Toolism! A Critique of EconoPhysics

Abstract

Economists are fond of the physicists’ powerful tools. As a popular mindset Toolism is as old as economics but the transplants failed to produce the same successes as in their aboriginal environment. Economists therefore looked more and more to the math department for inspiration. Now the tide turns again. The ongoing crisis discredits standard economics and offers the chance for a comeback. Modern EconoPhysics commands the most powerful tools and argues that there are many occasions for their application. The present paper argues that it is not a change of tools that is most urgently needed but a paradigm change.

Keywords: new framework of concepts, structure-centric, axiom set, paradigm, income, profit, money, invariance principle

JEL Classification: A12, B16, B41