrong (2014a). And this fate Marxianism shares with the other sects until this very day: “A satisfactory theory of profits is still elusive.” (Desai, 2008, p. 10)

Because of this, the formula that David Ruccio presents as Marx’s theory of accumulation is simply false, while his observations about declining capital investment in the USA are spot on. As with most heterodox economists, the sociology is better than economics proper.

The axiomatically correct macroeconomic Profit Law for the 2-sector economy reads Q_m ≡Y_d+I−S_m (2014b, p. 8, eq. (18))#1 Legend: Q_m monetary profit, Y_d distributed profit, S_m monetary saving, I investment expenditure, dimension €, $, etc. per period

The Profit Law gets a bit more complex when foreign trade and government are included. By summing up investment expenditures over time and taking depreciation into account the equation ultimately yields the profit rate (2011, Sec. 6.2). These details are not needed at the moment. Nonmonetary profit Q_n and nonmonetary saving S_n which relate to re-valuations are also left out of the picture.

The macroeconomic Profit Law says (for the world economy as a whole):
(i) strong growth = high investment I = accumulation is good for the overall monetary profit Q_m of the business sector as a whole,
(ii) strong consumption expenditures = low monetary saving S_m or even dissaving −S_m = growing consumer debt is good for profit,
(iii) by implication high government deficit spending = growing public debt is good for profit,#2
(iv) substantial profit distribution Y_d is good for profit.

Profit and profit distribution constitute a self-reinforcing feedback loop. The same holds for profit and investment. These built-in positive feedback loops explode the notion of equilibrium once and for all. The market economy is not a self-optimizing equilibrium system.

Note that overall profit has nothing to do with high productivity or low wages or the capital stock. These and other factors affect only the distribution of overall profit between firms or countries.

Note also that the Profit Law holds for the USA, Russia, China, the EU, and all other countries or associations, that is, it does not matter at all whether one has a pure/mixed market economy or private property or free enterprise or any other of the alleged characteristics of capitalism. The Profit Law holds for every national monetary economy and for the world economy as a whole.

In the last decades, overall (= world) profit has been driven by the growth in Asia (= high I), by dissaving, i.e. the growth of private debt mainly in the USA, by the growth of public debt worldwide, and by substantial profit distribution mainly in the USA. Overall profit has been redistributed between nations/regions via export surpluses/deficits.

Roughly speaking, as accumulation (= I) slows down in China/Asia and the developing regions world-profit goes down, then overall profit distribution goes down, then again profit goes down, then investment goes down, and so on. Rising unemployment and falling wages accelerate the downward spiral (2015). This spiral is deflationary no matter what the Fed or other central banks do.

So Marx got the life formula — accumulate, accumulate! — of the monetary economy almost right. He had, in any case, a better grasp of economic dynamics than standard equilibrium theory. Independently of all these differences between the major sects of economics the greatest collective scientific embarrassment of all times is: the profit theory is false since Adam Smith.

Egmont Kakarot-Handtke


References
Desai, M. (2008). Profit and Profit Theory. In S. N. Durlauf, and L. E. Blume (Eds.), The New Palgrave Dictionary of Economics Online, 1–11. Palgrave Macmillan, 2nd edition. URL
Kakarot-Handtke, E. (2011). Squaring the Investment Cycle. SSRN Working Paper Series, 1911796: 1–25. URL
Kakarot-Handtke, E. (2014a). Profit for Marxists. SSRN Working Paper Series, 2414301: 1–25. URL
Kakarot-Handtke, E. (2014b). The Three Fatal Mistakes of Yesterday Economics: Profit, I=S, Employment. SSRN Working Paper Series, 2489792: 1–13. URL
Kakarot-Handtke, E. (2015). Major Defects of the Market Economy. SSRN Working Paper Series, 2624350: 1–40. URL

#1 For the rising complexity of the Profit Law see Wikimedia AXEC143d.
#2 Keynesianism as ultimate profit machine

Related 'Rethinking the Profit Law' and 'The perennial conundrum: profit and distribution' and 'Ricardo, too, got profit theory wrong!' and 'The Common Error of Common Sense: An Essential Rectification of the Accounting Approach' and 'Profit'. For details of the big picture see cross-references Profit.

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Wikimedia AXEC109i

The thing with profit and exploitation

Comment on Peter Dorman on ‘It’s Red Friday and Time to Discuss the Role of Exploitation in Profit’

Blog-Reference and Blog-Reference on Nov 28

The Palgrave Dictionary summarizes: “A satisfactory theory of profits is still elusive.” (Desai, 2008)

This perhaps surprises the general public: economists do not know until this day what profit is. As a consequence, they have NO idea about how the monetary economy works. More specifically, economics consists of four main approaches, Walrasianism, Keynesianism, Marxianism, Austrianism, and NONE of them gets profit right.#1

As a consequence, economic policy guidance never has had sound scientific foundations. Because economists never captured the essence of the market economy, whatever they have said for or against capitalism, communism or socialism has been based upon provable false theories about how the monetary economy works.

Since Ricardo and Marx, both orthodox and heterodox economists believe that there is a fundamental antagonism between the firm’s owners (= capitalists) and the employees/workers.

The idea that antagonism between classes is built into the economic system, though, rests on an optical illusion. And this optical illusion ultimately derives from the theory of the firm. It is obviously true that an individual firm can increase profit by lowering the wage rate. But this is NOT true for the economy as a whole. To generalize what is true for an isolated part of a system is known in methodology as Fallacy of Composition.

In the most elementary case, the interdependencies of the economic system have the unintended effect that if firm A makes a profit by lowering the wage rate, firm B (= the rest of the economy) makes a loss under the initial macroeconomic condition that total consumption expenditure is equal to total wage income.#2 And, by the same token, the real wage of the workers of firm A decreases and that of the workers of firm B increases. So, what happens is that a redistribution of profit between firms and a redistribution of output between households takes place.

In political terms, this means that there are NO CLASSES with a common interest. Put differently, what appears as an exploitation of the workers of firm A is only part of the complete picture of a REDISTRIBUTION of profits WITHIN the business sector and a REDISTRIBUTION of output WITHIN the household sector. In other words: the exploitation of workers in firm A benefits the workers in firm B. And the profit increase of firm A’s capitalists comes from firm B’s capitalists. Taking all capitalists together their profit does not change. Taking all workers together their real share of output does not change.

Conclusion: the naive concept of exploitation has to be replaced by the concept of crossover exploitation.

Economists are supposed to be experts on the economy. So it is quite natural to think that they know how the profit mechanism works; after all, this is the foundational phenomenon of their subject matter. Yet, this is definitely not the case. Economists are incompetent scientists and, after 200+ years, they are still stuck in the Fallacy of Composition. So, economists have NOTHING to contribute to the discussion about how the economy, markets, and firms should be organized.

Economists have discussed the role of exploitation and profit without ever coming to the core of the matter. It is Red Friday and time for them to retire now for good.

Egmont Kakarot-Handtke

#1 How the Intelligent Non-Economist Can Refute Every Economist Hands Down and
The Profit Theory is False Since Adam Smith. What About the True Distribution Theory? and Profit for Marxists.
#2 Essentials of Constructive Heterodoxy: Profit

Immediately following How to end the Punch and Judy show about profit.

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REPLY to Tom Hickey on Nov 27

There are three things that are intertwined but have to be analytically kept apart: (i) Theory of Value, (ii) Theory of Profit for the economy as a whole, (iii) Distribution of overall profit between sub-sectors (production, banking, land use, etc.) and individual firms.

The Law of Value says that relative prices are inverse to the productivities.#1 This Law replaces the Labour Theory of Value.

The Profit Law for the pure consumption economy says that OVERALL profit depends on the expenditure ratio and the distributed profit ratio.#2

It holds in particular:
• Overall profit does neither depend upon the agents’ personal qualities, motives, their ideas about what profit is, nor on profit-maximizing behavior.
• In order that profit comes into existence for the first time in the elementary production-consumption economy, the household sector must run a deficit for at least in one period.
• Profit is, in the simplest case, determined by the increase and decrease of the household sector’s debt. There is a close relation between profit/loss and the expansion/contraction of credit for the economy as a whole.
• Wage income is the factor remuneration of labor input. Profit is NOT a factor income. Since capital is nonexistent in the elementary production-consumption economy, profit is not functionally attributable to capital.
• There is no relation at all between profit, capital, marginal or average productivity.
• Profit has no real counterpart in the form of a piece of the output cake. Profit has a monetary counterpart.
• The existence and magnitude of overall profit do not depend on the ownership of the firms that comprise the business sector.
• The value of output is, in the general case, different from the sum of factor incomes. This is the defining property of the monetary economy.
• Profit is a factor-independent residual and qualitatively different from wage income. Therefore, it is an elementary mistake to maintain that total income is the sum of wages and profits.#3
• There is no antagonism between total wages and total profits, and the distribution of consumption goods output has nothing at all to do with profit.
• Innovation and efficiency are irrelevant for the profit of the business sector as a WHOLE. It is a Fallacy of Composition to trivially generalize what can be observed in an individual firm.

In sum: The classical/neoclassical and Keynesian/Post-Keynesian Theories of Value/Profit are provably false.

#1 The Pure Logic of Value, Profit, Interest
#2 Essentials of Constructive Heterodoxy: Profit
#3 When Ricardo Saw Profit, He Called It Rent: On the Vice of Parochial Realism

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COMMENT on Andrew Anderson on Nov 28

You say: “A very interesting thing to me is that in the Bible profit is good but profit taking ISN’T(!) good ...”

It is common knowledge that the Bible belongs to the sphere of religion/belief/storytelling and that economics belongs to the sphere of science/knowledge/proof.

Both spheres do not mix, never have, and never will. Your post is out of place.

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REPLY to jrbarch on Nov 29

It is common knowledge that content and level of economic discussion are far below zero. There is NO need for you or anybody else to deliver more examples.

For details see FakeNews, FakeScience: economics in the information age.

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REPLY to jrbarch on Nov 30

You say: “I do have an issue with ‘trust me, I’m a scientist’.”

There is NO issue at all, there is only your abysmal ignorance and confusion. Science is NOT about trust or credibility or belief or authority, but only about proof, more specifically, about the logical and empirical consistency of a theory. A theory, in turn, is the best humanly possible mental representation of reality.

Since the ancient Greeks introduced the distinction between opinion (= doxa) and knowledge (= episteme) NO scientist has ever said believe me. As Popper put it: “... a critical discussion is well-conducted if it is entirely devoted to one aim: to find a flaw in the claim that a certain theory presents a solution to a certain problem.”

So, there is NO issue at all. I have given you the Profit Law and if you have qualms about it you are invited to refute it. Of course, you cannot. But you can endlessly waffle about Love, the Divine, your Australian aboriginal brothers, and all the other good vibration stuff.

Here is the ultimate test to practically find out the difference between doxa and episteme for yourself: You have the choice to board an aircraft that has been designed/constructed by your good vibration folks and one that has been designed/constructed by scientists/ engineers. Who do you REALLY trust?

OK, and now get out of economics.

Scientific ignorance is political strength

Comment on Lars Syll on ‘Radical uncertainty ― a question of economic methodology’

Blog-Reference and Blog-Reference and Blog-Reference on Apr 14

Economics is a scientific failure for 200+ years. The four major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent and that all got the foundational concept of the subject matter ― profit ― wrong. Methodologically, economics can be described as pluralism of provably false theories.

Economists have many explanations/excuses about why they have not achieved much of real scientific value. Here is the classical answer: “Years ago I heard Mr. Cobden say at a League Meeting that ‘Political Economy was the highest study of the human mind, for that the physical sciences required by no means so hard an effort’.” (Bagehot, 1885)

In Lars Syll’s modern parlance the chief difficulty is: “Radical uncertainty is feature of a complex adaptive system a chief characteristic of which is emergence. Emergence is at the heart of evolution theory. Emergence in this context means that there is no way to predict what will emerge from a complex adaptive system based on investigation of the past and present state of the system.” and “It’s long past time to admit that Keynes and Knight were correct …”

The fact of the matter is that it is sheer scientific incompetence that explains the persistent failure of economists. Uncertainty and complexity are, of course, real but economists abuse them as excuses. It is particularly painful when cargo cult scientists, who have not managed in 200+ years to get their foundational concepts right, blather about methodology.

But lack of knowledge about how the economy works is not seen as a disgrace among economists, just the opposite, it is taken as proof that laissez-faire is the best economic policy. After all, who knows nothing cannot do anything.

For details see
► Failed economics: The losers’ long list of lame excuses
► How Keynes got macro wrong and Allais got it right
► To this day, economists have produced NOT ONE textbook that satisfies scientific standards
► Ontological uncertainty is NOT the problem but economists’ ontological stupidity
► What is dead certain in an uncertain world: economists’ abysmal incompetence
► Uncertainty: ‘Whereof one cannot speak, thereof one must be silent’
► Economists: Either stupid or corrupt or both
► Opinion, conversation, interpretation, blather: the economist’s major immunizing stratagems
► Economics as storytelling and entertainment for the masses
► Still beyond the reach of economists: The Holy Grail of Science
► Econogenics in action

Egmont Kakarot-Handtke

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LINKS on Lars Syll’s ‘John Maynard Keynes — an introduction’ on Apr 12

► How Keynes got macro wrong and Allais got it right
► Macroeconomics ― dead since Keynes
► From Keynes’ fatal blunder to the true economic model
► The general theory of scientific incompetence
► Dear idiots, time to get saving and investment straight (II)
► From Keynes’ fatal blunder to the true economic model

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#PointOfProof

Apr 11

before

after

The worthlessness of value theory

Comment on Matias Vernengo on ‘Why do we need a theory of value?’*

Blog-Reference and Blog-Reference

Matias Vernengo correctly observes: “The theory of value and distribution is at the heart of economics. … However, most economists have no clue about it, about the centrality of value.”

Then he summarizes the main approaches:

• “Let me start with the authors of the surplus approach. In fact, a bit earlier with the economists that would eventually be known as Mercantilists (if you can talk about a school). If we are allowed to generalize and simplify, the latter believed that the wealth of nations depended essentially on maintaining trade surpluses and accumulating precious metals. Profits were essentially the result of buying cheap and selling dear, or profits upon alienation, which indicates that, for Mercantilists, profits were generated in the exchange process.”

• “Classical political economy authors, starting with William Petty, emphasize the determination of profits in the process of production, as a residual of output, once the conditions for the reproduction of the productive system were satisfied. So profits are not the result of selling high and buying low, something that could result from the mere fluctuation of market prices, but from the ability to produce beyond what was needed for the simple material reproduction of society. … So the normal rate of profit is needed to determine prices, and prices are needed to determine the normal rate of profit. This was well understood by both Ricardo and Marx.”

• “In other words, for a coherent theory of output, accumulation, international trade, technological change and more (taxation, etc.) you need a theory of value and distribution. That is also the case in the mainstream. Marginalism developed in the last quarter of the 19th century, both as a result of the lack of analytical solution in that period for the problems of the LTV and as a reaction to radical revival of the theory (Marxism). The important distinction is that while classical political economy authors dealt only with objective factors, and considered demand as given when determined value and distribution, marginalism incorporated subjective preferences as central for the explanation of long term normal prices, and prices and quantities were determined simultaneously.”

Let us make it short here: the theory of value/profit/distribution is false since Adam Smith.#1, #2 However, Matias Vernengo, too, has no clue about what profit is and how the monetary economy works.

The elementary production-consumption economy is defined with this set of macroeconomic axioms: (A0) The economy consists of the household 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.

Under the conditions of market-clearing X=O and budget-balancing C=Yw in each period, the price as the dependent variable is given by P=W/R (1a). The price is determined by the wage rate W, which takes the role of the nominal numéraire, and the productivity R. The elementary production-consumption economy is shown on Wikimedia.#2

The macroeconomic Law of Supply and Demand (1a) implies W/P=R (1b), i.e. the real wage is always equal to the productivity no matter how the wage rate W is set. Labor gets the whole product.

The focus is here on the nominal/monetary balances. For the time being, real balances are excluded, i.e. it holds X=O. The condition of budget-balancing, i.e. C=Yw, is now skipped. The monetary saving/dissaving of the household sector is defined as S≡Yw−C. The monetary profit/loss of the business sector is defined as Q≡C−Yw. Ergo Q≡−S.

The balances add up to zero. The mirror image of household sector saving S is business sector loss −Q. The mirror image of household sector dissaving (-S) is business sector profit Q. Q≡−S is the elementary version of the macroeconomic Profit Law.

Ramifications: (i) The business sector’s revenues can only be greater than costs if, in the simplest of all possible cases, consumption expenditures are greater than wage income. (ii) In order that profit comes into existence for the first time in the elementary production-consumption economy, the household sector must run a deficit at least in one period. This presupposes the existence of a credit-creating entity. (iii) Profit is, in the most elementary case, determined by the increase and decrease of the household sector’s debt. There is a close relation between profit/loss and the expansion/contraction of debt for the economy as a whole. (iv) Wage income is the factor remuneration of labor input. Profit is not a factor income. Since capital is nonexistent in the elementary production-consumption economy profit is not functionally attributable to capital. (v) There is no relation at all between profit, capital, marginal or average productivity. (vi) The value of output is, in the general case, different from the sum of factor incomes. This is the defining property of the monetary economy. (vii) Profit is a factor-independent residual and qualitatively different from wage income. Therefore, it is an elementary mistake to maintain that total income is the sum of wages and profits.

In brief, to this day, Walrasians, Keynesians, Marxians, Austrians, MMTers, and Matias Vernengo have no clue about profit and as a consequence about value and distribution. They will all be buried at the darkest corner of the Flat-Earth Cemetery.

Egmont Kakarot-Handtke


* Naked Keynesianism
#1 The Profit Theory is False Since Adam Smith. What About the True Distribution Theory?
#2 Economics ― nothing but claptrap, twaddle, drivel, slip-slop, wish-wash, waffle, and proto-scientific garbage
#3 Wikimedia AXEC31 Elementary production-consumption economy

Related 'The Logic of Value and the Value of Logic'.

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REPLY to André on Jul 23

You say: “Price is not directly related to costs, be it wages or any other costs. A theory that relies on relations between prices and costs is lacking, to put it mildly.”

Observing one firm and then generalizing for the economy as a whole is called the Fallacy of Composition. This fallacy is the main reason why economics is proto-scientific garbage to this day.

Take, for a start, the most elementary case that the households fully spend their wage income on consumption, i.e. C=Yw, and that there are two products. Under the condition of market clearing and W1=W2=W, the prices are given by P1=W/R1 and P2=W/R2. The profits in both firms are zero, i.e. Q1≡C1―Yw1=0, Q2≡C2―Yw2=0, C=C1+C2, Yw=Yw1+Yw2, C=Yw, Q=Q1+Q2=0.

For relative prices, i.e. the exchange relation, holds P1/P2=R2/R1 in the most elementary case. The exchange relation between the two goods is determined by the objectively given productivities.

Now firm 1 increases the price P1. The households pay more for good 1 but keep total consumption expenditures unchanged, i.e. C=Yw, so they spend less on good 2. P2 falls under the condition of market-clearing. As a result, firm 1 now makes a profit and firm 2 makes a loss and the total profit of the business sector Q is zero as before.

Alternatively. Firm 1 increases the price P1. The households pay more for good 1 but keep expenditures on good 2 constant, that is, total consumption expenditures C are now greater than wage income Yw. In other words, the household sector deficit-spends or dissaves. In this case, the profit of the business sector as a whole Q is greater than zero. It holds Q≡−S, i.e. total profit of the business sector is equal to total dissaving of the household sector. The balances of the two sectors add up to zero, i.e. Q+S=0. One may call this the Law of the Conservation of Value.

One cannot do Price Theory and Value Theory without taking the macroeconomic balances equation into account.#1 OK, you can because you are a scientifically incompetent blatherer, to put it mildly.


#1 The Pure Logic of Value, Profit, Interest

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REPLY to André on Jul 23

You say: “Price is not necessarily related to costs, and this is a fact. If you ignore facts, you are just like a mainstream economist - ie, no scientist at all.”

Indeed, price is not necessarily related to costs. This is a well-known triviality. I treat this case in the section that starts with “Now firm 1 increases the price P1.” and in the section that starts with “Alternatively. Firm 1 increases the price P1.”

So, the point at issue is that you make a trivial statement about the price-setting capacity of a single firm. This is not “realism” but dumb partial analysis. The Walrasians can be criticized for many things but their point is valid that Marshallian partial analysis is worthless and has to be replaced by total analysis because of the interdependence of markets.

The interdependence of markets is a reality. It is nowhere to be found in your trivial examples. You simply do not get the essential point of price/value theory, to put it mildly.

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#PointOfProof

Jul 24
post still missing

Occasional Xs: The futile attempt to recycle Marx (XXXVII)

 

#Economics#FailedFakeScience

Economics claims to be #Science but is NOT. The major approaches (Walrasianism, Keynesianism, Marxianism, Austrianism, and their derivatives) are mutually contradictory & axiomatically false & materially/formally inconsistent & ALL got #Profit…

— AXEC (@EgmontHandtke) December 27, 2024

Occasional Tweets: Marx got profit wrong ― Marxians have nothing to scientifically stand on

 

#Economics#FailedScience#FakeScience

The history of economic thought is like the history of the Easter Bunny ― scientifically vacuous. Marx, too, got #Profit wrong but Marxians realized nothing to this day.

Profit for Marxistshttps://t.co/94jqoxxHCP

— E.K-H (@AXECorg) October 25, 2021

For more about Marxianism see AXECquery. 

The real problem with the economics Nobel

Comment on Lars Syll on ‘The Nobel factor — the prize in economics that spearheaded the neoliberal revolution’

Blog-Reference and Blog-Reference on Oct 3 and Blog-Reference on Oct 10 and Blog-Reference on Jun 8, 2017, adapted to context

Lars Syll argues that the economics Nobel is politically biased: “... the prize was thought to take advantage of the connection with the true Nobel prizes and spearhead a market-oriented neoliberal reshaping of the world.” (See intro)

This is a minor problem, the real problem is in the title: “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.

The keyword is Science[s]. Why not simply “Bank of Sweden Prize in Economics”? The original title clearly communicates the claim that economics is a science. This claim is as old as Adam Smith/Karl Marx.

Science is well-defined by the criteria of formal and material consistency: “Research is, in fact, a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant, 1994)

Neither orthodox nor heterodox economics satisfies the criteria of formal and material consistency. It is a provable fact that neither Walrasianism, Keynesianism, Marxianism, nor Austrianism is materially/formally consistent.

Accordingly, economics is not a science (or sciences) but what Feynman famously called a cargo cult science.

The Bank of Sweden is legitimized to award prizes to whoever it wants and to push any political agenda it wants. The Bank, though, is NOT legitimized to declare economics as science well knowing that economics has not lived up to scientific standards since the founding fathers.

The scientific community has to see to it, firstly, that the word ‘sciences’ is eliminated from the “Bank of Sweden Prize in Economic Sciences”. The general public has to be informed that the 200-year-old claim and the actual state of economics do not match and that ALL economic policy guidance, i.e. independent of political orientation, lacks a sound scientific foundation. It follows, secondly, that economists have to be expelled from the scientific community. It follows, thirdly, that organizations like AEA, Royal Economic Society, Verein für Socialpolitik etcetera refrain from speaking in the name of science.

The real problem with the Bank of Sweden Prize is that it may give rise to a claim for damages in the case of severe depression/unemployment which is ultimately caused by provably false economic theory.


Egmont Kakarot-Handtke


Related 'Swedish muddle' and 'Swedish economists — what’s that?' and 'Economics: the simple logic of failure' and 'Scientists and science actors' and 'The economist as stand-up comedian' and 'Economists: the Trumps of science' and 'When fake scientists call out on fake politicians' and 'The economics Cargo Cult Prize' and 'Economics is NOT a science of behavior' and 'As Napoleon said: don’t listen to economists' and 'Why does Heterodoxy not abolish the fake Nobel?' and 'Legitimacy lost' and '10 steps to leave cargo cult economics behind for good' and ' Great souls’ methodology' and 'The trouble with economics prizes' and 'Links on the Economics Nobel'. For details of the big picture see cross-references Failed/Fake Scientists.

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COMMENT and COMMENT on 'Oliver Hart, Laureate in Economic Sciences' on Dec 13

Economics is a failed science. Walrasianism, Keynesianism, Marxianism, and Austrianism are contradictory and axiomatically false. See The real problem with the economics Nobel.

In order NOT to mislead the general public, the word 'Sciences' has to be deleted from the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.

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Twitter 2019 Oct 8

Twitter 2019 Oct 8

Twitter 2020 Nov 28

Richard S.J. Tol, 2020,  Rise of the Kniesians: The professor-student network of Nobel laureates in economics

Twitter Jan 30, 2022

Twitter Oct 10, 2022 What the EconNobel rewards ― not science to be sure

Twitter Oct 15, 2020

MMT and Marxism: A debate between proto-scientific zombies

Comment on Jehu on ‘MMT is right … which (paradoxically) is why it is wrong’

Blog-Reference

Jehu argues: “I approach the core assumptions of MMT from the perspective of Marx’s labor theory of value not from the perspective of bourgeois neoclassical theory.”

Unfortunately, the core assumptions of Marx are also false. Fact is that Marx never understood what profit is.#1 This is what Marxianism, Walrasianism, Keynesianism, Austrianism, and MMT have all in common.#2

From this follows that economics is a failed/fake science and economic debate between the different schools has never been more than brain-dead political blather.

Not only Marxian profit theory is provably false but also the theory of money: “It is not simply that the fiat no longer expresses the value of commodity, inconvertible fiat expresses the values of all commodities as zero. Since a unit of fiat contains no value, in an exchange it expresses the value of the commodity for which it is exchanged as zero.”

This is plain BS. The value of fiat money is given in the elementary case of the production-consumption economy as P=W/R or W/P=R, i.e the real wage is equal to the productivity.#3

Jehu, though, comes close to the secret charm of MMT, which boils down to the formula Public Deficit = Private Profit: “Here is the thing: MMT can show how it is possible for the state to use MMT to prop up profits; instead they choose to lobby support for more abuses by the state. They begin with the argument that if the ‘private sector’ (i.e., the capitalists) choose to save more than they can invest productively, the state is obligated to make this excessive accumulation possible by running deficits and borrowing the excess savings (capital) that can’t be invested profitably. In the long run, private firms could not accumulate more profits than they can invest profitably if the state did not run the deficits (and thus issue interest paying treasury bonds) that make this possible.” And “Not surprisingly, Kelton is now Chief Economist, U.S. Senate Budget Committee, where she is educating dumb congresspersons on the basic facts of modern money theory.”#4

MMT’s policy guidance does NOT promote the cause of WeThePeople but of the Oligarchy.#5 It does NOT matter at all whether deficit-spending/money-creation is caused by military or social spending, the axiomatically correct Profit Law says Public Deficit = Private Profit. It is deficit-spending per se that feeds the Oligarchy.#6 The MMTers demonstrative care for the unemployed, the environment, the elderly, the sick, and the poor is a fig leaf for pushing Wall Street’s agenda.

Jehu, the retarded Marxist, beats MMT for the wrong reasons but the beating is justified because MMT is full-blown proto-scientific garbage ― paradoxically ― just like Marxianism.

Egmont Kakarot-Handtke


#1 Profit for Marxists
#2 See cross-references Profit
#3 The creation and value of money and near-monies
#4 The Kelton-Fraud
#5 MMT: Money-making for the one-percenters
#6 How MMT makes everybody happy

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REPLY to Jehu on Nov 21

200+ years after Smith/Marx, you still do not understand that economics from Smith/Marx up to MMT is proto-scientific garbage, so that’s something.#1


#1 Marx’s bicentennial ― nothing to discuss, nothing to celebrate

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REPLY to Jehu on Nov 22

You have studied economics and do not know what profit is? You are beyond help. Neither goodness nor I nor anybody else will school you or relieve you of your ignorance.

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REPLY to Jehu on Nov 25

Yous ask: “Wait, wha… I thought money was debt! Is everything debt now?”

The general macroeconomic Profit Law Qm≡Yd+(I−S)+(G−T)+(X−M) boils down to Public Deficit = Private Profit. Loosely speaking, profit is the mirror image of a growing public debt. Politically speaking, MMT’s deficit-spending/money-creation is a program for the permanent self-alimentation of the Oligarchy.#1, #2

Marxists in their utter stupidity have not figured this out in the past 200 years.#3 Ultimately, profit does NOT originate from exploitation but from growing public/private debt.#4, #5

There is no need for “Looking forward to the book PROFIT: The first 5000 Years.” For details of the big picture see cross-references Profit.#6

Of course, there is a relationship between deficit-spending/money-creation, debt, and money.#7

The first thing Marxists have to realize is that the pivotal concept of exploitation has to be replaced by cross-over exploitation. This, of course, is too much for their two brain cells.


#1 MMT: A free lunch for the Oligarchy
#2 Keynes, Lerner, MMT, Trump. Biden, and exploding profit
#3 Profit for Marxists
#4 Capitalism, poverty, exploitation, and cross-over exploitation
#5 Ricardo and the invention of class war
#6 Cross-references Profit
#7 The creation and value of money and near-monies

Occasional Tweets: All one needs to know about economics

 

#FailedScience#FakeScience#Walrasianism, #Keynesianism, #Marxianism, #Austrianism, #MMT, #Pluralism are mutually contradictory, axiomatically false, materially/formally inconsistent, and all get #Profit wrong. That's #AllOneNeedsToKnow about the last 200+ years of #Economics.

— E.K-H (@AXECorg) June 17, 2021

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AXEC109i

Occasional Xs: The futile attempt to recycle Marx (XXIV)

 

#Economics#FailedFakeScience#NoFalseHeroMemorials#Marx NEVER understood what #Profit is and how the economic #System works. Because the foundational concepts of the subject matter are inconsistent, the whole analytical superstructure is scientifically worthless.

Dear idiots,…

— E.K-H (@AXECorg) March 14, 2024

Also here. 

What’s the trouble with some Canadian economists?

Comment on Nick Rowe on ‘Increased Price Flexibility is Destabilising in New Keynesian Models’

Blog-Reference

The general trouble with economists is that they are either stupid or corrupt or both. The major approaches — Walrasianism, Keynesianism, Marxianism, Austrianism, MMT — are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational economic concept profit wrong. Economics is a failed science from Adam Smith/Karl Marx onward to New Keynesianism, DSGE, and MMT but economists cling desperately to their provably false proto-scientific garbage.

This is not only stupid but amounts to a violation of scientific standards: “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) #1-#14

What is needed in economics is NOT repetitive critique and futile cosmetic repair but a Paradigm Shift. This is long known: “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).

The specific trouble with some Canadian economists is (i) that they cling to false approaches and a failed methodology, (ii) that they have NO idea how to perform a Paradigm Shift, but (iii) that they prevent it by (a) stubbornly recycling provably false approaches, and (b), by actively suppressing critique and refutation in the econblogosphere.#15-#17

In this, though, the agenda-pushing Canadians are by no means alone but follow a widespread pattern.#18, #19

Egmont Kakarot-Handtke

References


#1 Is Nick Rowe stupid or corrupt or both?
#2 I is never equal S and even Nick Rowe will eventually grasp it
#3 Nick Rowe’s soapbubbling about money
#4 Worthless Canadian model bricolage
#5 It has been said before but economists still don’t get it
#6 Nick Rowe: Bury me at the end of coal-pit
#7 How economists missed out on the essential relationship of economics
#8 Another X-mas fantasy about IS curves
#9 Worthwhile Canadian filibuster?
#10 DSGE and profit―forget it! MMT and profit―forget it!
#11 How Keynes got macro wrong and Allais got it right
#12 Kalecki and Keynes: The double macroeconomic false start
#13 Are economics professors really that incompetent? Yes!
#14 Cryptoeconomics ― the best of Nick Rowe’s spam folder
#15 #EconBlocker Nick Rowe

Source: Twitter

#16 #EconBlocker George Selgin

Source: Twitter

#17 #EconBlocker

Source: Twitter

#18 Economists/MMTers: agenda pushers, distractors, blockers, muters, censors
#19 Economics ― the science that never was

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AXEC123e

Exploitation and its unintended outcomes: an axiomatic view of Marx's surplus value {09}

Working paper at SSRN

Abstract  The present paper scrutinizes the logical foundation of Marx's dialectic analysis of the evolving money economy. The frame of reference is thereby given with the set of structural axioms. It turns out, first, that the commonplace notion of exploitation has to be replaced by crossover exploitation among capitalists and workers; second, that the concept of surplus-value cannot explain the existence and magnitude of overall profits; finally, that the real shares of output are determined in the spheres of income and expenditure and not, as classical, Marxian and neoclassical economists unanimously maintain, in the sphere of production.

#DeleteKeynes #ExpelAllKeynesians

Comment on Asad Zaman on ‘Methodology of Modern Economics’

Blog-Reference

• The formal basis of the General Theory is given with “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (p. 63)

• This proposition is conceptually/logically false because Keynes NEVER came to grips with profit.

• Because the foundational economic concepts of profit/income/saving are miss-specified, the whole theoretical superstructure of Keynesianism in all its variants is false.

• Keynes messed up the inexorable Paradigm Shift from microfoundations to macrofoundations.

• Keynes was an agenda pusher, NOT a scientist. Keynesian policy guidance has NO sound scientific foundations and in effect enables the self-alimentation of the Oligarchy.

• The extremely unequal distribution of income and financial wealth is the direct result of public deficit spending. It holds Public Deficit = Private Profit.

• After-Keynesians have not detected/rectified Keynes’ blunders to this day. Macroeconomics ― profit and employment theory, in particular ― is materially/formally inconsistent.

• Keynesianism is scientifically worthless. All Keynesians have to be expelled from the sciences.

• The same holds for Walrasians, Marxians, Austrians, and Pluralists.

For details of the big picture see cross-references Keynesianism

Egmont Kakarot-Handtke

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Wikimedia AXEC138

Austrian blather

Reply to Major.Freedom on 'Fiscal multiplier studies — it's far worse than I thought'

Blog-Reference

(i) I did not ask you for a “good piece of advice”, so do not pester me with it.

(ii) My pivotal point is that there is no such thing as a specific BEHAVIORAL axiom in economics because axioms have to be ‘certain, true, and primary’. This is definitively not the case with the maximization axiom HC3 of Neoclassics and the action axiom of Praxeology.

Strictly speaking, a ‘behavioral axiom’ is an oxymoron. This has been known to scientists of all ages: “The bifurcation of motion into two fundamentally different types, one for natural motions of non-living objects and another for acts of human volition ... is obviously related to the issue of free will, and demonstrates the strong tendency of scientists in all ages to exempt human behavior from the natural laws of physics, and to regard motions resulting from human actions as original, in the sense that they need not be attributed to other motions.” (Brown, 2011, p. 211)

From the general proposition that human action is original or, alternatively, target-oriented with any number of possible targets NOTHING specific follows. So, after the first step, one is already at the end of the road.

This, in turn, explains why Praxeology is a failed approach: “Now, at any rate, we have an explanation for why the assumptions of economic theory about individual action have not been improved, corrected, sharpened, specified, or conditioned in ways that would improve the predictive power of the theory. None of these things have been done by economists because they cannot be done. The intentional nature of the fundamental explanatory variables of economic theory prohibits such improvement.” (Rosenberg, 1992, p. 149)

For cogent methodological reasons: (1) economic theory cannot be built upon a behavioral assumption like the maximization axiom or the action axiom or any other, for that matter, and (2), as a matter of principle, NO way leads from the explanation of individual human behavior to the explanation of how the monetary economy works. Because of this, ALL subjective-behavioral approaches are bound to fail.

(iii) You say about the action axiom “It is IMPOSSIBLE for it to be proven false.” Obviously, you did not realize that this is NOT a strong point but, just the contrary, the very antithesis of science: “But a method that can explain everything that might happen explains nothing.” (Popper, 1960, p. 154)

To recall, when the ancient Greek thinkers, who invented science, heard a man saying “I can explain everything, Zeus did it, and you cannot prove me wrong” they showed him the way to the temple and threw him out of the academy.

(iv) This thread is about testing. As long as Austrians cannot produce a testable proposition about the overall profit of the monetary economy they have nothing worthwhile to say. Who does not understand profit understands nothing. Folk psychology is not economics.

(v) I do not engage in criticizing Praxeology or Austrianism. I understand that there must be something like economics for the scientifically retarded and I am quite content that you faithfully stick to it.

(vi) If you wish to prove the structural-axiomatic approach wrong it suffices to empirically refute the Profit Law. All else is obsolete Austrian blather.


References
Brown, K. (2011). Reflections on Relativity. Raleigh: Lulu.com.
Popper, K. R. (1960). The Poverty of Historicism. London, Henley: Routledge and Kegan Paul.
Rosenberg, A. (1992). Economics ― Mathematical Politics or Science of Diminishing Returns? Chicago: University of Chicago Press.

Related 'The futility of testing economics blather' and 'Hayek was not an economist' and 'Both Austrianism and MMT are proto-scientific garbage' and 'Austrians, too, are either stupid or corrupt or both'.

For more about Austrianism see AXECquery.

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REPLY to Major.Freedom on Apr 2

You say: “It [Praxeology] is strictly a theory of human action.” It is obviously beyond your horizon that human action is the realm of the so-called social sciences (psychology, sociology, anthropology, political science, history, etc.). Economics is about the behavior of the monetary economy. So, economics is a system science (2014). The so-called social sciences have been accurately characterized by Feynman as cargo cult sciences (see Wikipedia). Praxeology is a case in point.

So there is no need at all to clarify the finer points of Praxeology just as there is no need to quarrel about whether geocentrism worked with 20 or 25 epicycles because geocentrism has been buried long ago and everybody — except Flat-Earthers and Austrians — understands by now that epicycles are NONENTITIES like angels and the Easter Bunny.

You say: “But we are not God, and we are not superhuman. We are human.” Trivially true, but not much follows from brain-dead tautologies.

Folk psychology and the "subtle and sophisticated process of self-reflection" are not economics. Praxeology is proto-scientific garbage and more is not to say about it.

Science is well-defined as formal and empirical consistency (Klant, 1994, p. 31). No genuine scientist ever had a problem with this definition. Curiously, those who are known not to have produced one tiny piece of science can exactly explain why the scientific method does not work.

Here is the collection of the most ridiculous excuses: “Economics is a strange sort of discipline. The booby traps I mentioned often make it sound as if it is all just a matter of opinion. That is not so. Economics is not a Science with a capital S. It lacks the experimental method as a way of testing hypotheses. . . . There are always differences of opinion at the cutting edge of a science, . . . . But they last longer in economics . . . and there are reasons for that. As already mentioned, rival theories cannot be put to an experimental test. All there is to observe is history, and history does not conduct experiments: too many things are always happening at once. The inferences that can be made from history are always uncertain, always disputable, . . . You can’t even count on a long and undisturbed run of history, because the ‘laws’ of behavior change and evolve. Excuses, excuses. But the point is not to provide excuses. (Solow, 1998, x-xi)

The obvious explanation is missing: the scientific incompetence of economists. The first thing to understand is that there are no ‘laws of behavior’ but that there are objective and testable systemic laws.

After more than 200 years economists can still not tell the difference between profit and income. Economics is at the level of medieval physics before the concept of potential and kinetic energy was properly understood. Austrians, too, cannot explain how the economy works but they have any number of excuses for why they have achieved nothing of scientific value.

You say: “We’re pigeons playing chess, pooping on the board, and flying away.” Again trivially true, dear Austrians, but now take your poop and play somewhere else. As Shaw put it "People who say it cannot be done should not interrupt those who are doing it."


References
Kakarot-Handtke, E. (2014). Objective Principles of Economics. SSRN Working Paper Series, 2418851: 1–19. URL
Klant, J. J. (1994). The Nature of Economic Thought. Aldershot, Brookfield: Edward Elgar.
Solow, R. M. (1998). Foreword, volume William Breit and Roger L. Ranson: The Academic Scribblers. Princeton: Princeton University Press, 3rd edition.

Related 'The zombie wars are over'.

Economists and methodology: the horror of all horrors

Comment on Lars Syll on ‘Deduction — induction — abduction’

Blog-Reference and Blog-Reference on Jan 28

Economists are feeble thinkers. We take Keynesians as an exemplary case here, but the argument applies in full generality to Walrasians, Marxians, and Austrians.

As a centerpiece of the General Theory Keynes formulated the foundational syllogism of macroeconomics. “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (1973, p. 63)

This elementary syllogism is conceptually and logically defective because Keynes did not come to grips with profit and therefore “discarded the draft chapter dealing with it” (Tómasson et al., 2010, p. 12). As a result, all I=S models including the Keynesian multiplier are provably false to this day (2011).

To see the enormity of intellectual failure one has to let this sink in: Keynes had no idea of the fundamental concepts of his discipline, viz. profit and income. This did not hinder him from talking a lot about Capitalism and Laissez-faire and, worst of all, economic methodology. Keynes’s economic policy proposals never had a sound theoretical foundation but were at best commonsensical. The scientific horror, though, did not stop there. After-Keynesians did not realize to this day that there is something fundamentally wrong with Keynes’s two-liner and I=S but still hallucinate about ex-ante/ ex-post (2014).#1

So we have two indicators of the logical incapacity of present-day economists: Keynesians are for more than 80 years in the dark. Sorta-kinda Neoclassicals, who are not aware that ‘maximization-and-equilibrium’ (Krugman) is a methodologically inadmissible axiomatic starting point, are for more than 150 years in the dark. This, though, is still not the worst.

Keynes was by no means an exception. Economists, in general, do not understand what profit is.#2 This means that all models in which profit appears or, worse, does not at all appear explicitly are definitely false. So, economists, in general, have since Adam Smith been in the dark. This, though, is still not the worst.

People who have no idea of the foundational concepts of their discipline, viz. profit and income, philosophize endlessly about methodology and mathiness and axiomatics and deduction/induction and probability. Because they have disqualified themselves on their own turf neither Keynesians nor sorta-kinda Neoclassicals nor the rest of the profession can be taken seriously for one split-second in matters of methodology.

All that an economist has to know about methodology is that every theory/model has to satisfy the conditions of both formal and material consistency (Klant, 1994, p. 31). Economic models do not satisfy these conditions. Because of this, economics is a failed science.

Egmont Kakarot-Handtke


References
Kakarot-Handtke, E. (2011). Why Post Keynesianism is Not Yet a Science. SSRN Working Paper Series, 1966438: 1–20. URL
Kakarot-Handtke, E. (2014). Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It. SSRN Working Paper Series, 2392856: 1–19. URL
Keynes, J. M. (1973). The General Theory of Employment Interest and Money. The Collected Writings of John Maynard Keynes Vol. VII. London, Basingstoke: Macmillan.
Klant, J. J. (1994). The Nature of Economic Thought. Aldershot, Brookfield: Edward Elgar.
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

#1 I=S: Mark of the Incompetent
#2 How the intelligent non-economist can refute every economist hands down

Related 'Economists’ proto-scientific methodology' and 'Agenda pushing or science?' and 'Why the Naked-Emperor-Zombie cannot die' and 'Lousy scientists' and 'Confused Orthodoxy vs. confused Heterodoxy'

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ADDENDUM Unskilled users, comment on Lars Syll on Jan 27

You say: “The hypothetico-deductive method (in case we treat the hypothesis as absolutely sure/true, we rather talk of an axiomatic-deductive method) basically means that ...”

This is not quite correct. Popper describes the axiomatic-deductive method thus: “The attempt is made to collect all the assumptions, which are needed, but no more, to form the apex of the system. They are usually called the ‘axioms’ (or ‘postulates’, or ‘primitive propositions’; no claim of truth is implied in the term ‘axiom’ as here used). The axioms are chosen in such a way that all the other statements belonging to the theoretical system can be derived from the axioms by purely logical or mathematical transformations.” (1980, p. 71)

Axioms are defined by their role and, as Popper explicitly states “no claim of truth is implied” initially. So, to associate ‘absolutely true’ and ‘axiomatic-deductive method’ is false and misleading.

Schumpeter understood this very well and he, too, made no categorical distinction between hypothesis and axiom: “... the things (propositions) that we take for granted may be called indiscriminately either hypotheses or axioms or postulates or assumptions or even principles, and the things (propositions) that we think we have established by admissible procedure are called theorems.” (1994, p. 15)

As a rule, the proof of axioms is in the deductively derived conclusions. If what the theory says should be the case is actually the case, then the axioms are indirectly corroborated. If not, they are refuted qua modus tollens. This was already obvious to J. S. Mill. “The ground of confidence in any concrete deductive science is not the à priori reasoning itself, but the accordance between its results and those of observation à posteriori.” (2006, p. 896-897)

You say “In mathematics, the deductive-axiomatic method has worked just fine. But science is not mathematics. Conflating those two domains of knowledge has been one of the most fundamental mistakes made in the science of economics.”

It is obvious that economists misunderstood and misapplied mathematics. And it is trivially true, of course, that ‘science is not mathematics’. The point is that there is a ‘logical parallelism’ between the two. Einstein put the crucial methodological issue with perfect clarity thusly “A complete system of theoretical physics consists of concepts and basic laws to interrelate those concepts and of consequences to be derived by logical deduction. It is these consequences to which our particular experiences are to correspond, and it is the logical derivation of them which in a purely theoretical work occupies by far the greater part of the book. This is really exactly analogous to Euclidean geometry, except that in the latter the basic laws are called ‘axioms’; and, further, that in this field there is no question of the consequences having to correspond with any experiences. But if we conceive Euclidean geometry as the science of the possibilities of the relative placing of actual rigid bodies and accordingly interpret it as a physical science, and do not abstract from its original empirical content, the logical parallelism of geometry and theoretical physics is complete.” (Einstein, 1934, pp. 164-165)

Note that ‘axioms’ is in inverted commas to indicate that in physics its meaning is physical. Einstein knew already long before Lars Syll that ‘science is not mathematics’ but he knew how to merge them.

The logical parallelism between science and mathematics has puzzled many people “I find it quite amazing that it is possible to predict what will happen by mathematics, which is simply following rules which really have nothing to do with what is going on in the original thing.” (Feynman, 1992, p. 171) [note: the meaning of prediction is different from soothsaying]

There is no need here to discuss why this logical parallelism works so splendidly (Velupillai, 2005). Suffice it to say that there is no good reason whatever to maintain that — as a matter of principle — the axiomatic-deductive method cannot work in economics. Just the contrary “My opinion continues to be that axiomatics, like every other tool of science, is no better than its user, and not all users are skilled.” (Clower, 1995, p. 308)

The fact of the matter is that economists have not been very skilled users of the scientific method up to now. This is due to a lack of scientific competence which seems to be hereditary among both orthodox and heterodox economists.


References
Clower, R. W. (1995). Axiomatics in Economics. Southern Economic Journal, 62(2): 307–319. URL
Einstein, A. (1934). On the Method of Theoretical Physics. Philosophy of Science, 1(2): 163–169. URL
Feynman, R. P. (1992). The Character of Physical Law. London: Penguin.
Mill, J. S. (2006). A System of Logic Ratiocinative and Inductive. Being a Connected View of the Principles of Evidence and the Methods of Scientific Investigation, Vol. 8 of Collected Works of John Stuart Mill. Indianapolis: Liberty Fund.
Popper, K. R. (1980). The Logic of Scientific Discovery. London, Melbourne, Sydney: Hutchison, 10th edition.
Schumpeter, J. A. (1994). History of Economic Analysis. New York: Oxford University Press.
Velupillai, K. (2005). The Unreasonable Ineffectiveness of Mathematics in Economics. Cambridge Journal of Economics, 29: 849–872.