Economics: Fixable or Broken Beyond Repair?
There has been a clash between two well regarded economists over the state of economics as a discipline, the way economics is taught in schools and universities and how far pluralising reforms must go.
See Howard Reed’s article:
And Diane Coyle’s response:
Howard Reed, in his article ‘Rip it up and start again: the case for a new economics’, advocates radical change and an absolute departure from the neoclassical paradigm, whereas Diane Coyle’s ‘In defence of economists’ accuses Reed of oversimplification and retorts that most economists are not guided or constrained by a narrow neoclassical framework. This debate has been commented on by Larry Elliot in The Guardian and is causing a storm on social media. This has been an ongoing theme of debate between journalists, economists, and other commentators for some time and is of huge significance to our campaign.
Rethinking Economics advocates pluralism in economics. The Neoclassical school of thought has been highly influential and made valuable contributions to the discipline of economics, and therefore deserves a place on our academic syllabuses. Nonetheless, neoclassical approaches have tended to dominate syllabuses, particularly at undergraduate level. Other schools of thoughts such as Marxian, feminist, and post-Keynesian should also be represented. As with all other social sciences, students should be presented with a range of different theories, so they can assess the strengths and weaknesses of each perspective and develop a more nuanced and balanced approach.
To move past Reed & Coyle’s debate, we should make a clear distinction between undergraduate study, postgraduate study and professional academic research. It is at the undergraduate level that we are particularly concerned by the neoclassical orthodoxy found in syllabuses. This is because undergraduate students have either restricted or no control over the modules they take. Whereas postgraduate students, to some extent, and certainly academic professionals, have much more autonomy in their studies, the journals they read and the theories and concepts they employ. We hope that Coyle and Reed, to some extent, share this view as both their articles suggest.
Reed insinuates that the roots of neoclassical orthodoxy are in ‘undergraduate textbooks’, and that students’ work throughout their careers remains shaped in some way by the ‘tenets of neoclassicism’. Coyle vehemently disagrees, claiming most economists know ‘that there is no such thing as the abstract “free” market‘ and ‘does not require that people be rational, calculating automatons’. Whether or not you take Coyle’s word that professional microeconomists aren’t constrained by a neoclassical paradigm is up to you. Our main concern is for those economics students who do not progress to postgraduate studies and therefore never properly dissect the neoclassical framework that they are presented as near-fact. Economics graduates will typically pursue careers in the financial and policy sector, where their misunderstanding of economics may have severe, negative, global consequences.
Coyle does state that there is wide agreement ‘that macroeconomics—which looks at growth, inflation, interest rates and the economy as a whole—is in a troubled state’ but argues that it is a ‘minority field.. contrary to popular belief’. However, it must be said that macroeconomics is hugely influential in terms of the shaping of national economies and the implementation of policy. As Larry Elliot writes in https://bit.ly/2JQxPjo:
‘It was after all, macro-economists – the people working at the International Monetary Fund, the Federal Reserve, the European Central Bank, the Bank of England – that the public relied on to get things right a decade ago.’
Hopefully both economists can at least agree that, at undergraduate level, there is a need for greater pluralism. Our new reader, Rethinking Economics: an introduction to pluralist economics has already been adopted by several undergraduate courses into reading lists and hopefully more will follow. See https://bit.ly/2wmYnAB
When Reed mentions Rethinking Economics, he describes our campaign as ‘all very well to the good’ but states that we don’t go far enough. Those who follow us know that we have consistently called for substantive pluralist reforms, and that while steps have been made towards a more adequate economics curricula, our demands are far from being met.
There are many economists and organisations campaigning for pluralist reform and genuine progress is being made. University College London, for example, has just introduced a new module ‘Rethinking Capitalism’ (see https://bit.ly/2J3VgUO). Unfortunately, reversing decades of neoclassical orthodoxy will require a certain level of patience, but we are moving in the right direction.
For a journalist, it is easy to write an article about radical reform under a contentious title, but for a campaigning organisation representing the disparate voices of an international network of members, we have to accept some level of pragmatism. We don’t find calls to rip it all up and start afresh to be particularly constructive, neither do we agree that there isn’t a serious issue within economics.
Written by Reuben Shapland from RE HQ