What does Gödel's Incompleteness Theorem prove?

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Does Gödel's incompleteness theorem only prove that you can't have a formal system which describes number theory which is both complete and consistent, or is it more general? In other words: does it prove that any formal system is either inconsistent or incomplete?

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There are formal systems that are both consistent and complete.

However, there is no formal system that has all of the following properties:

  • it is strong enough to cover number theory
  • it is recursively decidable whether a formula is well-formed, whether a sentence is an axiom, and whether a sequence of sentences is a proof
  • the system is consistent
  • the system is complete
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Not exactly. Let $L = \{+,\times, 0, 1, <\}$ and define $Th_L(\mathbb{N})= \{\varphi$ in $L$$:$ $\mathbb{N} \models \varphi \}$.

This is complete and consistent (since it clearly has a model) which encompasses arithmetic. Godel's Theorem states that this collection cannot be recursive (or even recursively enumerable), i.e. there is no finitary algorithm which tells us which sentences in $L$ are in $Th_L(\mathbb{N})$.