Occasional Tweets: Economists are not scientists but storytellers (II)

 

#Economics#FailedScience#FakeScience#DisInfoTainment

Economics as storytelling and entertainment for the masseshttps://t.co/SbHCzArwe3

— E.K-H (@AXECorg) August 25, 2022

For more about storytelling see AXECquery. 

Occasional Tweets: Economists are not scientists but storytellers (IV)

 

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

The economist as storytellerhttps://t.co/Lroo52Puto

— E.K-H (@AXECorg) June 24, 2023

Occasional Tweets: Economists are not scientists but storytellers (I)

 

You say: “Lol, but economists are storytellers!” #Storytelling is NOT #Science but #Propaganda/#BrainWashing/#Fraud. #Economists are NOT scientists but #Clowns/#UsefulIdiots in the political #CircusMaximus.

Media-fake-farce-fraud-storytelling-macrohttps://t.co/9lFFKXBPU8 pic.twitter.com/euMsdBArpM

— E.K-H (@AXECorg) April 22, 2021

 

 Storytelling / Propaganda / Agenda-Pushing / Deception / #DisInfoTainment / Blather

• Economics as storytelling and entertainment for the masses
• The long genealogical tree of economic storytelling
• Media-fake-farce-fraud-storytelling-macro
• Economics — from storytelling to science
• Politics, storytelling, and science
• Economic narratives are for the scientific garbage dump
• Storytelling vs Theory = Politics vs Science
• How to save the economy from storytelling economists
• Storytelling and facts
• The end of storytelling
• Economics: Stories, narratives, and disinformation
• Narrative economics and the imperatives of the sitcom
• Mental messies and loose losers
• The subtle distinction between storytelling and science
• Circus Maximus: Economics as entertainment, personality gossip, virtue signaling, and lifestyle promotion
• Failed economics: The losers’ long list of lame excuses
• Wikipedia, economics, scientific knowledge, or political agenda pushing?
• Economics: The greatest scientific fraud in modern times
• Links on the Economics Nobel

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For more on communication see AXECquery.

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Twitter Apr 23

Occasional Tweets: Economists are not scientists but storytellers (III)

 

#Econ#FailedFakeScience#Economics claims to be #Science but is NOT. The representative #Economist is NOT a #Scientist but an #AgendaPusher / #UsefulIdiot / #Clown in the political #CircusMaximus. They are storytellers since Adam Smith. ⇒https://t.co/Lroo52OWDQ pic.twitter.com/H3Ne3iDLfb

— E.K-H (@AXECorg) June 9, 2023

For details of the big picture see cross-references Failed/Fake Scientists. 

Occasional Tweets: Economists are not scientists but storytellers (V)

 

#Econ

Economics claims to be #Science but is NOT. The representative #Economist is NOT a #Scientist but an #AgendaPusher / #StoryTeller / #Clown in the political #CircusMaximus. It started 200+ years ago, today #Economics is an integral part of the #DisInfoTainment industry.

— E.K-H (@AXECorg) July 20, 2023

Related 'The economist as storyteller (I)' and  'The economist as storyteller (II)'.

Occasional Xs: Economists are not scientists but storytellers (VI)

 

#Walrasianism, #Keynesianism, #Marxianism, #Austrianism etc. are axiomatically false & materially/formally inconsistent & ALL got #Profit wrong. #EconomicPolicyGuidance has NO valid scientific foundations. The representative #Economist is a #PolitClown.⇒https://t.co/Lroo52OWDQ pic.twitter.com/f6wNSNjrrk

— E.K-H (@AXECorg) February 9, 2024

Related 'Narrative economics and the imperatives of the sitcom' and 'Economic narratives are for the scientific garbage dump'. 

If you meet the storyteller on the road, kill him

Comment on Blissex on ‘We Are so S---ed. Econ 1-Level Edition’

Blog-Reference

You write: “I am sympathetic to any model which is less comically weak than the usual ‘neoclassical synthesis’ and other politically motivated propaganda, but here I am more pleased than usual because ...”

Note, that science is NOT about like/dislike but about true/false. If economics is, as it claims for more than 200 years to be, a science, then we have only one worthwhile issue: is standard economics true or false? The answer is that it is provably false according to well-defined scientific criteria.

This has several implications: (i) economists like Krugman or DeLong have not realized that their models are logically/empirically inconsistent, (ii) they pass their defective approaches on to their students, (iii) they throw economic policy proposals into the discussion that have no scientific foundation. From the standpoint of science, economics produces a vast amount of disutility.

Re-read the preceding posts, including your own, and you will realize that economics has come down to a narrative of fraud, deceit, corruption, and crime; with the greedy plutocracy, the Fed money wizards, the duped working class, and the evil tax-state as main protagonists.

To recall, this is how the ancient Greeks explained the world before they invented science: Zeus oversaw the universe, assigned the various gods their roles, and had a lot of trouble with other gods, goddesses, and humans. At Prometheus, for example, he was angry for three things: being tricked on sacrifices, stealing fire for man, and refusing to tell him which of his children would dethrone him. To handle his problems, Zeus regularly fell back to chicanery, force, and violence.#1

Everybody can see the common pattern. Economics is still at the level of myth and storytelling. The difference is, instead of Zeus we now have the Invisible Hand and the machinations of economic agents. People like this tabloid stuff.

To recall: “... it is a central aim of science to come to knowledge of how the world really is, that correspondence between theories and reality is a central aim of science as an epistemic enterprise and crucial to whatever objectivity scientific knowledge enjoys ...” (Suppe, 1977, p. 649)

The task of economics is to come to objective knowledge of how the economy really is. It is the economic system that is the subject matter and NOT the machinations of a more or less realistic homo oeconomicus.

Most economists have not yet realized that economics is NOT a science of human nature/behavior/action — not of individual behavior, not of social behavior, not of rational behavior, not of irrational behavior, not of sincerity, not of corruption. All these issues belong entirely to the realms of psychology, sociology, anthropology, political science, history, criminology, philosophy, etcetera.

Economics is the science of how the economic system works (2014). So, first of all, we have to get rid of all storytellers, more precisely, of Walrasianism, Keynesianism, Marxianism, Austrianism, and their proto-scientific garbage — NOT because we do not LIKE these approaches but because they are provably FALSE.

Egmont Kakarot-Handtke


References
Kakarot-Handtke, E. (2014). Objective Principles of Economics. SSRN Working Paper Series, 2418851: 1–19. URL
Suppe, F. (1977). Afterword–1977. In F. Suppe (Ed.), The Structure of Scientific Theories, 615–730. Urbana, Chicago: University of Illinois Press.

#1 Wikipedia

Immediately preceding Econ 101 or How to train morons.

For more about storyteller see AXECquery.

For more about narrative see AXECquery.

The economist as storyteller (I)

Comment on Chris Dillow on ‘Why not full employment?’

Blog-Reference and Blog-Reference on Apr 26 and Blog-Reference on Apr 28 adapted to context

The average person dislikes an objective explanation (e.g. the thunderbolt is an electromagnetic phenomenon subject to physical laws) and likes a subjective explanation (e.g. Zeus threw the thunderbolt because he was angry/vengeful/authoritarian). The scientific explanation takes the form of a theory, and the non-scientific explanation takes the form of a narrative. Almost all societal communication consists of storytelling/blather/ wish-wash/truisms, and only a tiny part has scientific content.

Economics claims to be a science, yet it has never risen above the level of storytelling. Accordingly, the subjective explanation of unemployment (UE) takes the following forms.

Psychologism: the unemployed actually enjoy UE, are indifferent, have resigned, suffer. Darwinism: UE’s are unfit, unqualified, lack motivation, and are beyond help. Moral hazard: UE is the result of a wrong incentive structure or perverted rewards/punishments, UE’s game the system. Mind reading: leisure is rationally preferred by UE’s over working at the given wage. Moralizing: the UE’s deserve their fate. Blaming: UE is a self-inflicted blowback of irrational behavior, i.e. of sticky wages, strikes, and shirking. Historicism: today’s unemployment is the result of known adverse external shocks and identifiable wrongheaded measures of DEMs/REPs/FED/GOV since WWII. Sociologism: the UE’s do have not enough leverage for changes in their favor; they are brainwashed into acceptance of everything. UE is deliberately created by capitalists/oligarchs/one-percenters/government as a means of social control. UE’s are the losers in a rigged power-play.

Within this tiny intellectual box of folk psychology, folk sociology, folk history, and folk politics economic storytelling has taken place since Adam Smith: “He ... disliked whatever went beyond plain common sense. He never moved above the heads of even the dullest readers. He led them on gently, encouraging them by trivialities and homely observations, making them feel comfortable all along.” (Schumpeter)

The time travel fantasies about Harlem, Haight-Ashbury, Paris, or Surbiton above show that economics has stagnated since Adam Smith. Clearly, from retarded storytellers, no solution to any economic problem is ever to be expected.

While dabbling in the so-called social sciences, economists overlooked that economics is a systems science and that it is their task to explain how the actual monetary economy works. To this day, economists still need to understand what profit is. It should be evident that they will never find it out by second-guessing and interpreting and understanding human behavior. This is NOT how science works. What is currently discussed among economists as employment theory is sitcom garbage.

Storytelling is not prohibited, of course, and neither is the pluralism of any number of false theories, but there is no place for storytellers in the sciences. So, economists have to stop pretending to do science and have to be expelled from the sciences because of proven incompetence for more than 200 years.

Egmont Kakarot-Handtke


Related 'Why do workers not tar and feather economists?' and 'Economics, methodology, morals ― a creepy freak-show' and 'The economist as storyteller (II)' and 'Economics as storytelling and entertainment for the masses' and 'Narrative economics and the imperatives of the sitcom' and 'If religion is opium of the people, economics is crack of the people' and 'Economics: Stories, narratives, and disinformation' and 'Economic narratives are for the scientific garbage dump' and 'Media-fake-farce-fraud-storytelling-macro'.

For details about the axiomatically correct employment theory see cross-references Employment.

***

Wikimedia AXEC139e

End of a storyteller

Comment on Lars Syll on ‘Krugman — a Vichy Left coward?’

Blog-Reference and Blog-Reference

Krugman is accused of supporting “political figures he likes, notably Hillary Clinton.” What could possibly be wrong with that? Nothing, of course, except that Krugman is an economist. What is indeed wrong, is that economics is a science and as a scientist, Krugman has no political mandate. Most people do not get the point because they think science is just another sitcom format.

Long before the hijacking of economics by morons, J. S. Mill, the economist and methodologist, was well aware that there is a categorical difference between politics and science: “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 ....” (Mill, 2006, p. 950)

In no uncertain terms, Mill told his fellow economists that politics and science have to be separated and there is no revolving door between the two. The first thing to notice is that this message was obviously wasted on Krugman.

To speak of economics tout court is always misleading because there are political and theoretical economics and there are storytelling and something like the true theory. The crucial distinction is:
(i) The goal of political economics is to push an agenda, the goal of theoretical economics is to explain how the actual economy works.
(ii) In political economics anything goes; in theoretical economics, scientific standards are observed. The standards are well-defined as material and formal consistency.

Theoretical economics has to be judged according to the criteria true/false and nothing else. The criteria of political economics are good/bad or like/dislike. Political economics has produced nothing of scientific value in the last 200+ years.

Accordingly, Krugman has to be criticized for having made the wrong choice between political economics (= agenda-pushing and storytelling) and theoretical economics (= science) and for trespassing the line between the two. He has to be criticized for being an incompetent scientist (2014) and thrown out of the scientific community. Being outside of science, he can no longer be criticized for preferring one politician above the other.

Political economics is when one lousy scientist calls the other lousy scientist a Vichy Left coward. To make economics a science, one has to get rid of all this garbage.

Egmont Kakarot-Handtke


References
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
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, volume 8 of Collected Works of John Stuart Mill. Indianapolis: Liberty Fund.

***

REPLY to anne

The proper task of economics is to develop the true theory. Whatever the political goals are, without the true theory economic policy is pointless, i.e. ineffective or even counter-productive. The separation of politics and economics implies that the overarching economic goals are determined in the political sphere according to agreed-upon rules. The economist qua economist is not legitimized to determine the overarching economic goals.

There is neither a political nor moral justification for an economist to give economic policy advice without sound scientific foundations. Economists owe society the true theory, not less, not more. As long as they do not have the true theory, the political sects of Walrasians, Keynesians, Marxians, and Austrians better shut up.

Krugman's policy proposals have no sound scientific foundations. His models are provably false. Economists should simply resist the temptation to say what ought to be. It suffices to say what is, i.e. how the economy works.

The economist as storyteller (II)

Comment on Caitlin Johnstone on ‘Propaganda Is The Root Of All Our Problems’*

Blog-Reference

There is the infinite reality and there is the limited individual consciousness, and between the two is a medium. This epistemological condition has been captured by Plato in the Allegory of the Cave: “Plato has Socrates describe a group of people who have lived chained to the wall of a cave all of their lives, facing a blank wall. The people watch shadows projected on the wall from objects passing in front of a fire behind them, and give names to these shadows. The shadows are the prisoners’ reality. Socrates explains how the philosopher is like a prisoner who is freed from the cave and comes to understand that the shadows on the wall are not reality at all, for he can perceive the true form of reality rather than the manufactured reality that is the shadows seen by the prisoners. The inmates of this place do not even desire to leave their prison; for they know no better life.”#1

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

There are three relationships between reality and consciousness:
(i) Faithful mapping from A-reality to A'-consciousness.
(ii) Reduction of B-reality to zero, i.e., to conscious non-existence.
(iii) Blowing up NONENTITIES to predominant C'-consciousness.

Alternative (i) is what science/philosophy is supposed to achieve. Alternatives (ii) and (iii) constitute the prisoners’ manufactured reality. As physical force is applied in order to control the physical realm, communicative force is applied to control the mental realm. This communicative force is called propaganda, and it comes either under the religious, political, or entertainment cloak.#3 In the real world, both forces are of roughly equal importance. Professional storytellers (historians, priests, romancers, journalists, movie makers) tend to think that the ‘pen is mightier than the sword’: “As I never tire of saying, the real underlying currency in our world is not gold, nor bureaucratic fiat, nor even raw military might. The real underlying currency of our world is narrative, and the ability to control it.”

Maintaining narrative control is also the main business of the economist. #4, #5, #6, #7, #8

Scientific truth has two inseparable methodological components: material and formal consistency. This, of, course, holds also for economics: “In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum)

To this day, economists do not have the true theory. Economics has been a fake science since Adam Smith. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, etc, ― are mutually contradictory, axiomatically false, materially/formally inconsistent, and all got profit ― the foundational concept of the subject matter ― wrong.

Economists have produced NOTHING of scientific value in the last 200+ years. This does not matter much, though, because, in the political Circus Maximus, there has always been a greater demand for storytellers, blatherers, trolls, actors, clowns, activists, and propagandists than for scientists. Scientific truth has never been a concern for religion, politics, and entertainment ― just the opposite. This is why human communication consists, for the greater part, approximately 99.9 percent of toxic mental garbage a.k.a. propaganda/disinformation/entertainment a.k.a. disinfotainment.

As failed scientists, economists easily get a second chance, for example, as exhibitionists of the Conscience of a Liberal in a propaganda outlet of the Oligarchy or as an Oligarchy-sponsored troll in the econblogosphere.

Time for a dishonorable discharge of these stupid/corrupt storytellers from the sciences.

Egmont Kakarot-Handtke


* Caitlin Johnstone
#1 Wikipedia Allegory of the Cave
#2 Graphic AXEC153 Allegory of the Cave
#3 “Propaganda is information that is not objective and is used primarily to influence an audience and further an agenda, often by presenting facts selectively to encourage a particular synthesis or perception, or using loaded language to produce an emotional rather than a rational response to the information that is presented. Propaganda is often associated with material prepared by governments, but activist groups, companies, religious organizations, and the media can also produce propaganda.
In the twentieth century, the term propaganda has often been associated with a manipulative approach, but propaganda historically was a neutral descriptive term.” (Wikipedia)
#4 Economics, Plato’s Cave and the Silver Blaze Case
#5 Economics: communication without content
#6 Opinion, conversation, interpretation, blather: the economist’s major immunizing stratagems
#7 MMT: How the Oligarchy communicates with WeThePeople
#8 Narrative economics and the imperatives of the sitcom

Related 'Are economics professors really that incompetent? Yes!' and 'Economics textbooks ― tombstones at the Flat-Earth-Cemetery' and 'Economics: The greatest scientific fraud in modern times' and 'Macroeconomics: Economists are too stupid for science' and 'Are economists natural-born scientific failures?' and 'Fact of life: your econ prof is scientifically incompetent' and 'Fake religion, fake science, fake news, and false complaints' and 'Dear idiots, MMTers are Wall Street’s agenda pushers' and '“We have sunk very low”' and 'FakeNews, FakeScience: economics in the information age' and 'Economics as storytelling and entertainment for the masses' and 'A brief history of soapbox economics' and 'If You Meet the Storyteller on the Road, Kill Him' and 'Economics: ‘a tale told by an idiot ... signifying nothing’ and 'The economist as stand-up comedian' and 'Economics: No method to the madness' and 'How to spot economics trolls' and 'Lock them up' and 'Circus Maximus: Economics as entertainment, personality gossip, virtue signaling, and lifestyle promotion'.

***

This is what Plato said in The Republic 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.”

***

AXEC139d

Economics — from storytelling to science

Comment on Lars Syll on ‘Economics — an empty and inexact science’

Blog-Reference and Blog-Reference and Blog-Reference on Apr 17

Lars Syll argues: “Mainstream economics is in the story-telling business whereby economic theorists create make-believe analogue models of the real economic system.”

This, of course, is correct. The problem is that traditional Heterodoxy has NO alternative to offer but is for 200+ years also in the storytelling business. See:
► Redefining economics
► From the pluralism of false models to the true economic theory
► The futile synthesis of neoclassical rubbish and Keynesian garbage
► Economics and the social science delusion
► The Law of Economists’ Increasing Stupidity

In order that economics can speedily progress from cargo cult science to science, it is necessary that both orthodox and heterodox storytellers retire.

Egmont Kakarot-Handtke

Occasional Xs: Another example of economic storytelling/filibuster/blather (I)

 

#Econ#AllYouNeedToKnow

The representative economist NEVER understood #Profit and how the economic #System works. But after 200+ years they still parade their water-is-wet/grass-is-green trivialities as profound insights. Kalecki is a relevant example. ⇒https://t.co/IFclXX5Ak5

— E.K-H (@AXECorg) January 20, 2025

Occasional Xs: The role of narratives and storytelling in economics (II)

 

#Economics#FailedFakeScience#DisInfoTainment

“Disinformation isn't new, but its scale and impact are. Can we navigate a world where anyone can spread lies easily?”

For 200+ years, economics claims to be #Science but is NOT. The major approaches (#Walrasianism, #Keynesianism,…

— E.K-H (@AXECorg) June 6, 2024

Storytelling and facts

Comment on Blissex on ‘The F story about the Great Inflation’

Blog-Reference

You write: “His [Phillips's] original graph was essentially a hunch based on a very small dataset that in some cases there is a tradeoff between labour market pressure and accelerating inflation, ...” This is inaccurate.

(i) “The original Phillips Curve is about the relation of the rate of unemployment and the rate of change of the wage rate. Phillips studied more than a century's worth of data and established the stable inverse relation for the United Kingdom. Phillips's original curve was a remarkable empirical finding.” (2012, Sec. 6)
(ii) It is the bastard Phillips Curve of Samuelson/Solow which initiated the ensuing discussion and it is this dilettante construction that was later found wanting.

If the Phillips Curve debate proves one crucial fact beyond reasonable doubt it is that the representative economist is an utterly confused confuser. This goes down the line from Samuelson/Solow to Friedman, to Wren-Lewis, and finally to Blissex.


References
Kakarot-Handtke, E. (2012). Keynes’s Employment Function and the Gratuitous Phillips Curve Disaster. SSRN Working Paper Series, 2130421: 1–19. URL

Related 'The end of storytelling'. See also 'Mental messies and loose losers'. For details of the big picture see cross-references Incompetence

Politics, storytelling, and science

Comment on Asad Zaman on ‘ET1% — Economic Theory of the top 1%’

Blog-Reference

What told Marx us about economics?: “In the domain of Political Economy, free scientific enquiry meets not merely the same enemies as in all other domains. The peculiar nature of the material it deals with, summons as foes into the field of battle the most violent, mean and malignant passions of the human breast, the Furies of private interest.” (1906, M.10)

What tells Asad Zaman us?: “Now if we consider conventional economic theory, it is easy to show that nearly all of it is ET1% — it is DESIGNED to prove that policies which favor the top 1% are beneficial for all.”

What tells YouTube us about economics, politics, and all the rest? “Everything Is A Rich Man’s Trick.”

And finally, what tells us science? “Apologetics may be a laudable objective. Its practical importance is unquestioned. People need to be shown that the institutions of their own society are good, those of others bad. But there is no place for apologetics in science. Scientific economics inquires only into the How and Why, not into the Good or Bad, of what is. From the scientific point of view preoccupation with Good and Bad is worse than useless since it not only fails to illumine anything but keeps the lightbeam of inquiry from being turned in directions where answers to significant questions can be found.” (Murad, 1953, p. 2)

What is the underlying problem? Every one of us can only have a personal experience of a tiny section of space and time and it is not at all certain whether we interpret this personal experience correctly. The rest of reality consists of the extrapolation of limited experience, second-guessing of causes and motives, and of what society tells us. Society consists of family, peers, neighbors, teachers, philosophers, priests, gurus, artists, government, business, and the media.

Our view of reality is the result of rather limited personal experience and storytelling. The bad thing is that we are sometimes confronted with facts, events, or claims/opinions that do not fit into our worldview. And this brings up the distinction between opinion and truth.

“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, 1994, pp. 39-40)

What the ancient Greeks called opinion/doxa is roughly the same as what Buddha called the Veil of Maya, what Marx called ideology, what Hollywood calls dream/nightmare, what Bernays called PR/advertising, what Plato called shadows on the cave wall, and what Orwell called big-brother mind-control.

Is Asad Zaman’s claim that ET1% influences opinion true? Yes. Is the claim that they influence science in general and economics in particular true? Yes. Can they determine the outcome of the research? No, because nobody knows the outcome in advance. It all depends on whether scientists stick to the well-defined rules of science. “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, 1997, p. 1)

Asad Zaman’s claim amounts to the accusation that orthodox economists are fraudsters, that is, that they intentionally produce false theories. This brings us outside of science and into the criminal court (see also Lysenkoism on Wikipedia).

Heterodoxy stands before this question: We all agree that Orthodoxy is false so (i) let us forget this proto-scientific garbage and focus on developing the true theory (= materially and formally consistent), or (ii), let us bring Orthodoxy to court and prove that DSGE is not a failed approach but a political fraud. Option (i) is the scientific way to settle matters.

It all would be much simpler if Asad Zaman could present the true theory (= materially and formally consistent) of how the actual monetary economy works. In particular, I would like to know which one of the four different heterodox profit theories is correct.#1

Egmont Kakarot-Handtke


References
Haack, S. (1997). Science, Scientism, and Anti-Science in the Age of Preposterism. Skeptical Inquirer, 21(6): 1–7. URL
Marx, K. (1906). Capital: A Critique of Political Economy, Vol. I. The Process of Capitalist Production. Library of Economics and Liberty. URL
Murad, A. (1953). Questions for Profit Theory. American Journal of Economics and Sociology, 13(1): 1–14. URL
Popper, K. R. (1994). The Myth of the Framework. In Defence of Science and Rationality. London, New York: Routledge.

#1 Heterodoxy, too, is proto-scientific garbage

Related 'Refocusing economics'.

Key Issues: Sloppiness, multi-senseism, storytelling ― thriving in the thickness of confusion

... economics is a big omnibus which contains many passengers of incommensurable interests and abilities. (Schumpeter, 1994, p. 827)

***

... he [Adam Smith] disliked whatever went beyond plain common sense. He never moved above the heads of even the dullest readers. He led them on gently, encouraging them by trivialities and homely observations, making them feel comfortable all along. (Schumpeter, 1994, p. 185)

But though the Wealth of Nations contained no really novel ideas and though it cannot rank with Newton's Principia or Darwin's Origin as an intellectual achievement, it is a great performance all the same .... (Schumpeter, 1994, p. 185)

With Adam Smith, economics had a clumsy start and, despite great performances of whatever sort, fell further back over the long haul in comparison to physics and biology.

***

A good principles of economics teacher is a good storyteller. (Colander, 1995, p. 169)

Another danger is that you may ‘precise everything away’ and be left with only a comparative poverty of meaning. ... Such a problem was avoided, said Keynes, by Marshall who used loose definitions but allowed the reader to infer his meaning from “the richness of context.” (Coates, 2007, p. 87)

What a tricky business this all is! In his Treatise on Money, Mr. Keynes told the world that savings and investment are only equal in conditions of equilibrium; that an excess of investment over saving means rising prices, and vice versa. In his General Theory, he told us that saving and investment are always equal, and that this is a mere identity or truism, without significance for the determination of prices. As far as I can make out, there are relevant and important senses in which all these statements are each of them right and each of them wrong. (Hicks, 1939, p. 184)

This is the articulate methodological commitment to inconclusiveness that, on a deeper level, unites economists of all camps: "... there are relevant and important senses in which all these statements are each of them right and each of them wrong. " Many senses make no sense at all. However, empirical and logical inconclusiveness quite effectively secured the ecological niche of Political Economy as a separate science. Demarcation does not work in the "thickness of confusion" (Suppes, 1968, p. 654).

Contradictory statements are reconciled routinely by relating them to one of the following distinctions: short run/long run, ex ante/ex post, identity/equality. Inconclusiveness helps passably against outright refutation. With regard to empirical testing, the commitment to inconclusiveness implies the — self-defeating — assertion that in economics no experimentum crucis is feasible. All questions that cannot possibly be decided by experiment are out of science in the first place.

... you cannot prove a vague theory wrong. (Feynman, 1992, p. 158)

With enough fog emitted, almost anything becomes possible. (Mirowski, 2013, p. 344)

... nothing is clear and everything is possible. (Keynes, 1973, p. 292)

You can define anything you want, but as a sage once said,  “A rose by any other name will smell as sweet!” (P. Davidson, RWER-Blog, July 2, 2013)

For, on principle, we may call things what we please. (Schumpeter, 1994, p. 598)

This is a tough question to adjudicate on scientific grounds since the issue is largely definitional and, as Lewis Carroll pointed out, everyone is entitled to his own definitions. (Blinder, 1987, p. 131)

Let us mean by current income the value of current output, ... (Keynes, 1933, p. 699)

... twentieth-century neoclassical theory resembles nothing so much as the child's game of Mr. Potatohead – the fun comes in mixing and matching components with little or no concern for the coherence of the final profile. (Mirowski, 1995, p. 294)

Trying to pin down the essential ideas is sometimes difficult because neoclassical economics always seems to be a moving target. (Boland, 1992, p. 213)

Since everybody is indeed free to define whatever appears to be appropriate, it seems that a definition could not pose any real problem. This, indeed, is not true because the full freedom of definition holds but for the first definition. The subsequent definitions must be consistent with their predecessors. This continuously restricts the freedom of definition. It is by no means the case that anything can be defined as desired. This is a methodological illusion that is rather widespread among economists. It explains, for the most part, the discipline's state of manifest confusion. A consistent and agreed-upon framework of concepts is indispensable. Keynes' aforementioned determination of income, for example, invalidates the General Theory and all its legitimate and illegitimate offshoots (IS–LM, AD–AS) in one sentence (see Keynes's Missing Axioms URL or Why Post Keynesianism is Not Yet a Science URL).

***

We know from the history of science that entrenched classificatory schemes and misleading descriptive vocabularies have impeded scientific advance as much or more than the complexities and observational inaccessibility of the subject matter. (Rosenberg, 1980, p. 114)

As was standard with Marshall, the narrative told one story, the mathematics another. (Mirowski, 1995, p. 299)

Is it not a fact, which stares at us from the histories of all sciences, that it is much more difficult for the human mind to forge the most elementary conceptual schemes than it is to elaborate the most complicated superstructure when those elements are well in hand? (Schumpeter, 1994, p. 602)

The only way to arrive at coherent languages is to set up axiomatic systems implicitly defining the basic concepts. (Schmiechen, 2009, p. 344)

The currently prevailing pattern of economic theorizing exhibits the following three characteristics: (1) a syncopated style of argument fluctuating back and forth between literary and symbolic modes of expression, (2) naive translation, or the loose paraphrasing of formulae into sentences, and (3) loose verbal reasoning for certain aspects of theoretical argumentation where explicit symbolic formulation is lacking. (Dennis, 1982, p. 698)

Thus, economics is apparently the study of the economy, the study of the coordination process, the study of the effects of scarcity, the science of choice, and the study of human behavior. One possible conclusion to draw from this lack of agreement is that the definition of economics does not really matter. (Backhouse and Medema, 2009, p. 221)

The truth is, most persons, not excepting professional economists, are satisfied with very hazy notions. (Fisher, quoted in Mirowski, 1995, p. 86)

I think it is the lack of quite sharply defined concepts that the main difficulty lies, and not in any intrinsic difference between the fields of economics and other sciences. (von Neumann, quoted in Mirowski, 2002, p. 146 fn. 49)

Precision and rigor in the statement of premises and proofs can be expected to have a sobering effect on our beliefs about the reach of the propositions we have developed. (Hutchison, 1960, p. xxiii)

There has been no rigor and precision in the definition of income and profit for more than two centuries. The reach of conventional propositions is zero. That is more than sobering.

***

To be sure, economics may perform a valuable social role without adding any significant understanding to knowledge of the economy – a “good myth,” economically speaking, can work not only in primitive tribal cultures but also in modern societies. ... Indeed, ... the religious function may have been the most important role throughout the history of modern economics since the Enlightenment. (Nelson, 2006, pp. 300-301)

Myth, well told, is still the most convincing way to explain how the world and humankind came to be in their present form. To recall, Zeus was the god of the sky and thunder. He oversaw the universe, assigned the various gods their roles, and was known for his erotic escapades. Zeus was emotional, spontaneous, and had a lot of trouble with other gods, goddesses, and humans. At Prometheus, for example, he was angry for three things: being tricked on sacrifices, stealing fire for man, and for refusing to tell him which of his children would dethrone him. To handle his problems, Zeus regularly fell back on chicanery, force, and violence (for an overview, see Wikipedia URL). Since antiquity, everybody "understands" Zeus, and he easily provokes like/dislike. Purified from all religious connotations, Greek myth is the stuff psychology, literature, soap operas, blogs, newspapers, and history are made of to this day. Let us call this all-embracing panorama of human motives and actions the gossip model of the world. It affords immediate access to subjective understanding, which, however, is barely distinguishable from a projection. With the gossip model, everything and its opposite can be explained. That makes it both popular and preposterous. Utility maximization is the economist's reduced version of the gossip model. Science started the very day when Greek philosophers threw the gossip model out of the window.

... observed acts of behavior allow an indefinite number of interpretations regarding the plans from which they are assumed to have sprung. (Morgenstern, 1941, p. 381)

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)

***

Economics as a discipline faces the following alternative. If it wants to be accepted as a science, it has to stick to the rules. The rules are quite simple: material and logical consistency. No excuses (complexity, Duhem-Quine, etc.). If economics cannot deliver on principle, it has to join the Geisteswissenschaften/Humanities and try its luck with Verstehen/understanding. Feynman defended the standards in quite certain terms: "You don't like it? Go somewhere else!" Since J. S. Mill spoke — excusatory — of Political Economy as an inexact and separate science, economists attempted to water down the rules and to tergiversate material or logical consistency or both. Lower standards or Verstehen can, by its very nature, not lead to much more than a gossip model of the world. Homo oeconomicus may be replaced by the far more realistic homo socialis; this improvement, though, still remains within the confines of the gossip model and is not sufficient for a better understanding of how the economy works. No behavioral approach, whatever, is adequate. It is not a question of realism; it is a question of methodology. There is no such thing as an inexact and separate science. There is no hiding behind complexity. There is only science and non-science. The Unity of Sciences does not mean unity of science and its look-alikes.

***

The solution consists of replacing behavioral assumptions, both the sloppy and the axiomatized ones, with structural axioms. Structural axiomatization has the accessory advantage of putting off muddleheads, commonsensers, wishwashers, smatterers, storytellers, and all those "whom any discovery that brought quietus to a vexed question would inevitably vex because it would end the fun of arguing around it and about it and over it" (Peirce, 1931, 5.520). Objective/structural/systemic axiomatization strictly excludes the explanation or prediction of human behavior. Hence, there is no empty talk about it.

Filibuster economics may indeed have performed a multitude of useful social roles, but this is of no consequence for its scientific status. Social utility is not a criterion for the assessment of a theory. Sloppiness, incoherent definition, green cheese assumptionism, and self-protecting inconclusiveness are detrimental to the growth of knowledge. Social utility cannot exculpate proto-scientific garbage.

A Supreme Being would have no need for axioms, but they are often found quite useful for mere men. (Strotz, 1953, p. 390)

More specific: The rigor and objectivity of structural/systemic axiomatization is needed in order to abandon the endemic sloppiness of economic argument and finally to advance from proto-science to science.


References
Backhouse, R. E., and Medema, S. G. (2009). On the Definition of Economics. Journal of Economic Perspectives, 23(1): 221–233.
Blinder, A. S. (1987). Keynes, Lucas, and Scientific Progress. American Economic Review, 77(2): 130–136. URL
Coates, J. (2007). The Claims of Common Sense. Moore, Wittgenstein, Keynes and the Social Sciences. Cambridge, New York, etc.: Cambridge University Press.
Boland, L. A. (1992). The Principles of Economics. Some Lies My Teacher Told Me. London, New York: Routledge.
Colander, D. (1995). The Stories We Tell: A Reconstruction of AS/AD Analysis. Journal of Economic Perspectives, 9(3): 169–188. URL
Dennis, K. (1982). Economic Theory and the Problem of Translation (I). Journal of Economic Issues, 16(3): 691–712. URL
Feynman, R. P. (1992). The Character of Physical Law. London: Penguin.
Hicks, J. R. (1939). Value and Capital. Oxford: Clarendon Press, 2nd edition.
Hutchison, T.W. (1960). The Significance and Basic Postulates of Economic Theory. New York: Kelley
Keynes, J. M. (1933). Mr. Robertson on "Saving and Hoarding". Economic Journal, 43(172): 699–712. 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.
Mirowski, P. (1995). More Heat than Light. Cambridge: Cambridge University Press.
Mirowski, P. (2002). Machine Dreams. Cambridge: Cambridge University Press.
Mirowski, P. (2013). Never Let a Serious Crisis Go to Waste. London, New York: Verso.
Morgenstern, O. (1941). Professor Hicks on Value and Capital. Journal of Political Economy, 49(3): 361–393. URL
Nelson, R. H. (2006). Economics as Religion: From Samuelson to Chicago and Beyond. Pennsylvania, PA: Pennsylvania State University Press.
Peirce, C. S. (1931). Collected Papers of Charles Sanders Peirce, volume I. Cambridge: Harvard University Press. URL
Rosenberg, A. (1980). Sociobiology and the Preemption of Social Science. Oxford: Blackwell.
Rosenberg, A. (1992). Economics - Mathematical Politics or Science of Diminishing Returns? Chicago: University of Chicago Press.
Schmiechen, M. (2009). Newton’s Principia and Related ‘Principles’ Revisited, volume 1. Norderstedt: Books on Demand, 2nd edition.
Schumpeter, J. A. (1994). History of Economic Analysis. New York: Oxford University Press.
Strotz, R. H. (1953). Cardinal Utility. American Economic Review, 43(2): 384–397. URL
Suppes, P. (1968). The Desirability of Formalization in Science. Journal of Philosophy, 65(20): 651–664.

Related Confused Confusers: How to Stop Thinking Like an Economist and Start Thinking Like a Scientist URL


© 2013 EKH, except original quotes

Storytelling vs Theory = Politics vs Science

Comment on Thomas Palley on ‘Inequality, the financial crisis and stagnation: competing stories and why they matter’

Blog-Reference

You say: “Theory shapes the way we understand the world, thereby shaping how we respond to it.” True, but you say also: “Theory is a form of storytelling, and the stories we tell shape our understanding of the economy and economic policy. That means the stories we tell are critical.” (p.1)

To equate theory with storytelling is a gross methodological blunder because theory belongs to the realm of science while storytelling belongs to the realm of politics. This distinction is of utmost importance. The main differences are:
(i) The goal of political economics is to push an agenda, the goal of theoretical economics is to explain how the actual economy works.
(ii) In political economics anything goes; in theoretical economics, scientific standards are observed.

Theoretical economics has to be judged according to the criteria true/false and nothing else. Scientific truth is well-defined as formal and material consistency (Klant, 1994, p. 31).

The fact of the matter is that economists have failed for more than 200 years to develop the true theory. What we have is Walrasianism, Keynesianism, Marxianism, and Austrianism. Neither of these approaches satisfies the scientific criteria of formal and material consistency. So ALL have to be abandoned: what economics urgently needs is a Paradigm Shift.

The fatal mistake/error of Heterodoxy is to argue that Orthodoxy tells a biased story and then replace it with another biased story. This is NOT a Paradigm Shift. A Paradigm Shift replaces ALL stories with the scientifically true theory. In marked contrast to politics, science is neither capitalist-friendly nor worker-friendly but simply true.

Storytelling is ultimately a means to a political end. What looks like theory lacks the essential properties of formal and material consistency. What looks like science is cargo cult science (Feynman). The outer features of science are cultivated in order to signal credibility and authority.

Accordingly, you argue: “Given the vital significance of ‘getting the story right’, progressive action aimed at policy change must be accompanied by vigorous efforts to challenge and replace the mainstream economic story.” (p. 16) Thus, your agenda determines your story.

What you call a ‘purely analytical exercise’ in distribution theory fails. It is indeed true that Orthodoxy in both the Chicago and the MIT variant does not satisfy scientific criteria by any stretch of the imagination, yet, the problem of Post Keynesianism is that it is also defective (2011). The common error/mistake is located in profit theory and because of this, the whole neoclassical and Post Keynesian distribution theory falls apart (2014).

Because both orthodox and heterodox economists lack the true theory all their arguments and policy proposals are freely floating in midair. Whatever is uttered about economic policy has no sound scientific foundations and is not different from reading poultry entrails.

The answer to the cargo cult science of Chicago and MIT is to expel both from the sciences. To combat malpractice with just another political bias is not such a good idea.

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). The Profit Theory is False Since Adam Smith. What About the True Distribution Theory? SSRN Working Paper Series, 2511741: 1–23. URL
Klant, J. J. (1994). The Nature of Economic Thought. Aldershot, Brookfield: Edward Elgar.

***

Wikimedia AXEC75

Occasional Xs: The role of narratives and storytelling in economics (VI)

 

#Economics#AllYouNeedToKnow

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 wrong.…

— AXEC (@EgmontHandtke) May 13, 2025

The end of storytelling

Comment on Simon Wren-Lewis on ‘The F story about the Great Inflation’

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, 1991, p. 30)

Because economists have been aware at least since the 1930s that they lack the true theory they let a change of rules happen. The true/false criterion of science vanished and had been replaced by the first rule of communication: “A good principles of economics teacher is a good storyteller.” (Colander, 1995, p. 169)

This is how economics eventually became a sitcom or proto-scientific shitshow.

This blog makes no exception. Already the third sentence of the intro is incorrect. You write: “After Phillips discovered his curve, which relates inflation to unemployment, ...” It has to be emphasized that Phillips ‘had not made an explicit link between inflation and unemployment’ (Ormerod, 1994, p. 120).

The original curve was bastardized by Samuelson with the formula: rate of inflation = rate of wage growth minus the rate of productivity growth (Samuelson and Nordhaus, 1998, p. 590). This ‘important piece of inflation arithmetic’ was fallacious but this did not prevent the acceptance of the Samuelson/Solow ‘Phillips’ curve. Phillips is said to have remarked ‘if I had known what they would do with the graph I would never have drawn it.’ (Quiggin, 2010, p. 91).

The storytelling then continued with Friedman and the vacuous filibuster about expectations and the natural rate of unemployment.

The axiomatically correct Phillips curve is shown on Wikimedia AXEC36:

This testable structural curve asserts inter alia (2012, Sec. 7):
• An increase in the average wage rate leads to a lower unemployment rate. This is in accordance with the correlation of Phillips's original study, but clearly against conventional labor market wisdom (2015).
• A price increase is conducive to lower employment. This is in accordance with the stagflation of the 1970s.

The structural Phillips curve contains vastly more variables than the methodologically inferior bastard versions. All that has to be done is to stop storytelling and to check how data and formulas fit together. Time to make economics a science.

Egmont Kakarot-Handtke


References
Colander, D. (1995). The Stories We Tell: A Reconstruction of AS/AD Analysis. Journal of Economic Perspectives, 9(3): 169–188. URL
Kakarot-Handtke, E. (2012). Keynes’s Employment Function and the Gratuitous Phillips Curve Disaster. SSRN Working Paper Series, 2130421: 1–19. URL
Kakarot-Handtke, E. (2015). Major Defects of the Market Economy. SSRN Working Paper Series, 2624350: 1–40. URL
Ormerod, P. (1994). The Death of Economics. London: Faber and Faber.
Quiggin, J. (2010). Zombie Economics. How Dead Ideas Still Walk Among Us. Princeton, Oxford: Princeton University Press.
Samuelson, P. A., and Nordhaus, W. D. (1998). Economics. Boston, MA, Burr Ridge, etc.: Irwin, McGraw-Hill, 16th edition.
Stigum, B. P. (1991). Toward a Formal Science of Economics: The Axiomatic Method in Economics and Econometrics. Cambridge: MIT Press.

Occasional Xs: Another example of economic storytelling/filibuster/blather (II)

 

#Econ#AllYouNeedToKnow

von Mises never understood #Profit and how the economy works. Austrianism has been scientifically worthless from the get-go. Science is about true/false and NOT about mustaches. Economists have finally arrived at the IQ distribution's zero lower bound. pic.twitter.com/RRd28FxKvE

— E.K-H (@AXECorg) January 23, 2025