Wednesday, April 20, 2011

the central unscientific claim of Economics

Peter Dorman really nails it at EconoSpeak:

"is consistent with" is a phrase which really means "we must accept this hypothesis or accept some degree of Type 2 error" and does nothing about the Type 1 error which most science deals with.

This is only the beginning, however.  To this unsound methodology, you need to add:

1.  Obviously wrong assumptions and re-definitions of common words.
2.  Special servile relationship with wealth and power for which typical economics serves as propaganda tool, delivering this underlying but usually covert message: accept only the crumbs that fall from the great tables of the great system, since your taking more than that would destroy the greater good which includes you.  The special relationship arises because people of wealth and power take great interest in the dogmas that advance their privileges, and have ways to fund them, thus letting alternative visions such as Marxism or Minskyism or even Keynesianism wither on the vine.
3.  Physics envy.

(1) generally follows (2), and (3) is the magic glue that makes it all seem scientific and respectible.  This is not a new idea, Keynes said essentially the same thing in General Theory.

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