Economics as a Science & Paul Krugman as a Scientist

(This is in response to Ian Welsh's evaluation of Paul Krugman's strengths and weaknesses as an
expert. It is slightly revised from my remarks in comments.)

K-k-k. There is in science and engineering a distinction between pure science, which is
descriptive in character, and applied science and engineering, which use the descriptions of pure
science to some goal. In economics, this distinction is often lost. There is a descriptive social
science which might be called pure economics and an applied practice of economic policy
making which doesn’t have a separate name. I think, as a matter of scientific practice and ethics,
it is important to clarify the distinction.

Equally important, and widely overlooked, are the scientific basics of explicitly stating the
assumptions of theory and checking theory against experimental data. In the area of stating
assumptions, economics fares poorly: economic behavior occurs in a social context, and it is part
of the assumptions of any economic theory (= model.) Without stating the social context of an
economic result, one can get remarkably boneheaded results: as Galbraith points out, one can end
up assuming that people negotiate for jobs in the same way they haggle over fish.

Which brings us back to Krugman. Points in Krugman’s favor which I don’t think you’ve
covered: he is aware of the distinction between pure and applied economics, he is willing, after a
struggle to be sure, but willing, to check his theories against experimental data, and he accepts
that people behave differently in different markets.

On the other hand, he himself has acknowledged a theoretician’s weakness for elegant general
theories and he is not a strong applied economist. Since his time with the Reagan administration,
he has refused policy-making positions, and I think this may be why.

CONOMIC SCIENCE, IN SHORT

Lyndon H. LaRouche, Jr.

May 29, 2009

The following report has been produced for the special benefit of those serious scientists and poets who
are prepared to come directly to the crucial issue underlying the world’s presently accelerating plunge
into the onrushing new dark age of general breakdown-crisis of the present world economy as a whole.
The subject within which this report is situated, is what is, to my present knowledge, the still rarely
considered principle which distinguishes the human mind, knowledgeably, from that of beasts. This is
the same uniquely human principle, of that willful potential of the human mind which lies under the
same heading, under which the notion of the ontological conception of the tensor must be situated for
our study here.

FOREWORD

Unless there is a relatively immediate reversal of the current economic and demographic policies
which had been expressed by both the recent U.S. Presidency of George W. Bush, Jr., and, now,
President Barack Obama, civilization on this planet is now doomed to a rapidly accelerating
descent of all mankind in a general dark age, a time during which the population of this planet
would descend, foreseeably, from the presently estimated level of more than six-and-a-half
billions persons, to the less than two billions which has been the stated goal of Britain’s Prince
Philip and the Prince’s explicitly pro-genocidal World Wildlife Fund.

This nightmare, born out of current British ideology, which is already now descending upon this
planet as a whole, is not a product of natural causes, but, rather, the natural outcome of so-called
Malthusian economic policies, policies which had been radiated from the British empire, and had
been carried out, during a certain time, by what the British monarchy and its ideological
accomplices and interests had created as the Nazi Germany regime under Adolf Hitler, earlier.
The same kind of genocidal result packaged as the Hitler regime, is being promoted by the
British under the impetus of Prince Philip and his World Wildlife Fund now, with the present
collaboration of U.S. President Barack Obama.

These pro-genocidal policies of the current British monarchy, are of a type which is by no means
new to known history. The current policies of the British monarchy, of its accomplices inside
leading political and related circles inside even our own United States, and its current
Presidential administration today, are types of policies which the Eighteenth-Century British
Empire’s British East India Company of Lord Shelburne and his accomplices had copied,
explicitly, from the policies of practice of the ancient Roman Empire, policies which had been
described in the Prometheus Bound of the ancient Greek Classical dramatist Aeschylus.

The continuation of such pro-genocidal policies as those of Britain’s Prince Philip and his World
Wildlife Fund today, is not to be traced to the United Kingdom as a nation-state, but, rather, to
the imperial character of the role of London’s financial center as the capital of a world-wide
empire based on a currently dominant world-wide monetarist system akin to a Keynesian
monetarist system. This is a system whose origins are traced to the feudal medieval European
monetarist system, centered in Venice, which crashed in the so-called “New Dark Age” of
Europe’s Fourteenth Century, and to the monetarist imperial system of usury maintained by the
Roman and Byzantine empire earlier. That is the present-day echo of the imperialist form of
tyranny, an echo which is known by the name of “globalization” today.
“Globalization” and the attempted global practice of genocide, by the British monarchy and its
accomplices, against the world’s population today, is a presently immediate threat to all mankind
which has arisen in its present form through the virtual capture of the Presidency of the United
States by the British monarchy, as under the recent and current Presidencies of George H.W.
Bush (1989-1993), George W. Bush, Jr. (2001-2009), and, presently, Barack Obama (2009 -...).

President Obama and his immediate personal cabal of the pro-genocidal British fanatics gathered
within his Presidency, is a present expression of the particular, greatest economic threat to
mankind as a whole. It is an expression of the influence of the British monarchy’s currently
continuing tradition of Lord Shelburne’s British East India Company, a tradition of hateful
efforts against all mankind during the course of the modern world history since that February
1763 Peace of Paris which established that Company as, in fact of practice, a private world
maritime empire holding the British monarchy itself as captive.

The United Kingdom, as a form of an only nominally sovereign nation-state, had become, up to
the present time, a virtual colony of what Shelburne established, in 1782, as the British Foreign
Office and its relationship to a City of London as a center of a global form of imperial monetarist
system. President Obama, like the present regime of the U.S. Federal Reserve System, is
presently a collateral puppet of that continuing, global form of monetarist imperium crafted
according to the paradigm of the Roman, Byzantine, and Venetian traditions.

Our United States

It is an, unfortunately, little known, but crucial fact of all modern world history, that what was to
become our United States, was the outgrowth of the influence of the then-deceased Cardinal
Nicholas Cusa, since about A.D. 1480, in motivating Captain Christopher Columbus to take a
known passage across the Atlantic Ocean, a voyage intended to find, on a newly rediscovered
continent, a place from which to secure a new future for that, then imperilled, new European
civilization which had been launched by the great ecumenical Council of Florence.

It was that mission, adopted by Columbus, which set into motion what was to become our United
States. Such was, also, the expressed intention of the mission which launched the Pilgrim and
Massachusetts Bay settlements in what became known as New England. These settlers were not
refugees, but true pioneers embarked upon a mission to give birth to new hope for a European
civilization which was being torn apart, in Europe itself, by the monstrous evils of the prolonged
religious warfare of 1492-1648. The intention of these trans-Atlantic settlements, was to create a
new world system of sovereign nation-state republics, as had been proposed by Nicholas of
Cusa’s Concordancia Catholica (establishing the modern nation-state), his De Docta Ignorantia
(the founding of modern European science), and his De Pace Fidei (his ecumenical policy).

There were similar attempts launched across the Atlantic from Spain, but it came to be the
English-speaking settlements in North America which produced the unique form of self-
government, later emulated by notable cases of Spanish speaking nations there, as expressed,
most notably, by those who reacted against the imperial intentions of the British East India
Company’s attempted tyranny, in 1763.
The British East India Company went on, to become a world empire, absorbing the British
monarchy itself by, cleverly, like an infectious disease, being swallowed by it. Through wars
which Anglo-Dutch Liberal agents of the new European imperial party either launched, or
provoked, beginning that so-called “Seven Years War” celebrated by the East India Company’s
February 1763 Peace of Paris, and through such successors of the same divide-and-rule warfare,
as the Napoleonic wars, what became World Wars I and II, and also “The Cold War,” that
British Empire worked to secure the ruin of those nation states whose independence would be a
threat to the British imperial monetarists’ design for their intended world maritime empire.

The essence of this Anglo-Dutch, imperial monetarist scheme, commonly known as the British
Empire, has always been an extended expression of the monetarist systems typified by the issues
of: the Peloponnesian War; the wars of the Roman and Byzantine empires; the Venetian model
of imperial monetarism associated with European feudalism; and, despite important periodic
resistance to this, most of modern European practice.

In short, monetarism is the essence of a specifically European imperialism extant, as a kind of

infectious disease, since the Peloponnesian War. The essence of such empires has been the
existence of a privately held, monopolistic system of credit, in the form of a monetary system. It
is a system which remains opposed to a truly sovereign, national credit-system in the likeness of
what the U.S. Federal Constitution prescribed as a “Hamiltonian” national banking policy for our
Federal republic. That policy of our republic, has always been, as under the leadership of our
President Franklin D. Roosevelt, and President Abraham Lincoln before him, the greatest threat
to imperialism ever existing in modern world history to date.

In short, the British empire hates us, but admires the breeding and promotions of the parasites
and ruinously degrading immoralities it has bred within our economy and customs.

'I Am a Paradigmatic Patriot!’

Clearly, the Obama Presidency must be either soon reformed, to purge it of its complicity in such
implicitly treasonous policies as those practiced by both the George W. Bush administration and
the Obama administration itself, since September 2007; or, in the alternative, it must be replaced
by means of constitutional due process now. President Obama has virtually no secure choice but
that. Either he reverses his present policies, especially his rabidly unconstitutional, Hitler-like,
health-care policies, or it will be either him or the United States as a nation, or both, which will
be destroyed very soon. World history has already had one attempt, by Adolf Hitler, at such an
imperial regime, and civilization will not readily tolerate another such epidemic.

In short, history would not tolerate a new, would-be “Emperor Nero” for long.

It is a good, but perilous endeavor to be a patriot in our present “time that tries men’s souls.” It is
also urgent that our remedies be competent ones. Since the root for the cure of our society’s
onrushing catastrophe, lies in the need for a competent economic policy, my own patriotic
contribution is unique. In fact, as fairly competent economists will come to recognize, our
nation’s life depends upon adoption of what I have to say here and now. I am, in that way, a
paradigmatic patriot.
Therefore, herewith, in the following body of this report, I shall proceed as follows. I shall begin
with the introduction of some indispensable essentials of economics practiced as a science. I
point out the commonplace errors of opinion about economy, opinion of which we must rid the
governing circles of our nation, if this nation is actually to survive.

The most profound and widespread failure presently pervading most scientific thought, including
a science of economy, as taught and believed today, is expressed as what I identify here as the
pathological quality of the presumptions of the so-called “Anglo-Dutch empiricists.” Their first
error is their presumption, that sense-perception provides us a direct insight into what we should
consider, if not as the real universe, but, nonetheless, what they regard as if it were the real
universe; for them, the rest is “merely theory.” The second is the associated presumptions, such
as those inherently corrupting, a-priori definitions, axioms, and postulates of Euclidean
geometry, which were overthrown categorically by Bernhard Riemann’s 1854 habilitation
dissertation.

So, the modern empiricists, such as the followers of Adam Smith, insist, still to the present day,
that there is no existence of truth, but, instead, only customary, implicitly statistical, or kindred
presumptions, presumptions which are premised, in turn, upon more or less blind obedience to
mere sense-perceptions.1The tragic incompetence, exhibited in its effects by the presently onrushing global economic breakdown-crisis, is typical of
virtually all modern economists of today’s Anglo-Dutch Liberal school. See Adam Smith, Theory of Moral Sentiments (1759). The fascist bio-ethical policies of
President Obama are based almost entirely on this work of Adam Smith. Cf. Lyndon H. LaRouche, Jr., et al., The Ugly Truth About Milton Friedman (New York:
New Benjamin Franklin House, 1980).
That denial of the existence of any truth, is the underlying premise of the
entire doctrine of President Obama’s currently stated, radically malthusian, and frankly Hitler-
like health-care policies, and, also, his related economic policies generally.

This now brings us to the crucial matters of economics as a true science.

What Is Science?

Contrary to such delusions as those of President Obama currently, the truth is, that human sense-
perceptions are fairly described as: “merely instrument readings,” rather than being “a direct
sense of the real universe as such.” Those “instrument readings,” at least some among the entire
roster, remain indispensable for us; but, they are clear to us only on the condition, that we
recognize the fact, that, contrary to the a-priori presumptions of Euclid, from the outset of every
relevant inquiry, that instrument readings, such as those of sense-perception, or otherwise, are
just that, rather than being “self-evident” ideas of nature in and of themselves.

The tendency of those persons who are ignorant of this distinction, has been to believe in sense-
certainty, more or less as the empiricist followers of Paolo Sarpi have defined it. That latter,
empiricist, tendency, as radiated by the global influence of what is called “The British Empire”
of today, is, in fact, the source of the greatest single moral crisis, as much as an intellectual crisis,
among the cultures of the world presently.

Contrary to such pathological tendencies, the power of the human mind to know reality, lies
actually within that mind as such; the senses, like all, either inborn, or man-made instrumentation
used by us to explore our experience, present the creative powers of the human mind with the
“data” which serves as the challenge posed by the fact, that it is from the human mind’s
apprehension of the subsuming dynamics of those relationships, among those mere shadows,
from which we adduce that experimental evidence, from which, in turn, that mind must adduce
the functional existence of what is to be recognized as the efficient reality among mental
objects.2I.e., the ancient Pythagoreans’ dynamis, and the modern dynamics of Gottfried Leibniz.

Those subsuming dynamics are expressed as demonstrable universal physical principles, as that
point is illustrated by Johannes Kepler’s uniquely original discovery of the universal principle of
gravitation in the Solar system. These are real objects whose sensed presence is adumbrated by
those “shadows” which, when cast, are to be recognized as merely “shadows” cast by reality, as
merely sense-perceptions, not the reality of the action which those shadows reflect.3For example, there was
never any truth in the allegation that Isaac Newton discovered gravitation. All arguments which insist that Newton discovered gravitation are nothing but outright
frauds.

Thus, the human mind, as such, has no directly sensory access to the reality of the world which it
inhabits: although it does have the means to bring about changes in that world, and, it is by
exactly the means of those changes, that that mind gains access to knowledge of the “world out
there, beyond mere sense-perceptions.”

At first glance, we might, admittedly, think, mistakenly, that the mind’s experience is limited to
the role of sense-organs, which are merely a source of instrument readings. This means either
inborn sense-organs, or supplementary, man-made instruments which serve as extensions of
those functions of those built-in senses, which were delivered with “the package” which was the
new child. Thus, that child’s primary experience of the universe which mankind inhabits, is not a
direct representation of the actual universe which we inhabit; but, rather, it is a kind of shadow
cast on the mind, which is expressed, cumulatively, as a dynamic pattern among shadows; it is
that, subsuming, dynamic pattern, in the sense of the dynamis of the ancient Pythagoreans and
Plato, or the dynamics of Gottfried Leibniz, from which we are to adduce that higher principle,
such as the universal gravitation discovered, uniquely, by Johannes Kepler, as in his The
Harmonies of the World, which has cast such patterns among shadows.

It is from the subsuming, dynamic relations manifest in the process of man’s practice upon the
patterns of the “instrument readings,” that we are able to adduce the real universe which casts
those shadows which we experience as sense-perceptions. This was the fact emphasized by
Gottfried Leibniz during the 1690s, in his exposure of the scientifically fraudulent character of
the presumptions on which not only the system of Rene Descartes depended, but also those
Anglo-Dutch Eighteenth-century empiricists who attacked the very memory of Leibniz’s
existence, fraudulently, on this account, after he was dead: such lying hoaxsters were the
hoaxsters de Moivre, D’Alembert, Leonhard Euler, Joseph Lagrange, and also Laplace and the
plagiarist swindler Augustin Cauchy.4As I have made the same point in earlier locations, this notion of dynamics also appears implicitly in
the concluding paragraph of Percy Bysshe Shelley’s A Defence of Poetry.

It is through experience, that the human foetus and infant begin to assemble what becomes a
sense of the notion of that individual’s relationship to those sense-experiences as such. So, the
development of the foetus, infant, and child, is not experienced as a replica of the universe it
might be thought to be merely experiencing in this way; it is a reflection of that experience of our
sense of those changes which we are able to effect within the universe itself, as, within our own
patterns of behavior. It is through the newly emerging individual, in this way, that the mind of
the emerging child comes to recognize its interaction, through the senses, among individual
creatures whose actually dynamic patterns of response have what becomes recognized as a
specific quality of kinship with that child’s own nature.5E.g., Gottfried Leibniz, “Critical Thoughts on the General Part of the
Principles of Descartes” (1692). See also, Leibniz, “Specimen Dynamicum” (1695). In Gottfried Wilhelm Leibnitz: Philosophical Papers and Letters, Leroy E.
Loemker, ed. (Boston: Kluwer Academic Publishes, 1989).

Among the results which may emerge in the continuation of this process, the following notable
cases are to be included.

Within the bounds of a modern, Twentieth-century and Twenty-First-century physical science,

the matter of that distinction is to be located now, most directly, and most efficiently, as at the
center of the interacting deliberations of Albert Einstein and Academician V.I. Vernadsky on the
subject of what is called the tensor, as expressing a physical conception, rather than merely a
mathematical one. Dynamics (or, the ancient dynamis) are synonymous with the concept of the
tensor, when this matter is considered as a subject and product of the method of Bernhard
Riemann. As Leibniz attacked Descartes explicitly on this point, the dynamic (e.g., tensor) is the
proper subject of science; the sensory or like forms of experience are the products (predicates) of
that subject.6ibid.

On this account, great minds, such as Bernhard Riemann and such among his most relevant
followers, as Albert Einstein and Academician Vernadsky, appear to us today as having been
what are called “true geniuses,” chiefly, because they had reached the stage of moral and
intellectual maturity at which they are not to be mistaken for populist-like dupes of blind faith in
sense-certainty as such. They are, rather, focused, less on events as such, than on processes of
changes; they think so in the sense of Leibniz’s introduction of the modern term dynamics, with
emphasis on those kinds of changes manifestly induced and controlled by relevant kinds of
willful actions by the human mind itself.7So, Kepler's uniquely original discovery of a principle of universal gravitation, as detailed in his
The Harmonies of the World, defined a principle of universal gravitation as if bounding the action within the ordering of the Solar system, rather than a kinematic
interaction among those bodies. Albert Einstein, in reviewing this discovery by Kepler as implicitly Riemannian, defined the universe as "finite, but unbounded."

The Principle of Economy

On this account, all that is contrary to what I report here, but which is generally taught and
believed teachings in the name of “economics” today, is to be thrown into the waste-paper
basket. Not carelessly, as if all at once, not arbitrarily, but through a process of distinguishing,
step by step, experimentally, actual from merely presumed knowledge. So, for example, once
reigning superstitions in the form of viciously reductionist fallacies of composition respecting
economy, are put aside in this way.

However, in the meantime, there is already no remaining basis for the widespread, but
delusionary belief, that some intrinsic value is expressed by money. Value is expressed, not as a
quantity per se, but only as the relative effects of the increase, or decrease of the physical
potential relative population-density of the individual in society. The value of money lies not in
the individual exchange, but in the functional unity (unifying dynamic) of the social process of a
nation, or nations when considered as an individual, dynamic entirety.8On this account, all British economists, such
as Adam Smith, Jeremy Bentham, and their followers, have based the entirety of their dogmas on utter frauds. The fascist types of so-called economists, such as the
charlatans associated with the policy-making of President Barack Obama, are examples of what tends to become the mass-murderous character of such frauds. Hence,
in the latter cases: mass-murderously criminal frauds.

On a deeper, far more important level than that, the issue to be considered is, that, essentially, the
individual person must become capable of seeing each among themselves in his, or her society,
as expressing the mind which makes use of the mere instrument-readings we call sense-
perceptions, rather than, mistakenly, locating the person himself, or herself, as like a creature
belonging, ontologically, to the illusory domain of that shadow-world called “sense-certainty.”
This is an expression of that principle of dynamics on which all competent practice of a science
of economy depends, any competent notion of “economic value,” most emphatically.

What tends the most to conceal the true nature of the human individual from himself, or herself,
is the tendency for belief in sense-certainty, as that pathological disordering of the human mind,
is typified by the a-priori presumptions of Euclidean geometry, and, similarly, the grave error,
as this was pointed out by Philo of Alexandria, as the error of presuming, that the Creator of the
universe had lost the power of creativity, once an initial Creation had occurred. It is only to the
degree, that the individual recognizes that the reality of his, or her existence, does not lie in the
mere shadows of what are often, mistakenly, supposed sense-certainty, as such, that the
individual rises to an efficiently conscious awareness of the reality of one’s own functioning, a
reality which lies within the individual’s historical identity within the historical-cultural process
of society as a whole.

It is here, beyond vulgar, populist’s, or kindred sorts of erroneous notions of space and time, that
true scientific reality, as known presently to only the greatest poets, musicians, and scientists,
reposes in that which is often misnamed by the confused in their misuse of the term “spiritual”
domain.

So, Percy Bysshe Shelley wrote in the concluding paragraph of his 1819 A Defence of Poetry.
There, in that place, in a passage which is usually misunderstood still today, he points toward the
only place where the presence of the access to immortality of the individual human soul can be
found, in that domain of an eternal simultaneity of human immortality, under which mankind’s
proper conception of space and time reposes.

It is in the unity of science and Classical poetry (and polyphony), that the efficient unity of
experience of physical practice and creativity (Classical artistic composition) are unified as a
single process.

In that true domain of human individual existence, time, like space, is merely another sensory
experience to be made knowable to us through the powers specific to human individual
creativity. It is real only in the sense that time and space are known as being, efficiently, an
adumbration of reality for us, rather than being, as for the dupes of Descartes, each some
independent faculty outside and above the actual physical domain.
Art, Science & Creativity

Since, most emphatically, the discoveries by Johann Sebastian Bach, the most alert minds of
science and music alike, have recognized that poetic principle of what is called Classical musical
composition, as the experience of the unity of effect of mind, matter, space and time. So, matters
were considered by the relevant greatest minds of the time prior to the 1890-1989 period of
general threat of “world war” throughout our planet. Thus, prior to the recent rise of the so-called
“modernist” hostility against the legacy of Bach, a hostility had come on, like a new bubonic
plague of the soul: so, now, as during the preceding Twentieth Century, in the worsening state of
mind and morals already prevalent, now, in the first decade of the Twenty-First, we have come
to live in four or more recent decades during which there has been an accumulated loss of that
connection to the Classical revolution in both science and Classical music, painting, and poetry,
a connection on which the greatest achievements of modern European civilization had depended
during the immediately preceding centuries.

Within certain limits, we can, and must say, that the modern world history, since the accession of
the novel, Anglo-Dutch Liberal form of British monarchy of England’s George I, but, most
emphatically, since the February 1763 Peace of Paris, has been a period of a special quality of
wars and other great struggles between good and evil, a war, on the one side, which had achieved
what was typified by the founding of our United States as a constitutional republic, and, on the
opposing side, the intrinsic evil of British imperialism, the latter an evil which presently
dominates the world, now including the United States, through British, Venetian-style shaping of
the present world’s monetarist system, today. That has not been essentially a conflict between
nations, but a conflict of two fundamentally different principles of two opposing world systems:
two mutually exclusive conceptions of the nature of mankind.

Any contrary view of that period of modern history is fairly described as being, at its best,
politically and scientifically childish, and actually bestial.

It is to be said, without any justified fear that we might be exaggerating, that there has been a
generally accelerating moral decay in U.S. culture since the April 12, 1945 death of President
Franklin Roosevelt. The process of moral decay in the U.S.A. since the April 13, 1945
inauguration of President Harry S Truman, was accelerated in the immediate aftermath of the
assassination of President John F. Kennedy; not long after that, came a steep decline into a new
fascist wave of the late Spring 1968, fascist movement merely typified by the depravity of Mark
Rudd and his associates. During the 1970s, the U.S. Nixon Administration was already a fascist
administration in intent, as was the U.S. Carter Administration, to the degree it was under the
control of the Trilateral Commission of David Rockefeller and Zbigniew Brzezinski.