Comment on Asad Zaman on ‘ET1% — Economic Theory of the top 1%’
Blog-Reference
What told Marx us about economics?: “In the domain of Political Economy, free scientific enquiry meets not merely the same enemies as in all other domains. The peculiar nature of the material it deals with, summons as foes into the field of battle the most violent, mean and malignant passions of the human breast, the Furies of private interest.” (1906, M.10)
What tells Asad Zaman us?: “Now if we consider conventional economic theory, it is easy to show that nearly all of it is ET1% — it is DESIGNED to prove that policies which favor the top 1% are beneficial for all.”
What tells YouTube us about economics, politics, and all the rest? “Everything Is A Rich Man’s Trick.”
And finally, what tells us science? “Apologetics may be a laudable objective. Its practical importance is unquestioned. People need to be shown that the institutions of their own society are good, those of others bad. But there is no place for apologetics in science. Scientific economics inquires only into the How and Why, not into the Good or Bad, of what is. From the scientific point of view preoccupation with Good and Bad is worse than useless since it not only fails to illumine anything but keeps the lightbeam of inquiry from being turned in directions where answers to significant questions can be found.” (Murad, 1953, p. 2)
What is the underlying problem? Every one of us can only have a personal experience of a tiny section of space and time and it is not at all certain whether we interpret this personal experience correctly. The rest of reality consists of the extrapolation of limited experience, second-guessing of causes and motives, and of what society tells us. Society consists of family, peers, neighbors, teachers, philosophers, priests, gurus, artists, government, business, and the media.
Our view of reality is the result of rather limited personal experience and storytelling. The bad thing is that we are sometimes confronted with facts, events, or claims/opinions that do not fit into our worldview. And this brings up the distinction between opinion and truth.
“There are always many different opinions and conventions concerning any one problem or subject-matter (such as the gods). This shows that they are not all true. For if they conflict, then at best only one of them can be true. Thus it appears that Parmenides ... was the first to distinguish clearly between truth or reality on the one hand, and convention or conventional opinion (hearsay, plausible myth) on the other ...” (Popper, 1994, pp. 39-40)
What the ancient Greeks called opinion/doxa is roughly the same as what Buddha called Veil of Maya, what Marx called ideology, what Hollywood calls dream/nightmare, what Bernays called PR/advertising, what Plato called shadows on the cave wall, and what Orwell called big-brother mind-control.
Is Asad Zaman’s claim that ET1% influences opinion true? Yes. Is the claim that they influence science in general and economics in particular true? Yes. Can they determine the outcome of the research? No, because nobody knows the outcome in advance. It all depends on whether scientists stick to the well-defined rules of science. “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)
Asad Zaman’s claim amounts to the accusation that orthodox economists are fraudsters, that is, that they intentionally produce false theories. This brings us outside of science and into the criminal court (see also Lysenkoism on Wikipedia).
Heterodoxy stands before this question: We all agree that Orthodoxy is false so (i) let us forget this scientific garbage and focus on developing the true theory (= materially and formally consistent), or (ii), let us bring Orthodoxy to court and prove that DSGE is not a failed approach but a political fraud. Option (i) is the scientific way to settle matters.
It all would be much simpler if Asad Zaman could present the true theory (= materially and formally consistent) of how the actual monetary economy works. In particular, I would like to know which one of the four different heterodox profit theories is correct.#1
Egmont Kakarot-Handtke
References
Haack, S. (1997). Science, Scientism, and Anti-Science in the Age of Preposterism. Skeptical Inquirer, 21(6): 1–7. URL
Marx, K. (1906). Capital: A Critique of Political Economy, Vol. I. The Process of Capitalist Production. Library of Economics and Liberty. URL
Murad, A. (1953). Questions for Profit Theory. American Journal of Economics and Sociology, 13(1): 1–14. URL
Popper, K. R. (1994). The Myth of the Framework. In Defence of Science and Rationality. London, New York: Routledge.
#1 Heterodoxy, too, is proto-scientific garbage
Related 'Refocusing economics'.
