IS ECONOMICS AS A UNIVERSITY SUBJECT IN TROUBLE?

John Kay, Visiting Professor of Economics at the London School of Economics and a regular columnist for the "Financial Times”, posts (23 May) HERE and re-posted on Social Europe Journal HERE  

“Angry Economics Students Are Naive – And Mostly Right”

Students of economics are in revolt – again. A few years ago, even before the crisis, they established an “autistic economics” network. After the crisis, in 2011, a Harvard class staged a walkout from Gregory Mankiw’s introductory course. That course forms the basis of textbooks prescribed in universities around the world. This year, 65 groups of students from 30 countries established an International Student Initiative for Pluralism in Economics. In no other subject do students express such organised dissatisfaction with their teaching. …

It seems, however, to little lasting effect. Impermanence is inherent in student life: they don suits, collect their first salary and leave their complaints behind until the same gripes are rediscovered by a new group of 19-year-olds with similar naive hopes of changing the world. Still, recurrent dissatisfaction among both students and employers suggests they have a point.

A problem specific to economics is that students suspect the material they are taught is designed to offer intellectual cover for rightwing ideology. …

Why Do Economics Students Chose Their Subject?

As are their students. The real burden of their complaint is not a political protest. As I did, they chose to study economics in the hope of solving, or at least understanding, real world problems: poverty, inequality, inflation and financial crises. But their classroom experience is narrower and less satisfying than mine was. They find themselves engaged in rote learning of models based on rational choice. They are fobbed off with assurances that acquisition of these skills is a necessary foundation for understanding of the great issues of the day; but somehow these great issues never make it into the curriculum. They suspect, rightly, that many of their teachers are not much interested. This is the burden of a powerful and detailed critique of their course prepared by students at the University of Manchester.

Their demand for more pluralism in the economics curriculum is well made. Yet much of the “heterodox economics” the Manchester students suggest including is flaky, the creation of people with their own political agenda, whether Marxist or neoliberal; or of those who cannot do the mathematics the dominant rational choice paradigm requires. Their professors reject the introduction of these alternative schemes for the same good reasons their science colleagues would reject phlogiston theory or creationism.

Yet teachers are mistaken in their conformity to a single methodological approach – encapsulated in the claim that has taken hold in the past four decades that approaches not based on rational choice foundations are unscientific or “not economics”. The need is not so much to teach alternative paradigms of economics as to teach that pragmatism, not paradigm, is the key to economic understanding.

This eclecticism is reflected in the curriculum proposals being developed by the Institute for New Economic Thinking, led by Professor Wendy Carlin of University College London, on whose advisory board I sit. The subject of economics is not a method of analysis but a set of problems – the problems that drew students to the subject in the first place. The proper scope of economics is any and all ideas that bear usefully on these topics: just as the proper scope of medicine is any and all therapies that help the patient.

Comment

I have known John Kay since we both were undergraduates, he at Edinburgh University and me at Strathclyde University (Glasgow), with a common friend in Robin Cook (who became foreign minister in a Labour Government). John Kay has enjoyed a long-standing career as a talented economist at the highest level in both UK public office and in UK academe. In political philosophy he has always been of a moderately  and consistently ‘soft’-leftist disposition.

At the time of student criticism of economics at Manchester University and Harvard I commented on ‘Lost Legacy’, joining my long-standing and continuing criticisms of “rational expectations” and “selfish self-interest” distortions of Adam Smith’s legacy, not to mention my critiques of the rampant myths of “invisible hands” supposedly working as an entity in markets to “benefit all”.

I note that John reports on the usual attempted put-down of those who alllegedly “cannot do the mathematics the dominant rational choice paradigm requires”.  This is not true in my case nor is/was it true generally among critics of the neoclassical paradigm, many of whom I know are accomplished in higher maths.  Long ago, to help students in classes taught at Strathclyde University, I authored “Mathematics for Innumerate Economists” (Duckworth, 1982) and “Invitation to Statistics”, Blackwell, 1986), both still available via Amazon, which readers reported their thanks and several academics thought addressed a gap among students in the 1970s onwards.

Those who seek comfort for their ideological views in defence of a false paradigm by ignoring the evidence of economists who know the fairly easy mathemics used in the economics of rational choice theories as well as the arrogant neoclassicals who currently dominate modern (smaller) economics departments in the ‘naughties’.   

The truth is that the maths do not make true the unrealistic assertions about human behaviour with lines like justifying  serious criticism of “rational choice” theories in the same manner as “their science colleagues would reject phlogiston theory or creationism”. Professors I heard first-hand used to dismiss criticism of Friedman’s “positive economics” theories with their authoritative lines that the ‘realism of predictions did not matter, so much as the validity of the predictions’, as if this assertion itself made their predictions true! That’s why economic theories are in such a mess today.

The problem may well be unresolvable now given the variety of different ‘economics’ schools of thought that barely coexist in the discipline, which ideologically is divided now as ever.  No school, left or right of centre, has a monopoly of  truth or even realism.  

The earlier dissatisfaction that set in during the 1990s is getting closer to a major turn-off of new students’ recruitment to Econ 101, which in time will slow down recruitment to final Honours Years, and in some places denudes classes to the new status economics becoming a non-viable subject. This has already happened to the ‘History of Economic Thought’ as a mainstream subject, not least because mainstream economic’s professors earlier squeezed out recruitment/promotion opportunities for candidates who do not meet their narrow subject criteria over a number of decades (though a well-fought rearguard action by scholars has done much to hold the line, albeit with a much denuded presence in several major institutions.

Whether the Institute for New Economic Thinking, led by Professor Wendy Carlin of University College London, as reported by John Kay, will help to save the day for sufficient academic courses in economics is uncertain at present. I hope it is safe and and I wish its sponsors well in their endeavours.