“The way economics is taught in universities does not include half the tools and concepts necessary to understand economic problems. The core of economics teaching is mathematics, statistics, macroeconomics and microeconomics, meaning that there is no pluralism in terms of theories and disciplines,” says Arthur Jatteau, the University of Lille economist who led the project.

Such formalisation is a product of the discipline’s history. Economics started as a branch of philosophy, evolving into a social science in the 19th century. Even then, it was largely free of mathematics. Adam Smith’s The Wealth of Nations includes no equations. Despite its humble beginnings as a ‘moral science,’ the discipline soon adopted mathematical modelling in an effort to wear the impenetrable armour of objectivity that only ‘hard’ sciences like physics can boast of.

The turn towards neoclassical approaches, which emphasise supply and demand equilibriums, enabled economists to pass their policy prescriptions as scientific analysis. “Mathiness comes from this pursuit of influence,” says George DeMartino, an economist who teaches at the University of Denver. “It sends a signal to policymakers that they don’t understand what economists do and therefore they must defer to their judgement.” Milton Friedman, the high priest of free markets, famously argued that it did not matter if models made unrealistic assumptions, as long as they accurately forecast the economy’s ups and downs. For many economists, this approach is necessary for the science to maintain its academic rigour. “Mathematics in economics brings transparency in that it makes assumptions explicit. So the models still work in most cases,” says Jon Danielsson, an economist and co-director of the LSE’s Systemic Risk Centre.

The issue came to the fore recently due to the failure of models to predict the inflation crisis. In an astounding admission, Belgium’s central bank governor Pierre Wunsch acknowledged that the European Central Bank’s models were practically useless. “It was more or less impossible in our models to produce any inflation that would not be temporary,” Wunsch said last year, explaining that they always showed price rises falling under the bank’s two percent target. The issue had broader political repercussions, with central banks taking flak for failing to grapple with the first inflation crisis since the early 1980s.

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While concerns over academic integrity and research reproducibility are not uncommon among other sciences, economics faces a much bigger ethical crisis. One piece missing from its models, argues George DeMartino, author of The Tragic Science: How Economists Cause Harm, is an understanding of the harm that theories can cause, as most economists believe that some collateral damage is the price to be paid for a higher good. The gap separating economists from those who cannot master its advanced mathematics results in a sense of entitlement.

“There’s this profound paternalism in the profession that economists know best, and society should defer to our judgement because everybody will be better off,” DeMartino says. “If you take this approach, you find that it’s okay to deceive.” One example is the ‘Shock therapy’ imposed on post-Soviet Russia by a group of Russian and foreign economists, seeking to transform the country into a market economy. The economic argument, DeMartino suggests in his book, was a smoke screen for economists to pursue their agenda. As an antidote to such behaviour, he believes that economics teaching needs to incorporate ethics, notably what he calls ‘moral geometry’: the study of how complex economic policies could affect and potentially harm different groups.

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“Until economics recognises its limits in terms of predicting the future, we economists shouldn’t have too much influence in these areas,” says DeMartino, adding: “Economics has aspired to be the physics of the social world for over 100 years. That pretension has to be dropped.”

https://www.worldfinance.com/special-reports/is-economics-broken

As it happens, most of these concepts were borrowed from the methodology of natural science in general and from astronomy, or astrophysics as it is now called, in particular. Early practitioners in the field of political economy can, in all probability, be acquitted of the charge of harbouring any malicious intentions in developing this methodology but introducing concepts from mathematics and physics threw open the door of adding the appellation ‘science’ to the subject of economics. Indeed, the popularly known LSE had been given the title London School of Economics and Political Science when it was established in 1895, thus effectively claiming that economics was, in fact, a science no different from the natural sciences.

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Meanwhile, the mathematisation of economics had given it the superficial credentials of a science so that any other views, particularly value judgements, were given short shrift and dismissed as lacking in rigour. The claim – essentially untested – was that policy-making relating to issues of social justice and equity should not interfere in the functioning of markets, as it would lead to sub-optimal outcomes. Ideally, the state should only concern itself with internal security and defence and leave everything else to the markets.

What is the reality? As an intellectual discipline, economics has built its theoretical framework on several assumptions regarding the behaviour of individual men and women and about society within which those individuals live. But the economic system that we have to live with, apart from its own internal mechanics and rationale, is not only concerned with inflation and unemployment; it has to operate within some ethical framework. It is man-made and needs to conform with the underlying value system of society. However, many economists contend that introducing morality is outside the remit of both traditional and neoliberal, market-driven economic theorising. The question is whether such a contention can be seriously maintained. While people might take a relativistic view of morality it is also the case that there are basic ethical feelings that virtually all of us as human beings share – kindness, harmony, fairness and justice.

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As Keynes said: ‘The master economist must possess a rare combination of gifts… He must be a mathematician, historian, statesman, philosopher – in some degree and touch abstract and concrete in the same flight of thought.’ He also said that ‘the fundamental problem is to find a social system which is efficient economically and morally’. Keynes made these comments nearly a century ago and they remain as valid today as in the 1930s. It is a harsh judgment but economics, pretending to be a science, has failed abjectly to provide solutions to the world’s most pressing problems. Let it now learn humility. Perhaps, wisdom can then follow.

https://www.thefridaytimes.com/04-Sep-2025/why-economics-isn-t-the-science-we-think-it-is%3Fversion=amp

Unlike the labor theory of value, the utility or subjective theory is completely empirically untestable, a point which Marxist economist Paul Cockshott makes in his defense of the labor theory and critique of Alfred Marshall, who’s often considered the father of neoclassical economics[3]. The neoclassicals consider consumer demand to be a primary determinant of commodity prices, but a commodity’s perceived utility is an entirely subjective factor which cannot be quantified, and thus cannot be measured or compared to other commodity values numerically. This is the opposite of labor theory which measures commodity values by the average quantity of labor time needed to produce it. The utility theory of value is entirely based on the subjective perceptions of consumers which can’t be quantified and thus can’t be compared to commodity prices. This means that neoclassical economists can never actually test their theory that consumer demand determines the price of a commodity, unlike labor time on the other hand, which correlates very closely to commodity prices (as we will discuss later). The subjective nature of the utility theory, or the subjective theory of value, has been very useful for the neoclassical ideologues who defend it and allege that it has disproved the labor theory.

https://www.midwesternmarx.com/articles/neoclassical-economics-postmodernist-philosophytwo-academic-expressions-of-the-ruling-class-by-edward-liger-smith

A Nobel prize in economics implies that the human world operates much like the physical world: that it can be described and understood in neutral terms, and that it lends itself to modelling, like chemical reactions or the movement of the stars. It creates the impression that economists are not in the business of constructing inherently imperfect theories, but of discovering timeless truths.

To illustrate just how dangerous that kind of belief can be, one only need to consider the fate of Long-Term Capital Management, a hedge fund set up by, among others, the economists Myron Scholes and Robert Merton in 1994. With their work on derivatives, Scholes and Merton seemed to have hit on a formula that yielded a safe but lucrative trading strategy. In 1997 they were awarded the Nobel prize. A year later, Long-Term Capital Management lost $4.6bn (£3bn)in less than four months; a bailout was required to avert the threat to the global financial system. Markets, it seemed, didn’t always behave like scientific models.

https://www.theguardian.com/commentisfree/2015/oct/11/nobel-prize-economics-not-science-hubris-disaster