By William K. Black
February 11, 2017 Bloomington, MN (Part 2 in my Tirole series)
In his letter to the French education minister denouncing French heterodox economists as a “motley crew” of academic failures, Jean Tirole, the 2014 Nobel Laureate in Economics, stated his test for the standard for an economist to be a scientist.
Secondly, like the other great scientific disciplines, modern economic science relies on the continuous questioning of its hypotheses, testing its models against the facts, and abandoning theories that fail the test of reality.
Tirole and his Toulouse school of orthodox economists fail the Tirole test. Their models, policies, and theories, typically “fail the test of reality” – yet they do not abandon the falsified theories. Further, they ignore reality-based scholarly work. Worse, as Tirole admits, the Toulouse school’s failures are typical of orthodox economists. Tirole shows that the foundational errors fall into three categories, and the nature of those errors supports three other underlying errors. Tirole’s admissions also demonstrate the dishonest nature of his and his disciples’ attacks on heterodox economists, as I will explain later in this series of articles.