Thursday, July 19, 2018
Lars P. Syll — What’s the use of economics?
The economists' dilemma: If economic methodology doesn't base itself on assumptions common to the hard sciences, like homogeneity, additivity, transitivity, etc, then it won't be considered a real science. On the other hand, if economists ignore reflexivity, downward causation in systems, synergy, and other factors that affect individuals who are socially embedded, its output will not fit reality and it will appear lack empirical foundation, not to mention disappointing raised expectations resulting from the claim of being a "hard" science distinct from "soft" science like social science.
Maybe quit being hypocritical and 'fess up to the actual situation?
Lars P. Syll’s Blog
What’s the use of economics?
Lars P. Syll | Professor, Malmo University
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What’s the use of economists?
Comment on Lars Syll on ‘What’s the use of economics?’
Lars Syll summarizes: “Much work done in mainstream theoretical economics is devoid of any explanatory interest. And not only that. Seen from a strictly scientific point of view, it has no value at all. It is a waste of time.”
True. The state of economics is this: theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers). Political economics has produced NOTHING of scientific value in the last 200+ years.
Economics, though, is not alone orthodox economics but also heterodox economics. Fact is that Heterodoxy has been complicit in the failure. 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. As a result of the utter scientific incompetence of the representative economist, what has been achieved is the pluralism of provably false theories.#1, #2
The simple fact of the matter is that economists ― orthodox or heterodox do not matter ― are either stupid or corrupt or both. Take note:
(i) Economics is not a science but what Feynman called a cargo cult science.
(ii) To maintain that economics is a social science is the foundational blunder. Economics is a system science.#3
(iii) Economists have not figured out to this day how the price- and profit mechanism works.#4
(iv) Economists have not even figured out what profit is.#5
(v) Economists are too stupid for the elementary mathematics of macroeconomic accounting.#6
(vi) Walrasian Micro and Keynesian Macro are both built upon false premises/axioms.#7 Because of this, the whole analytical superstructures are scientifically worthless. The same holds for Marxianism and Austrianism.
(vii) Economic policy guidance has no sound scientific foundations since Adam Smith/Karl Marx.
(viii) Economists have been political agenda pushers/useful political idiots from day one onward.
Economists are storytellers. Economics is a failed science. All microfounded (Walrasian) and macrofounded (Keynesian) models are provably false. Economists do not know how the economy works. Economics is a cargo cult science. The ‘Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel’ is a fraud. Heterodoxy has always been complicit in the fraud.
What’s the use of scientifically incompetent economists? Ask those who use them.
Egmont Kakarot-Handtke
#1 Economics: a science without scientists
https://axecorg.blogspot.com/2016/10/economics-science-without-scientists.html
#2 And the answer is NCND ― economics after 200+ years of Glomarization
https://axecorg.blogspot.com/2018/07/and-answer-is-ncnd-economics-after-200.html
#3 For details of the big picture see cross-references Not a Science of Behavior
http://axecorg.blogspot.com/2015/12/behavior-cross-references.html
#4 For details of the big picture see cross-references Failed/Fake Scientists
http://axecorg.blogspot.com/2015/11/failedfake-scientists-cross-references.html
#5 Profit: after 200+ years, economists are still in the woods
http://axecorg.blogspot.com/2018/06/profit-after-200-years-economists-are.html
#6 Wikipedia and the promotion of economists’ idiotism
https://axecorg.blogspot.com/2018/07/wikipedia-and-promotion-of-economists.html
#7 The miracle cure of economists’ micro-macro schizo
http://axecorg.blogspot.com/2018/07/the-miracle-cure-of-economists-micro.html
“Seen from a strictly scientific point of view, it has no value at all.”
That’s because 99% of Econ degrees are Art degrees...
That’s because 99% of Econ degrees are Art degrees...
Or because the content of the subject matter is not particularly suited to the application of scientific method.
Economics is neither pure science, e.g., no framework for generating competing theories (amateur economist and real physicist Jason Smith), nor an applied science, since there is no science there to apply.
Without operational definitions of variables that precisely define boundary conditions in terms of specific criteria that enable precise measurement and doing the measurement, it's speculation, regardless of formalization.
The chief aim of doing science is providing causal explanation that is data-based rather than being either storytelling or speculation.
The level of scientific method that can be applied to the content is limited in comparison to natural science and even life science.
The foundation of modern science is atomic theory. Physics has yet to generate a theory that unities the four known fundamental forces. Chemistry is based on the atomic theory since a great deal of basic chemistry is now molecular. Life science is increasingly seen as resting on biophysics and biochemistry, that is, as also have an atomic basis. Psychology is increasingly becoming cognitive science based on brain behavior at the atomistic level, e.g., molecular. But psychology is only a proton-science at this point and it's claim to be scientific rests largely on application of stochastic methods.
Some economists and social scientists try to mimic these sciences by assuming an atomistic "nature" of humans, e.g., homo economicus. Thus far, it is impossible to ground the human individuals as socially embedded in an atomistic theory that connects with physics and chemistry through biology.
So their assumptions are speculative being neither consilient with science as a whole nor data-based in sense of data as carefully defined in the scientific world.
That is doing philosophy.
This is not for lack of training. Lots of people have tried to make economics a science as a causal explanation formalized as a quantitative theory that can be tested by generating hypotheses that can be tested by the experimental method of science.
And when economists get dogmatic about economics, then they resemble priests more than philosophers.
This is not a matter of lack of being trained. The subject matter of a discipline has to be approached in terms of the limitations it imposes.
Calling something a science doesn't make it so. Asserting that proposition is true doesn't make it true, either.
I'd first ask what's the use of the Fundamental Accounting Equation, Assets = Equity + Liabilities, with Liabilities that are largely a sham?
Yet that's exactly the situation with banks, credit unions and other depository institutions wrt the non-bank private sector since the non-bank private sector may not even use, except for mere physical fiat, aka "cash" what the banks are liable for, which is the Nation's fiat.
And we wonder why the banks, etc are a perennial source of trouble?
“Economics is neither pure science, e.g., no framework for generating competing theories (amateur economist and real physicist Jason Smith), nor an applied science, since there is no science there to apply.”
It can still be taught via a science degree methodology... regardless of terminology...
Tom the terminology is tertiary to the methodology... seems like you are wrapped around the wheel on the terminology... I’m not talking about the terminology I’m talking about the methodology of the teaching...
These morons don’t tumble out of the womb saying “we’re out of money!” they are taught that via an Art Degree methodology.... a proper Science methodology would reveal that theory to be false and it would be immediately discarded...
“the content of the subject matter is not particularly suited to the application of scientific method.“
That’s not what Wharton believes they teach Econ via a Science Degree program... they award a BS not a BA...
Any material discipline is ideally taught via a science methodology...
Tom you are making the words more important than the actual human actions...
“And we wonder why the banks, etc are a perennial source of trouble?”
LOL there hasn’t been any trouble with them since 2009 or so... going on 10 years...
In fact they are kicking ass and are over capitalized by couple 100 billion and quarterly profits are up over 30%....
https://undergrad.wharton.upenn.edu/academics/bs-in-economics/
“What’s the difference between a BS in Economics at Wharton and BA major in economics in a liberal arts program? We get this question all the time, and the answer comes down to curriculum and teaching and learning methods.
(Yo: METHODOLOGY....)
TEACHING & LEARNING METHODS
Wharton classes focus on hands-on problem solving, using teaching methods such as case studies, negotiations, group work, and simulations in addition to traditional lectures. Students learn by starting with a problem or concrete example. After fully understanding the problem, they look for solutions and then begin to examine theories to see how they might apply.
In a liberal arts setting, students often learn by starting with a theory or abstract idea. After fully understanding the theory, they then look for problems to understand how the theory applies.“
Just start teaching the kids via this type of Science methodology that Wharton is using exclusively and 75% of this moron fest will be gone in 5-10 years.... don’t have to do anything else...
Tom you are making the words more important than the actual human actions..
That is what I am accusing you of doing.
For example, a BS or BA is nothing but a label. The test is the curriculum that students pursue.
It also have to relevant to the case.
Even citing the Wharton curriculum relative to DJT is not indicative unless it is a citation of the curriculum during the time he was matriculating.
Schools change degree labels and curriculum requirements and offering all the time.
LOL there hasn’t been any trouble with them since 2009 or so... going on 10 years...
Like Wells Fargo?
Come on.
Just start teaching the kids via this type of Science methodology that Wharton is using exclusively and 75% of this moron fest will be gone in 5-10 years.... don’t have to do anything else...
So you are saying that DJT understands economics as a science?
Not by the advisors he has appointed, who are all clueless "artists."
He just said that the dollar is rising because the Fed raised rates, and he wants them to quit it, after all he has done for the economy. I kid you not.
Clueless.
Tom the terminology is tertiary to the methodology... seems like you are wrapped around the wheel on the terminology... I’m not talking about the terminology I’m talking about the methodology of the teaching...
So you accept non-deterministic stochastic methods and simulations as part of "science" in your view? Previously, you said you were a determinist and non-deterministic methods are "arts," IIRC.
That’s not what Wharton believes they teach Econ via a Science Degree program... they award a BS not a BA...
Well, plenty of schools give a BS in science and most economists with terminal degrees consider themselves scientist doing real science as much as physicists.
Putting a label on something means nothing, as you say. Look at the behavior.
Well, there is a whole lot of controversy over the behaviors that constitute necessary conditions for doing science and I have already described these conditions.
Business schools use scientific method to some degree, but they don't teach science in the same sense as departments that teach theoretical science and the application of theoretical science as engineering and medicine, for example. Case method is not theoretical science or its application in engineering.
Matt, I think you might be on more solid grounding arguing about rigor in training. In all disciplines there are various degrees of rigor in training, which is often based on the level of students they get to select. The "best" school are able to select the top students and can engage in a much higher degree of rigor than lower level schools that get the residual.
This is true in academic subjects, engineering, law, business, etc. These people are the best selectively, are the best trained, and occupy the top positions in their career fields.
Now it may be and often is true that people are selected to for jobs for which they have not been adequately trained even though they are trained rigorously in their field. Asking a lawyer to do the work of an engineer isn't likely to turn out well and vice versa.
The is a an issue in a liberal democracy where political selection is based on popularity rather than competence.
Conversely, China 's traditional system (Mandarinism) is based on meritocracy. T his is A big reason that China is pulling ahead. This system is curiously similar to Western militaries and corporations but not politics and therefore not government either, except at the level of the civil service.
The reason that Western nations work with the governments they have is pretty much owing to the bureaucracy that is presided over by political appointees but functions seamlessly across administrations, owing to the continuity and expertise of the civil service.
Western countries do have top schools that train policy types rigorously. But there is as yet no policy science, although it is so labeled. But it is clear from the outcome that it is more craft than science, like business.
Very often "successful" people are just lucky, in that they can't repeat their successful record with any regularity.
Engineers don't get lucky building bridges that don't collapse.
Well I wouldn’t put correct knowledge of numismatic system operations in the category of “policy science”... it’s technical... it’s ideally taught via a pure science methodology...
Aristotle said that noumisa was man-made. Actually, noumisma falls under custom and law, which contemporary lawyers assert, especially those that understand MMT.
Noumisa is not generated naturally but by institutional arrangements that are relative to the zone in which a form of noumisma is used.
Conversely theoretical science is about causal explanation of the natural world, and applied science, such as engineering and medicine, is use of this theoretical knowledge practically to achieve results by harnessing causes.
They’re like measurement systems imo Tom...
The unit of account is established by law, as well as accounting procedure and standards. Not scientific.
LOL there hasn’t been any trouble with them since 2009 or so... going on 10 years...
In fact they are kicking ass and are over capitalized by couple 100 billion and quarterly profits are up over 30%.... Franko
perennial meaning: 1. lasting a long time, or happening repeatedly or all the time: 2. a plant that lives for more than two years. from https://dictionary.cambridge.org/us/dictionary/english/perennial [bold added]
Not that the damage the banks do is limited to themselves nor does not occur even while the banks prosper*.
“As a partridge that hatches eggs which it has not laid, so is he who makes a fortune, but unjustly; in the midst of his days it will forsake him, and in the end he will be a fool.” Jeremiah 17:11
Jeremiah 17:11 sounds like a reoccurring story with the banks and bankers to those who know a little history ...
*e.g. the automation of the public's jobs away with what is, in essence due to government privilege, the public's credit but for private gain.
“The unit of account is established by law, as well as accounting procedure and standards. Not scientific.“
That’s like saying aviation isn’t technical because it is legally governed by the FAA...
"LOL there hasn’t been any trouble with them since 2009 or so... going on 10 years...
Like Wells Fargo?"
Simple fraud Tom... hang the perps on a cross and move on...
there has been no systemic issues now going on 10 years...
there has been under-performance yes (CB asset purchases limiting bank risk assets) but no systemic issues...
Andrew Anderson
You say: “I’d first ask what’s the use of the Fundamental Accounting Equation, Assets=Equity+Liabilities, with Liabilities that are largely a sham?”
The Fundamental Accounting Equation Assets=Equity+Liabilities is methodological garbage that proves only one thing: economists are too stupid for the elementary logic/mathematics that underlies macroeconomic accounting. The formally correct equation reads Equity≡Assets−Liabilities.#1
For 200+ years, economists do not understand what science is all about and what the subject matter of economics is. This includes Orthodoxy, Heterodoxy, Walrasianism, Keynesianism, Marxianism, Austrianism, MMTers, Lars Syll, Tom Hickey, Matt Franko and you.
Egmont Kakarot-Handtke
#1 Wikipedia and the promotion of economists’ idiotism (II)
https://axecorg.blogspot.com/2018/07/wikipedia-and-promotion-of-economists.html
Egmont what discipline were you trained in and how?
What are your technical qualifications?
Or did you roll out of the womb already thinking of your illustrious Accounting equation by random chance mutation?
Matt Franko
What’s the use of economists?
It would certainly be a good thing if economists could increase scientific knowledge about how the monetary economy works. They have done nothing of the sort in the last 200+ years.
Does Tom Hickey’s and Matt Franko’s blather about methodology and the curriculum at Wharton and elsewhere contribute to anything that is of interest to anybody?
No, not at all, as far as scientific knowledge is concerned. But to filibuster about God, his wife, his poor qualification, and the rest of the world is a tried and tested method to distract from the point at issue. The point at issue is that MMTers are failed/fake scientists and that MMT is (i) proto-scientific garbage, and (ii), a political fraud.
While economists are useless for science, even the dumbest moron is useful as a sand sack in political warfare.
Egmont Kakarot-Handtke
That’s like saying aviation isn’t technical because it is legally governed by the FAA..
Poor comparison.
Aviation is partly regulated legally but also partly based on the laws of nature used in aeronautical engineering.
This is not the cause with either the monetary system, which is a human construct established in custom an law, and, a fortiori, accounting as the constructed procedure fo keeping records in a unit of account. There are no laws of nature that apply.
Simple fraud Tom... hang the perps on a cross and move on...
there has been no systemic issues now going on 10 years...
there has been under-performance yes (CB asset purchases limiting bank risk assets) but no systemic issues...
That's not what Bill Black has documented.
Maybe you could debate him on this.
Egmont your comments wrt “science” have no value if you are not trained in science...
Tom his whole “control fraud!” schtick is textbook art process where you come up with the theory FIRST and THEN look for situation to back fit it...
The Western liberal tradition is about replacing theology and philosophy with science as the arbiter of knowledge, with science being based on the assumption of naturalism instead of supernaturalism. The residual is belief and opinion.
Naturalism holds that everything about the universe that can be known scientifically is based on applying reason to observation in formal quantitative models that depend measurement.
This knowledge is express in scientific theories that provide causal explanations of natural events. When theory is well-established by experiments, the result of which are reputable, the causes discovered are called "laws of nature."
The sciences have a lot of other implications and produce byproduct through their application as technology, but the purpose of science is knowledge discovery. For example, engineering is not a scientific discipline. Engineering is a set of methods applicable to different subject matter to yield desired output based on applying scientific method along with technical methods and instruments.
The residual after the application of scientific inquiry to natural phenomena and events is human constructs, and these are to be dealt with using operational analysis. This is not part of science, since it doesn't involve causal explanation based on laws of nature discoverable through scientific method.
Nevertheless rigorous methodology can be developed to deal with this large and important area, for example, legal theory and the study of law. There is a legal theory based on natural law, but very few people today think that natural law in this sense is equitable with the laws of nature that are the result of scientific discovery. Many more view the natural law theory as the residue of medieval thought, where the concept was a key aspect of rationalizing theology.
Methods, training, notations, and the like are used in scientific method, operational analysis and other disciplines that involve rigor.
Scientific method, training, are not scientific disciplines, nor is logic or math. These are methods and instruments that are used in scientific disciplines, protocol-scientific disciplines, quasi-scientific disciplines and also pseudoscience, which narrative or speculation dressed up to look like a scientific endeavor. They are used in other disciplines as well, without this application constituting a scientific discipline as a consequence, since key criteria in the definition of "scientific discipline" are not met.
This is discussed and argued in philosophy of science, philosophy of logic, and philosophy of math, for example. There is a sizable body of literature in each of these fields, and abundant controversy, too.
What I stated in summary above is therefore an attempt to summarize the general attitude rather than deal with the details of the controversies. There are those that argue, for example, that science should include supernaturalism in addition to naturalism, but that is a minority view.
Tom his whole “control fraud!” schtick is textbook art process where you come up with the theory FIRST and THEN look for situation to back fit it...
I'm waiting for you to debate Bill Black on that.
There was a constellation of causal factors and attendant conditions that came to together to produce a systemic crisis.
There is a hierarchy of causes from root causes at the foundation to the attendant conditions.
I am not aware of any of the institutions involved that conducted an RCA.
Being political, neither did Congress.
Neither did the regulators or the central banks.
At least, if anyone did they did not reveal in publicly and kept any changes make private.
I conclude nothing was done analytically or by way of addressing the issues other than superficially for cosmetic purposes.
there has been under-performance yes (CB asset purchases limiting bank risk assets) but no systemic issues... Franko
There's no doubt that systemic risk for the private credit cartel AS A WHOLE can be entirely eliminated via enough government privilege* so that the systematic looting of the poorer by the richer can continue - until it can't and Divine Judgement ensues.
Read the Old Testament, Franko, for what God thinks about oppression of the poor and what He has done about it in the past.
*e.g. Warren Mosler: Proposals for the Treasury, the Federal Reserve, the FDIC, and the Banking System
To follow up on that, imputation of a single cause or even a single root cause appears to be simplistic. A lot of factors came together at a critical point to generate the crisis.
Only in very simple situations is there a single causal factor. Even in science and engineering, many functions have multiple independent variables, for example. Identifying the appropriate variables is part of the craft of doing science and engineering.
Oversimplifying and overgeneralization are two big reasons from analytical failure.
Preference for a single cause is a cognitive bias.
Operational analysis using methods like RCA is necessary to avoid it.
The first step is discovery but putting everything relevant into the mix before performing analysis on it.
Divergent thinking before convergent thinking.
Tom, looks like your boy there is a Rossophobe or maybe needs some information on the dialectic method:
http://neweconomicperspectives.org/2018/07/the-three-impossible-things-trumps-base-must-believe-before-breakfast.html
Matt Franko
Questions for Matt Franko and other certified cargo cult scientist.
From the axiomatically correct Profit Law for the open economy with government and profit distribution follows the AXEC balances equation (i) (I−S)+(G−T)+(X−M)−(Q−Yd)=0#1 which compares directly to the MMT balances equation (ii) (I−S)+(G−T)+(X−M)=0.#2
(a) Which of the equations satisfies the scientific criteria of material and formal consistency?
(b) Why do economists/mathematicians with a university training not know the correct answer?#3
(c) How could it happen that academics propagate a provably false balances equation in their seminars and in public?
Egmont Kakarot-Handtke
#1 Wikimedia, Profit Law and Balances Equation
https://commons.wikimedia.org/wiki/File:AXEC143.png
#2 Down with idiocy!
https://axecorg.blogspot.com/2017/12/down-with-idiocy.html
#3 Truth by definition? The Profit Theory is axiomatically false for 200+ years
https://axecorg.blogspot.com/2018/07/truth-by-definition-profit-theory-is.html
Bill Black is a financial forensics expert, so his legal and operational analysis has extremely high relevance for analyzing operational crises from that perspective, as well as examining regulatory failure, potential issues owing to arrangements and behaviors, etc.
His opinions regarding political matters are his personal views. He has no special expertise there. Nor does he have an inside track as far as I know.
Bill Black gives himself away when he refers to the banks as "our banks" and, while concerned about how owners and management rob banks, has never expressed, to my knowledge, any concern about how banks, even when legally and "prudently" run, themselves rob and destroy, via government privilege, the rest of society.
Tom Hickey
Economics is the true theory about how the economic system works, with truth well-defined as material/formal consistency. Instead of filibustering about the right methodology it would be more effective to practically apply it and to report what new insights you have achieved. As J. S. Mill said: “Doubtless, the most effectual mode of showing how the sciences of Ethics and Politics may be constructed, would be to construct them . . . “
Instead of doing serious scientific work, you are promoting already falsified theories and scientifically incompetent economists.
A philosopher is supposed to contribute to the growth of scientific knowledge. As a soapbox philosopher (= Sophist in Plato’s terms) you are only heightening the already outsized heap of proto-scientific BS.
Egmont Kakarot-Handtke
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