Why Roberto Unger's new book is worthless

Roberto Unger believes Economics is flawed because it lacks causal theories. This is not true. It holds that the cause of the activity it studies is 'scarcity' which it defines in terms of its discourse's 'Tarskian primitives'.  Thus it escapes circularity or infinite regress and is established as a utile discourse with a scientific methodology. In particular it can separate correlation from causation and accommodate multiple realizability.

Unger's false belief causes him to write nonsense- e.g

 from the standpoint of economics the division of the world into states is an accident without proper economic significance, although it is the predicate of the theory of trade and of the Ricardian doctrine of comparative advantage. The world might just as well be a single state. But if it were a single state there would be much less diversity on which the method of competitive selection could operate.

This is bizarre. There is diversity within a state and within a village. Specialization and Trade based on opportunity cost ratios occurs both locally and globally.

It is a different matter that a Despot who does not approve of Trade- considering it as infra dig or morally repugnant- may pretend that what is happening is either the offering of tribute by barbarians which is rewarded by gracious gifts or else an exchange of fraternal gifts between Dictatorships of the Proletariat.

Nevertheless, there will only be 'gains from trade'- i.e. a larger cake than would have otherwise obtained- if trade is on the basis of lower opportunity cost production. Any more 'causal' approach will rapidly degenerate into nonsense.

Perhaps Unger believes Brazilians have a different nature from Americans. Why should that be? The answer is obvious. The former can only produce things while doing the salsa. The latter's productive activities must be adapted to the rhythms of the square dance. A proper Economic theory- one with content- would not look at 'opportunity cost ratios'. It would study the salsa's effects on productivity in a wide variety of fields and then prescribe what Brazil should export. A similar exercise could be carried out by square dancing American economists. In this way Economics would have a proper theory of International Trade rooted in the fact that trade between Nations is predicated upon the existence of Nations. But, what causes Nations to exist? In the case of Brazil, it is the fact that Brazilians are doing the salsa all the time. Naturally, this confines them to a certain geographical area. Americans, by contrast, have square danced their way into a certain territory thus pushing out hat dancing Mexicans and Cancaning Canadians perpetually flinging up their skirts to expose their knickers .

Unger's ire at Economics is not confined to the latter's lack of a theory of the State. He complains that it has no causal theory of the Law. Since economic activities occur even if there is no Law but the Law never operates save where there is scarcity and thus economic activity occurs, it would seem that the latter is supervenient on the former. Physics does not need to have a theory of Engineering. But Engineering must base itself on what Physics has established.

Unger writes-

 The greatest achievement of legal thought over the last 150 years has been to establish that a market economy has no single natural and necessary form -- that there is no regime of contract and property inherent in the conception of a market economy.

Thus 'Econ' must predominate in 'Law & Econ' just as Engineering must content itself with being applied Physics.

Unger doesn't get that, if what he says about legal thought is true, then Economists ought not to give the Law a thought.

But this idea has never penetrated the inner sanctum of practical economic thinking and the reflex of the economists is still to believe that a market is a market a contract is a contract and property is property.

This may be the reflex of very elderly economists. The current reflex is to see markets as imperfect, contracts as incomplete, and property as factorizable in a Hohfeldian manner. No doubt, the influx of Von Neumann type maths obscured this for a period but this is the actual Marginalist tradition.

From this standpoint you could say that there are three kinds of economics: there’s the pure economics of an Arrow of Debreu which has no institutional content,

but it has no Knightian Uncertainty and, in any case, was proved to be 'anything goes' back in the early Seventies. Alan Kirman- who contributed to this development- explicitly shifts attention to 'organization'.

there’s the ideological economics of a Hayek that identifies the abstract idea of a market with a particular set of market institutions,

Unger is right to say this is ideology. It isn't economics. That's why Varoufakis or Meghnad Desai describe themselves as 'Marxist-Hayekians'. They wish to advertise their status as morons by uttering this oxymoron.

and there’s the equivocating economics illustrative of the argumentative practice of the American followers of Keynes – so called macroeconomics, the exploration of supposed law-like relations among large-scale economic aggregations such as the level of savings, investment, and employment.

Yup. Those guys are senile and continually shit the bed.

If you challenge them and say that these law-like regularities depend on a whole host of background institutional conditions, such as for example the nature and level of unemployment insurance, they will concede that they do depend on those background conditions but then they will go on to disregard this concession in their argumentative practice as if the institutional arrangements are in fact stagnant. Confusing stagnation with law, and that’s what I mean by equivocating economics.

An engineer might challenge a Physicist by saying 'you didn't build the instruments which helped prove your theory. Thus you don't really understand your own theory.' The Physicist may reply 'you were paid to build this instrument so as to test my theory. You are just a monkey which is good at tinkering with things. Go away. Your stupidity may be contagious.'

This may seem unfair. Watching Big Bang theory, we resent Sheldon's arrogance and sympathize with Howard, the engineer. But, we have to admit that Sheldon's theories can quickly change such that entirely new vistas are born. Howard is playing catch up. Physics moves faster than Technology. Thus Physicists look down on Engineers though they may earn more money.

Why should the same thing not be true of Economics Professors vs Law Professors?

Consider Unger's reference to 'the nature and level of unemployment insurance'. He probably thinks these are fixed or otherwise determined by law. Sadly, this is not the case. A macro event can very quickly change both the nature and level of this type of entitlement. Indeed this constantly happens at the margin. If the Govt. is facing a cash crunch, more claims are denied or terminated. There may be a legal challenge but this involves a time lag and restitution is seldom complete. On the other hand, during an upswing, claims may be very differently assessed. The Govt. may wish to prolong the boom for a political purpose.

Unger is ignorant of the existence of what we may call Production Economics which is allied to Engineering and subsumed under the rubric of Dynamic Programming and Operations Research. This is very much part of the Knowledge Economy he gasses on about in his new book. But because he says this type of Econ does not exist, his book is worthless.