Home > The Economics Profession > I am a know-nothing

I am a know-nothing

from Peter Radford

Beware of the possible snark in the following:

One of the possibilities you face when you commit to writing about something is that you get called names. Sometimes you are called wrong. And sometimes when you are called wrong, you are indeed wrong. Such is life. We learn.

This is not one of those times.

Because I am right.

Anyway, this time I have been called wrong because I asked that we raise a collective voice to ask questions about economics. I made no substantive claim in my call for questions. I just asked for questions and then did claim that the resultant conversation would/could be interesting. I thought this was uncontroversial. 

Not so.

One correspondent let fly with a torrent of abuse that requires some unpacking and examination.

Economics, I am told, is NOT what economists say it is. This is disturbing. The practitioners of an art or science are being told that what they study is not what they study. Economists need to find another name for their discipline; and, presumably, for themselves [we’ll get to that below]. Now I am aware that I myself have called economics into question along similar lines. I sometimes argue that economists spend too much time examining economics rather than economies. But I do not dispute that economists have the right to give their discipline a name they like. So if economists want to call what they do ‘economics’ it is not up to me to argue. I would prefer to argue more substantive issues, such as the discipline’s content.

Then I am told I don’t understand philosophy. Or at least I infer that from the correspondent’s next sentence or three. Further, I am too understand that my ignorance stems from my having been trained as an economist. Since the correspondent has no idea what I was trained as — it wasn’t economics — I find this somewhat surprising. Somewhere in this accusation I also learned that economics may be about ‘what it does’, but that this is definitely NOT about “a mere balancing of dishonest monetary measures of supply and demand of unspecified goods by covertly printing IOU’s”.

How do I respond to that? Apparently economics is some fraudulent pursuit reeking of dishonesty and covert IOU’s. Or is it that the economy is fraudulent and filled with covert IOU’s? I don’t know.

But it is comforting to be mentioned in the same long paragraph as God, Hume, Aristotle, Bacon, and Harvey. Four of whom I look up to and one of whom doesn’t exist. Oh, but I’m not quite sure what to make of the reference to Humpty Dumpty.

Moving on.

Economics we are told should revert to its etymological roots and be about household management or people living together. This leaves the field open for a new science to worry itself about people who not live together or who merely interact at arms length. Since this is what economists tend to worry about most — although there are plenty who study household issues — I suppose this is another way of saying economics is not about economics. Or ought not to be. I imagine we could play this game of enforcing reversion to etymological roots across all the sciences, and/or our entire language. But why stop there? Why not revert back to the ancient Greek itself and just stop with all this silly 2,000 year long evolution of speech? That would clear everything up nicely.

But we don’t stop there. Next we are told that the words ‘economics’ absolutely must not be used to refer to money-making  or marketing which are consigned to the word ‘chrematistics’. This word for those who may be baffled by it harkens back to days of yore when money-making was deemed somehow nasty. It was old Aristotle who came up with the distinction between economics and chrematistics, and he wanted us to ignore the latter because it was unseemly. Aristotle believed a lot of things, some of which would not fit well within our contemporary world: for instance, he seemed to think that some people were naturally slaves and others naturally slave owners. This is lovely. Hopefully our correspondent has a nice word — not economics — to cover that.

How did that ghastly chrematistics get muddled up with economics? Here we are sent to Shakespeare for enlightenment. It has something to do with usury, the Bank of England, and the City of London. Or it has something to do with Hume’s friend Adam Smith who was SEEING it about the wealth of nations and not the well-being of mankind. I am not sure which. Actually I am not sure Smith was using either the word chrematistics or the word economics in his work. Perhaps he did. I don’t care. He was most certainly interested in the wealth of nations, ands since it was his book why should we care if that isn’t the same as well-being of mankind? If he had wanted to write about the latter maybe he would have. This is like saying that Francois Furet’s book about twentieth century communism is a lousy book about New York. I usually leave it to authors to define their own topics. I find it easier to critique them that way..

Next we are left hanging: what is the purpose of an economist? Whatever God, Aristotle, Hume, Bacon, and Harvey say it is. Or at least I think so, since here we are simply referred back to the paragraph in which they turn up. This leaves me somewhat quizzical since I am not sure any of them actually ever met an economist, and attributing a purpose to a person would have sent poor old Aristotle off on one of his long winded explanations about causes the end result of which might just have been more confusion.

I won’t respond to the next part of my correspondent’s tirade since it appears more to focus on other correspondents and their errors. So let me move on the last paragraph.

Just for good measure this starts with this:

“Peter, [that’s me] I repeat, has got it wrong.”

I put this in emphasis so as to releive you of any qualms about ignoring me. Leave me to wallow in my ignorance for I know nothing. I am pre-Aristotle. Perhaps Socratic? Don’t I wish!

The answer, we are told, is not to be FOUND in a collective voice, though IF FOUND it is desirable to be taught that way. I have one small point to make here: it was the search I was advocating. Oh, and if we are so sure it won’t be found there, we won’t bother looking and thus the desirable outcome of collective teaching, whilst desirable, is for ever impossible. Anyway we are assured — by implication — by our correspondent that the common voice is drowning out diverse and possibly unique contributions that see through the superficialities and untruths that are what is now known as economics. Or chrematistics. Or whatever.

Anyway. It’s been cathartic talking about it.

This is what I learned: I am ignorant. I am an economist — and hence even more ignorant. I don’t understand much about etymology, and even less about Aristotle who is, apparently, the go-to guy for economics. I learned that the Bank of England is usurious despite its interest rates being near zero — which kind of conflicts with my understanding of usury. I now realize that Smith ought to have written a book about something other than the wealth of nations. And I remain confused about the purpose of an economist — although I will check with Aristotle to clear that up.

That’s quite an edukation.

Lucky me.

End snark.

  1. blocke
    February 27, 2015 at 2:11 pm

    Although, as an historian, I have never thought economics, was a science, I have been interested (mildly) in efforts to make it into one and (strongly) in why people who do so are so opposed to those who do not. If economics is acknowledged to be a failed science (and what other conclusion could people who read this blog reach), then what is the motive of those who insist that we study it as science. That is the historian’s question about economics.

  2. February 28, 2015 at 12:28 pm

    Questions and answers about economics
    Comment on Peter Radford’s ‘I am a know-nothing’

    First of all one has to distinguish between theoretical and political economics. The goal of political economics is to push an agenda, the goal of theoretical economics is to explain how the actual economy works. From the viewpoint of science political economics as a whole is a no-go. The first problem of economics is that many economists are not scientists but agenda pushers of one sort or another. This means that economics is exploited for other purposes.

    Political economics is essentially moralizing and the explanation consists usually in a good-guy-bad-guy story. In political economics anything goes; in theoretical economics scientific standards are observed.

    “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, p. 31)

    Theoretical economics starts with ignorance and the attempt to clarify what the subject matter is and how to approach it. As a first approximation, we can agree here on the general characteristic that the economy is a complex system.

    However, with the term system one usually associates a structure with components that are non-human. In order to stress the fact that humans are an essential component of the economy we could perhaps better say that the economy is a complex hybrid human/system entity.

    The scientific method is straightforwardly applicable to the sys-half but not to the hum-half. While it is clear that the economy always has to be treated as an indivisible whole, for good methodological reasons the analysis has to start with the objective sys-half.

    In gestalt-psychological terms the economic system is the foreground, individual behavior the background. Common sense wrongly insists that the hum-half must always be in the foreground. This fallacy compares to geo-centrism. The economic system has its own logic which is different from the behavioral logic of humans. The systemic logic is what Adam Smith called the invisible hand.

    Whether the outcome of the human/system-interaction is good or bad is a political question that lies outside of theoretical economics. Theoretical economics explains how the actual economy works — no less, no more.

    Since Veblen Heterodoxy has been mainly occupied with debunking the assumptions and claims of equilibrium theory. However, the fatal errors/mistakes of Orthodoxy do not lie so much in particular green cheese assumptions but in the complete failure to understand what the scientific method is all about.

    Nonentities like equilibrium, rational expectation, constrained optimization, or utility maximization for that matter, are perfectly in line with the accepted methodology.

    “It is a touchstone of accepted economics that all explanations must run in terms of the actions and reactions of individuals. Our behavior in judging economic research, in peer review of papers and research, and in promotions, includes the criterion that in principle the behavior we explain and the policies we propose are explicable in terms of individuals, not of other social categories.” (Arrow, 1994, p. 1); see also (Arnsperger and Varoufakis, 2006)

    The fundamental methodological blunder resides in the idea that economics is about human behavior. Let us call this the social science delusion. The irony is that Heterodoxy is even more convinced that economics is essentially a social science. It differs from Orthodoxy only insofar as it claims that their behavioral assumptions are more realistic.

    The fact of the matter is that economics is about the behavior of the economic system and not about the behavior of individuals. This, indeed, is the realm of psychology, sociology, anthropology, history, etcetera. To speculate about rational or irrational human behavior is not economic analysis at all (Hudík, 2011).

    This means that the subject matter of economics has to be redefined. No way leads from the understanding of human behavior to the understanding of how the actual economy works. This fully explains why economics is a failed science.

    You sum up:
    “And I remain confused about the purpose of an economist — although I will check with Aristotle to clear that up.”

    No need to check it. All answers are in Wikipedia and this is what Aristotle said about how to do science:

    “When the premises are certain, true, and primary, and the conclusion formally follows from them, this is demonstration, and produces scientific knowledge of a thing.” (Resume of Aristotle’s Posterior Analytics)

    And from this follows for the economist’s job description:
    “A scientific observer or reasoner, merely as such, is not an adviser for practice. His part is only to show that certain consequences follow from certain causes, and that to obtain certain ends, certain means are the most effectual. Whether the ends themselves are such as ought to be pursued, and if so, in what cases and to how great a length, it is no part of his business as a cultivator of science to decide, and science alone will never qualify him for the decision.” (Mill, 2006, p. 950)

    Certainly, this is not what the political economist thinks his true mission is. The problem with political economists, though, is not that agenda pushing is illegitimate. The problem is, that the scientific claims are illegitimate. This, unfortunately is, what unites Orthodoxy and Heterodoxy. Both are talking scientific nonsense.

    Egmont Kakarot-Handtke

    Arnsperger, C., and Varoufakis, Y. (2006). What Is Neoclassical Economics? The
    Three Axioms Responsible for its Theoretical Oeuvre, Practical Irrelevance and,
    thus, Discursive Power. Paneconomicus, 1: 5–18.
    Arrow, K. J. (1994). Methodological Individualism and Social Knowledge.
    American Economic Review, Papers and Proceedings, 84(2): 1–9. URL http:
    Hudík, M. (2011). Why Economics is Not a Science of Behaviour. Journal of
    Economic Methodology, 18(2): 147–162.
    Klant, J. J. (1994). The Nature of Economic Thought. Aldershot, Brookfield, VT:
    Edward Elgar.
    Mill, J. S. (2006). A System of Logic Ratiocinative and Inductive. Being a Connected
    View of the Principles of Evidence and the Methods of Scientific Investigation,
    volume 8 of Collected Works of John Stuart Mill. Indianapolis, IN: Liberty Fund.

  3. John McDonald
    February 28, 2015 at 5:16 pm

    Hats off to you for even trying to make some sense out of that comment. I kept getting lost in it.

    Just one little question about your comment. Are the two statements: “God exists.” and “God does not exist.” scientific statements that can be shown to be true or false? Or are they statements of faith which are not subject to scientific analysis? And if they are statements of faith, isn’t it more accurate to say either: “I don’t believe God exists.” or “I believe God exists.”?

    And that is not to say that statements of faith can not be discussed as regards their truth content. If that were not true then we surely would have to wonder what some very bright theologians have been doing for centuries. Of course I don’t mean to imply that their scholarly work guarantees the validity of their subject matter – but then we probably both agree that that notion readily applies to economic theory too.

    • Macrocompassion
      March 1, 2015 at 4:15 pm


      Thus we cannot absolutely prove the existence of God from a scientific viewpoint and our belief in this existence cannot be doubted unless it is completely denied. There should be some halfway stage where some doubts can be entertained as being the most satisfactory and that the agnostic attitude of sitting on the fence is best.

      • March 16, 2015 at 3:56 pm

        Perhaps some Fundamentalists (Christian and others) are 100% certain about their faith and theology. As for me, and I presume many other people of faith, certainty of faith is a wee bit dangerous in the hands (minds) of fallible human beings.

  4. Macrocompassion
    March 1, 2015 at 1:57 pm

    What’s going on here? Economics is the general name for a number of related subjects, some of which are scientific and some of which are obviously not. As far as I can tell the ones that are scientific have already been associated with some kind of mathematics (however poor, and some are very poor!); and some like history of thought in economics, clearly are not.

    The kind of economics mostly capable of becoming scientific in a serious sense is macroeconomics. Microeconomics does have a lot of mathematics too, but it is not of a kind that is policy-making and it applies to a small part of the whole system only. Microeconomics is useful for local problem solving but it is insufficiently profound for a national policy to be based on it.

    The mathematics of macroeconomics has not been properly explored nor examined in the best possible way, due to a deliberate decision to avoid the logic which originally was set in motion by Adam Smith. This starting theory was later rejected by John Bates Clark and others, when they put land ownership under the heading of capitalism. But land has very different characteristics to other kinds of man-made capital of a durable kind.

    Unlike capital goods, land does not become obsolete with time. In fact its value usually increases with time and the growth of communities. It therefore is misleading and very anti-scientific to forget about its special nature. For this reason it has been impossible for would-be scientific economists to develop proper theories about how our social system operates. Recently with the proper representation of the unique function of the land-owner and 5 other kinds of agencies within the social system, I have managed to extend the scientific analysis and improved theory about the way our system works. Please see Wikimedia, Commons, Macroeconomics, as: DiagFuncMacroSyst.pdf file (the picture of which should be enlarged to read all 38 money and goods mutual flows).

    Using this approach and other assumptions, I have managed to develop a full theory that goes a long way to providing a suitable explanation about the functioning of our country’s system.

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