Saturday, May 28, 2016

Egmont Kakarot-Handtke — Petitio principii — economists’ biggest methodological mistake

Petitio principii (appeal to principle) is also called circular reasoning, begging the question, and assuming the conclusion.
You summarize how ergodicity came to economics: “Samuelson said that we should accept the ergodic hypothesis because if a system is not ergodic you cannot treat it scientifically.” (See intro)
This is pretty much the same way how most other core concepts and foundational propositions came to economics as Mirowski has shown (1995).…
The rationale of conventional economics is taken from classical physics, where atoms act predictably in accordance with the laws of force fields in which they interact. The program of conventional economics is to construct an analog to atoms and law of force fields. Methodological individualism and rational optimization are assumed and used to construct the concept of homo economicus as an analog to the atom. Markets are "fields," where the forces are the "market forces" of supply and demand that maintain an economic system in a state of equilibrium through mutual adjustment of atoms to shifting economic conditions analogous to the ergodic operation of a physical system in classic physics that is predictable based on laws. Neat, but baseless. Mirowski lays this out in detail in his works.

AXEC: New Foundations of Economics
Petitio principii — economists’ biggest methodological mistake
Egmont Kakarot-Handtke

No comments: