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On dogmatism in economics
from Lars Syll
Abstraction is the most valuable ladder of any science. In the social sciences, as Marx forcefully argued, it is all the more indispensable since there ‘the force of abstraction’ must compensate for the impossibility of using microscopes or chemical reactions. However, the task of science is not to climb up the easiest ladder and remain there forever distilling and redistilling the same pure stuff. Standard economics, by opposing any suggestions that the economic process may consist of something more than a jigsaw puzzle with all its elements given, has identified itself with dogmatism. And this is a privilegium odiosum that has dwarfed the understanding of the economic process wherever it has been exercised.
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Lars Syll; you are right in saying that, “And this is a privilegium odiosum that has dwarfed the understanding of the economic process wherever it has been exercised”. But the question remains why we were/even are so innocent to carry it forward. We also bear responsibility in its progression, otherwise it might have failed to keep its dominance.
The habit of self interest and ethical distortion of incitations hidden behind academical convenances (in French “bienséance” adding a moral aspect…) : they were mains tools for the “soft power” acting permanently in economics and in the academic sphere. They decrease critical sense and proceed by isolation of the more critical views (out of the convenances).
We were not armed against that “soft power” in line with the finance business and goal for normalization . At a point we were all isolated and convinced of our faults and misfortune.
I seen also the effect of a strong moral attitude against non conformed economists… publishing incommensurably harder, very demanding for revisions (asymmetrical process)…made to discourage the isolated rebel! A well coordinate system of pressure in every area. 1984 , the Orwell novel have given element to understand the process used for the “domestication” of the economist specie.
Methodology — Marx, too, messed it up
Comment on ‘On dogmatism in economics’
Lars Syll writes: “Abstraction is the most valuable ladder of any science. In the social sciences, as Marx forcefully argued, it is all the more indispensable since there ‘the force of abstraction’ must compensate for the impossibility of using microscopes or chemical reactions.” (See intro)
Marx, of course, was perfectly right, albeit only in the abstract. In the practical art of abstraction he messed things up like his classical predecessors since Adam Smith.
The most embarrassing fact of political economics is that neither the pro-capitalists (2014b) nor the anti-capitalists (2014a) ever came to grips with profit (Desai, 2008). This is really mind boggling. Non-economists take notice: more than 200 years full of sound and fury — signifying nothing.
The good news is that Constructive Heterodoxy finally got the fundamental abstraction right. For the correct profit theory see (2015).
By the way, Marx was only echoing J. S. Mill:
“Since, therefore, it is vain to hope that truth can be arrived at, either in Political Economy or in any other department of the social science, while we look at the facts in the concrete, clothed in all the complexity with which nature has surrounded them, and endeavour to elicit a general law by a process of induction from a comparison of details; there remains no other method than the à priori one, or that of ‘abstract speculation’.” (Mill, 1874, V.55)
No dogmatism here! Mill had a profound understanding of economic methodology. In this he was far ahead of those who nowadays busily but unknowingly twitter and blog about the economy.
Egmont Kakarot-Handtke
References Desai, M. (2008). Profit and Profit Theory. In S. N. Durlauf, and L. E. Blume
(Eds.), The New Palgrave Dictionary of Economics Online, pages 1–11. Palgrave
Macmillan, 2nd edition. URL http://www.dictionaryofeconomics.com/article?id=pde2008_P000213.
Kakarot-Handtke, E. (2014a). Profit for Marxists. SSRN Working Paper Series, 2414301: 1–25. URL http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2414301.
Kakarot-Handtke, E. (2014b). The Profit Theory is False Since Adam Smith. What
About the True Distribution Theory? SSRN Working Paper Series, 2511741:
1–23. URL http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2511741.
Kakarot-Handtke, E. (2015). Essentials of Constructive Heterodoxy: Profit. SSRN
Working Paper Series, 2575110: 1–18. URL
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2575110.
Mill, J. S. (1874). Essays on Some Unsettled Questions of Political Economy. On
the Definition of Political Economy; and on the Method of Investigation Proper
To It. Library of Economics and Liberty. URL http://www.econlib.org/library/
Mill/mlUQP5.html#EssayV.OntheDefinitionofPoliticalEconomy.
Martin Luther King Jr. proposed jobs-for-all and basic income for all. Admitting to having acquired much less knowledge/training in economics than regualr readers at this site, MLK’s proposal seems emminently positive, reasonable and attainable, yet no concrete actions/steps to realize such a proposal have become taken. MLK studied spirituality, religion and philosophy, separate terms for the same area of human thought, and what he learned during that study he applied to his economic proposals.
Management courses stress the main focus being maximization of profit, in contrast to MLK whose paramount focus was maximization of peace, health and well-being for the greatest number in the human population, where decisions are driven by love, not profit.
It seems MLK, who perished in a murder/assassination whose details are far too little known (search William Pepper/1999 Martin Luther King civil trial) at age 39 for his spiritual economics ideas, gave those who study economic science a profound example of the possible, most positively impactful for humanity, application of economic theory toward eliminating worldwide, historically negative societal problems.
Perhaps saying that economics should have as its greatest goal not profit but building a more peaceful world while at the same time eliminating war, poverty, disease, illiteracy, pollution, etc. will be viewed as utopian or completely unrealistic, but is it really? The human mind created today’s existent international conditions, and there seems to be no reason for believing that the human mind is incapable of improving those conditions, until at some future point, depending on the intensity of Earth-wide efforts, humanity realizes living a true version of the dream MLK and history’s spiritual visionaries spoke of.
In other words, an economics which has as its driving motivation and fuel not profit but creating heaven on Earth.
I will write here the same I already wrote here several times, the economics is a class ideology, not science. No one should expect the economics to pursue scientific truth. The aim of economics is dissemination of the class interests and oppressing the interests of the other classes in the society. If one puts the economics to a scientific ground will immediately reach the conclusion, that the profit (not only the private one) and the private ownership of capital and means of production are the major problem which bad consequences go beyond the economics and poison the entire society. Those, who will oppose, that Marxism is also not scientific I will answer immediately – I never red Marx. You do not need the Marxist approach to reach the aforementioned conclusion. You need only observation and clear thinking.
Economics vs. Sociology
Comment on ‘On dogmatism in economics’
You say: “… economics is a class ideology, not science.” This is certainly true for political economics but not for theoretical economics. The goal of theoretical economics is to explain how the economy works.
The crucial 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)
That thinking is normally determined by self-interest is not such a new insight. As a matter of fact, any thinking about society ends with some inner necessity at a conspiracy hypothesis (= all bad things are ultimately caused by an unknown but powerful entity. The Invisible Hand is only a variant of this kind of ‘explanation.’)
The crucial point is that economics deals NOT AT ALL with society. This is the realm of sociology, psychology, anthropology, history, etcetera. Insofar as economics deals with behavioral assumptions like utility maximization, greed, power grabbing, etcetera it is a dilettantish variant of Psycho-Sociology.
Theoretical economics deals exclusively with the systemic behavior of the actual monetary economy.
Most economists have never understood their real task: they are doing Psy-Soc not economics. Hence, they are out of science before they even start to think.
Theoretical economics is objective. There are systemic laws but no behavioral laws. Systemic laws have the same methodological status as physical laws. The economist’s task is to find these laws and not to waffle about human behavior and society.
Egmont Kakarot-Handtke
References
Haack, S. (1997). Science, Scientism, and Anti-Science in the Age of Preposterism.
Skeptical Inquirer, 21(6): 1–7. URL http://www.csicop.org/si/show/science_
scientism_and_anti-science_in_the_age_of_preposterism.
If what Egmont writes is true, then the only real economists are of a theoretical kind, who incidentally deal not only with money flows but also with their reciprocal ones of goods, services, access rights, and valuable documents too. However these matters are a part of society and consequently it is social science which overlaps with economics with the former dominating and not the opposite. There is so much pseudo science going on under the title of real economics that we have difficulty in identification which is true. My new book “Consequential Macroeconomics” should help in this respect, since it better explains how macroeconomics works in a theoretical way and as our social system.
Theoretical economics is objective. There are systemic laws but no behavioral laws. Systemic laws have the same methodological status as physical laws. The economist’s task is to find these laws and not to waffle about human behavior and society.
There is theoretical law, medicine, engineering, physics, and so on. In all scientific fields, when new discoveries come about, those (most) in the particular science first start thinking about how to use the new knowledge effectively to improve conditions in societies, and are excited about new, more-positive possibilities. Putting in intense work/intellectual effort in any of the sciences, discovering something new thereby adding to the store of knowledge, then placing the new on the fireplace mantle as one would a trophy without making good use of it brings into question the reasons for becoming involved in the work in the first place.
It seems to boil down to analyzing which condition is more beneficial for humanity: separation of science and spirit, or union of science and spirit.
A very interesting and hope-inspiring 30-minute film about the profoundly positive beneficial-for-societies nature of land value taxation systems:
Reblogged this on ihtis69.