ChrisAuld
18 signs you’re reading bad criticism of economics
Chris Auld
Unlearning Economics
18 Signs Economists Haven’t the Foggiest18 signs you are not having a productive conversation about economics
Jason Smith
The Economics Debate, again and again
Dani Rodrik
5 comments:
Economics is extremely useful as a form of employment for economists.
-- John Kenneth Galbraith
'Do not let math scare you; economists use math not because they are smart, but because they are not smart enough.'
Come on, AX, EC, less maths, and more real life examples.
False models and true incompetence
Comment on Chris Auld on ‘Derek Zoolander, spherical cows, the Guardian, and econophysics’
Economics is a failed science. The four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational concept of the subject matter ― profit ― wrong.
Quite naturally, there are a lot of explanations/lame excuses swirling around.#1 One of them relates to the use of models: “Pop critics such as John Rapley should at least understand why economists use models with obviously false assumptions, they should understand why such models can be useful even they are wrong, and they should be aware that all sciences, not just economics, routinely use models with false assumptions.” (Chris Auld)
This is true but the argument is nonetheless idiotic.
A chimpanzee can solve problems. For example, he can put chairs and boxes on top of another and use a stick in order to get the bananas which the experimenter has fixed on the ceiling. Other chimpanzees then imitate the problem-solving strategy. This works fine until the problem situation changes such that the hitherto successful strategy fails and a new solution is required.
Let us call the creative problem solver scientist. Economists, unfortunately, are only imitators and look-alikes: “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.” (Feynman)
It is pretty obvious that economists fall into the category of cargo cult scientists. The problem is NOT that they apply models and abstractions and simplifications and ‘unrealistic’ assumptions and mathematics, the problem is that they do not apply these scientific tools properly. They are incompetent imitators and do not really understand what science is all about.#2
One example suffices. Walrasian Orthodoxy is defined by these verbalized 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)
The Walrasian hard core contains THREE NONENTITIES ― (HC2), (HC4), (HC5). To take equilibrium into the premises and then to establish the properties of general equilibrium is a methodological blunder that is known since antiquity as petitio principii.
The basic question of economics is whether “the existing economic system is, in any significant sense, self-adjusting.” (Keynes) One simply cannot put the unknown answer into the premises. This is a primitive methodological blunder. Because of this, ALL equilibrim models are a priori false.
All this is known since more than 2000 years: “When the premises are certain, true, and primary, and the conclusion formally follows from them, this is demonstration, and produces scientific knowledge of a thing.” (Aristotle)
But this happened in economics: orthodox microfoundations, as well as Keynesian macrofoundations, are provably false. Economics has no sound axiomatic foundations, because of this, the whole analytical superstructure is false, and because of this, economic policy guidance NEVER had sound scientific foundations.
Economists are simply scientifically incompetent.#3 Their cardinal mental deficiency is the Fallacy of Insufficient Abstraction.
Egmont Kakarot-Handtke
#1 Failed economics: The losers’ long list of lame excuses
https://axecorg.blogspot.de/2017/01/failed-economics-losers-long-list-of.html
#2 All models are false because all economists are stupid
http://axecorg.blogspot.de/2016/09/all-models-are-false-because-all.html
#3 Throw them out! Orthodox and heterodox economists are unfit for science
http://axecorg.blogspot.de/2017/12/throw-them-out-orthodox-and-heterodox.html
Again and again: economists are incompetent scientists
Comment on Dani Rodrik on ‘The Economics Debate, again and again’
Economics is a failed science. What we actually have is the pluralism of false theories/models. The four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational concept of the subject matter ― profit ― wrong.#1
The current state of economics is indefensible#2 but economists even praise it as something positive. Pluralism, to recall, is NOT the scientific ideal but merely the original state of ignorance and confusion: “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)
Science is committed to truth. The rest of human communication is blather, storytelling, propaganda, and disinformation. Economics never rose above the level of an unplausible myth.
So, no surprise, Dani Rodrik’s first two commands for economists are nothing but methodological nonsense: “1. Economics is a collection of models; cherish their diversity. 2. It’s a model, not the model.”
Since 200+ years, economists do not really understand what science is all about: “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) Because of this incurable lack of understanding, economics is what Feynman called a cargo cult science: “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.”
Economists lack the true theory. And this is rather bad because: “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) A heap of inconsistent models is no substitute for the true theory.
The lethal arguments against Orthodoxy and traditional Heterodoxy are:
• since Adam Smith/Karl Marx economics is political agenda pushing in the bluff package of science,
• the subject matter of economics is the economic system as a whole, economics is a system science and NOT a behavioral science,
• orthodox microfoundations, as well as Keynesian macrofoundations, are provably false,
• economics has no sound axiomatic foundations, because of this, the whole analytical superstructure is false, and because of this, economic policy guidance NEVER had sound scientific foundations.
Economics is a cargo cult science and economists are fake scientists. Critique of economics is a waste of time, nothing less than a paradigm shift will do.
Egmont Kakarot-Handtke
#1 Profit and the collective failure of economists
http://axecorg.blogspot.de/2015/11/profit-and-collective-failure-of.html
#2 Economics: Defending the indefensible
https://axecorg.blogspot.de/2017/12/economics-defending-indefensible.html
#3 For details of the big picture see Failed/Fake scientists
http://axecorg.blogspot.de/2015/11/failedfake-scientists-cross-references.html
Silly critique of economics: 11 signs that you are the imbecile
Comment on Chris Auld on ‘18 signs you’re reading bad criticism of economics’*
Mainstream economics/Orthodoxy faces a barrage of criticism. Most of the arguments, though, are rather silly and easy to refute by Orthodoxy. Accordingly, this type of criticism is quite welcome because in contrast to the imbecility of the criticism the absurdity of the maximization-and-equilibrium world appears in a better light. In a sense, Orthodoxy is still alive only because of silly criticism: “The enemies, on the other hand, have proved curiously ineffective and they have very often aimed their arrows at the wrong targets.” (Hahn)
The ineffective/false/silly/time-wasting arguments against Orthodoxy are:#1
1. cannot predict the future,#2
2. too much mathematics,#3
3. the assumptions/models are unrealistic,#4
4. not pluralistic,#5
5. not empirical enough,
6. justifies/encourages greed and exploitation,#6
7. should care more for the environment, We-the-People, our grandchildren,
8. should communicate better, especially with laypersons,
9. should take sides with the ninety-nine-percenters, and not with the one-percenters,#7
10. the proponents have unethical/selfish motives,
11. the proponents lack credibility.
Criticism ultimately cements only the status-quo: “The moral of the story is simply this: it takes a new theory, and not just the destructive exposure of assumptions or the collection of new facts, to beat an old theory.” (Blaug) Science is not about signs or second-guessing or interpretation or credibility or authority but alone about knowledge and material/formal proof. The only effective criticism is the paradigm shift.
Egmont Kakarot-Handtke
#1 See also Failed economics: The losers’ long list of lame excuses
https://axecorg.blogspot.de/2017/01/failed-economics-losers-long-list-of.html
#2 Scientists do NOT predict the future
https://axecorg.blogspot.de/2017/09/scientists-do-not-predict-future.html
#3 Mathiness is NOT the problem — scientific incompetence is
http://axecorg.blogspot.de/2016/04/mathiness-is-not-problem-scientific.html
#4 Lacking the Midas touch of science
http://axecorg.blogspot.de/2015/01/lacking-midas-touch-of-science.html
#5 Economics: The pluralism of false theories is over
http://axecorg.blogspot.de/2017/01/economics-pluralism-of-false-theories.html
#6 The economist as moralist
https://axecorg.blogspot.de/2017/04/the-economist-as-moralist.html
#7 The end of political economics
https://axecorg.blogspot.de/2017/06/the-end-of-political-economics.html
* 18 signs you’re reading bad criticism of economics
http://chrisauld.com/2013/10/23/18-signs-youre-reading-bad-criticism-of-economics/
18 signs you are not having a productive conversation about economics
http://informationtransfereconomics.blogspot.de/2017/12/18-signs-you-are-not-having-productive.html
18 Signs Economists Haven’t the Foggiest
https://unlearningeconomics.wordpress.com/2013/10/23/18-signs-economists-havent-the-foggiest/
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