This was a note posted to the Societies for the History of Economics three days ago.
The Guardian, Tuesday 21 October 2014
Ha-Joon Chang powerfully argues the case that it was “an economic fairytale” which “led Britain to stagnation” (Opinion, 20 October). It may be added that our universities bear a heavy responsibility for this situation. Certainly, it cannot be denied that the fairytale paradigm (“supply-and-demand”, competition in the market, and all the rest of it) can be applied to any economic issue. The point, however, is that the currently dominant adherents of this approach deny that any other approach can even claim to be economics at all; indeed, adherents of other schools of thought have very largely been purged from our university economics departments.
Proponents of the fairytale justify this stranglehold by claiming that all former insights into the economy that have stood the test of time have now been incorporated into their own – narrowly quantitative – “modelling” framework: thus, Keynes’s discussions of uncertainty are reduced to “models” of expectations, Hayek’s alternative to neoclassicism into models of “price messages”, Marx’s heritage into models of inequality, Ricardo’s into “rent-seeking”, and so on. Consequently, so the argument goes, there is no longer any basis for the claim that there are different schools of thought in economics. There is only one.
It is the inflexible grip of this intolerant orthodoxy on university economics departments which has so signally distanced academic economics from engagement in discussion and debate outside the academic arena, much of which is directed towards questioning its fairytales. It is, by the same token, very encouraging that students who reject their approach have in the past year or more been reintroducing into university economics departments the kind of vibrant debate which ought to lie at the heart of academic life.
Dr Hugh Goodacre
Member of the academic board, University College London
I could not have agreed more so this was the reply I posted today:
I left Hugh Goodacre’s interesting post alone for the last few days to see if anyone else were interested. Apparently not, but I am. He made two points. First that the monopoly position of the economic mainstream, which he described as “this intolerant orthodoxy”, needs to be confronted so that other approaches to thinking about economic theory are brought into the curriculum. And then second, he notes that there has been the start of a kind of uprising amongst economic students who believe they have been deprived of the kind of broader education they would prefer but do not know how university departments can be encouraged to teach it.
I am in complete agreement with the need to bring these various other traditions into mainstream debate and am also working with the student movement, the so-called “Post-Crash Economics Society”, which coincidentally just last week had its first meeting in Australia.
There are many more ways to approach economic questions than those found in the confines of the mainstream. There has also been such a failure of the economic theory to provide much guidance in getting our economies out of the problems we are now in, that I find it a scandal how little effort has been made to have a post mortem on what went wrong. And when I think of what it is that went wrong, I am not referring to the frequently raised question about why was no one able to foresee the GFC, but the more significant question, which is, why are the policies that have been introduced to restore our economies to health not working?
The Post-Crash Economics approach is one way of going about it. But given my first experience here I have doubts about whether this is much of an answer even though the right questions were being asked.
The main speaker had come all the way from Manchester to discuss what they had in mind. And while there were various moments when his own underlying agenda was all-too-obvious to me as a long-ago member of the left, his final slide had the words “It’s time to challenge the orthodoxy” and showed a woman with a “power to the people” fist in the air.
I therefore asked the first of the questions from the floor, which was more of a comment than a question. And what I said was something like this
“If you would like to set up a group that widens the study of economics and introduces the full range of the various schools of thought to the education of economics students, then I am with you. But if you are going to just use this grouping as another version of the ratbag left, then you will do nothing other than create one more meaningless structure which someone such as myself will have nothing to do with. Your presentation was not neutral. You are a person of the left, which is all right since many people are. But you will only succeed if what you do really is neutral between all of the various groups that find neo-classical economics wrong in important respects. Economics, however, is not an easy subject that someone without formal training can choose amongst theoretical perspectives without serious study. If this is just one more self-indulgent anti-capitalist rant, then this will go nowhere. You cannot ‘democratise’ the study of economics as you described your ambition as if economics can be some kind of all-in enterprise where everyone’s opinion counts for one and no one’s counts for more than one. If you are genuinely interested in broadening the perspectives students receive, then, but only then, will you have the support of those of us from a more market-oriented perspective, or indeed, from anyone with an interest in the fullest development of economic theory.”
To be quite blunt about it, economic students are in no position to suggest how economic theory ought to be taught or what the content of their courses ought to be. And even while I agree with them that there is a large problem with mainstream economic theory, and I am pleased to find they are curious about other approaches, I cannot see how they can have much to say about which economic theories are the most appropriate. It is an issue to be decided within departments of economics and amongst economists themselves. They are absolutely right to seek a wider set of perspectives but I am not sure they are going about it in the right sort of way.
My own version of what these students have sought was proposed in my Defending the History of Economic Thought (Elgar 2013). In my view, the ideal place for debates among the various economic traditions is within the study of the history of economic thought. This is where it should be. Such discussions should be found on our websites, in our journals and as an important part of our conferences. Every one of these heterodox traditions has a history of its own that is an essential element in understanding these theories. Whether Austrian or Marxist or anything else between, each focuses on its own historical development as a way of understanding its own core concepts. It is, sadly, only the mainstream that ignores its history, which is why HET has almost disappeared from within most schools of economics.
I not only think this is part of the means to save the history of economic thought from extinction, but it would also be a valuable addition to the education of economists. The most important ability an historian of economic thought must have may be an ability to make sense of the views of others. It is why HET should be a forum for discussing the widest range of perspectives so that we can all learn new things from each other.