PKT message, Modern Economics - Concepts and Methods

(i) Modern "Keynesians"

Keynes admittedly served academic economists some "inconsistent hotch-potch" in the General Theory. It remains to be explained why so many of them have revered it and made it serve so long as a veritable "widow's cruse" for economic science.

The first part of the answer, the author would submit, lies in the code of academic scholarship by which the modern "Keynesian" tradition--that of the self-styled "mainstream macroeconomics--abides.

Samuelson expressed a basic tenet of that code in 1939 in these words:

"From a strictly logical standpoint, controversy over terminology is sterile; the flexible mind will adopt the terminology of his opponent of the moment." [90]

Bentham took a different view of the subject matter: "Till objects are distinguished, they cannot be arranged." [91] Thus, one cannot do geometry until the basic concepts of analytic geometry have been defined in a manner that is consistent, coherent, and complete.

Similar considerations apply to the concepts of "saving" and "investment," with respect to which Samuelson made his statement. Even now, these concepts remain in a state of disarray insofar as analytical economics is concerned.

A second part of the answer relates to the proper role of mathematics in economic science in its adolescent stage, when key concepts lack coherent definition and the science is plagued by pseudo-concepts such as that of the "multiplier".

"Contrary to the impression commonly held," Samuelson also concluded in 1939, "mathematical methods properly employed, far from making economic theory more abstract, actually serve as a powerful liberating device enabling the entertainment and analysis of ever more realistic and complicated hypotheses." [92]

This conclusion could not be contested if "properly employed" implied that mathematical methods should not be applied to the analysis of incoherent concepts.

Modern "Keynesians", however, have not so construed the meaning of these qualifying words. Therefore, mathematical methods have only served to transfer incoherence from the premises of mainstream macroeconomics to its super-structure.

Bentham had thoughts on this subject matter as on most others relating to the practice of economic science:

"I have by me a large quarto of mathematics," he said, "written by a mathematician and politician of deserved eminence, in which the utility of numbers, as a security for good judicature, is assured. The conclusions of mathematicians, though always mathematically just, are not unfrequently physically false: that is, they would be true if things were not as they are. Some necessary element is omitted to be taken into account: and thus the only effect of the operation is to mislead." [93]

Mainstream theorists have not let the constraints on the proper role of mathematics in economic science represented by epistemology slow its ascendancy in the postwar period.

Thus, Samuelson's Foundations of Economic Analysis has an elegant mathematical representation of the model of the General Theory, its "inconsistent hotch-potch" character notwithstanding.