Sunday, December 20, 2009

Two Words... "Vested Interests" - Economic Theory And The Disdain For Empirical Verification

"The validity of a theory proper does not depend on the correspondence or lack of it between the assumptions of the theory or its conclusions and observations in the real world. A theory as an internally consistent system is valid if the conclusions follow logically from its premises, and the fact that neither the premises nor the conclusions correspond to reality may show that the theory is not very useful, but does not invalidate it. In any pure theory, all propositions are essentially tautological, in the sense that the results are implicit in the assumptions made. {6}

Such disdain for empirical verification is not found in the physical sciences. Its popularity in the social sciences is sponsored by vested interests. There is always self-interest behind methodological madness. That is because success requires heavy subsidies from special interests who benefit from an erroneous, misleading or deceptive economic logic. Why promote unrealistic abstractions, after all, if not to distract attention from reforms aimed at creating rules that oblige people actually to earn their income rather than simply extracting it from the rest of the economy?"

--Excerpted from Michael Hudson, "Krugman's attack on my review of Samuelson, Personal correspondence (December 20 2009)". In re: "Elegant Theories That Didn't Work: The Problem with Paul Samuelson" by Michael Hudson, Counterpunch (December 14 2009)

[In Full]

For more on the topic, see: "A Note Of Appreciation From The Rich"
Let's be honest: you'll never win the lottery.

On the other hand, the chances are pretty good that you'll slave away at some miserable job the rest of your life. That's because you were in all likelihood born into the wrong social class. Let's face it -- you're a member of the working caste. Sorry!

As a result, you don't have the education, upbringing, connections, manners, appearance, and good taste to ever become one of us. In fact, you'd probably need a book the size of the yellow pages to list all the unfair advantages we have over you. That's why we're so relieved to know that you still continue to believe all those silly fairy tales about "justice" and "equal opportunity" in America.

Of course, in a hierarchical social system like ours, there's never been much room at the top to begin with. Besides, it's already occupied by us -- and we like it up here so much that we intend to keep it that way.

But at least there's usually someone lower in the social hierarchy you can feel superior to and kick in the teeth once in a while. Even a lowly dishwasher can easily find some poor slob further down in the pecking order to sneer and spit at.

So be thankful for migrant workers, prostitutes, and homeless street people...


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