November 11, 2016

Political economics: a deadhead sitcom

Comment on Lars Syll on ‘Why Trump won the election’

Blog-Reference

There is political economics and theoretical economics. The founding fathers 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 scientific failures of all times.

The fact of the matter is that economists do not know how the actual economy works.#1 They do not even understand the foundational concepts of their subject matter, that is, profit and income. This is comparable to medieval physics when physicists did not properly understand the foundational concepts of their subject matter, that is, energy, mass, force, velocity, acceleration etcetera.

The actual state of economics is this: the four main approaches Walrasianism, Keynesianism, Marxianism, Austrianism are provable false. In methodological terms: all four approaches are axiomatically false, that is, beyond repair. There is no use at all to discuss their respective faults or merits, the way forward is to fully replace them. At the moment, about 90 percent of the content of peer-reviewed economic quality journals and 100 percent of textbooks is scientific rubbish.#2

The double insanity of economists consists in (i) not realizing that they are failed scientists, (ii) in stepping forward as experts and issuing economic policy guidance. The election campaign has delivered as much proof as anybody ever wanted to see.#3

Economists do not understand what their subject matter is. They do not even realize that the question ‘Why Trump won the election’ is a question for psychology, sociology, political science etcetera and NOT AT ALL for economics. Economics is NOT a social science that deals with the behavior of people, but a system science that deals with the behavior of the economic system, or more specifically, with the interrelation of measurable economic variables like wage income, profit, productivity, employment, money, etcetera.

Political economists do not know how the actual economy works. They lack the true theory. Instead, they senselessly speculate about NONENTITIES like utility maximization, rational expectations, equilibrium and hallucinate about the marvelous feats of the Invisible Hand. The whole stuff is exactly at the same level as ‘Had Adam a navel?’ or ‘How many angels can dance on a pinpoint?’.

It is important to first of all realize that economic policy guidance NEVER had sound scientific foundations. And it does not matter at all whether this guidance has been more rightist or more leftist. ALL political economists are scientific failures.

Political economists have captured economics 200 years ago and steered it into the wrong direction “... but when the road ends at a coal-pit, he [the traveler] doesn’t need much judgment to know that he has gone wrong, and perhaps to find out what has led him astray.” (Hume)

To be sure, it has been political agenda pushing that led economists astray.

The general public’s idea that economists can solve economic problems has always been a bad joke because economists are the VERY CAUSE of economic problems.#4 And there is NO difference between team blue and team red.

Egmont Kakarot-Handtke

#1 See also ‘There is NO such thing as an economic expert
#2 See ‘The father of modern economics and his imbecile kids
#3 See also ‘Krugman and the scientific implosion of economics
#4 See ‘How economists murdered the economy and got away with it

For more details of the big picture see cross-references Political Economics