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

“Ayn Rand's most important lesson: Production comes before distribution. You cannot divide a pie nobody baked.” (Handre)

True. Tautology has been Ayn Rand's main figure of speech. This makes it sound convincing.

Ayn Rand's main defect has been that she did not know how the…

— AXEC (@EgmontHandtke) July 5, 2026

Occasional Xs: Clueless economists / Philosophy (II)

 

#Econ#FailedFakeScience

The history of economic thought is the history of scientific failure. Robert Heilbroner called #Economists worldly #Philosophers. This is an euphemism for #AgendaPushers / #Clowns in the political #CircusMaximus. ⇒https://t.co/DH0Mw4sQER pic.twitter.com/Nnrt4nqkkU

— E.K-H (@AXECorg) January 15, 2024

Occasional X: Clueless economists / Philosophy (XIV)

 

“Yes, Ayn Rand proved that capitalism is the only moral social system but further (which you omit), that rational egoism is the only valid moral code.” (Salsman)

Ayn Rand proved nothing. Her main defect has been that she did not know how the economy in general, and…

— AXEC (@EgmontHandtke) March 18, 2026

Dialectic: the swampies’ methodology of choice

Comment on Matt Franko on ‘Dialectic Method’

Blog-Reference

Matt Franko observes: “Probably 99.99% of the Economics discipline is operating under the Dialectic Method and accordingly the material result is the manifest shit-show we are watching every day … a moron-fest goat rodeo … Its NOT the discipline of Economics that is the problem, we often can see the discipline taking a lot of heat … imo its unfair criticism of a discipline … its rather the dominant dialectic methodology commonly used within that discipline that is fucking everything all up.”

Matt Franko is not the first to realize that economics has a methodology problem. What he does not realize, though, is that this is not a bug but a feature. Economics has firmly established itself in the dialectical impasse of political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda; the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics, anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed. The fact is that 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. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are mutually contradictory, axiomatically false, and materially/formally inconsistent.

The dialectical impasse consists of the manifest contradiction between the claim that economics is a science and the fact that it is a political agenda pushing.

Science is digital=binary=true/false and NOTHING in between. There is NO such thing in science as roughly right or roughly wrong; it is only materially/formally true/false. The swamp between true/false, where “nothing is clear and everything is possible” (Keynes), is the natural habitat of morons, agenda pushers, confused confusers, blatherers, fraudsters, trolls, and incompetent scientists. #1, #2, #3, #4

Swampies euphemize their inability/unwillingness to resolve inconsistencies as dialectic method: “According to Kant … the ancient Greeks used the word ‘dialectic’ to signify the logic of false appearance or semblance. To the Ancients, ‘it was nothing but the logic of illusion. It was a sophistic art of giving to one’s ignorance, indeed even to one’s intentional tricks, the outward appearance of truth, by imitating the thorough, accurate method which logic always requires, and by using its topic as a cloak for every empty assertion.'” #5

The philosophical father of modern dialectics is Hegel. Schopenhauer had not much good to say about him: “If I were to say that the so-called philosophy of this fellow Hegel is a colossal piece of mystification which will yet provide posterity with an inexhaustible theme for laughter at our times, that it is a pseudo-philosophy paralyzing all mental powers, stifling all real thinking, and, by the most outrageous misuse of language, putting in its place the hollowest, most senseless, thoughtless, and, as is confirmed by its success, most stupefying verbiage, I should be quite right.” #6

In marked contrast to swampies, scientists drive the question under discussion to the point of a clear-cut decision between true and false: “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)

Formal consistency is secured by applying the axiomatic-deductive method, and empirical consistency is secured by applying state-of-the-art testing.

The profession of useful political idiots has no genuine interest in a clear-cut true/false outcome of research and debate but seeks to keep everything and everybody in the status quo swamp. Swampies subscribe to dialectical inconclusiveness, i.e., anything goes, truth is subjective and relative, reality is a social construct, nobody has the truth with a big T, everybody has some truth with a small t, and to the pluralism and peaceful coexistence of provably false theories.

As Popper summarized it: “Hegel’s intention is to operate freely with all contradictions. ‘All things are contradictory in themselves’, he insists, in order to defend a position which means the end not only of all science, but of all rational argument. And the reason why he wishes to admit contradictions is that he wants to stop rational argument, and with it scientific and intellectual progress.” #7

Political economists prevent scientific progress to this day. Economics is still at the proto-scientific stage, which is characterized by material/formal inconsistency.

Egmont Kakarot-Handtke


#1 It is better to be precisely right than roughly wrong
#2 Marshall and the Cambridge School of plain economic gibberish
#3 Confused Confusers: How to Stop Thinking Like an Economist and Start Thinking Like a Scientist
#4 Finally, the embarrassment of economics is over
#5 Wikipedia
#6 Goodreads
#7 A Free Left Blog

Related 'Profit: after 200+ years, economists are still in the woods' and 'A new curriculum for swampies?' and 'Getting out of the economics swamp' and 'Economics: The greatest scientific fraud in modern times' and 'Opinion, conversation, interpretation, blather: the economist’s major immunizing stratagems' and 'Economics, too, is pre-truth' and 'Links on capital-T Truth, stupidity, corruption' and 'Economics is locked in idiocy: How could this happen?' and 'Economists: scientists or political clowns?' and 'Economics as storytelling and entertainment for the masses' and 'And the answer is NCND ― economics after 200+ years of Glomarization'.

***

Graphic AXEC176b  Economics, Communication, Disinfotainment

Twitter/X May 12, 2026 Adrián Ramírez, LIBERALISM AND THE RISE OF ERISTICISM or the application of Schopenhauer's Die Kunst Recht zu behalten

History delivers the questions but not the answers

Comment on Robert Locke on ‘The naiveté of science as the history of Ideas’

Blog-Reference

It is rather trivial that a scientific/mathematical proposition/law/discovery/theorem emerges in a specific social, historical, geographical, or biographical context. But for the question of whether, for example, the Law of Universal Gravitation #1 is true or false, these specifics are absolutely irrelevant.

What, then, is relevant?: “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)

Everything else, e.g., calendar time, religion, nationality, gender, etc., is a distraction from actual scientific problem-solving and irrelevant to the assessment of the truth/falsity of a theory. Historians are occupied with the context of discovery, and scientists are occupied with the context of justification, i.e. the logical and material consistency of a theory.

Science is about general and invariant features of reality (= invariances, see Nozick 2001 ), history/ evolution is about unique event configurations on the surface which never repeat themselves. This is known since Heraclitus, and that is why Descartes said that history was not a science. Science abstracts from historical detail. No way leads from the history of falling apples to the universal Law of Falling Bodies. No way leads from the historical fact that Einstein wore no socks to the understanding of the Theory of Relativity.

Economics is about the underlying structural laws of the economic system. If you do not understand these (e.g., the macroeconomic Profit Law #2), you neither understand the present nor the past.

The current state of economics is this: economists got the premises/basic concepts/axioms of economic theory hopelessly wrong. Because of this, the whole theoretical superstructure that in turn informs economic policy is defective. What we actually have is folk psychology, folk sociology,#3 storytelling, political blather, senseless model bricolage, the history of money since the cowrie shell, and utter methodological confusion.

Egmont Kakarot-Handtke


#1 Wikipedia
#2 Graphic AXEC08

#3 How to get out of the Econ 101 PsySoc woods

***

REPLY to Robert Locke on Jun 4

You say: “ the pursuit of knowledge tempered by the subjectivity of the individual observer and by extension the political, economic, and social subjectivities specific to historical time and place.”

I agree. Just because of this, economics has to leave all subjective/behavioral/human nature issues to psychology, sociology, history, politics, etc., and focus on the systemic aspect of the (world-) economy.

This is what the shift from subjective-behavioral microfoundations to objective-structural macrofoundations is all about. And this is the economic methodology of the 21st century.

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

“Taxation of earnings from labor is on a par with forced labor. Seizing the results of someone's labor is equivalent to seizing hours from him and directing him to carry on various activities.” (Robert Nozick)

Not true. Another philosophy built on provably false economics.

The…

— AXEC (@EgmontHandtke) July 27, 2026

Hijackers, agenda pushers, PsySocs and other morons

Comment on Oleg Komlik on ‘Theodor Adorno on the division between economics and sociology’

Blog-References

Oleg Komlik quotes Adorno: “My thesis is quite simply that the strict division between economics and sociology, the consequence of which is unquestionably to dismiss the Marxian theory ante portas, causes the decisive social interests of both disciplines to disappear; and that precisely through this separation they both fail to assert their real interests, what really matters in them.”

All confusion about economics derives from the fact that there are TWO economixes: political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.

In the beginning, there was Political Economy. J. S. Mill defined it clearly as a social science: “The fundamental problem, therefore, of the social science, is to find the laws according to which any state of society produces the state which succeeds it and takes its place.” Or, a bit more specific with regard to economics: “The science which traces the laws of such of the phenomena of society as arise from the combined operations of mankind for the production of wealth, in so far as those phenomena are not modified by the pursuit of any other object.”

Economics started as a hodgepodge of sociology, history, folk psychology, and folk philosophy, which came under the heading of utilitarianism.

Classical Political Economy was carried one step further with methodological individualism: “It is a touchstone of accepted economics that all explanations must run in terms of the actions and reactions of individuals. Our behavior in judging economic research, in peer review of papers and research, and in promotions, includes the criterion that in principle the behavior we explain and the policies we propose are explicable in terms of individuals, not of other social categories.” (Arrow)

Methodological individualism is clearly defined by this set of behavioral axioms: “HC1 economic agents have preferences over outcomes; HC2 agents individually optimize subject to constraints; HC3 agent choice is manifest in interrelated markets; HC4 agents have full relevant knowledge; HC5 observable outcomes are coordinated, and must be discussed with reference to equilibrium states.” (Weintraub)

Axiomatization is not only laudable but methodologically indispensable: “We should also like to underline Debreu’s effective reference to Bacon when he says that ‘citius emergit veritas ex errore quam ex confusione.’ It would be a mistake to lower the level of analysis and clarification. The only way possible is a thorough reexamination of the theory’s basic hypotheses, i.e., a true paradigmatic revolution.” (Ingrao et al.)

Orthodox economics remains firmly rooted in the social sciences because it is defined by behavioral axioms. Yet, orthodox economics is widely considered a scientific failure. To replace Orthodoxy requires the replacement of HC1-HC5 with an entirely new set of axioms. This is what a true paradigmatic revolution is all about.

What is true for Walrasianism holds for the rest of economics. The current state is this: the major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the pivotal economic concept of profit wrong. How could this happen? 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. As a result of the utter scientific incompetence of political economists, economics is a failed science.

There is no way around this: economists need the one true theory and not the pluralism of false theories: “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)

Everybody knows: the so-called social sciences in general and political economics in particular NEVER got anything off the ground. Feynman called them cargo cult sciences: “They’re doing everything right. The form is perfect. ... But it doesn’t work. ... So I call these things cargo cult science because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential.”#1

What is needed is a strict separation between the so-called social sciences and economics.#2 Separation of the subject matter, of course, does NOT exclude cooperation and the exchange of knowledge. Economics has to be clearly redefined as systems science:

• Old definition, subjective-behavioral: Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.
• New definition, objective-systemic: Economics is the science which studies how the monetary economy works.

All Human Nature issues can be left to psychology, sociology, anthropology, history, political science, social philosophy, biology/Darwinism/evolution theory etcetera. What is needed is the strict separation (i) of science and politics, and (ii), of the so-called social sciences and economics. There is no other way out of the proto-scientific cul-de-sac of economics.#3

Adorno never understood what profit is#4, whether his understanding of sociology was much better is doubtful.

Egmont Kakarot-Handtke


#1 What is so great about cargo cult science? or, How economists learned to stop worrying about failure
#2 Economics is NOT about Human Nature but the economic system
#3 For the axiomatically true theory see True macrofoundations: the reset of economics
#4 Profit for Marxists

Occasional X: Clueless economists / Profit (LVIII)

 

#Economics#FailedFakeScience

“… one of Nozick’s great insights was that simply examining how much more the rich have than others is insufficient ― we also need to examine *how* they got rich.” (Chris Freiman)

Economics claims to be science but is NOT. The major approaches…

— E.K-H (@AXECorg) November 13, 2024

Understanding socialism presupposes understanding profit

Comment on Michael Roberts/Tom Hickey on ‘Understanding socialism’*

(The symbol has been changed in the meantime, i.e., C and Ec are interchangeable)

Blog-Reference and Blog-Reference

“The New York Times magazine has described Richard Wolff as ‘probably America’s most prominent Marxist economist’.”

From the word ‘prominent’ alone, you know that you are outside of science and in the midst of the usual journalistic propaganda hype. The applause troll Michael Roberts tries to arouse even more enthusiasm by quoting Wolff: “If you want to understand an economy, not only from the point of view of people who love it, but also from the point of view of people who are critical and think we can do better, then you need to study Marxian economics as part of any serious attempt to understand what’s going on.”

No, you don’t because Marx’s economics is refuted on all counts and Wolff only recycles long-dead stuff: “Wolff concentrates on Marx’s key discovery about capitalism, namely the surplus value, which is what employers appropriate above what they pay for wages.”

The fact of the matter is that Marx NEVER understood what profit ― the foundational magnitude of economics ― is. #1 Neither did his followers to this day. #2 The rectification of Marxianism consists of the replacement of the key concept of exploitation by cross-over exploitation. #3

Wolff sticks to surplus value, and this tells one that he is a rather feeble thinker. Marx got economics wrong, so he can safely be forgotten. Same for Wolff’s policy proposals, which have no valid scientific foundations.

Oh no, says the philosopher Tom Hickey: “He [Marx] was a philosopher, social and political activist, political theorist, historian, and one of the founders the disciplines that later became sociology and economics.”

True, but irrelevant. #4 Marx’s economics is provably false = scientifically worthless, and this makes it very probable that the rest of his intellectual output was also proto-scientific garbage.

Egmont Kakarot-Handtke


* Michael Roberts Blog
#1 Links on Karl Marx
#2 Dear idiots, Marx got profit and exploitation wrong
#3 Capitalism, poverty, exploitation, and cross-over exploitation
#4 Perhaps the debunker Miles Mathis is closer to the historical facts than the philosopher Tom Hickey: “In that sense, Marxism is probably the greatest propaganda success of all time. The smashing success of this early major psy-op has led to everything we have seen since, including the sharp rise of all forms of misdirection. The upper class discovered that most people could be fooled most of the time, and that this fooling allowed for complete control of society.”

***

REPLY to Bob on Dec 8

The crucial point with Marx/Socialism/Communism/Capitalism is whether Marx understood how the monetary economy works. This presupposes an understanding of the foundational economic magnitude of profit. The point is that Marx and Marxians have NO idea what profit is. For the proof, see Profit for Marxists.

So, Marxianism is scientifically worthless for 150+ years. Maybe Marx is philosophically relevant; in any case, he is irrelevant for economics understood as science.

Note in passing that philosophy has degenerated much from the ancient Greeks to the present and has become irrelevant itself. The practical proof is that philosophers readily board an aircraft that has been constructed by scientists/engineers, but would refuse to board an aircraft that has been constructed by philosophers.

Now, the philosopher Tom Hickey claims: “I would add, at the very least. Marx and Engels, and subsequent Marxists and those influenced by Marx, are still highly relevant, and they are becoming more so as capitalism is more and more in crisis owing to neoliberalism, neoliberal globalization, and the challenge of climate change.” Given their track record, the idea that philosophers or Marxists or economists can solve any of humanity’s problems is downright idiotic.

To repeat, Marx is scientifically irrelevant. And whether he gets many likes from folks like Richard Wolff, Michael Roberts, Tom Hickey, and the brain-dead journalists of the New York Times is a scientific non-event.

The fact is that Marx got profit wrong, and this he has in common with MMTers. The fact is that Marxians, MMTers, and philosophers like Tom Hickey are too stupid for the elementary algebra that underlies macroeconomics. The proof has been given elsewhere.

To expect from folks who cannot put 2 and 2 together a contribution to the advancement of science, culture, and civilization is the very definition of madness.

***

REPLY to Bob on Dec 8

You say: “Marx was concerned with the operation of individual businesses, hence the profit of the firm. He was looking at microeconomics.” and “Can science come to a conclusion that a relationship (employer/employee) is exploitative?”

Yes, Marx generalized what can be observed in a single firm, that is, methodologically Marxianism is one big Fallacy of Composition from Marx onward to retarded Marxians like Richard Wolff and the applause trolls of the NYT/econblogosphere.

If one does not understand macroeconomic profit, one cannot understand exploitation and cross-over exploitation.

Here is the abbreviated argument. #1

The business sector is split into two identical firms, and firm 1 is supposed to cut the wage rate W1 arbitrarily by half. From this follows that the market-clearing price P declines if all independent variables remain unchanged. Firm 2 is affected because total income Yw falls, and with it consumption expenditures C and the market-clearing price P.

The reduction of the wage rate W1 increases the profit of firm 1 and produces a loss in firm 2. When we look alone at firm 1, we see what Smith, Mill, Ricardo, and Marx have seen before, to wit, wages down ― profit up. This fits the time-honored stereotype of wages and profits as antagonists. #2

The error/mistake/blunder of economists since the Classics has been to generalize what is true for a single firm, and this is known as the Fallacy of Composition.

If profits have been zero in the initial period because of budget-balancing C=Yw, then firm 2 makes a loss which is exactly equal to firm 1’s profit. Therefore, the arbitrary wage rate cut of firm 1 does NOT increase the profit of the business sector as a whole but only REDISTRIBUTES profit/loss between the firms that constitute the business sector.

Seen from the perspective of a single firm, the antagonism of wages and profits is absolutely real. This, though, is parochial realism. The complete picture reveals that firm 1 is better off at the disadvantage of firm 2, and the workers of firm 2 are better off at the disadvantage of the workers of firm 1, because at a lower market-clearing price, they absorb a bigger share of output O with their unaltered income.

The situation of the business sector AS A WHOLE is unchanged, and the same is true for the household sector AS A WHOLE. If there is exploitation, it happens WITHIN the sectors. A partial wage rate change leads only to a redistribution of profits between the firms and of output between the workers. So, in real terms, the exploitation of the workers of firm 1 benefits the workers of firm 2. The capitalist class as a whole does NOT benefit from the exploitation by the owners of firm 1 because the profit of firm 1 is exactly equal to the loss of firm 2.

So, Marx got the relationship between profit, exploitation, and class badly wrong. Marxians are for 150+ years now struck with the Fallacy of Composition. Not very smart these ‘philosophers, social/political activists, political theorists, and historians’. Time to bury them at the Flat-Earth-Cemetery in the dark corner that is reserved for the worst of all useful political idiots.


#1 Capitalism, poverty, exploitation, and cross-over exploitation
#2 Ricardo, too, got profit theory wrong

***

REPLY to Bob on Dec 9

You say: “Parochial realism is the perspective they are interested in. Marxists and business owners are not interested in macroeconomic explanations.”

It is a matter of indifference what Marxists and business owners are interested in. The economist as scientist figures out how the economy works just like astrophysicists figure out how the universe works, and it is a safe bet that they are not at all interested in what retarded flat-earthers think or want.

The first thing an economist is supposed to know is what macroeconomic profit is. Marx did NOT know it, and this is why Marxianism is proto-scientific garbage to this day. Why folks like Richard Wolff, Michael Roberts, the journalists of the New York Times, or Tom Hickey are recycling Marxian proto-scientific garbage is at anybody’s guess. OK, the journalists are on the payroll of the Oligarchy. The others are perhaps only stupid. Anyway, for all of them holds Voltaire’s écrasez l'infâme!

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REPLY to Bob on Dec 10

You say: “… but you have to answer their questions. ... How do we eliminate unemployment?”

The matter has already been settled. For the axiomatically correct Employment Law, see Full employment through the price mechanism, and for more details, see cross-references Employment/Phillips Curve.

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REPLY to Calgacus on Dec 11

Marx always claimed that he was doing science. Of course, he was NOT. He was a political agenda pusher.
► Karl Marx, fake scientist

The same holds for Marxians to this day. And also for Walrasians, Keynesians, Austrians, and MMTers.

This brings us back full circle to
► Economics, philosophy, and the crapification of science
and to
► Economics ― the science that never was

To this day, Marxians are NOT doing science. Neither do the others. Economists are clowns and useful idiots in the political Circus Maximus.

***

REPLY to Bob on Dec 12

You say: “If the matter were settled, I wouldn’t have had to provide five places for five different answers. Could this be settled if there were a technical debate free of politics?”

The matter IS settled. The problem is that the scientific mechanism does not work in economics.

Science is NOT an endless conversation and never-ending recycling of old arguments, but eventually ends with the refutation of materially/logically inconsistent theories: “That the settlement of opinion is the sole end of inquiry is a very important proposition.” (Peirce)

Being incompetent scientists, i.e., being stupid or corrupt or both, economists simply ignore refutation. This defect is well known: “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)

This is the simple reason why you have to provide “five places for five different answers”. And this tells you that economics is NOT a science.

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

Walrasians, Keynesians, Marxians, Austrians, and MMTers violate scientific standards. The “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel” is a fraud.

Stop blathering, apply the principles of science, and your five places reduce to one. Simple.

***

REPLY to Dr. Wintermute on Dec 13 and Blog-Reference

Broadly speaking, economics is about how the economy works and NOT about how society or the human brain works. The economy is a subset of the universe, and the subject matter is defined with phenomena like profit, income, price, output, saving, etc., that do not appear in other subsets of reality like physics or biology.

Science takes the concrete form of a theory. The true theory/model is the humanly best mental representation of reality. Scientific truth is well-defined by material and formal consistency. “The chief demerit is inconsistency …” (Popper)

In this thread, we are concerned specifically with Marx’s economics. The proof has been given that Marx’s profit theory is false. Because Marx got the foundational concept of economics wrong, the analytical superstructure of Marxianism is scientifically worthless.

This is the 150+ years overdue end of Marxian economics. Tom Hickey admits this but argues: “Secondly, Marx was a philosopher in his own right and a public intellectual in this time as a journalist and writer of political tracts in the context of the contemporary debates.” Yes, but this does NOT change the fact that Marx was a fake scientist and Marxianism is proto-scientific garbage.

What the philosopher Tom Hickey does is meta-communication. We are no longer talking about how the economy works, but about the philosopher and agenda pusher, Marx. Calgacus goes further in the wrong direction: “That’s some sort of positivism, analytic philosophy stuff. Stuff that was popular in the 20th century. Especially virulent in the postwar era. 1945-1970 or so. There was a bit of that in Marx, but not much. He was German, not English!” Perhaps this is good to know in a TV quiz.

You drive meta-communication even further away from the point at issue: “Your beef with Hegelian Dialectics is that on one hand, you don’t understand that the set of things which can be thought of without contradiction is only a subset of all possible things, and on the other hand, that the Kantian assumption that knowledge as such is limited is itself inconsistent. So you cannot blame the assumption of existing «real contradictions» solely on bad theorizing.”

I do not blame Marx or any other economist for bad theorizing; I blame them for being too stupid for the elementary algebra that underlies macroeconomics. #1 In fact, I prove it, and the proof is as good as the proof of the Pythagorean Theorem and, in any case, vastly superior to your brain-dead off-topic meta-communication.

To make it concrete and politically relevant: Dear philosophers, tell the econblogosphere which of the two sectoral balances equations is true?
a) (I−S)+(G−T)=0 (MMT, Keynesianism)
b) (I−S)+(G−T)=Q (AXEC)

Equation b) boils down to Public Deficit = Private Profit, and this gives one the life formula of present-day Capitalism. You certainly agree that one cannot find this enlightening formula that gives you the conditions of the breakdown of Capitalism in the works of the philosopher and political agenda pusher Marx, nor in Hegel’s Dialectic, nor in Dr. Wintermute’s Analytische Sozialkritik.


#1 The ancient philosophers were supposed to be proficient at math, as the motto of Plato’s Academy testifies.

Non-existence of economic science

Comment on Lars Syll on 'Piketty and the non-existence of economic science'

Blog-Reference

“... suppose they [the economists] did reject all theories that were empirically falsified ... Nothing would be left standing; there would be no economics.” (Hands, 2001, p. 404)

As a matter of fact, there is no economic science.

But how does it come that the peer-reviewed journals nearly explode with accepted contributions to the official body of economic science?

Economists simply ignore refutation; that is, they violate the First and Fundamental Law of Science. “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, pp. 369-370)

Assessed according to the criteria of science, economics has already been over the cliff for a considerable time. It keeps on running because of the overriding imperative: The show must go on ― who stops is done.

“I think that the discipline is in need of a major overhaul.” (Hausman, 1992, p. 263)

Egmont Kakarot-Handtke


References
Hands, D.W. (2001). Reflection without Rules. Economic Methodology and Contemporary Science Theory. Cambridge, New York, etc: Cambridge University Press.

Hausman, D. M. (1992). The Inexact and Separate Science of Economics. Cambridge: Cambridge University Press.
Morgenstern, O. (1941). Professor Hicks on Value and Capital. Journal of Political Economy, 49(3): 361–393. URL

For details of the big picture, see cross-references Proto-Science/Cargo Cult Science/Fake Science and cross-references Paradigm Shift.

***

Graphic AXEC136g

Bye, bye economic philosophers

Comment on Lars Syll/Tom Hickey on ‘The capital controversy’

Blog-Reference and Blog-Reference

What the Cambridge Capital Controversy has proven is that both orthodox and heterodox economists are NOT scientists but brain-dead political agenda pushers. #1, #2

With regard to the CCC, Tom Hickey maintains: “From the perspective of a philosopher, this is a good illustration of why philosophy of economics and philosophy of science, which focus on clarification of concepts, is foundational to the discipline.”

Sort of, but the brute fact of the matter is that neither economists nor philosophers have clarified the foundational economic concept of profit.

Because of this, economics is a scientific failure. Walrasianism, Keynesianism, Marxianism, Austrianism, MMT, and Pluralism are mutually contradictory, axiomatically false, and materially/ formally inconsistent. #3

Not only the representative economist has proven to be scientifically incompetent ― actually, too stupid for elementary algebra ― but also the self-styled philosophers of science. #4, #5

It is a remarkable fact that the champions of scientific methodology never stumbled upon the plain fact that profit is ill-defined, except perhaps for Mirowski: “... one of the most convoluted and muddled areas in economic theory: the theory of profit.”

So, as economics currently goes down the scientific toilet, let us by no means forget the philosophers of science.

Egmont Kakarot-Handtke

#1 The CCC ― a monument of economists’ utter scientific incompetence

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

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

#4 How incompetent are economic methodologists? Very!

#5 Economics, philosophy, and the crapification of science

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REPLY to Matt Franko on Sep 3

You say: “It’s not foundational to Economics its foundational to Accounting.”

There is microeconomic accounting and macroeconomic accounting. Macroeconomic profit is foundational to economics because economics is about how the economy works. #1

To think one can understand the economy by studying the mom-and-pop store is known as the Fallacy of Composition. It is a bit like trying to understand the universe by studying a molehill in the backyard.

#1 Profit

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REPLY to Matt Franko on Sep 3

You say: “It [accounting] has been ignored (espec.in macro) with a few exceptions (Lerner, Minsky, Godley, Lavoie, Bezemer, and Keen, among a very few others). ”

Accounting is elementary algebra; however, economists don't get it to this day. MMTers are no exception. Here is the proof

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

Yes, economists incl. MMTers and philosophers of science fail the intelligence test already at the entry level.

Occasional X: Clueless economists / Philosophy (V)

 

#Economics#Philosopy#DisInfoTainment

The correct term for the U.S. polity is NOT #Democracy but Oligarchy with #Congress / #Treasury / #Fed / #WallStreet / #BigBusiness as integral parts. The 3-sector #ProfitLaw Qm≡(G−T)+(I−Sm)+Yd implies #PublicDeficitIsPrivateProfit. So,…

— E.K-H (@AXECorg) June 5, 2024

Occasional Tweets: Economics, philosophy, and the crapification of science

 

#Econ#FailedFakeScience

The history of economic thought is the history of scientific failure. #Walrasianism / #Keynesianism / #Marxianism / #Austrianism / #MMT & #Pluralism are axiomatically false & materially/formally inconsistent. ⇒https://t.co/DH0Mw4sQER#DefundEconomics

— E.K-H (@AXECorg) January 13, 2023

Lawson’s fundamental methodological error and the failure of Heterodoxy

Comment on Lars Syll on ‘Critical realism and scientific explanation’

Blog-Reference and Blog-Reference on Mar 5

As far as the critique of orthodox economics is concerned, critical realism is correct. Yet, the fundamental error of critical realism is to assume that economics is about ‘how society works’. No! This is the subject matter of sociology. Economics is about ‘how the economy works.’ Society and economy are intertwined but must be separated analytically.

Since Adam Smith, economics claims to be a science. Methodologically, it started as a mixture of sociology and political science: “The science which traces the laws of such of the phenomena of society as arise from the combined operations of mankind for the production of wealth, in so far as those phenomena are not modified by the pursuit of any other object.” (Mill, 1874, V.39)

With respect to the subject matter, there is no difference between Mill and Marx: “My stand-point, from which the evolution of the economic formation of society is viewed as a process of natural history, ...” (Marx, 1906, M.9)

With Jevons/Walras/Menger, the focus shifted to methodological individualism, and economics became a mixture of dilettantish psychology, sociology, and political science. This approach has failed abysmally.

Economics is NOT a science of individual/social/political behavior but of the behavior of the monetary economy. Accordingly, the correct definition of the subject matter is objective/ structural/systemic: “Economics is the science which studies how the monetary economy works.”

As a consequence, the long-overdue Copernican turn in economics consists of the methodological switch from behavior-centered bottom-up, i.e., subjective microfoundation, to structure-centered top-down, i.e., objective macrofoundations. All Human-Nature issues are the subject matter of other disciplines (psychology, sociology, anthropology, biology/Darwinism, political science, history, philosophy, etcetera) and are taken in from these by way of multidisciplinary cooperation. To paraphrase J. S. Mill: ‘Economics as a systems science presupposes all the physical and social sciences; it takes for granted all such of the truths of those sciences as are concerned with the working of the economic system.’ (cf. Mill 1874, V.29)

Lars Syll summarizes Tony Lawson: “We have to maintain the Enlightenment tradition of thinking of reality as principally independent of our views of it and of the main task of science as studying the structure of this reality. Perhaps the most important contribution a researcher can make is reveal what this reality that is the object of science actually looks like.”

Exactly so.

Therefore, economics has to drop these axioms/microfoundations:
HC1 There exist economic agents.
HC2 Agents have preferences over outcomes.
HC3 Agents independently optimize subject to constraints.
HC4 Choices are made in interrelated markets.
HC5 Agents have full relevant knowledge.
HC6 Observable economic outcomes are coordinated, so they must be discussed with reference to equilibrium states.” (Weintraub, 1985, p. 109)

Lawson’s critique fully applies to the theoretical superstructure that has been built upon HC1 (= methodological individualism) to HC6 (= closure).

The proper object of economics is neither the individual nor society but the economy. So we have to move on and, first of all, describe the structure of the monetary economy.

(A0) The most elementary configuration of the (world-) economy consists of the household and the business sector, which in turn consists initially of one giant fully integrated firm and is given by three objective structural axioms/macrofoundations:
(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.

These premises are certain, true, and primary, and therefore satisfy all methodological requirements (2014). In the words of Lars Syll: “Science is made possible by the fact that there are structures that are durable and are independent of our knowledge or beliefs about them. There exists a reality beyond our theories and concepts of it. It is this independent reality that our theories in some way deal with.”

Society has no durable structures, but the monetary economy has, and they are given in the most elementary case by (A1) to (A3). Economics is not a social science but a systems science, and it deals not with the defects of society but with systemic defects that produce what every superficial observer can see but not understand (2015).

The fundamental flaw of Lawson’s methodology is that he defines economics as a social science.

Egmont Kakarot-Handtke


References
Kakarot-Handtke, E. (2014). Objective Principles of Economics. SSRN Working Paper Series, 2418851: 1–19. URL
Kakarot-Handtke, E. (2015). Major Defects of the Market Economy. SSRN Working Paper Series, 2624350: 1–40. URL
Marx, K. (1906). Capital: A Critique of Political Economy, Vol. I. The Process of Capitalist Production. Library of Economics and Liberty. URL
Mill, J. S. (1874). Essays on Some Unsettled Questions of Political Economy. On the Definition of Political Economy; and on the Method of Investigation Proper To It. Library of Economics and Liberty. URL
Weintraub, E. R. (1985). General Equilibrium Analysis. Cambridge, London, New York, etc.: Cambridge University Press.

Related 'Economists’ three-layered scientific incompetence'. For details of the big picture, see cross-references Heterodoxy and cross-references Paradigm Shift and cross-references Axiomatization.

For more about Lawson, see AXECquery.

Postmodernism — the philosophy of scientific write-offs

Comment on Robert Locke on ‘The problem of postmodernism in American economics: a historian’s perspective’

Blog-Reference

Science is about true/false, and it is decisive to determine one or the other with the highest possible certainty. Vague propositions/theories are, to begin with, scientifically worthless: “Another thing I must point out is that you cannot prove a vague theory wrong.” (Feynman, 1992, p. 158)

And exactly this is the reason why vague theories are so popular among non-scientists in general and economists in particular. As the Keynesians say: “it is better to be roughly right than precisely wrong!” (Davidson, 1984, p. 574)

Economists know very well that economics is still at the level of storytelling and that it does not satisfy well-defined scientific criteria: “Economics is a strange sort of discipline. The booby traps I mentioned often make it sound as 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, pp. x-xi)

What holds for economics holds for the so-called social sciences a fortiori. It is, therefore, no surprise that postmodernism thrives yonder. The natural habitat of all scientific write-offs is the pluralistic no man's land between true and false, where “nothing is clear and everything is possible.” (Keynes, 1973, p. 292)

In this no man’s land nobody can be refuted and this is quite fine for all who have nothing to offer but proto-scientific garbage yet claim to have an explanation for everything: “By having a vague theory it is possible to get either result. ... It is usually said when this is pointed out, ‘When you are dealing with psychological matters things can’t be defined so precisely’. Yes, but then you cannot claim to know anything about it.” (Feynman, 1992, p. 159)

For all who know nothing but feel the urge to say something, postmodernism is the philosophical outfit of choice.

Egmont Kakarot-Handtke


References
Davidson, P. (1984). Reviving Keynes’s Revolution. Journal of Post Keynesian Economics, 6(4): 561–575. URL
Feynman, R. P. (1992). The Character of Physical Law. London: Penguin.
Keynes, J. M. (1973). The General Theory of Employment Interest and Money. The Collected Writings of John Maynard Keynes Vol. VII. London, Basingstoke: Macmillan.
Solow, R. M. (1998). Foreword, volume William Breit and Roger L. Ranson: The Academic Scribblers. Princeton: Princeton University Press, 3rd edition.

Immediately preceding How to creatively destruct Orthodoxy.

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REPLY  to Ken Zimmerman on Feb 28

You write: “Science is about observing first. Then theorizing (if useful) can set up testing of what we think we have observed.”

(i) With regard to empiricism, you are light-years behind the curve. For details, see Economics, too, has been almost ruined by the bigots of common sense.

(ii) About how science works, I have given this quote in the preceding post above: “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, p. 31)

Read more. Think more. Post less.

Supply-demand-equilibrium ― employment theory as an example of proto-scientific soap bubbling

Comment on Sandwichman on ‘The Wage[s]-Lump Doctrine ― still dogma after all these years’

Blog-Reference and Blog-Reference

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

The fact is that economists do NOT have the true theory. This holds in particular for employment theory, and the Lump-of-Labor theory is a case in point. The lethal methodological blunder of employment theory consists in the Fallacy of Composition, i.e., the illegitimate transfer of truths that hold for one firm/market onto the economy as a whole. What the representative micro-brained economist never understood is that what is true for the molehill is not true for the universe.

Methodological conclusion: the traditional microfoundations approach is as false as one can get and has to be fully replaced by the macrofoundations approach.

The axiomatically correct macroeconomic Law of Unemployment #1 is reproduced under Graphic AXEC36. #2

From this objective-structural-systemic relationship follows inter alia:
(i) An increase in the expenditure ratio ρ_E leads to higher employment L or lower unemployment u (the Greek letter ρ stands for ratio).
(ii) Increasing investment expenditures I exert a positive influence on employment.
(iii) An increase in the factor cost ratio ρ_F≡W/PR leads to higher employment.

The complete Employment Law is a bit longer and contains, in addition, the public sector and the foreign trade sector.

Items (i) and (ii) cover the familiar arguments about how aggregate demand affects employment. Item (iii) embodies the macroeconomic price mechanism. It works such that overall employment L increases if the average wage rate W increases relative to the average price P and productivity R, and vice versa. This is the opposite of what the obsolete Supply-Demand-Equilibrium approach says. 

From this follows the rules of effective employment policy. In the unemployment situation (with ρ_E and I given), the scientifically enlightened Legitimate Sovereign sets the parameters as follows: price increase zero and wage increase greater than productivity increase. This increases employment for a while. Afterward: price increase zero and wage increase equal to productivity increase. This stabilizes the economy at full employment.

Mentally retarded economists do, after 200+ years, still not know how the price and profit mechanism works. The one thing that they have brought to perfection in all this time is the trick of blowing bigger and bigger communicative soap bubbles. #4 Not to forget, economists reward themselves with the Nobel Prize for Proto-Scientific Soap Bubbling a.k.a. Economic Sciences.

Egmont Kakarot-Handtke


#1 NAIRU, wage-led growth, and Samuelson’s Dyscalculia
#2 Keynes’ Employment Function and the Gratuitous Phillips Curve Disaster
#3 Graphic AXEC36 Structural-systemic Phillips Curve
#4 Economics: communication without content

For details of the big picture, see cross-references Employment/Phillips Curve.

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REPLY to Sandwichman on Jun 11

The Walrasian Auctioneer is not unemployed but dead. But Sandwichman is still soap-bubbling.

I wonder if you ever realize that the employment theory is false for 200+ years and that the only worthwhile issue in economics is how to abandon soap bubbling and start with serious scientific work.

For a start, you could try to empirically refute the axiomatically correct Law of Employment / Unemployment.

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REPLY to Sandwichman, Barkley Rosser on Jun 12

Your dialogue about the Walrasian Auctioneer is a wonderful demonstration of soapbubbling.

The Walrasian Auctioneer is known since its invention as one of the most idiotic constructions in the history of cargo cult science. You are the last persons who remember him.

The empirical refutation of the axiomatically correct Law of Employment/Unemployment means the application of econometrics, which in turn means: “the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference.” (Wikipedia)

The Employment Law defines the set screws for policymakers#1 who are institutionalized differently in different national monetary economies and are lumped together under the heading of Legitimate Sovereign.

Stop soap bubbling, try to empirically refute the Employment Law. You are in for a big surprise.


#1 The set screws of overall and individual employment

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REPLY to Sandwichman, Barkley Rosser on Jun 13

The London gold market is micro/partial; the Auctioneer refers to general equilibrium and overall simultaneous market coordination. The Auctioneer has been a construct of breathtaking idiocy from the very first moment, and this means a lot in view of the hereditary delirium of the representative economist who did not get out of the silly Lump-of-Labor Fallacy in 200+ years.

Why do Sandwichman and you not simply quit economics and soap bubble amicably about real-world facts like cow flatulence, the assassination of JFK, or the death of Yeshua bin Yusuf?

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REPLY to Barkley Rosser, Sandwichman  on Jun 13

Stop soap-bubbling about the Auctioneer and cow flatulence and simply try to empirically refute the axiomatically correct Employment Law. It is never too late to do serious scientific work.

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REPLY to Barkley Rosser on Jun 13

Of course, soap bubblers cannot test the Employment Law. But since it consists exclusively of measurable variables, every econometrician who has tested the Phillips Curve already has a good part of the data for testing the macroeconomic Employment Law. #1

Looking forward to the grand showdown.


#1 Keynes’ Employment Function and the Gratuitous Phillips Curve Disaster

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REPLY to ANC Driver, Tom Hickey, Calgacus on Jun 13

The Legitimate Sovereign can realize any employment level by applying the Employment Law. This is NOT AT ALL a question of left-wing/right-wing. The Employment Law defines exactly the set screws for policymakers.#1 It is much like taking an aircraft off the ground.

Needless to emphasize that soap-bubbling economists have never taken anything off the ground. Just the opposite. #2


#1 The set screws of overall and individual employment
#2 Mass unemployment: The joint failure of orthodox and heterodox economics

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REPLY to Tom Hickey on Jun 14

You say: “Institutionalization is an issue involving political economy and politics.”

No, not at all. Institutionalization involves two things: the Legitimate Sovereign and Science. The actual problem with regard to economic institutions is that there is neither.

There are political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, and the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics, anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.

Economics claims to be a science, but it is NOT. 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. #1 Employment Theory is provably false, Profit Theory is provably false, Monetary Theory is provably false, and so on.

MMT, too, is proto-scientific garbage. And it is too obvious that it has been hijacked by political agenda pushers. #2

Economics, understood as a science, is supposed to develop the true theory. The true economic theory tells one how the economic system works. This knowledge is needed to realize the goals that have been set in the political sphere by the Legitimate Sovereign.

Imagine this situation: The Legitimate Sovereign ― in current understanding = We The People ― has extensively discussed whether to fly to paradise on Christmas Island or to paradise on Easter Island. The decision has been Christmas Island, and in order to make things happen, a group of people has been tasked to build the aircraft. Obviously, these scientists and engineers need a lot of knowledge about materials and physical laws. What these folks need not at all is an opinion on whether Christmas or Easter Island is the better destination. What these folks need indeed is scientific competence.

What has happened in economics is that economists have, since Adam Smith/Karl Marx, been permanently involved in the political discussion and have spent neither time, nor talent, nor brains to figure out how the monetary economy works. What we now have is incompetent scientists from Krugman to Varoufakis to Kelton to Mitchell and so on, from the right wing to the left wing and back, who are fully occupied in pushing some agenda.

The vast majority of economists have entirely lost any scientific instincts, which would tell them to keep science and politics strictly apart, and have joined the crowd of clowns and useful idiots in the political Circus Maximus. #3

MMTers are no exception. The whole discussion about the Job Guarantee is just political soap-bubbling that lacks sound scientific foundations. It is only good as a smokescreen to obscure the political agenda of money-making for the one-percenters. Economics has degenerated into a plain political fraud.

Make science great again! Throw all economists out! Start with MMTers! Take Tom Hickey first!


#1 Economics has arrived at the bottom of the proto-scientific shithole
#2 Richard Murphy: the MMT fraudster dressed up as realist
#3 For details of the big picture, see cross-references Political Economics

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REPLY to Tom Hickey on Jun 14

You say: “I am not an economist. My PhD is in philosophy. If I were an economist, I would argue economics with you, but I don’t operate outside my field.”

As a philosopher, you have studied The Republic and what Plato has said about stories “… which are now in use [but] must be discarded.”

“Of what tales are you speaking? he said. …
Those, I said, which are narrated by Homer and Hesiod, and the rest of the poets, who have ever been the great story-tellers of mankind.
But which stories do you mean, he said; and what fault do you find with them?
A fault which is most serious, I said; the fault of telling a lie, and, what is more, a bad lie.”

Philosophers have been known for 2300+ years to be committed to truth. They introduced the distinction between doxa=opinion and episteme=knowledge. You say you are a philosopher who operates strictly within your field.

How does it come, then, that you promote on this blog economists who are political storytellers, incompetent scientists, and who violate scientific standards/ethics on a daily basis?

Here are five political story-tellers/agenda-pushers who pose as scientists and censor and manipulate their blogs/Twitter accounts:
Bill Mitchell,
Stephanie Kelton,
Jason Smith,
Lars Syll,
Richard Murphy.#1

You know quite well that the foundational MMT balances equation is provably false. This is sufficient for the refutation of MMT. Refutation means that MMT has no sound scientific basis. It’s just storytelling and political agenda-pushing. That is NOT what scientists are supposed to do.

What kind of philosopher are you? Who awarded you a degree? Trump University? And why do you so evidently operate outside your field?


#1 For details/proofs, see cross-references MMT

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REPLY to Tom Hickey on Jun 14

You need not study philosophy, what the absolute novice in every marketing and PR department and every half-witted journalist can tell you, even in the state of near-coma, is the mantra: Whoever Controls The Narrative Controls The World.

After all, already Plato was aware of “the great story-tellers of mankind”. The point is, though, that Plato was not directly enthusiastic about “telling a lie” or “a bad lie” or what we today call fake news or propaganda or disinformation, or cargo cult science. #1, #2, #3

Yes: “He [Shackle] could see that this [marginalist economics] was, in fact, a form of pseudo-secular religion… and that struck him, as it strikes others, as absurd.”

Yes, and because it IS absurd, marginalist economics will now be thrown out of science together with Keynesianism, Marxianism, Austrianism, Pluralism, MMT, and the fake philosopher Tom Hickey.

Note that economists award themselves with the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel” which is a deception of the general public. Economics has never been more than storytelling. Economics is the worst embarrassment in the history of modern science. And MMT and Tom Hickey are part of it.


#1 Economics is not a science, not a religion, but proto-scientific rubbish
#2 Economics: communication without content
#3 Economics: stories, narratives, and disinformation

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REPLY to Barkley Rosser on Jun 15

You say: “I just reread your supposed ‘Employment Law’.”

Fine, but obviously, you still do not understand how things work. There are TWO uses of the equation.

(i) For testing, one simply feeds the historical data in and looks at how the Law fits. Needless to say that inflation has not been zero in the past, but if the Law is true, it fits perfectly with the historically given rates of inflation/deflation and employment, and all the other variables.

(ii) For achieving his employment goal, the policymaker uses the equation as a tool that tells him how to set the independent variables on the right-hand side while the target value of employment is entered at the left-hand side.

Testing the Employment Law is, in principle, not different from testing the Phillips Curve. The beauty of the test is that the Employment Law (= structural Phillips Curve) is confirmed and the silly behavioral Phillips Curve is refuted.

Testing can be done and will be done ― not by soap bubblers, though, that much has always been clear, but by scientists. In the meantime, you can tell me more about your fields of expertise ― cow flatulence and proto-scientific methodology.

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REPLY to Tom Hickey on Jun 15

You say: “What many if not most that think they understand this but have not studied a relevant discipline don’t understand is that ‘the world’ is based on a narrative aka story and myth.”

Everybody understands this and knows that people are born, told some idiotic stories in kindergarten, are later on guided in their neurotic behavior by it, eventually become philosophers/journalists/bloggers and earn a living by pushing narratives, tell their children the updated idiotic stories, and then go as stupid out of ‘the world’ as they have come in. This is how culture and communication work in Plato’s Cave.

The scientific realm is different. Science is about true/false with truth well-defined as material and formal consistency: “Research is, in fact, a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant)

The political realm and the scientific realm run on fundamentally different principles. And this is why they have to be kept strictly apart. The mixing of politics and science inevitably ruins science, as everybody can know from the history of political economics, which has produced NOTHING of scientific value in the last 200+ years. #1

Political economics was and is, in the best case, brain-dead soap-bubbling and in the worst case, outright fraud.

MMT falls into the latter category: it pushes the narrative of the benefits of MMT policy for the ninety-nine percenters through all media. The scientific fact is that the MMT selling proposition, ‘print, spend, and don’t worry about public debt’, with the same necessity as the First Law of Thermodynamics translates into Public Deficit = Private Profit and therefore benefits the one-percenters.

So, MMT is clearly what the philosopher Plato called a “bad lie” and what the philosopher Tom Hickey euphemizes as narrative, covers with folk-psychological soap bubbling, and actively promotes by applying the old Huxley/Orwell recipes of political brain-washing.

#1 The irrelevance of economics
#2 Economists: political trolls for 200+ years

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REPLY to Tom Hickey on Jun 14

You say: “You are now arguing outside your field unless you are credentialed in philosophy, especially logic and epistemology.”

Before pestering the world with your good advice and talking nonsense about credentials, take a basic methodology course on YouTube. #1 Note, in particular, that science is NOT about credentials but about logical/empirical proof.

You seem to have an extremely short attention span. You present yourself as a philosopher who does not operate outside his field and then blathers about theoretical economics and political economics and political science and sociology, and mass psychology.

You say: “In political science and politics, a fundamental problem is that even when the ‘true theory’ is known, it is not automatically adopted but must be passed into policy (law) and that involves politics.”

Wake up, this is NOT the problem, for the simple reason that economists do not have the true theory. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got the pivotal economic concept of profit wrong. Economic policy guidance has had NO sound scientific foundations for 200+ years. Nothing to adopt, neither automatically nor otherwise.

Get it, there is NO true theory in economics, economists are NOT scientists but agenda pushers and useful political idiots.

Here is good advice for you: read what the great methodologist and economist J. S. Mill has said about the separation of science and politics: “A scientific observer or reasoner, merely as such, is not an adviser for practice. His part is only to show that certain consequences follow from certain causes, and that to obtain certain ends, certain means are the most effectual. Whether the ends themselves are such as ought to be pursued, and if so, in what cases and to how great a length, it is no part of his business as a cultivator of science to decide, and science alone will never qualify him for the decision.”

Repeat: NO part of his business. The political decisions are made in the political sphere by the Legitimate Sovereign, and they are NOT AT ALL the business of folks who should have figured out in the last 200+ years how the monetary economy works but failed to do so.

As a philosopher, you have NO credentials to dabble in economic policy or to promote MMT. All the more so, as you have obviously NOT realized some basics about what you are promoting:
(i) MMT is proto-scientific garbage, i.e., provably false, i.e., materially/formally inconsistent.
(ii) MMT is a political fraud, i.e., it pretends to promote the cause of the ninety-nine percenters but de facto promotes the cause of the one-percenters.
(iii) MMTers are scientifically incompetent.
(iv) MMTers constantly violate scientific standards/ethics.

You say you are a philosopher who does not operate outside his field. Very good! Get out of economics, we already have an oversupply of soap bubblers, or what Joan Robinson called the ‘throng of superfluous economists’.


#1 YouTube Feynman on Scientific Method

"It doesn't matter how beautiful your theory is, it doesn't matter how smart you are. If it doesn't agree with experiment, it's wrong. In that simple statement is the key to science."

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REPLY to ANC Driver on Jun 16

You recommend Collingwood’s Economics as a Philosophical Science as follows: “Seeing as we are talking of economics, science, and philosophy all in the same cave I thought I’d share probably one of the best ‘short’… pieces I have ever read and which for its comparative size has probably had the greatest impact on me personally in understanding first and foremost, what an economic activity actually is, second, that we take the ability to engage in economic activities for granted, and third, that we cannot mix morals with economics.”

Realize:

• You are putting economics, science, and philosophy into one hat.
• This is illegitimate because economics and philosophy are what Feynman called cargo cult science.
• The fundamental blunder of economics is that it defines itself as a social science.
• The subject matter of economics is the economic system, i.e., the interaction of economic variables like employment, price, profit, productivity, income, output, and so on.
• Human Nature/motives/behavior/action is the subject matter of Psychology, Sociology, Anthropology, History, Political Science, Biology, Social Philosophy, Ethics, and so on.
• As far as economics deals with Human Nature/motives/behavior/action, it is Political Economics.
• Political Economics has achieved nothing of scientific value in the last 200+ years.
• Political Economists are failed/fake scientists.
• Political Economics is since Adam Smith/Karl Marx a smokescreen for agenda pushing.
• Political agenda pushers, no matter how they present themselves, are either stupid or corrupt or both and will therefore never be accepted in the community of scientists.
• Economics had been hijacked from the very beginning by agenda pushers. This aberration has to be reversed. In methodological terms, economics needs a Paradigm Shift.

Collingwood writes in the introduction: “The thesis here to be advanced, then, is that there is a special type of action, … that this utilitarian or economic type of action is the fundamental fact with which all economic science is concerned; …”

No, this exactly is the Social Science Fallacy. Economics as a science is NOT concerned with how people behave but with how the economic system behaves. There are systemic laws that can be objectively determined, but economists have, to this da,y failed to figure them out. Instead, they were very successful in producing a breathtaking heap of peer-reviewed proto-scientific garbage.

Time to acknowledge that political economists had much support from retarded social philosophers like Collingwood and Tom Hickey. Also, time to properly separate science/theoretical economics from politics, soapbox economics, agenda-pushing, philosophy, and all the other cargo cult sciences.

Politics has to be determined in the political sphere by the Legitimate Sovereign. The political sphere and the scientific sphere have to be separated. After 200+ years of failure, economists are supposed to figure out how the economic system works. Only then can they credibly claim to be of assistance in the realization of the Legitimate Sovereign’s objective, that is, the Good Society.

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REPLY to Tom Hickey on Jun 16

You say: “Given contemporary conditions, that would seem to involve instituting full employment now, since it is not only possible but simple by following MMT analysis, theory, and policy based on it. In fact, as Calgacus has pointed out, the MMT JG would begin breaking the back of modern capitalism by increasing labor power. … What needs to happen is that the capital/labor share ratio has to be shifted in favor of workers.”

Take notice that there is Xmas economics where everybody writes down a list of their wishes. Your priorities go roughly as follows: full employment, technological innovation, increasing productivity, increasing leisure, and a more equitable distribution.

This list makes you a very likable philosopher. Not many people will contradict you, but probably add such things as environmental protection and affordable health care.

In order to realize this program, you need to know how the monetary economy works. Your problem is that you don’t. For example, you recommend MMT/JG without realizing that MMT’s money-creation/deficit-spending makes distribution progressively more unequal.#1 You say that you want to better the distributional situation of the ninety-nine percenters, but your recommendations make matters worse.

The economist’s business is NOT to write down a wish list but to realize the goals that have been authorized by the Legitimate Sovereign. This requires scientific knowledge about how the monetary economy works. This knowledge is embodied in the systemic laws of the monetary economy. You cannot achieve full employment (however defined) if you don’t know the Employment Law.#2

To soap bubble about flying above the clouds is futile. It is the folks who have figured out the laws of aerodynamics and thermodynamics who get things off the ground. Analogous in economics.

As Marx said: “Philosophers and politicians have hitherto only popularized various wish lists; the point is to know how to realize them.”


#1 MMT: So-called progressives as trailblazers for Trumponomics
#2 This brings us back to the first post.

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REPLY to Tom Hickey on Jun 17

Tom Hickey summarizes: “I have said that new vision is needed and proposed a framework in terms of one of the enduring questions of Western intellectual history, which I believe can only be dealt with holistically by incorporating non-Western traditions. That question is the one that occupied the ancient Greeks: what does it mean to live a good life as an individual in a good society? That has a long tradition in terms of ethics, action theory, and social and political thought.”

Yes, the political/philosophical discussion about the Good Society goes back to the beginning of civilization.

Tom Hickey tells the story of how he came after a spiritual quest through Western and non-Western history to see that the society we live in is mentally deranged and institutionally dysfunctional, and that MMT offers a solution, at least for the economic causes of the malaise.

“Realistically, that is where we need to start strategically. What MMT proposes is feasible politically.” Tom Hickey’s narrative explains how he became an MMT agenda pusher.

When one takes the political glasses off and puts the scientific glasses on, one sees a quite different reality:
• Tom Hickey never did serious science.
• It is the MMT social goals that appeal to him.
• He never realized that the economic theory that underlies MMT policy guidance is provably false.
• He promotes MMT for political reasons and does not really care about its scientific validity.

So, Tom Hickey stands firmly in the tradition of Political Economy, which abuses ‘science’ from Adam Smith onward as a credibility/authority-enhancer. For agenda pushers, the political narrative always comes first: “A genuine inquirer aims to find out the truth of some question, whatever the color of that truth. ... A pseudo-inquirer seeks to make a case for the truth of some proposition(s) determined in advance. There are two kinds of pseudo-inquirer, the sham and the fake. A sham reasoner is concerned, not to find out how things really are, but to make a case for some immovably-held preconceived conviction. A fake reasoner is concerned, not to find out how things really are, but to advance himself by making a case for some proposition to the truth-value of which he is indifferent.” (Haack)

Tom Hickey recounts MMT history: “Warren Mosler has set forth a range of proposals for implementing a policy based on MMT principles. The range is not complete and many other issues need to be addressed that MMT hasn’t yet. As the MMT have said, there are fewer than a dozen of us, which is an improvement on the original 3 + 1 twenty years ago ― Warren Mosler, Bill Mitchell and Randy Wray, along with grad student Pavlina Tcherneva.”

This is what MMT looks like to me. The trained economist and hedge fund founder Warren Mosler stumbled one day upon Post-Keynesianism/MMT and found that it contained a lot of sound arguments against mainstream monetary theory and some good social planks for a political platform. Warren Mosler developed the narrative of how the fiat money system can be used to solve most socio-economic problems. As a marketing buff, he realized that Wall Street types have a credibility problem with selling social policy. And this resulted in strengthening the sales team with caring Stephanie Kelton and the spiritually enlightened philosopher Tom Hickey.

I have no problem with agenda pushers promoting their stuff in the political Circus Maximus. And I have no problem with Wall Street’s Warren Mosler running for the Virgin Islands' governor. The lethal flaws of MMT are:
• The scientific part of MMT is provably false.
• MMT policy guidance has no sound scientific foundations.
• MMT is a political fraud, not substantially different from Neoclassics, Keynesianism, Marxianism, Austrianism.

The mixing of politics and science always corrupts science. This starts with Smith/Marx and continues over the whole right/left spectrum from Hayek, Keynes, Friedman, Krugman, Keen, Mosler, to Tom Hickey.

Let’s get rid of all of them.

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REPLY  to Calgacus on Jun 17

You say: “Not seeing fallacies in some reasoning that MMT is welfare for the rich is not the same as there not being a fallacy, and there is. A really easy way for anyone to quickly see that the reasoning must be fallacious (formally inconsistent) is the historical fact that applied MMT has everywhere led to progressively more equal distributions of wealth and income, not the opposite. … (By applied MMT I mean the New Deal, WWII in the US & UK, the postwar era practically everywhere & for a few countries even afterward. Pretty much the closer to MMT / genuine Keynes ― the better for income/ wealth distribution.)”

Note that there are two issues here: (i) the classical macroeconomic issue of the relative magnitudes of profits and wages [To determine the laws which regulate this distribution, is the principal problem in Political Economy (Ricardo)] and (ii), the issue of the distribution of wages among workers and of profits among firms. I have dealt with both issues in working papers#1, #2 and in blog posts. #3, #4

It is pretty obvious that economists from Smith/Ricardo via Keynes to MMT never understood what macroeconomic profit is and as a consequence, thoroughly messed up Distribution Theory.

I know for sure that you don’t understand what macroeconomic profit is. Therefore, it is beyond your means to say anything sensible about distribution.

The axiomatically correct Profit Law for the economy as a whole is given as Q_m≡Y_d+(I−S_m)+(G−T)+(X−M), which reduces to Q_m=G−T for Y_d, I, S_m, X, M = 0. The reduced Profit Law says that the monetary profit of the business sector Q_m is equal to the deficit G−T of the public sector, in a nutshell: Public Deficit = Private Profit.

Now, MMT is essentially money-creation/deficit spending. Because of this, it is correct to say that MMT progressively worsens the distribution. #5

However, for anyone who can read an equation, it is obvious that the positive effect of a government deficit G−T on macroeconomic profit Q_m can at any time be counteracted by the negative effects of the other variables, i.e., Y_d, I, S_m, X, M.

Whether this has been the case during the “New Deal, WWII in the US & UK, the postwar era practically everywhere” can be established only by testing the complete equation.

There is no way around it; in order to make progress with Distribution Theory, the Profit Law must be tested with the data for the historical time periods you mentioned.

As far as I know, the axiomatically correct Profit Law has never been tested. Your assertion: “Pretty much the closer to MMT / genuine Keynes ― the better for income/ wealth distribution.” is pretty much hanging in midair.#6


#1 The Profit Theory is False Since Adam Smith. What About the True Distribution Theory?
#2 Essentials of Constructive Heterodoxy: Profit
#3 Profit and the decline of labor’s nominal share
#4 Profit and distribution: a primer
#5 Keynes, Lerner, MMT, Trump and exploding profit
#6 Keynesianism as ultimate profit machine