Tuesday, July 31, 2018

Chris Dillow — Lying for Money: a review

Good read.

Stumbling and Mumbling
Lying for Money: a review
Chris Dillow | Investors Chronicle

1 comment:

AXEC / E.K-H said...

Lying for money: a generalization
Comment on Chris Dillow on ‘LYING FOR MONEY: A REVIEW’

Chris Dillow discusses Dan Davies’ history of fraud: “Dan has also a theory of fraud. Also, perhaps we can extend Dan’s work. He discusses outright criminal fraud. But there are similar types of behaviour which are legal ― such as selling snake oil in 19th century America.”

There are not only similar types of behavior which are legal but which are even honored with the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.#1

The situation of economics is this: “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)

The fact of the matter is that economists do NOT have the true theory. More precisely, economists do not know how the price- and profit mechanism works. 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. With the pluralism of provably false theories economics sits squarely at the proto-scientific level.#2

Fact is that economics claims to be a science but 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 ignore/violate scientific standards. Or, as Blaug put it, they are playing tennis with the net down. Morgenstern reminded his fellow economists back in 1941: “In economics we should strive to proceed, wherever we can, exactly according to the standards of the other, more advanced, sciences, where it is not possible, once an issue has been decided, to continue to write about it as if nothing had happened.”

Economics is scientifically unacceptable since Adam Smith/Karl Marx but all factions recycle their stuff with minor cosmetic corrections “as if nothing had happened”.#3

Economics is a failed/fake science because economists (i) are scientifically incompetent, (ii) violate scientific standards/ethics, and (iii), deceive the general public on a regular basis.#4, #5, #6

Since the founding fathers, economic policy guidance never had sound scientific foundations. To this day, economists push their respective political agendas in the bluff package of science.

Egmont Kakarot-Handtke

#1 The real problem with the economics Nobel
#2 Economics: 200+ years of scientific incompetence and fraud


#3 New Economic Thinking, or, let’s put lipstick on the dead pig

#4 The father of modern economics and his imbecile kids

#5 The Kelton-Fraud

#6 MMT: academic snake oil for the people