An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
"most critiques of economics miss the mark. They start from the premise that economics is a systematic effort to understand the concrete social phenomena we call “the economy,” an effort that has gone wrong in some way.I don’t think that’s the right way to think about it. I think McCloskey was right to say that economics is just what economists do. Economic theory is essentially closed formal system; it’s a historical accident that there is some overlap between its technical vocabulary and the language used to describe concrete economic phenomena."this is the way I look at it: "start from the premise that economics is a systematic effort to understand the concrete phenomena we call “the economy,”ie take out the "social" in "concrete social phenoms..." this is an oxymoron...A topic is either 'concrete' (material) or it is 'social' (normative) it cant be both... if you try to mix them that is when you get this current mess in the academe of economics...
Translating what JW Mason said, "The emperor has no clothes."Jason Smith has it right in his critique of economics. Economists, like other social scientists, don't have a framework for a theory. Therefore, they can only study special cases. Business schools concluded this long ago, as did social scientists and psychologists.Samuelson also had it right that generality in science requires ergodicity.But the social sphere is non-ergodic.There are no laws of economics, however equations are dressed up.Economists as a discipline need to get a grip and go back t the drawing board in conceiving what they are about.The difference between philosophy and science is that both offer explanations but only science makes predications, which allows for hypothesis formulation and testing.Economics explanations have been tested against outcomes and found wanting. Therefore, economists either haven't hit on the correct explanatory framework yet, or there is none owing to the subject matter, which is infected with uncertainty so that one can never be sure beforehand in any case that an ensemble will be the same as a time series. Keynes pointed this out over a half-century ago and the economics profession still hasn't gotten it. If fact, Samuelson, who is largely at the bottom of this, was pot-Keynes and never met Keynes's objections.The correct approach in economics is an institutional one similar to the approach of the classical economists, using formal methods only where they apply, which is in a limited way depending on the subject matter.Presently, economics is as Michael Hudson says, "junk economics." I would call it pseudoscience. This becomes a tragedy when pseudoscience is relied on as "policy science." The result is one disaster after another, which is fine with disaster capitalism. Capitalism is not based on liberal economics being correct, but on the ownership class ending up owning everything and the rest being convinced that this is the only alternative. This is the real purpose of the pseudoscience of economics — the not-so-hidden agenda. Those who participate in this as enablers are as guilty as the perps. They all need to be marched out.
Tom I don't think we will get anywhere discussing if it's a conspiracy or simply bad thinking (probably a bit of both, depending of who is doing the talking). On this much i can agree with Matt.What we "all" (all who are not mainstream economists and are interested in this subjects) can agree is that the current pseudo/proto-scientific state of "economics" discipline must be demonstrated as such. And then come with a better replacement of it (because one of the lame excuses economists have been using lately is "but, but, we need to relay on something when politicians ask us! (even if it's a fucking fairy tale)".
Matt that's the problem, it's both. On one side you have the material relations of what an economy is: 1) production of goods and utilisation of resources in a certain context (ecosystem). There is a lower and higher bound on production and 'transactions' (not necessarily trade) subject to physical laws. Then you have 2) how those resources are organised and distributed/transferred amongst different economic actors. This is a social issue.And is easy to see if you de-anthropomorphise the discipline, there is an underlying economy in a temperate climate forest amongst the different organisms living there for example. Species amongst themselves have different ways to deal with the social issues, underlying the material ecosystem relations.the main difference with humans is that we humans, supposedly, can reflect on those relations and can change them with out own willpower. This is where it really gets messy. Because if you acknowledge this then you are not dealing with an independent system, you are dealing with a system where the observer is also an actor in the system with its own volition.We deal with social problem through political action, we deal with physical problems with engineering action. We have to clearly establish the domain of each problems and separate them extensively. The current status quo is to pretend that everything pertains to one of the domains while at the same time messing with the other domain to advance whatever agenda each party has.
What we "all" (all who are not mainstream economists and are interested in this subjects) can agree is that the current pseudo/proto-scientific state of "economics" discipline must be demonstrated as such. And then come with a better replacement of it (because one of the lame excuses economists have been using lately is "but, but, we need to relay on something when politicians ask us! (even if it's a fucking fairy tale)".This has been done in spades from a variety of angles. Some of the most succinct and devastating criticism has come from working physicist and amateur economists Jason Smith, who has shown clearly why economists are clueless about real science. They are playing in the sand lot and not in the ballpark, while pretending to be professionals. It's embarrassing. Longer and more detained take-down, read Mirowski, for example, or Marxians like Richard D. Wolff or David Ruccio, or Post Keynesians, or MMT economists.There is not way to model a real economy formally the way they are trying to do iaw Samuelson. It's not possible owing to ergodicity (Paul Davidson). They cannot define capital operationally (Cambridge Capital Controversy). Their ploy in arguing is, "What's your alternative, and "What's your model," meaning that only one method in economics is acceptable, theirs, and if you can beat them at their own game with rules of their choosing, you aren't in the game and are not worth listening to. That's not an argument. It's quasi-religious dogmatism, or politics in which raw power rules. It's anti-science.There is no sense arguing with them anymore. They need to be ridiculed for their failures and the messes they have created, not to mention serving the interests of their masters for pay and prestige. They are shills and prostitutes. Or they are morons. In either case, they should just be shown the door.continued
continuationAnd then come with a better replacement of it (because one of the lame excuses economists have been using lately is "but, but, we need to relay on something when politicians ask us! (even if it's a fucking fairy tale)"."We" have. Mosler has a slew of policy proposals, for example, and 7DIF is a short read that easily understandable.To put in simply, economics is about allocating scarce real resources. The assumptions of neoclassical economics about methodological individualism, rational optimization aka max u, general equilibrium based on spontaneous order arising from market forces is bonkers because it also assumes no asymmetries regarding power and influence, and knowledge, and it also ignores the role of finance. Conventional economics assumes that money is basically irrelevant even though allocation of resources in markets is mediated through prices. It's just totally ridiculous and only morons or people trying to dupe others by concealing foolishness behind a veil of gibberish, like medieval priests did their theology with Latin, would involve themselves in this. Ofc, some would do it just because of the money and prestige, knowing it's all BS. That's intellectual and professional prostitution.This is not just an academic issue since economics is policy science that is related to just about everything else important in one way or another. Often economics is used to justify policy choices in other areas. The issues are chiefly social and political, which involves value and norms. Moreover, societies are complex adaptive system characterized by emergence. They are also reflexive and learn through feed back. We need to engage reflexivity and the learning it makes possible, which leads to emergence that is planned rather than "spontaneous," which generally means reactive. We can either assume responsibility for creating our destiny or choose to be passive witnesses of change. The direction of change now obviates passivity as a realistic option. The wheels have been loosening from some time and could come off at any moment.It's time to say Enough already! It's going to take a lot of people screaming loud enough to be heard before the economists, geostrategists and politicians drive this train over a cliff again, which they are in the midst of doing, wrecking economies and lives, and waging war to feed the MIIC.
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