What do economists understand about the economy if they do not understand the profit phenomenon? Next to nothing. Therefore, the very first task in theoretical economics is to clarify the difference between profit and wage income and their respective determinants. It was Ricardo who tackled the...

For a host of compelling methodological reasons, homo oeconomicus has to be replaced. This is consensus, the open question is how this could be accomplished. What is required first is the separation of the formal foundations into a structural and a behavioral part. This paper introduces the...

The representative economist does not understand the two most important phenomena in the economic universe: profit and income. Because of this economists have nothing to offer in the way of a scientifically founded advice. Therefore, the contributions to economic blogs cannot claim to offer more...

It is common knowledge that neither Walrasians nor Keynesians nor Marxians nor Institutionialists nor Austrians nor Sraffaians came to grips with profit. The reason is a defective formal basis. In the present paper the formal foundations are first renewed. When the profit theory is false the...

It is clear by now that pure exchange models are useless. For two reasons. First, because exchange is the other side of specialization in production, and, second, because a direct exchange of goods does not take place in the monetary economy. The decisive drawback of conventional exchange...

There is no such thing as a law of human or social behavior. The conceptual consequence of the present paper is therefore to discard the subjectivebehavioral axioms and to take objective-structural axioms as new formal foundations. The central piece of economic theory is the interaction of...

All popular schools lack a consistent profit theory. Economists have no true conception of the most important phenomenon in their universe. This methodological defect persists since Adam Smith. Therefore, the theories of income and wealth distribution are wrong by logical implication. If the...

The characteristic capability of science – to turn whatever it might touch into knowledge – seems to have eluded economics. Currently, economists do not understand how the economy works. To get out of the cul-de-sac requires a paradigm shift. It consists in replacing behavioral axioms by...

Krugman has recently revitalized IS-LM with a number of succinct analytical pieces on his blog. The reverberations were remarkable. Economists, however, are known often not grasp the full content of their own and, a fortiori, of others’ models. This happened to Keynes in the days of high...

The existence proof of general equilibrium, which is based on subjective-behavioral axioms, is replaced by the existence proof of a final turning point, which is based on objective-structural axioms. The final turning point is characterized by an irreversible switch from profits to losses for...