November 5, 2016

Economics: the simple logic of failure

Comment on Barkley Rosser on ‘The Biggest Disjuncture Ever Between Public Opinion And Professional Economists?’


Let us proceed in manageable logical steps.

(i) Economics is a science and the whole world is in no uncertain terms told so each year: “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.

(ii) If economics is a science then professional economists are supposed to be scientists.

(iii) If professional economists are scientists then Barkley Rosser is supposed to be a scientist.

What do scientists do? Scientists continuously augment the corpus of scientific knowledge. They do this by establishing the material and formal consistency of theories. A theory is the mental representation of reality. A scientific theory is the best representation of reality that is humanly possible.

How do scientists augment the corpus of scientific knowledge? By critical discussion: “And a critical discussion is well-conducted if it is entirely devoted to one aim: to find a flaw in the claim that a certain theory presents a solution to a certain problem.” (Popper, 1994)

In the previous post the proof has been given that the central piece of standard economics ― the labor market theory ― is false. The proof consists in the logically transparent derivation of a testable systemic employment equation. This equation shows (1) that the market economy is inherently unstable, (2) that the standard employment theory is false, (3) that economic policy guidance which follows from standard theory worsens the situation, i.e. leads to more unemployment, deflation, depression, stagnation.

A scientific discussion would be well conducted if Barkley Rosser could either logically or empirically refute the systemic employment equation. Yet, nothing of the sort ever happens. From this follows:

(iv) Barkley Rosser has no idea of what science is all about. As an incompetent scientist he argues ad hominem and utters irrelevant opinions. Because he does not understand what science is and how genuine scientists work he is a cargo cult scientist.

(v) Because Barkley Rosser is the representative professional economist, what applies to him can be generalized for the rest of the profession.

(vi) Because economists are not scientists economics is not a science.

(vii) This is corroborated by the fact that economics consists of four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― which are (a) mutually contradictory, and (b), axiomatically false in each individual case.

(viii) Economic policy guidance of professional economists has no sound scientific foundation since more than 200 years.

(ix) Because they are a menace to their fellow citizens, professional economists have not only to be barred from politics but, more importantly, to be expelled from the scientific community. In addition, the title of the Economics Nobel has to be changed to “Bank of Sweden Consolation Prize for Scientific Failure in Memory of Alfred Nobel”.

Egmont Kakarot-Handtke

Immediately preceding 'How economists murdered the economy and got away with it'

Related 'From false micro to true macro: the new economic paradigm' and 'Economics: a science without scientists' and 'How the mainstream vanished in the gutter' and 'Economists have no brain' and 'There is NO such thing as an economic expert' and 'It is better to be precisely right than roughly wrong'

REPLY to Barkley Rosser on Nov 6

Time for you to retire, see ‘The future of economics: why you will probably not be admitted to it, and why this is a good thing

NEWS for Barkley Rosser on Nov 7 and Blog-Reference

Breaking from Zero Hedge Nov 6, originally Forbes
  • Economics is broken and there is no internal incentive to fix it.
  • Five reasons to smash the ivory towers.
  • We are experiencing deep economic problems and it is the fault of the economics discipline.
  • Their macro theories suck.
  • What we lack is sound theory to guide our actions.
  • In our hour of greatest need, societies around the world are left to grope in the dark without a theory. 
Here is your lucky escape, societies.