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ECONOMIC INDETERMINACY: A personal encounter with the economists’ peculiar nemesis

New Book: Published by Routledge in December 2013. For the publisher’s webpage click here.

This book is about consistent theoretical failure feeding, consistently, into immense social power.

The theoretical failure in question is that of mainstream economics and concerns the neoclassical economists’ fundamental incapacity to tell a logically coherent story about how complex economic entities evolve through real time.

Theoretical failures are neither surprising nor shameful. What is both startling and scandalous about economics is the surreptitious conversion of the economists’ theoretical Waterloos into discursive triumphs, which then unashamedly prop up toxic economic policies and toxic financial ‘products’.

But how is this astonishing conversion of failure into power realised? Based on the author’s own modelling experiences, and drawing from a range of different theoretical fields (from bargaining theory and labour economics to experimental economics and attempts to model history by means of evolutionary game theory), this book illustrates a sequence of theoretical moves, The Dance of the Meta-axioms, by which economists, with the panache of master magicians, prevent their audience from noticing the crucial obfuscating move.

The book explains why attempts at modelling both complexity and time are bound to come up against the economists’ reliable nemesis: radical indeterminacy. At that point, younger scholars come up against a hideous ethical dilemma: Will they acknowledge that the rules of indeterminate processes are themselves indeterminate? Or will they perform the Dance of the Meta-axioms, violating logic but, in the process, succeed in ‘closing’ their models and securing tenure? If they refuse to comply with the Dance, they will be ejected from the profession. If they dance to its tune, they will be helping economics reproduce its power by ruling themselves out of any serious engagement with the logic of really-existing capitalism.

Quite possibly, never before has intellectual history fashioned an ideological triumph of this magnitude out of a sequence of sorry, yet powerfully motivated, theoretical failures.