Economics – pushing for reform?

Words by Pallavi Bichu
01 October 2017

Pallavi Bichu from the University of Wisconsin- Madison (USA) discusses the ‘dark side’ of Economics– its inherently flawed assumptions, lack of pluralism and its tendency to simultaneously over-simplify and over-mathematize.


Is economics enough on its own?

The obvious answer, of course, is no. No field exists in a bubble, and interdisciplinary studies departments in universities seem redundant, because by definition, knowledge and learning cannot be categorized into neat boxes. Can you imagine learning about capitalism without any understanding the Protestant work ethic illustrated by Weber? Can you justify the rationality assumption without any understanding of human psychology? Can you talk about the deadweight loss of taxes, price floors and price ceilings on society without seeing the real ramifications of the same through a careful study of how these played out throughout history? Unfortunately, what seems obvious to us right now doesn’t seem all that obvious to quite a few Economics departments today. Interdisciplinary learning is looked at as a choice, rather than the normative approach. This sort of academic elitism in a field like Economics, is inherently dangerous. It simultaneously denigrates the contribution of less exact social sciences because they may not stand up to the apparently rigorous scientific method that Economics claims to employ; and over-emphasizes the findings of the field as being the last word on the subject of study.


Can economics be taught better?

Much has been made about the dangers of the assumption of an ideal ‘homo economicus’– a self-interested, focused individual with no goal greater than utility and profit maximization. This model reduces complex human beings to simple, one-dimensional creatures with no capacity for emotional attachment or altruism. I’m going to take this ‘homo economicus’ individual to signify an archetypal teacher of Economics at the university level today. She is (hopefully) interested in her students’ well-being, which can be measured by the success rate of academic program placement or job market placement. She may want to spend classes discussing the origins of market systems, the impact of economic phenomena on the politics of countries, or even just spend classes reading Smith and Keynes and explore the history of economic thought. Unfortunately though, this cannot be her main contribution as a teacher, because she is being evaluated one-dimensionally– either “publish or perish” or “place or you’re out of the race”. She is aware that the world of economics today is cut-throat, and methodological design is given more importance than the subject of the study. And to succeed as an individual in an academic fraternity, she subjugates to the will of the majority. Her transformation to a homo economicus is complete. Unless the standards of academic evaluation on faculty change, the homo economicus is here to stay.


So should I just give up?

No way, go to class. You can’t change a field without gaining legitimacy as an insider. I once had an argument with professor of English Literature on the concept of a ‘canon’– a body of works considered to be the most representative of a field of study. She contended that the concept was redundant, and has its own failings with the kind of works included– foreign authors, women, contemporary authors would all fail to be accurately captured by this canon, thus making it an exclusive and misleading body of work. I disagreed then, and I disagree now. Shakespeare is important, and should be treated as such. No contemporary author worth his salt will earn a place in the canon without at least knowing of him.

Similarly, those dry Econometrics classes on ‘Propensity Score Matching’ are important. They constitute canonical work in the field. You need to be able to communicate in a language your field and your peers understand, to make any sort of lasting change. One of the concerns raised by a reader of my previous rant on my disillusionment with graduate school was that as a member of the so-called elite group of schools, my opinion was redundant because I’d go on to a cushy job and a house in the suburbs, whereas a non-member wouldn’t do as well or even have the ability to be heard. I loved the feedback, because that is exactly the kind of problem I am trying to highlight. The economics elites refuse to take anyone who hasn’t proved success in their field seriously. My enrollment in this school opens doors for me, but this isn’t the end of the road, or even the only road. Any reform movement needs support from the inside, and the success of a movement like Rethinking Economics is owed in no small part to those insiders. The canon is important, conventional study is important, and the disillusionment with the conventional should carry you through those classes and push you to do more to make a change, not just leave. So yes, I could end up in the suburbs, but that’s not a problem, as long as I realize that that’s not what I got into the field for. Take those politics, literature, psychology and sociology classes. Read as much as you can. Keep pushing for academic reform, whether as a student or an instructor. Finally, don’t fail to recognize that you are in an exalted field because it has the potential to work, and it’s our responsibility to make it work better

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