Economists don’t have the methodological and conceptual toolkit needed for appreciation of FMD’s scientific and historical significance.
They don’t know what they don’t know.
They’re not methodologists and don’t know what constitutes good theory.
They never read CWL 3, pages 3-172 and 490-97 and, thus, they never studied the canons of empirical method, especially the Canon of Parsimony and the Canon of Complete Explanation; they have no idea of the deficiencies of their method.
Thus, they lack a purely scientific and explanatory heuristic.
They do not adequately distinguish description vs. explanation.
They do not know the type of answer they’re seeking, i.e. their known unknown.
They do not put questions in the right order to discover basic terms of scientific significance.
They are mired in muddy premises and disorienting assumptions.
They are unable to employ a scientific, dynamic heuristic adequate for analysis of a current, purely dynamic process.
They don’t understand what constitutes the normative system’s requirement for concomitance, continuity, and equilibrium of flows.
They lack a background in theoretical physics. They don’t understand the principles and abstract laws of hydrodynamics, electric circuits, or field theory. Nor do they understand adequately the idea of continuity and the conditions of equilibrium in macroeconomic dynamics. They are unaware of analogies from physics applicable on the basis of isomorphism to the phenomena of Functional Macroeconomic Dynamics. (Continue reading.)
Scientific macroeconomics, if it is to be genuinely scientific, must not be contaminated by human psychology. Gustav Kirchhoff’s laws of the electric circuit do not incorporate the psychology of the human who operates the levers or switches. So, Lonergan, the scientist, strove to discover the purely relational, purely functionallaws of the circuits of the objective economic process. Unfortunately, many proponents of Modern Monetary Theory exhibit sentiments and inclinations favoring a totalitarian bureaucracy for the management of fiscal and monetary affairs. Their purported science contains some valid assertions, but is not a coherent set of objective laws to which participants must adapt, regardless of sentiment; rather MMT is an admixture of several ideological and psychopolitical sentiments transformed into a contaminated set of mandates for the management of fiscal and monetary affairs. The tenets of MMT fail to constitute a fully explanatory theory of macroeconomic dynamics. (to continue reading, click here)
The popular textbooks of Macroeconomics – by N Gregory Mankiw, Paul Krugman and Robin Wells, Olivier Blanchard, Andrew B. Abel and Ben S. Bernanke, William J. Baumol and Alan S. Blinder – suffer in common from several flaws. Our subheadings immediately below and the pointers thereafter point out flaws and deficiencies in textbooks commonly used in higher education. Though the treatments in this section are not exhaustive, they are sufficiently provocative; they should stimulate careful scrutiny of, and skepticism regarding, many traditional and conventional tenets. Finally, though the treatments in this section are relatively brief and often primarily referential, there is a lot of ground to cover; so, we will underline and publish as time allows.
Paul Krugman, currently Distinguished Professor of Economics at the Graduate Center of the City University of New York, and a columnist for The New York Times, commented on the unfavorable events of 2008 with his book:
Krugman, Paul (2009) The Return of Depression Economics and the Crisis of 2008, (New York, NY, W. W. Norton & Company)
Early in the book Krugman states his intention to explain what went wrong; he would address not so much what happened but why it happened. But to explain scientifically what went wrong requires a theory, a scientific explanation of the normative behavior of the economy. The theory would be a general theory universally applicable to all equilibrated and disequilibrated configurations of aggregate functional flows in the economic process. And since the economic process is a dynamic process, with flows of money and products per period of time, the theory must be a theory of economic dynamics. Professor Krugman does not appear to have reached such a general theory which explains all situations as either meeting the norms of the theory or diverging from the norms so as to require systematic correction. Continue reading →