Saturday, January 14, 2017

The Economist —To be relevant, economists need to take politics into account

Like I have been saying.

Some people are now waking up to this. The Economist article is typically lame though — a day late and a dollar short. At least they are acknowledging the relevance of politics to economics.

The Economist
To be relevant, economists need to take politics into account
ht/ Lambert Strether at Naked Capitalism


Noah Way said...

To be relavent, the dismal science needs to fully understand and incorporate sociopathic behavior.

Bob said...

Economists have been taking bribes for years. It doesn't get more political or relevant than that.

AXEC / E.K-H said...

The political corruption of economics
Comment on The Economist on ‘To be relevant, economists need to take politics into account’

Most economists have no proper understanding of what economics is all about. Therefore it is, first of all, of utmost importance to distinguish between political 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.

Theoretical economics has to be judged according to the criteria true/false and NOTHING else. The history of political economics from Adam Smith to Keynes and beyond can be summarized as utter scientific failure. A closer look at the history of economic thought shows that theoretical economics had been hijacked from the very beginning by the agenda pushers of political economics. Smith and Ricardo fought for liberalism, Marx and Keynes were agenda pushers, so were Hayek and Friedman, and so are Krugman and Varoufakis.

Political economics has produced NOTHING of scientific value in the last 200+ years. The four majors approaches — Walrasianism, Keynesianism, Marxianism, Austrianism — are mutually contradictory and materially/formally inconsistent. Economics is a failed science.

Neither the orthodox defense of the market economy nor the heterodox critique can be taken seriously. Since the founding fathers economists claim to do science but they have never risen above the level of opinion, belief, wish-wash, storytelling, soap box propaganda, and sitcom gossip.#1

Keynes is a case in point. His political critique of Laissez-faire was spot on. But Keynes himself was a political economist and an incompetent scientist. He did not even get the elementary conceptual foundations of economics right.#2

Political economists of all stripes are characterized by four common traits: (i) They are mainly occupied with sociology, psychology, political science, social philosophy, history, anthropology, Darwinism/evolution theory, etcetera. That is, they miss the essentials of economics proper, viz. the SYSTEMIC properties of the monetary economy. (ii) They use theoretical economics to advance their agenda. By this, they ABUSE science unknowingly or knowingly. (iii) As far as they have tried to underpin their agendas theoretically it can be proved in each case that their approaches lack formal and material consistency. (iv) They have NO idea about how the actual economy works because they lack the correct profit theory since Adam Smith/Karl Marx.#3

It is not decisive what the political agenda is: ALL of political economics is what Feynman called cargo cult science or what we call today fake science.#4 Economists do not become relevant when they do political economics they only become USEFUL IDIOTS. The criterion of science has always been and still is true/false. Politics only corrupts science. Political economics is scientific crap.

Egmont Kakarot-Handtke

#1 See ‘Americans believe crazy things, yet they are outdone by economists’
#2 See ‘How Keynes got macro wrong and Allais got it right’
#3 See ‘The distribution theory is false because the profit theory is false’
#4 See ‘FakeNews, FakeScience: economics in the information age’