Blog-Reference and Blog-Reference
Personal experience makes only a tiny part of what every human knows about the world/ universe and other humans, the greater part stems from myth/religion/philosophy/ science. Myth/religion/philosophy is storytelling and does not satisfy the scientific criteria of logical and empirical consistency. Storytelling is easy, to establish consistency is hard. From the history of the last 5000 years we know that stories sell well, the absurder the better. The average person prefers belief/opinion (= doxa) to knowledge (= episteme) and thinks more about natural/supernatural persons/personifications and less about the universe and its sub-systems. Because of this, nearly 100 percent of human communication consists of gossip.
A case in point is economics. What Thomas Sargent tells his students boils down to: (i) humans respond to incentives, (ii) one cannot always get what one wants, (iii) in equilibrium economic agents are satisfied, (iv) sometimes people/governments keep their promises, sometimes not, (v) people try to get more out of the social pot than they put in, (vi) it is difficult/impossible to know other peoples’ motives/preferences and to forecast their actions. (See intro)
This is folk psychology and folk sociology — PsySoc for short. The economist Sargent tells his students how humans work but not how the economy works. The main reason is that Sargent and his fellow economists at Chicago, Berkeley, Harvard and elsewhere do not know how the economy works.
This would not be a big issue, after all, people talk most of the time about nonentities and things they know nothing about. To believe in standard economics is in no way different from the belief in the myths of ancient goat herders. The real trouble with economics begins here: “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.
The key word is science[s]. Why not simply “Bank of Sweden Prize in Economics”? The original title clearly communicates the claim that economics is a science. This claim is as old as Adam Smith/Karl Marx. But economists never lived up to the claim.
Science is well-defined by the criteria of formal and material consistency: “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, 1994)
Neither orthodox nor heterodox economics satisfies the criteria of formal and material consistency. Worse, economists violate scientific standards since the founding fathers. There is no exception: Walrasian, Keynesian, Marxian, or Austrian economics is provable inconsistent.
There is political economics and theoretical economics. The founding fathers were straightforward people and called themselves political economists, that is, they left no doubt that their main business was agenda pushing. Economists never got out of political economics. In other words, theoretical economics (= science) ultimately could not emancipate itself from political economics (= agenda pushing). And this is how economics became one of the most embarrassing failures in the history of scientific thought.
Economics is not a science, but what Feynman famously called a cargo cult science. Accordingly, economists are not scientists but science actors. The difference is this: “A genuine inquirer aims to find out the truth of some question, whatever the color of that truth. ... A pseudo-inquirer seeks to make a case for the truth of some proposition(s) determined in advance. There are two kinds of pseudo-inquirer, the sham and the fake. A sham reasoner is concerned, not to find out how things really are, but to make a case for some immovably-held preconceived conviction. A fake reasoner is concerned, not to find out how things really are, but to advance himself by making a case for some proposition to the truth-value of which he is indifferent.” (Haack, 1997, p. 1)
Not only the Chicago version but economics in all its orthodox and heterodox variants is unacceptable proto-scientific stuff. The first thing to do is to rename the most prestigious economics prize into “Bank of Sweden Oscar for the best science actor/actress.”
Haack, S. (1997). Science, Scientism, and Anti-Science in the Age of Preposterism. Skeptical Inquirer, 21(6): 1–7. URL
Related 'Feeble minds, shaky assumptions, and the inevitable failure of economics' and 'How to get out of the Econ 101 PsySoc woods' and 'Economics is NOT a science of behavior' and 'From PsySoc to SysHum' and 'The happy end of the social science delusion' and 'The Science-of-Man fallacy' and 'PsySoc — the scourge of economics' and 'A farewell to PsySoc economics'
Your argument adds nothing to the discussion but distracts from the main point. The question is: Is the theory/model true or false. The character of the author, his CV, and what his motives might be is ultimately irrelevant. Science is about proof and not about personality or credibility.
“Remember: occasionally, it may be an interesting question to ask why a man says what he says; but whatever the answer, it does not tell us anything about whether what he says is true or false.” (Schumpeter)*
Chicago economics is provable false. The same holds for Cambridge economics. It is irrelevant whether Cambridge is regarded politically more leftist and Chicago more rightist. The point is that both Chicago and Cambridge produce scientific rubbish.
* See also the first 60 seconds of ‘Feynman on Scientific Method’ on YouTube