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That economics is a value-laden science is not a new idea. Most of the prominent economic thinkers were also philosophers, wary of moral and philosophical content of scientific assumptions, models, and theories. That economics needs philosophy, and the separation between these two cannot be maintained any longer, is gaining recognition, and has become a subject of debates in the field of philosophy of economics that brings together (to various extends) philosophers, mainstream, and heterodox economists. For example, Daniel Hausman (1992) discusses that at an analytic level economists do successfully separate the philosophical and ethical content from economic analysis, albeit this separation is possible only at the analytic level. Karl Polanyi (1957), in his discussion on the entanglement of economic activities in the social totality, gives insights from a different perspective how considering the subject of economic study in social vacuum can in fact lead to thinking that scientific practice indeed has disentangled from society.

Today economists of both mainstream (e.g., Jean Tirole) and heterodox approaches more readily admit: economics is a moral and philosophical science. Yet the meaning and scope of the normative components of economics, the epistemic consequences of the social embeddedness of science, and the social consequences of economics are raising so far inconclusive debates. These issues constitute two-tiered dimensions of scientific rationality: external and internal ones. While the criteria of internal rationality (which constitute the standard approach to scientific rationality) refer to disciplinary epistemology and methodology, the criteria of external rationality involve the axiological, ethical, and societal elements of the process of knowledge production and the social consequences of science.

Interestingly, as Gustav Márquez (2016) points out, even in the field of philosophy of economics, the discussions are often focused on the elements of what I call here internal rationality. Márquez argues that the predominant focus on these issues characterize the mainstream philosophy of economics, while the more normatively-laden issues, such as a broader theoretical reorientation towards more responsive and socially engaged approaches (which I considered as aspects related to the external scientific rationality), are not so much a part of the dominant concerns and discourse.

Why would an external rationality matter? What is the meaning of the social consequences of economics as a science? And how the acknowledgment of the value-laden component of scientific practices plays out in research practices of the scientific community, and of an individual researcher? These questions are not easy to answer, as they involve several complex issues, such as what is the meaning of scientific truth, scientific objectivity, how to account for the normative components of science, or what are the grounds for our confidence in scientific methods and analysis—to name a few. While each of these questions opens a Pandora box by itself, my goal is to simply open up some of the ways these profound issues can be approached for a discussion. My guiding thought is that one of the elements that drastically shapes our take on these questions pertains to the context in which science and the process of knowledge production is considered.

My specific focus will be on the role of science in society and for policy making. In my next entries of the WEA Pedagogy Blog, I am going to consider several issues, problems, and controversies raised at the intersection of economics, society, and policy, with an eye towards their educational and pedagogical challenges. My objective is to problematize, hopefully for a broader discussion with the readers, the fact that the specific philosophical commitments (e.g. ontological and epistemological assumptions about the role of science, function of knowledge, scientific truth, etc.) bear impact on how the epistemic consequences of the value-ladedness of economics are framed, and on the acknowledgment and role assigned to the extra-scientific components of research practices.

References:

Hasuman, Daniel M. 1992. The Inexact and Separate Science of Economics. New York: Cambridge University Press.

Márquez, Gustavo. 2016. A Philosophical Framework for Rethinking Theoretical Economics and Philosophy of Economics. London: College Publications.

Polanyi, Karl, [1944] 1957. The Great Transformation. Boston: Beacon Press.

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Friday, 26th Jan 2017: Lecture by Dr. Asad Zaman, VC PIDE to students at University of Cambridge, Center of Development Studies for Religion & Development paper. 40 minute video recording of lecture on you-tube. For related posts, see: An Islamic Approach to Humanities.

Part 1: “What Is Spirituality?”:  Modern Secular thought takes spirituality and religion to be diseases which affect weak minds not properly trained in the scientific method. Part I of this lecture explain why this view, which is based on positivist ideas, is seriously mistaken. OUTLINE of this lecture is given below

Separate Lecture Part 2:“What is Development” focusing on how spirituality affects how we think about development and how to achieve it.

  1. Standard Modern Answer
    1. Spirituality is a literary term, used to spice up poetry and novels.
    2. It is like Phlogiston, Unicorns, Ghosts, Souls, God
    3. It is one among many medieval beliefs, like flat Earth, which have been proven wrong.
  1. Why don’t we understand spirituality?
    1. Because we have been trained to think like Logical Positivists, EVEN though this philosophy has been proven wrong! Key wrong positivist beliefs:
    2. Unobservables do not matter for science
    3. Science explains the observable patterns. It may postulate things like atoms, gravity, but this is just for convenience. Existence of gravity is not part of scientific assertion.
    4. Kant: Thing-In-Itself is not knowable, not relevant for science. Wittgenstein: Wherof one cannot speak, thereof one must be silent. ALSO, The human body is best picture of the human soul (That is, observables matter, unobservables don’t)
    5. SCIENCE is the ONLY source of valid knowledge.

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jobsThis is the 9th Post in a sequence about Re-Reading Keynes. In chapter 2 of General Theory, Keynes wishes to develop a theory of employment. He claims that classical economics does not have a theory of employment, because it assumes that all resources will be fully employed. But the theory that unemployment will always be 0% – except for frictional – is not a theory which can explain observations of high and persistent unemployment. Taking this post-Depression observation for granted, the question arises how we can create a theory in which the labor resources can be utilized at different levels. In order show that classical theory cannot explain the observed fluctuations in the level of employment, Keynes lists the four possibilities under classical theory which could create a change in the quantity of labor being employed:

  1. A more efficiently organized labor market, which find faster matches between the unemployed and job opportunities, would lower frictional unemployment and increase employment.
  2. A decrease in the disutility of labor would mean that laborers would be willing to accept lower wage offers, which would lead to expansion of the employment.
  3. An increase in the productivity of labor would bring greater rewards to the employers and induce them to hire more labor at a given wage.
  4. An exogenous decline in price of consumer goods purchased by laborers would increase the real wage and thereby employment. Exogenous means that demand for these goods by non-laborers decreases, causing the price decline.

These factors constitute the classical theory of employment in the sense that the variations in the equilibrium quantity of labor can only be brought about by varying these four factors. Keynes argues for the necessity of radical revision in the classical theory by showing that employment levels following the Great Depression cannot be explained by these factors.

Keynesian theory is going to be built around the rejection of the 2nd Postulate: labor is supplied until the marginal disutility of additional units of labor is exactly offset by the real wage. This means that the fourth possible explanation based on changes in real wages is not valid. The evidence for this is the NON-FUNDAMENTAL argument of Keynes. Laborers react to cuts in nominal wages by going on strike. They do not respond similarly to general increases in the price of consumption goods. It follows that the decision to offer labor is not a function of the real wage.

The Scientific Method: There is a huge amount of confusion regarding the nature of science and the scientific method. See for example, the best-selling, widely used textbook by Chalmers: “What is this thing called science?” for clearing up many widespread myths. Making minimal claims, I would argue that an important aspect of science is the revision of theories to match discordant observations. Contrary to Popper, observations in conflict with theories do not falsify the theory. Rather, they create a puzzle, an anomaly in Kuhn’s terminology. This is a challenge for researchers to find a modification of the theory which will explain the anomaly. If all such attempts fail, or such attempts create a degenerating research program which adds ad-hoc assumptions without explanatory power, to protect core axioms of the theory [Like Ptolemaic astronomy], then situation becomes ripe for a scientific revolution.

The fundamental conflict between classical theory and empirical observation is the existence of involuntary unemployment:

It is not very plausible to assert that unemployment in the United States in 1932 was due either to labour obstinately refusing to accept a reduction of money-wages or to its obstinately demanding a real wage beyond what the productivity of the economic machine was capable of furnishing. Wide variations are experienced in the volume of employment without any apparent change either in the minimum real demands of labour or in its productivity. Labour is not more truculent in the depression than in the boom; far from it. Nor is its physical productivity less. These facts from experience are a prima facie ground for questioning the adequacy of the classical analysis.

Just like observations of elliptical orbits conflict with the circular orbits assumptions of Ptolemy, so the above observation of Keynes conflicts with the standard postulates of economic theory (both pre-Keynesian and modern economics) about the labor market. Once we have an observation in conflict with our fundamental theory of the labor market, we have two options which are routinely used in science.

OPTION 1: (Normal Science) Work on finding ways to explain these conflicting observations while retaining the postulates. The standard explanations for lower equilibrium employment would follow the FOUR possibilities that Keynes has listed. These are all the possibilities available which allow for changes in the volume of employment in a way consistent with the classical postulates of the labor market.  He rejects all of these possible explanations in the paragraph above. Another possibility is that strong unions keep wages above equilibrium; he discusses and rejects this possibility elsewhere. In the above passage, he indicates that Labour is not more truculent in the depression. This does not end the possibilities. It is part of normal science to look at the situation carefully and try to find other ways to create a compatibility between the observed long and persistent unemployment and the postulates.

OPTION 2: (Kuhnian Revolution). Keynes became convinced that the classical postulates for labor market CANNOT be reconciled with the observation of large fluctuations in volume of employment, as well as the observation of different reactions of labor to cuts in wages and rise in price levels. Therefore, he proposes to overthrow the second postulate, while retaining the first one. This really is a revolutionary step, because it amounts to rejecting Supply & Demand theory in the Labor Market. It also amounts to rejecting the efficacy of the free market mechanism in the labor market. These ideas are sacred ideologies – for example, when David Card published research showing that raising minimum wages did not lead to increased unemployment, “It cost me a lot of friends. … (economists) became very angry … They thought that in publishing our work we were being traitors to the cause of economics as a whole.” Keynes is also aware that his revolutionary ideas might anger some people, and lose him some friends:

The classical theorists resemble Euclidean geometers in a non-Euclidean world who, discovering that in experience straight lines apparently parallel often meet, rebuke the lines for not keeping straight, as the only remedy for the unfortunate collisions which are occurring. Yet, in truth, there is no remedy except to throw over the axiom of parallels and to work out a non-Euclidean geometry. Something similar is required to-day in economics. We need to throw over the second postulate of the classical doctrine and to work out the behaviour of a system in which involuntary unemployment in the strict sense is possible.

(Non)-OPTION 3: (Ostrich Mode) One can try to explain it away, or revise core theories, but the option to ignore, or to assume away, empirical evidence is not available to scientists. Yet this is precisely the route that was followed by macro-economics since the 1970’s. This is why Romer has said that the Chicago School ignored basic principles of science. What Romer fails to realize is that the entire edifice of modern economics is based on an anti-scientific methodology in which validity of statements is determined by authority and reputation, and not by consistency with empirical evidence. The Nobel Prize in 2010 seeks to re-habilitate the “friction” explanation (modernized as search theory) for unemployment, which Keynes rejected because it was obvious that the frictions remained the same while the volume of employment fluctuated. Anti-scientific hostility to empirical evidence was reflected in the response by mainstream journals to my paper “The Empirical Evidence Against  Neoclassical Utility Theory: A Review of the Literature” [with Mehmet Karacuka] International Journal for Pluralism and Economics Education Vol. 3 (4)  2012, p 366-414. This paper provides overwhelming empirical evidence against the vaunted micro-foundations of economics. Referee’s reports from the leading Economics Journals did not say that the paper was wrong, but rather that it was too insulting to economists. Given strong evidence of dramatic conflicts between the models and reality, scientific methodology would demand an urgent search for alternative bases for a theory of consumer behavior, which is at the foundation of all modern economic theory. Instead, a few token behavioral economists are hired to deflect criticism, while homo economicus continues business as usual within mainstream economics departments. Since criticisms of economic methodology conflict with ideological commitments, I have criticized econometric methodology, which is less charged emotionally. In my paper, Methodological Mistakes and Econometric Consequences, I have shown how contemporary methodology of econometrics is based on logical positivist ideas and is deeply flawed.

The upshot of all this is that the Keynesian Revolution was aborted before it got started. Keynes observed that empirical evidence of behavior of laborers conflicts with the standard homo economicus model of rational behavior of laborers; this conflict strikes at the root of modern economic theory. In an extremely ironic twist, instead of accepting his insights, economists rejected Keynesian theory on the very grounds that it is not compatible with rational behavior of laborers – when this incompatibility was the raison d’etre of Keynesian theory.

To continue his analogy, Keynes told the Euclidean geometers that your axioms conflict with observations, so let us drop the parallel postulate, and instead use another axiom which is compatible with what we see around us. The Euclideans rejected this theory on the ground that it lacks “micro-foundations” — meaning that it is not compatible with the Euclidean parallel postulate, which is the foundation of Euclidean thought, and cannot be questioned.

I am planning a sequence of posts on re-reading Keynes, where I will try to go through the General Theory. This first post explains my motivations for re-reading Keynes. As always, my primary motive is self-education; this will force me to go through the book again — I first read it in my first year graduate course on Macroeconomics at Stanford in 1975, when our teacher Duncan Foley was having doubts about modern macro theories, and decided to go back to the original sources. At the time, I could not understand it at all, and resorted to secondary sources, mainly Leijonhufvud, to make sense of it. Secondarily, i hope to be able to summarize Keynes’ insights to make them relevant and useful to a contemporary audience. Thirdly, there are many experts, especially Paul Davidson, on this blog, who will be able to prevent me from making serious mistakes in interpretation.

Reasons for Studying Keynes

The heart has its reasons of which reason knows nothing.” Blaise Pascal

In line with the objectives of the WEA Pedagogy Blog, I am initiating a study group with the aim of [re-]reading Keynes’ classic The General Theory of Employment, Interest and Money. There are many reasons why I think this is a worthwhile enterprise. I hope to make weekly posts summarizing various aspects of the book, as we slog through the work, which can be difficult going in some parts. At the very least, this will force me to re-read Keynes, something I have been meaning to do for a long time. In this first post, I would like to explain my motivation in doing this exercise. Read More

A driving spirit of the modern age is the desire to banish all speculation about things beyond the physical and observable realms of our existence. This spirit was well expressed by one of the leading Enlightenment philosophers, David Hume, who called for burning all books which did not deal with the observable and quantifiable phenomena: “If we take in our hand any volume; of divinity or school metaphysics, for instance; let us ask, Does it contain any abstract reasoning concerning quantity or number? No. Does it contain any experimental reasoning concerning matter of fact and existence? No. Commit it then to the flames: for it can contain nothing but sophistry and illusion.”

This is a breathtakingly bold assertion. The literate reader may examine his or her bookshelf to see what little, if anything, would survive after applying Hume’s prescriptions. Nonetheless, the spirit of the secular age was very much in tune with Hume, and relegated vast areas of human knowledge captured in literature, history, and the arts, to second-class citizenship. The modern world has been shaped by this downgrading of the spiritual, intuitive, and mystical, and the elevation of the rational as supreme judge and arbiter over all other faculties.

The leaders of the Enlightenment advocated rationality as the sole criterion for establishing an authoritative system of ethics, aesthetics, and knowledge. This has led to a dualism which has become firmly embedded in the foundations of Western thought, and has created a social science incapable of perceiving, let alone solving the problems currently being faced by humanity as a whole. Western hegemony has led to the global and widespread acceptance of this dualism, clearly expressed by Hume, in embracing the quantitative and passionately and violently rejecting the qualitative. Exploring the full range of difficulties caused by this dualism would take several books. In this essay we consider just one of the salient problems. Harvard Professor Julie Reuben expressed it as follows: “Truth was (a united whole) embracing spiritual, moral, and cognitive knowledge. By the 1930’s, this unity was shattered; factual cognitive knowledge (was separated from) moral/spiritual knowledge.”

The Enlightenment project had aimed to provide rational foundations for all human knowledge. However, influential intellectuals like Max Weber, in the early twentieth century, argued that scientific knowledge had to be value-free, because values could not be established empirically. Widespread acceptance of this rejection of morality and spirituality has had dramatic consequences in all realms of human life. The most important questions that we face as human beings were declared to be meaningless, and unworthy of our attention and study. We all recognize that our own life is an infinitely precious gift; the most important question we face is: how should we use this gift? What is the purpose or meaning of life? What characterizes the ‘good life’ and what steps can we take to achieve a lifestyle which embodies the good?

Influential positivist philosophers argued that these questions had no meaning, because there was no empirical or observational evidence which could be used to answer them. All answers were equally valid. We should simply do with our lives whatever we desire to do. There were no ethical or moral standards to guide our behavior. As one of the leading positivist philosophers, A J Ayer, stated: “Moral judgments are as meaningless as a cry of pain”. Centuries of traditional wisdom about life was discarded as meaningless noise, and the new generations were encouraged to work out answers to these deep and difficult questions on their own, starting from scratch. To understand the catastrophic consequences of this, imagine what would happen if we threw out accumulated wisdom in medicine (or any other field of knowledge), and started again from scratch.

The key to the social sciences is an understanding of the nature of human beings. Can we understand human lives without understanding responsibility, conscience, courage, love, heroism and cowardice, trust, jealousy and the enormous range of human emotions? All of these elements of human lives are deeply and inherently qualitative and cannot be measured on any scales. Thus, by definition, these do not qualify for inclusion in the realm of scientific knowledge. The wisdom of the ancients, contained in books discussing these concepts in literary and philosophical terms, without measurement and data, would deserve to be burned according to Hume. But all this book-burning would leave us without any guidance on issues central to human affairs.

The dualism that deified science, and scoffed at that qualitative and unmeasurable, resulted in a tremendous loss of knowledge about the nature of human beings and society. We are living with the consequences of a college education which teaches students how to build bombs, but nothing about the ethics of killing innocents. As a chilling example, consider the changing attitudes towards torture and murder. Japanese soldiers were executed for torturing American POW using waterboarding, and American soldiers in Vietnam were tried for such treatment of Vietnamese prisoners. But recent Presidents have thrown their full support behind the use of extreme torture techniques, officially approving their use. Hollywood movies glorify and justify torture, even though empirical evidence shows that it does not work to obtain useful intelligence. Official reports show that senior officials in the UK and the US concocted evidence to fool the public into supporting the invasion of Iraq, resulting in deaths of millions of innocent civilians, and unnecessary expense of trillions of dollars. But no one has been convicted of any wrongdoing. MBAs are taught that the bottom line is all that matters, and social responsibility should not interfere with the pursuit of profits. Thus, there is no outrage at the deaths of the poor and hungry farmers, caused by millions of dollars spent on research to produce genetically modified terminating seeds, so that rich organisations can make more profits by selling seeds every year. Even justice has been separated from morality; in the adversarial system, lawyers are taught that their responsibility is to win the case for their clients, regardless of whether or not justice would be served by this win. Reform requires deep and fundamental changes in the system of education, which needs to be firmly grounded in all those ideas that have been kicked out of the curriculum as ‘unscientific’.

Short Posts on Diverse Topics: My author page on LinkedIn. Other works: Index . Related: Re-Enchanting the World.

Published in The Express Tribune, August 15th, 2016.ethicseducation

This post was meant to provide a framework for further elaboration of the idea of ET1% — the Economic Theory of the top 1% — as one ingredient of a Meta-Theory of Economics. However, covering necessary preliminary background already took up more than a thousand words, so this project has been deferred for a later post. The goal of this post is to explain why we need to focus on Meta-Theoretical aspects of social science, rather than whether or not economic theories are true or false. The perspective emerges from my understanding of the Methodology of Polanyi’s “The Great Transformation” [which was recently ranked as the 2nd most important book of the 20th Century in a Poll of RWER Blog Readers]

As the name indicates a Meta-Theory for Economics is a theory about economic theories. As we are all aware, economic theories evolve, change and mutate. Multiple rival conflicting and contradictory theories co-exist within the mainstream. Outside the mainstream, there are people (like myself) who claim that all of mainstream theories are fundamentally and deeply flawed.

A meta-theory studies the process by which new theories emerge. Some of the central questions for a meta-theory would be:

  • What are the circumstances which lead to the creation of new economic theories?
  • Who are the agents who create new economic theories?
  • Why are new economic theories created?
  • What leads some theories to become popular and widely accepted?
  • What leads other theories to be rejected, or neglected and ignored?

Those who refuse to think about meta-theories often commit themselves to an extremely simplistic meta-theory without realizing or explicitly acknowledging it. This simplest of meta-theories is based on the idea of “TRUTH”. According to this meta-theory, new theories are generated as part of a process of searching for the truth. A theory is adopted because it explains the observed phenomena well, and hence is likely to be true. Agents are motivated by the search for truth, and seek to improve the explanatory power of theories. New theories are created to bring wider range of phenomena within the scope of explanation. Theories which are able to explain a large range of observed phenomena become widely accepted and popular. Theories which conflict with observations are rejected and confined to the dustbin of history.

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Post 4/4 about Economic MethodologyFriedmanKeynes

Before Keynes, Classical Economic Theory (CET) was based on three principles. The First Principle is that Unemployment is automatically eliminated by the free market. The Second Principle is the Quantity Theory of Money, which states that money supply makes no difference to real economic outcomes. The Third Principle is that private investors automatically find the right investment opportunities to create the best economic outcomes for future. The realities of the Great Depression of 1929 clashed violently with these three principles which hold only in an imaginary world bound by axioms and logic. Keynes followed scientific methodology to create a new theory which rejected all three axioms of CET, so that Keynesian theory would match the experienced realities of the Great Depression. This is the distinguishing feature of science, that theories are devised and changed in light of experience. In contrast, Greek axiomatic-logical methodology disregards conflict with observational evidence.

The experience of the Great Depression showed that free markets cannot eliminate unemployment. The role of expansion of money stock in the boom, and of restrictive money in the recession, became clear to economists. Keynesian theory incorporates this experience and asserts the extreme importance of money in the real economy, contrary to the Quantity Theory of Money. Also, Keynes argued that the future was unpredictable. Investor sentiment and expectations about future governed their investment decisions, but these could become artificially depressed. This would choke off investment and badly affect the future of the economy. In such situations, the government should step in with investments to compensate for shortfalls in private investments. This type of fiscal policy would be able to restore full employment and generate growth. This Keynesian prescription is diametrically opposed to the Third Axiom of CET which argues that governments should not intervene in economic activity. Keynesian theories were “scientific” in the sense that they were based on observations and economic experiences, and conflicted with the Greek axiomatic approach of CET.

Banks had lost fortunes, and wiped out lifetime savings of many depositors in the Great Depression. Soon afterwards, a strong set of laws were enacted which sharply regulated financial institutions, prohibiting them from speculation, and placing many other restrictions on their activities. Financial regulation restricted the power of the wealthy to generate income from their existing wealth. This meant a sharp reduction in money generated by non-productive financial activities like interest based loans. At the same time, the main thrust of Keynesian theory was that the government had the responsibility to maintain full employment, and undertake investments necessary for growth. Investments flowed to the real sector, instead of the financial sector, and full employment meant that all the productive capacity of the economy was utilized. Empowering the working classes, investing in growth, and restricting the financial sector, led to decades of prosperity in the Western world.

In order to understand what happened next, we have to look at the dramatic impact of the three Keynesian policies of financial regulation, full employment, and government investments, on the income distribution in the USA. From 1930 to 1980, the share of wealth accruing to the bottom 90% increased from a low of 15% to a high of 35%. At the same time, the share of wealth accruing to the top 0.1% decreased from a high of 25% to a low of 5%. This reversal of fortunes was not acceptable to the extremely wealthy, who plotted a coup against Keynesian theories with patience and persistence. Their last bastion and stronghold was Chicago University, which was virtually solitary in its advocacy of free market economics in the days of dominance of Keynesian theories. In their paper “Winning Ideas”, Sabena Alkire and Angus Ritchie have provided detailed information about the campaign to spread, popularize and implement free market ideas. One key strategy was the utilization of economic and political crises and disasters to rush in with revolutionary changes. Naomi Klein has documented this aspect in her brilliant book “The Shock Doctrine: The Rise of Disaster Capitalism” which details how crises were used or generated all over the world as a means of introducing free market policies which could not be achieved by popular vote.

In the USA and UK, the oil crisis in early 1970’s created an opportunity which was seized upon by the Chicago School to create the Monetarist Counter-Revolution against Keynesian ideas. All economic troubles were blamed on Keynesian policies and financial regulation, and a strong push was made for financial liberalization, and for restricting the authorities and power of the government. One weakness of Keynesian theory was that while macroeconomics was scientifically based on observed behavior of real world economies, microeconomics was based on an axiomatic-logical Greek approach to consumer theory. Progress would have involved changing microeconomic theories to match observations of real world consumer behavior. Instead of this, the monetarist counter-revolution succeeded in dislodging Keynesian theory by arguing that these macro theories were not consistent with the axioms for consumer behavior in microeconomic theories. This return to Greek axiomatic methodology effectively divorced economics theories from reality. Keynesian Nobel Laureate Robert Solow remarked:  “Since I find the fundamental framework [of Chicago economists Lucas & Sargent] ludicrous, … I respond by laughing.” Financial liberalization together with repeal of Keynesian economics had exactly the effects desired by the wealthy. The share of the top 0.1% has steadily risen from its bottom at 5% to the current 25% and is steadily rising. The share of the bottom 90% has fallen from its top value of 35% to its current 15% and is steadily declining. The Global Financial Crisis has wiped out the middle classes and further enriched the wealthy financiers. The use of a Greek methodology which confines economists to the study of an imaginary world is extremely helpful in perpetuating the current state of affairs as it prevents the public from noticing essential aspects of the economic system. This is why scientific methodology, which would be based on close observations of contemporary realities of the economic system, is shunned by economists.

Posts on Diverse Topics:My author page on LinkedIn. Other works: Index . More material on Science & Scientific Methodology. Articles on the Nature of Human Knowledge.