The title might better read, Why orthodox economics is an impossible science. While so-called orthodox economics fits this bill, it doesn't necessarily apply to so-called heterodox schools like MMT.
One of the characteristic criticisms of MMY economists by so-called orthodox economists (like Paul Krugman) is "Where's your model?" For neoclassical" economists, who assume formalization as a sine qua non of doing economics, required methodological assumptions include "equilibrium and maximization" as Krugman is fond of saying.
The post linked to below objects that this not even possible given the attendant conditions, other than as a "toy model" serving as "a teaching tool." Such models cannot underlie a casual explanation of real change in the world of events that economists then assume themselves perfectly capable of not only explaining but also prescribing. Their results speak for themselves.
Instead, MMT adopts an historical and institutional approach which recognizes economics as a study of events from particular perspectives that are conditioned by both subjective and objective considerations instead of presuming that economics is based on invariant principles similar to the natural sciences.
Economics is unlike physics and chemistry as natural sciences but it partakes of the life sciences including their extensions as the social sciences. While these "science" qualify as "science" owing to their assumption of naturalism and use the scientific method, the application of method is determined by the type of subject matter. The life and social science differ from the natural sciences in approach in that they types of data they study and seek to explain are quite different from the phenomena studied by natural sciences.
A good example of this is an unsourced quote widely attributed to Richard Feynman, "Imagine how much harder physics would be if electrons had feelings." However, the issue goes much deeper institutionally since economics and finance are joined at the hip, economic data being reported not only in real terms but also nominal with the nominal taking precedence since monetary value in exchange is the basis of reporting about economic data. As a result, conditions that affect this supervene in economics, as MMT economists recognize. These conditions are historical and institutional.
Lars P. Syll’s BlogWhy economics is an impossible science
Lars P. Syll | Professor, Malmo University
6 comments:
Penn does it as Science:
https://undergrad.wharton.upenn.edu/flexible-curriculum/
Maybe he should transfer to Penn…
The scientific method can be applied to economics.
Or urban transport:
These Stupid Trucks are Literally Killing Us
https://youtu.be/jN7mSXMruEo
"Imagine how much harder physics would be if electrons had feelings."
They kinda do. It's called Quantum Mechanics. The subatomic world is shy. It changes behavior when observed. That makes everything just a probability.
The future of economics may lie in String Theory. Plenty of math to cover up an agenda.
“ That makes everything just a probability.”
We’ve had a recession when the yield curve inverts 99% of time…
Comment on Lars Syll on 'Why economics is an impossible science'
Economics claims to be science but is NOT. The major approaches (Walrasianism. Keynesianism, Marxianism, Austrianism, and their derivatives) are axiomatically false & materially/formally inconsistent & ALL got profit wrong. So, economic policy guidance has never had valid scientific foundations. Because of their scientific incompetence, economists are a clear and present danger to their fellow citizens.#1
Lars Syll concedes that so-called orthodox economics is a failed/fake science. As a well-established scientific loser, he argues with a worn-out cliche: “Economics is unlike physics and chemistry as natural sciences but it partakes of the life sciences including their extensions as the social sciences. While these "science" qualify as "science" owing to their assumption of naturalism and use the scientific method, the application of method is determined by the type of subject matter.”#2
Lars Syll, however, claims that the characterization as a failed/fake science “doesn't necessarily apply to so-called heterodox schools like MMT”.
Why?
“Instead, MMT adopts an historical and institutional approach which recognizes economics as a study of events from particular perspectives that are conditioned by both subjective and objective considerations instead of presuming that economics is based on invariant principles similar to the natural sciences.”
First methodological mistake: Economics is about how the economy works. It is a systems science and NOT a social science i.e. NOT about Human Nature / Motives / Behavior / Preferences / Choice / Incentives / Expectations etc. Psycho-social economics has always been proto-scientific garbage.#3 It is only good for political blathering/agenda pushing.
Second methodological mistake: MMT gets the objective side of the economic system wrong. More precisely, MMTers are too stupid for the elementary algebra that is necessary to determine macroeconomic profit. Clearly, when the foundational concept of the subject matter ― profit ― is provably false, the whole analytical superstructure is scientifically worthless.#4
There is no way out. Economics in all its manifestations is a failed/fake science. MMT is no exception.
Egmont Kakarot-Handtke
#1 Iatrogenic economics
https://axecorg.blogspot.com/2016/06/iatrogenic-economics.html
#2 This is what Feynman called cargo cult science. Cross-references Proto-Science/Cargo Cult Science/Fake Science
https://axecorg.blogspot.com/2015/08/proto-science-cross-references.html
#3 Cross-references Not a Science of Behavior
https://axecorg.blogspot.com/2015/12/behavior-cross-references.html
#4 Cross-references Profit
https://axecorg.blogspot.com/2015/03/profit-cross-references.html
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