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What mainstream economists are embarrassed to admit

from Lars Syll

The true state of affairs is almost opposite of what Friedman makes it out to be when he ventures the opinion that “different predictions about the importance of so-called ‘economies of scale’ account very largely for divergent views about the desirability or necessity of detailed government regulation of industry and even of socialism rather than private enterprises.”

svs-sWas there ever an economist who came to believe in either socialism or capitalism because of compelling empirical evidence about economies of scale? For that matter, it is probably not economic arguments at all that turn economists into planners or free marketeers …The fundamental link between economic freedom and political freedom, however, is rarely discussed, possibly because mainstream economists are embarrassed to admit that what really lies behind their preference for private over public ownership of industry is a definite piece of reasoning in political theory.

Mark Blaug


According to Chicago economist George Stigler, studying economics naturally ‘makes one politically conservative.’ And the post-2007 world we live in today surely bears witness of how unjustified is the Panglossian conservative-libertarian myth of the free market.

Once the dust has settled, there is a strong case for an inquiry into whether the teaching of economics has been captured by a small but dangerous sect.

Larry Elliott/The Guardian


  1. February 15, 2016 at 2:25 pm

    There is very little reality in the notion of economy of scale. Instead, saving is pocketed from externalized messes enforced by fully owned violence propagators defined collectively as governments.

    There are those who will claim my conclusions are not based on scientific evidence. To them I offer a collapsing environment that no longer supports an expanding population of mammals and will soon not support any warm blooded life forms.

    Economies of scale are an illusion supported by a dying planet.

  2. February 15, 2016 at 3:21 pm

    Political economics: a playground for scientific deadbeats
    Comment on ‘What mainstream economists are embarrassed to admit’

    It is of utmost importance to distinguish between political and theoretical economics. The main differences are: (i) The goal of political economics is to push an agenda, the goal of theoretical economics is to explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics scientific standards are observed.

    Theoretical economics has to be judged according to the criteria true/false and nothing else. The history of political economics, on the other hand, can be summarized as the perpetual violation of well-defined and crystal-clear scientific standards.

    The fact of the matter is that theoretical economics has from the very beginning been hijacked by the agenda pushers of political economics. Smith and Mill fought for Liberalism, Marx and Keynes were agenda pushers, so were Hayek and Friedman, and so are Krugman and Varoufakis.

    Political economists of all stripes are characterized by four common traits:

    (i) They are mainly occupied with sociology, psychology, anthropology, political science, history, etcetera. That is, they miss the essentials of economics proper.*

    (ii) They use theoretical economics as a means/support for their agenda. By this, they abuse science unknowingly or knowingly.

    (iii) As far as they have tried to underpin their agenda theoretically it can be rigorously demonstrated in each case that their approaches lack formal and material consistency.**

    (iv) They have no idea how the actual economy works.***

    It is not decisive what the political agenda is: ALL of political economics is worthless cargo cult science.

    The difference between a theoretical economist and a political economist 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)

    Political economics has not produced anything of real scientific value since Adam Smith. After more than 200 years of dilettantism and failure there is no place for the political economists of Walrasianism, Keynesianism, Marxism, and Austrianism in the scientific community.

    Egmont Kakarot-Handtke

    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_

    * See ‘Economists’ three-layered scientific incompetence’
    ** See ‘On economists’ stupidity’
    *** See ‘How the intelligent non-economist can refute every economist hands down’

    • February 16, 2016 at 12:51 pm

      I have several concerns about your comments but let just ask one question. You reference:

      How the intelligent non-economist can refute every economist hands down

      Most non-economists are not fully aware that economists do not understand how the market economy works. The designation economist includes here all economists and in particular the adherents to the Walrasian, the Keynesian, the Marxian, and the Austrian approach as well as the IIAs (Independents, In-betweens, Alternatives). This embarrassment is due to the scientific incompetence of the representative economist who stands henceforth for the personified synthesis of the familiar sects.

      Most non-economists tend to think that economists know exactly what they are talking about when they use economic terms like income, profit, capital, market equilibrium, GDP and so on. This is not the case. As the Palgrave Dictionary summarizes with regard to profit “A satisfactory theory of profits is still elusive.” (Desai, 2008, p. 10)

      My question. How do the “intelligent non-economists” explain profit? What meanings do they attach to profit?

      • February 16, 2016 at 7:28 pm

        Ken Zimmerman

        You ask ‘How do the “intelligent non-economists” explain profit? What meanings do they attach to profit?’

        This is the wrong question. The right question is ‘How do people who call themselves economists explain profit?’ And the answer is that neither Walrasians, nor Keynesians, nor Marxians, nor Austrians can explain what profit is. And this is a rather bad situation because if one does not know what profit is one cannot understand how the market economy works. An then one only produces peer reviewed garbage and talks nonsense on blogs.

        My post ‘How the intelligent non-economist can refute every economist hands down’* enables the general public to readily debunk incompetent economists. This is the precondition to get them out of positions where they have a lever to wreck greater havoc.**

        Egmont Kakarot-Handtke

        * See http://axecorg.blogspot.de/2015/12/how-intelligent-non-economist-can.html
        ** See for example ‘Free the academy from economics’
        http://axecorg.blogspot.de/2015/11/free-academy-from-economics.html and
        ‘Economists are a menace to their fellow citizens’

      • February 16, 2016 at 8:22 pm

        I have a slightly different take on profit and professional economics in general. I’ll use profit to make my points, however. If profit is meaningless for the “intelligent non-economist” does it play a part in the non-economist’s life? I suspect not since she/he has no knowledge of it. They may know “salary”, “pay day,” “hourly wage,” etc. But profit is not in their lives. That being the case who did invent the notion of profit? Professional economists, I assume. So the situation is that economic scientists are using (widely and forcefully) in their work a notion attached to set of arrangements that does not exist for the actual participants (at least some of them) in economic actions. If this is the situation I don’t really see how much more completely a scientist (economist) could fail in their work. If not scientists, then economists of this type must be something. Empirical research on that question needs to be undertaken. Some possible answers are: propagandist, confidence man, or thief. I’d love to see what the research reveals.

    • February 16, 2016 at 7:01 pm

      Here is part of where we disagree, EKH. And I do agree with Ken Zimmerman.

      All Classical economics to J.S. Mill was ‘political economics’, and that includes the Wealth of Nations.

      The ‘utilitarians’, with their marginal utility theories with its notions of equilibria and general equilibrium sought to divorce economics from the idea that economic activity was about how we provide for our needs and wants, individually and together, and also about what are the best ways of our doing so. In Short, it was very clear to all of the classical economists that economics was affected by politics and that the ethical framework within which legitimate economic activity took place was not something that markets could or would determine.

      By removing values-in-use from economics, the marginalists succeeded in removing the idea that all economic activity was about how we provide for ourselves. They introduced subjective ‘utility’ –a form of ‘unobtainium’ that was possible to have if and only if one had the money to obtain it — and its maximization as the goal of consumption activity, and, by sleight of mind and by substituting a ‘consumer’ or ‘consumers’for ‘individual persons’ or ‘all people’ within the society. This meant that only consumers had well-being and that those without the income to consume had no well-being to maximize through the price system, for ‘well-being’, in the hands of the marginalists, was only the subjective well-being of those with the monies to consume at market prices.

      By removing objective utility from economics, marginal economists shifted the discussion of opportunity cost away from bio-psycho-social consequences to focus solely upon exchange gains or losses defined solely in terms of money gains or losses rather than gains or losses to people in everyday life.

      It is not all that difficult to show that the Grasshopper in Aesop’s fable is perfectly rational in marginalist terms.

      But, the Grasshopper is not rational in non-marginalist, human terms. For it fails to provide for itself while maximizing its subjective utility in consumption. The marginalist school in economics is, thus, fundamentally irrational at its core. It has nothing to say about human beings and their economic activity or how we provide for ourselves given that we have a monetary system of exchange.

      • February 16, 2016 at 7:21 pm

        Adding a quote from J.S. Mill:

        “The laws and conditions of the production of wealth partake of the character of physical truths. There is nothing optional or arbitrary about them. … It is not so with the Distribution of Wealth. That is a matter of human institution only. The things once there, mankind, individually, can do with them as they like.”

        It is precisely the question of the Distribution of Wealth which the marginalist schools of economics have ignored with their ‘unobtainium utility’ — a subjective utility that can be obtained if and only if one has the monies to obtain it.

      • February 16, 2016 at 8:07 pm

        Essentially what marginalists did (and it was/is psychopathic) was say every individual pursues her/his utility, which she/he doesn’t really need, could go on without it — take it leave it no matter on food, shelter, transport, etc. In other words managing the welfare of home and business is of little interest to the marginalists, as they sit mesmerized by the elegance of the maths. This matches not just a psychological definition of insanity, but a legal one. The inmates have taken over and made the whole world the asylum for non-marginalists.

    • February 16, 2016 at 11:01 pm

      You have said that Ken Zimmerman’s question — ‘How do the “intelligent non-economists” explain profit? What meanings do they attach to profit?’ — is the wrong one.

      You say — ‘How do people who call themselves economists explain profit?’ — is the ‘right one. You go on to say that the answer is that neither Walrasians, nor Keynesians, nor Marxians, nor Austrians can explain what profit is.

      Actually, most economists agree that profit is the difference between total costs (of production, advertising,and getting goods to various purchasers) and total revenues above such costs from the sales of what one is able to sell. I don’t think that any economists, including the Walrasians, Keynesians, Marxians, or Austrians, have any difficulty defining what profit is as a diffference between overall total costs and total revenues from actual sales.

      What poses difficulty is, among other matters, any so-called natural rate of profit: I.e., the distribution of revenues from sales into profit and wage streams. Unless you are prepared to buy ‘into’ the notion that wages reflect the marginal productivity of labor–J.B. Clark’s notion for which there is absolutely no evidence — then the simple definition of revenues minus costs fails to explain how these revenue shares are arrived at.

      And that is one of the problems with your macro-structure, EKH. It does not address the problem of wages at, above or below subsistence levels, nor, for that matter, what is politically or economically sustainable. When Ricardo referred to the “Iron Law of Wages’, he was, among other things, referring to an imbalance in power relationships. For that matter, Adam Smith was well aware that it was such imbalances in power relationships that required workers to be protected from economic predation based on his real concern that worker’s must ‘eat’ to live.

      The issue of how we share the Wealth of Nations cannot be addressed in the manner you seek to characterize your maco-economics. It avoids the central issues of how and whther we are providing for ourselves.

      • February 17, 2016 at 4:22 am

        I ask an astronomer, what’s the origins of the Sun, I might get an answer that delves into the research on the formation of stars and solar systems of planets, the fusion reactions that power stars, the effects of gravity on the placement of stars, etc. I ask the same question of a Catholic priest the answer might be something like, God placed stars and the planets there through processes that scientists investigate. I ask the same question of Ted Cruz, the answer might be something like, that’s one of the mysteries of God’s actions. The first answer is science. The second answer is not science, but holds open a place for science. The third answer is not science, and leaves open no role for science. Scientific answers are based on empirical observation, and nothing else. At least that’s the mythology of science. Most scientific answers involve other things as well, however. Such as ambition, mathematical symmetry, social acceptability, etc. But empirical observation guides the research, if not always perfectly the results. The issue before us is which type of answer do economists give when asked the question, what is profit and what are its origins? Based on empirical observations of the actors who invent and use profit. Based on some algorithm or theory, like the revealed word of God, but still leaving open the possibility that empirical research is possible. Or, third, only the algorithm or theory (e.g., God) knows what profit is since the algorithm/theory invented it. When I read economic literature (and it’s a painful process for me) the answer I see most often is number two. I see number three frequently, especially among mathematically oriented economists. The answer I see least often is number one, the scientific one. Based on this admittedly non-random and limited survey my conclusion is that economics is not a science and economists are not scientists.

      • February 17, 2016 at 4:56 pm

        Good analogies.

        Much of the mainstream talks about ‘markets’ and ‘market determination’ in the same way as the Catholic priest does. But ‘fundamentalist’ mainstreamers :: Chicago or Austrian School, ‘micro’ or ‘macro’ :: leave no room for science itself. They busy themselves with advancing and defending their notions of markets tending to equilibrium while also being paradigms of economic efficiency in production or consumption. They do not question their assumptions so much as relax parts of them to show how conclusions then deviate from markets with perfect information, albeit no one has ever observed such perfect ‘markets’.

        Similarly, a person like the late Milton Friedman could and did argue that the unrealism of the assumptions did not matter. To quote him:

        “In so far as a theory can be said to have “assumptions” at all, and in so far as their “realism” can be judged independently of the validity of predictions, the relation between the significance of a theory and the
        “realism” of its “assumptions” is almost the opposite of that suggested by the view under criticism. Truly important and significant hypotheses will be found to have “assumptions” that are wildly inaccurate descriptive representations of reality, and, in general, the more significant the theory, the more unrealistic the assumptions (in this sense).

        “The reason is simple. A hypothesis is important if it “explains” much by little, that is, if it abstracts the common and crucial elements from the mass of complex and detailed circumstances surround ing the phenomena to be explained and permits valid predictions on the basis of them alone. To be important, therefore, a hypothesis must be descriptively false in its assumptions; it takes account of, and accounts for, none of the many other attendantcircumstances, since its very success shows them to be irrelevant for the phenomena to be explained.

        “To put this point less paradoxically, the relevant question to ask about the “assumptions” of a theory is not whether they are descriptively “realistic,” for they never are, but whether they are sufficiently good approximations for the purpose in hand. And this question can be answered only by seeing whether the theory works, which means whether it yields sufficiently accurate predictions. The two supposedly independent tests thus reduce to one test.” Source: “The Methodology of Positive Economics” See: http://www.sfu.ca/~dandolfa/friedman-1966.pdf

        The issue, in my mind, is whether the assumptions ARE sufficiently good approximations which accurately yield reliable ‘predictions’. The theory of the consumer, for instance, is not a sufficiently good approximation of how people behave. ‘Predictions’ derived from it amount to little more than when the price of X goes up/down, less/more of X will be bought if budgets for the basket of goods containing X do not change. Neither whether nor why nor if budgets might change is addressed. Thus, the reality that a subsidy for, say, a vital food good could lead to LESS consumption of that particular good and MORE consumption of other foods simply ‘escapes’ from analysis.In short, the logic of assumptions that fail to sufficiently approximate economic behavior does not lead to useful predictions of such behavior.

        It would be far more sensible to examine what people in different income groups budget for and purchase and why they do so. Adopting a set of assumptions that are descriptively false on their face with ‘predictions’ that are descriptively false when looked at is what has impeded economics from developing as a science.

        At the ‘macro’ level, the problems with the theoretical apparatus and its underlying assumptions are those associated with NOT AT ALL being sufficiently good approximations of aggregate economic activity. There is no reasonable grounds for assuming such a creature as a ‘representative’ consumer, especially when ANY empirical observation would clearly show that this, like a ‘representative’ unicorn, is an imaginary being with no substantive existence nor needs.

        This is why I stress the importance of re-introducing values-in-use alongside values-in-exchange into theory. Values-in-use underlie most economic activity, if not all. But paths of economic activity are very much ‘determined’ by values-in-exchange, the distribution of income, and the privatization/enclosure of economic resources.

      • February 18, 2016 at 6:12 am

        Social science theories suffer the same problems as critical philosophy. Both are useless when we use them alone to account for the actions of people. Doesn’t matter if it’s sociology, or economics, or postimperialism. Alone they all fail. Neither critical philosophy nor the social sciences can deal with whole people. They address matters of fact. But are unable to address matters of concern, from which matters of fact are created. Whitehead considered matters of fact to be a very poor rendering of what is given in experience and something that muddles entirely the question. For Whitehead everything we perceive is in nature. “Matters of fact” that critical philosophy and the social sciences find so illuminating are implausible, unrealistic, unjustified definitions of what it is to deal with things. I prefer a solution from the social studies of science. Social theories claim to represent the human-side of things. Problem is there is no “human-side of things.” In the words of Bruno Latour, “Whatever the words, what is presented here is an entirely different attitude than the critical one, not a flight into the conditions of possibility of a given matter of fact, not the addition of something more human that the inhumane matters of fact would have missed, but, rather, a multifarious inquiry launched with the tools of anthropology, philosophy, metaphysics, history, sociology to detect how many participants are gathered in a thing to make it exist and to maintain its existence.” Or maybe a quote from “Fear the Walking Dead” fits better. “We’re all building a family here. So give me a break.” More social scientists ought to watch this program. Especially economists.

      • February 20, 2016 at 8:24 pm

        Economists have managed to construct a ‘scientia’ about imaginary beings called consumers’ who ‘exist’ because they have money to purchase things and who have nothng to lose but their status as ‘consumers’ if they don’t have monies to purchase anything. These imaginary beings [‘consumers’] have neither ‘needs’ nor ‘bodies’, so there are no negative outcomes associated with being unable to ‘consume’. But, apparently,they have wants which, naturally, they wish to ‘satisfy’, albeit there are no bad outcomes or consequences for them if they can’t do so. Finally, they also always use elementary calculus when making their decisions.

        Like any ‘scientia’ –biological or psychological or social — devoted to the study of ‘unicorns’ and their habits and behaviors, this ‘study’ lacks substance or any grounding as a ‘science’, hard or soft. Though some work is ’empricial’, most of the empricial work is ‘explained’ by axiomatic theories that, in fact, do not apply to human beings in any bio-psycho-social sense.

        The fact is that economics has no foundations whatsoever as a science.

        Economics could have. But to do so it would have to re-introduce values-in-use as distinctly different from values-in-exchange; and it would have to define those values-in-use in objective, empirical terms. Doing this would permit looking at how and why budgets are formed or change in response to price changes. It would allow for aggregate economic activity to be better formulated and predicted. It would be able to address inherent problems in incomes distribution and capital accumulation. It would also allow us to better use resources to actually advance the well-being of society, especially by properly distinguishing between public and private goods and the role exchange plays in monetary economies.

        So, yes, it could be a ‘social science’, but, frankly, it mostly isn’t even that. [There are a few outstanding exceptions, like Picketty for instance.]

  3. February 15, 2016 at 6:28 pm

    Wrote this years back about Iqbal Masih and the thinking of the Chicago School:

    In Memoriam: Iqbal Masih, 1983-1995.

    Would you tell me
    Who was it who murdered me?

    Yes … that is a fine carpet.
    They chained me to a parapet
    Moving constantly to make it.
    Of course, my hands were free
    To stitch and weave and knot it
    Twelve hours daily for a rupee.
    All us children’s hands were free
    Though shackles shook incessantly.

    No I never went to school in Chicago
    Where markets must be free.

    They said business was free;
    Industry was free;
    Merchants were free;
    Carpet buyers and sellers
    And baggers were free.
    International trade was free.

    Then, too, my boss was free
    To shackle me.

    No I never went to school in Chicago
    Where markets must be free
    To guarantee the liberty
    Of men and women and children like me;
    Where markets must be free
    To weave invisibly and referee
    So liberally, comparatively.
    Oh say can you see?

    No I never went to school in Chicago
    Where consumers must be free
    To find utility, buying satisfactorily,
    Perhaps fondly remembering me
    With equilibrious eleemosynarity.
    Weeping charity,
    Doling liberally
    In memory of me.

    Before you set your wallet free
    To make of me fond memory,
    What is the possibility
    The man who murdered me
    Was made in Chicago
    Where markets may be free?
    Before you wrap your apogee,
    Was it you who murdered me?

    W. Larry Motuz, April 20th, 1995

    Perhaps needless to say, I agree with Mark Blaug.

    • February 16, 2016 at 12:45 am

      Excellent conclusion, Calgacus. Yet unanswered is what does the scientific aspect of economics have to offer that is equivalent to physics and the atom bomb.

      Democracy functioning at the most efficient focus of millions has a trajectory through time impossible to see by one person. How many thousand physicists helped write the recent papers on gravity waves and particles that exist for trillionths of a second, the time it took the gravity wave to travel from Louisiana to Minnesota or near by.

      Efficient focus of distributed intelligence is how a culture and nations are measured in the information age. What that focus is doing is beyond the ability of the Pentagon to know. So the Pentagon drags education down and glorifies war at a cost of reduced efficiency of distributed intelligence.

      Economists understand that physics expressed through entropy can be tallied using standard accounting. Yawn. Economists also understand that a free market is a subset of an educated democratic union of politically free people. Stimulation of artificial want using knowledge of human as a social animal has no place in a modern world attempting balance with Earth. This kind of economics is not scientific economics. When will the little puppy pull open the curtain to reveal Oz?

      Will you mention a bit more?

    • February 16, 2016 at 12:46 am

      Darn I like thi poem or what ever it is.

      • February 16, 2016 at 6:10 pm

        Poem it is. I wrote it four days after his assassination at 12 years old.

  4. February 15, 2016 at 7:52 pm

    In 1921 Albert Einstein won the Nobel Prize in Physics for his “services to theoretical physics”, in particular his “discovery of the law of the photoelectric effect, a pivotal step in the evolution of quantum theory.” No mention of either the special or general theory of relativity. I conjecture that had it not been for WWII and Einstein’s emigration from Germany to the US the investigation of these two “mathematical” papers by Einstein would not even have begun in earnest for another 50 years. Why? Because both papers were an extension and for many a slap in the face of Newtonian physics. And in 1921 physics was a Newtonian Club. So economics is not the only “captured” academic discipline. In reality, being captured is more the rule than the exception in science. All that went out the window when the Nazis began building an atomic bomb. Anything like that in economics to shake the “powers that be” out of their seats of power?

    • February 15, 2016 at 10:41 pm

      I conjecture that had it not been for WWII and Einstein’s emigration from Germany to the US the investigation of these two “mathematical” papers by Einstein would not even have begun in earnest for another 50 years.
      That conjecture is untenable, for the earnest investigation of these papers / ideas began long before, especially concerning special relativity, without which modern physics is unthinkable, True, General relativity, its weltanschauung & its mathematics were not terribly fashionable for a long time & new experimental tests beyond the classic 3 took a long time. But there were natural theoretical and practical reasons for this – not having much to do with war or Einstein’s location – but simply because Rome cannot be not built in a day.

      • February 16, 2016 at 5:52 am

        I observe. In a conversation with Peter A. Bucky, Einstein replied to this question, “You were the focus of much attack on the part of the Nazis in Germany because of your Jewishness. What explanation have you come up with for why the Jews have been hated so much throughout history?”

        His reply, “It seems obvious to me that Jews make an ideal scapegoat for any country experiencing social, economic, or political difficulties. The reason for this is twofold. First of all, there is hardly a country in the world that does not have a Jewish segment in the population. And secondly, wherever Jews reside, they are a minority of the population, and a small minority at that, so that they are not powerful enough to defend themselves against a mass attack. It is very easy for governments to divert attention from their own mistakes by blaming Jews for this or that political theory, such as communism or socialism.

        For instance, after the First World War, many Germans accused the Jews first of starting the war and then of losing it. This is nothing new, of course. Throughout history, Jews have been accused of all sorts of treachery, such as poisoning water wells or murdering children as religious sacrifices. Much of this can be attributed to jealousy, because, despite the fact that Jewish people have always been thinly populated in various countries, they have always had a disproportionate number of outstanding public figures.”

        Einstein was aware apparently that his scientific career wasn’t going anywhere if he stayed in Germany. And the Nazis would never allow his Special Theory to publicly flourish, and would likely use him and the theory to aid in the building of an atomic bomb. Plus, as the Nazis consolidated power the German scientific establishment likely would not or could not protect Einstein. On top of that Einstein was perceived by many as a revolutionary. Scientific revolutionaries have a rough history. At least until their revolution becomes dogma. Leaving Germany was definitely the better option for Einstein. My puzzle, why did the Nazis let him go?

    • February 15, 2016 at 11:56 pm

      on einstein and relativity look up origin of special of relativity on wikipedia as well as relativity priority dispute. poincare, einstein, lorentz and others were discussing these ideas from 1905 on, and general relativity was being developed beginning around 1910 but didnt appear in final form until 1919.

      • February 16, 2016 at 12:37 pm

        Special relativity proposed rather small changes in the exiting theories of space and time. That the laws of physics are invariant in all non-accelerating systems and the speed of light in a vacuum is the same for all observers. General relativity proposed what appear to be even smaller changes in existing thinking. No privileged points of view; dependent observers; equivalence of observations; superimposition of traces; etc. Very subtle changes. One of the reasons the theory was so difficult for many to fully understand.

  5. February 17, 2016 at 4:36 am

    Economics are currently formulated with ‘orthodox’ economics is not a science, however ‘mathy’ it is.. Science must always be grounded in empirical measures of phenomena. This is not found generally within mainstream economics either in the small (micro-economics) or the large (macro-economics), and there is no actual connection between micro and macro theories.There are some excellent statistical studies — mostly financial — about normal and not-so-normal distributions which strongly suggest that the former are not necessarily characteristic of some economic activity.

    Mainstream economics is a boat that wouldn’t float — perhaps because it is not actually a boat.

    I agree with Ken Zimmerman above.

    • David Chester
      February 18, 2016 at 1:45 pm

      You can’t define science as being only about empirical observations. A science must include a theory or hypothesis at least about what is happening. Usually there are some observations too although with some sciences there is little or none of this. Economics is regarded as being a science but in pracytice the theory is limited to being applicable to only parts of the Big Picture. We are hoping that a better theory will emerge that can better include the whole thing.

      • larrymotuz
        February 22, 2016 at 10:11 pm

        I have not defined science as only about empirical values. I have repeatedly said that hypotheses are necessary, but they must be empirically testable. Insofar as economists have constructed a ‘consumer’ theory about the behavior of unicorns called ‘consumers’ which pass in and out of existence depending on whether that have or don’t have purchasing power, is it wrong of me to ask–at the very least–that it look at how people behave and the role that monetary exchange and the distribution of incomes plays in making purchases?

      • February 23, 2016 at 5:03 am

        Bear with me. I pull examples from everywhere. An episode of Star Trek Voyager called “Distant Origin” has a wonderful depiction of scientific observation and theorizing. Alien paleobiologists want to understand humans. They enter the star ship in secret to pursue their primary scientific job — observation. As they observe they theorize on the fly about the actions they observe. The theories are mostly incorrect, some by a little, some by a lot. But as they get to know the humans they correct the theories and develop a quite detailed and workable understanding of human actions and meanings. I would be over joyed if economists followed this example. They do not. They got stuck at the most theories are incorrect, generally by a lot, stage. And have not moved beyond it. So maybe it’s more accurate to call economists “failed” scientists. Science sounded interesting to them and then they lost interest when they saw they could say any nonsense and people would still follow their advice.

      • February 23, 2016 at 6:59 pm

        That is an excellent analogy, Ken. They start with observations and try to find patterns within them. These patterns are hypotheses that appear to ‘explain’ what they see, but do not actually explain what they see. In time, the cast off their older patterns of thought because they develop an understanding that these actually don’t explain. They adopt new and better hypotheses that ‘better’ explain and allow them to predict some behaviors the older patterns could not have.

        Their initial ‘takes’ are inductive hypotheses based less upon what they observe than on their own experience of themselves; i.e., what makes sense to them. But, as the become more familiar with what they are observing, they can ‘see’ that those initial hypotheses fail.

        Science, too, grows in such fits and starts, discarding hypotheses and keeping only those which give a better appearance of explaining and predicting. These kept ones become a framework or theory over time, one based on inductions and deductions from those.

        The marginalist revolution in economics, while appearing to ‘explain’ economic behavior, didn’t at all. It was, at best, a triumph of the logic of mathematics over induction from observed phenomena … of a theory of forms over substance. It ‘succeeded’ in establishing a framework for analysis that depended upon the removal of human beings [and outcomes for human beings] from all economic activity by substituting behavioral algorithmic formulas ( for the ‘consumer’ and for the ‘firm’). These gave the appearance of explaining while making observations redundant to ‘analytical’ progress.

        Since, in my view, economics is about how we provide for ourselves individually and together, I am re-introducing the behavior of human beings in their economic activities as the subject matter of economics. I am doing so by distinguishing values-in-use from values-in-exchange in monetary economies.

      • February 24, 2016 at 5:05 am

        To make all this science stuff work scientists must return again and again to observation. It is the object of their study the scientists want to understand. And the only way for that to happen is by actually observing this object, in action. Some would-be scientists are lazier than others. They want to “write it up,” but don’t want to do the hard work of observing to get to the point at which they can do a write up. Plus just doing the theorizing requires none of this hard work. My point — unless you’re ready for a life of hard work observing don’t get into science Most economists wanting to be scientists take the easy road – theory, theory, theory. Little observing. Marie and Pierre Curie observed pitch blend being processed for radium for 2.5 years. Now that’s a real scientist! And they were awarded a real Noble Prize.

      • February 24, 2016 at 4:19 pm

        Economists are not included in this recent pricing of Earth’s free services. Economists are not doing real economics so other sciences are taking over the field.


      • February 24, 2016 at 5:12 pm

        I wholeheartedly agree. Though I can sympathize with Alfred Marshall who used value-in-exchange as a proxy for benefits received, a part of that sympathy arises because he was well-aware that, at some point, measuring actual benefits would be necessary if economics was to develop outside of classrooms/academia.

        And, to be sure, much of his need to use value-in-exchange as a proxy for values-in-use :: actual benefits flowing from the different uses goods have :: was simply due to the lack of knowledge and good statistical data about these.

        Today, however, we have or can create such data. And, it’s time that we use what we have and create what we need to examine actual patterns of behavior given the mechanics of the price system and affordability constraints due to inequalities in time-stream holdings of money.

      • February 25, 2016 at 5:35 am

        I agree. I attended five seminars on “big data” collection and analysis in 2015. I just taught one on the analysis of literally millions of terabytes of data being collected. Just data from exercise equipment (from elliptical trainers to jogging shoes to climbing gear) amounts to thousands of terabytes. Home appliances now upload large amounts of data on a weekly basis. And the data on financial transactions is so voluminous that it can only be read and analyzed in parts. So there is no shortage of “observations.”

  6. February 17, 2016 at 2:41 pm

    Is pure thought using no numbers valid science? Pure logical progression can be refuted by exposing error exactly as is done in mathematics.

    My impression is economics can be very scientific using pure thought via studious observation, something academics often dismiss as anecdotal rather than treating it as scientific inquiry based on pure logic. Of course pure logic and one observation do not translate to universal axioms. Pure thought seems to me to contain mathematics and thus can probe mathematic conclusions by scanning a particular mathematical writing for errors of thought or conclusion from an apparently perfect mathematical statement.

    This question does not imply mathematical techniques are irrelevant to new directions of thought.

    • larrymotuz
      February 22, 2016 at 10:13 pm

      Mathematics is the Queen of the Logical Scientias, Garret. But, it is itself not science but only a scientia.

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