Rethinking Economics…


A long time ago, as an extremely un enthusiastic undergraduate, doing a degree in Social Studies, I studied Economics. I remember very little. However, from time to time I still dip into the edges of Economic theory after distant memories are fired by Robert Peston or a rather pompous politician fatuously attempting to make macro economics sound like household budgeting.

Economics matters. The people who undertake pure economics degrees do so because they know that it is one of the routes into power and wealth- working in the City, or making their way into policy making or work with influential think tanks. However the subject is a mystery to most of us. What are people taught on these courses? Are they prepared to use what they know for the good of people and planet?

Back in 2013, I blogged about an interesting rebellion by economic students (see here.) They called themselves the Post Crash Economics Society, as they were mystified at what to them seemed liked the ultimate failure of economic theory (the economic crash) had resulted in no change to the curriculums followed by the Universities, and the dominant (and apparently entirely fallible) economic theories continued to be taught with far to little critical engagement.

4 years down the road, those rebellious students have entered the world of work, but it seems that little has changed at the universities.

A new book, describing the journey of the Post Crash Economics Society and a network called Rethinking Economics has now been published.

The book, entitled Econocracy, challenges the core of how economics is taught around the world. Check out the review here in The Guardian by Aditya Chakrobortty, who wrote this;

The most devastating evidence in this book concerns what goes into making an economist. The authors analysed 174 economics modules for seven Russell Group universities, making this the most comprehensive curriculum review I know of. Focusing on the exams that undergraduates were asked to prepare for, they found a heavy reliance on multiple choice. The vast bulk of the questions asked students either to describe a model or theory, or to show how economic events could be explained by them. Rarely were they asked to assess the models themselves. In essence, they were being tested on whether they had memorised the catechism and could recite it under invigilation.

Critical thinking is not necessary to win a top economics degree. Of the core economics papers, only 8% of marks awarded asked for any critical evaluation or independent judgment. At one university, the authors write, 97% of all compulsory modules “entailed no form of critical or independent thinking whatsoever”.

Remember that these students shell out £9,000 a year for what is an elevated form of rote learning. Remember, too, that some of these graduates will go on to work in the City, handle multimillion pound budgets at FTSE businesses, head Whitehall departments, and set policy for the rest of us. Yet, as the authors write: “The people who are entrusted to run our economy are in almost no way taught to think about it critically.”

It is worth checking out the Rethinking Economics website too, which spells out their challenge to traditional economic theory, which in practice is almost always Neoclassical Economics, of a particular kind.  They describe a number of ‘problems’ with economics, including;

One of the most pressing issues of our time is climate change. To tackle it, we need all the good ideas we can gather. Yet academic economics is not helping. Take the UK, for example: of the 24 Russell Group universities that have economics departments, only nine have environmental economics modules. Of those nine none mention ecological economics or other alternative economic perspectives.

They also describe the way economics courses approach the issue of inequality;

Currently, economics education raises one perspective – ‘neoclassical economics’ – to the sole object of study, which has grave repercussions for the way economists view inequality. In basic neoclassical economics, the distribution of income is treated as a natural outcome of market forces, and interventions are deemed to disrupt these forces. Power and politics, and historical questions about how inequality has arisen, are rarely addressed.

What is more, there are ideas within economics that tackle these questions: approaches such as feminist or development economics do address the historical and cultural reasons for ingrained and persistent inequality, and take a more real world focused approach in which economics can and should try to intervene.

But, because curricula leave out these approaches, economists’ ability to understand or address inequality are limited. And because so many economics graduates go on to work in think tanks or organisations like the World Bank, this lack of pluralism has very real and tangible effects across the world.

They suggest this alternative approach;

Our campaign aims to change economics so that it will educate the next generation of economic decision-makers in a diversity of approaches. We believe that graduates will have a much firmer grasp of global, regional, gender and racial inequality were they exposed to a range of competing perspectives and required to assess their strengths and weaknesses. We also emphasise an understanding of the historical causes of inequality and the ethical implications of different policies.

These changes will shape a new generation of economists who are open, engaged and socially conscious. These changes will also mean that economists will be equipped with a variety of tools, appropriate to the shifting and complex factors that sharpen inequality in our society. Without a reformed curriculum, economists and policymakers repeatedly think within the same parameters and fail to devise policies or build economies that work for the good of everyone within society. To address inequality, the ‘Overton Window’ through which politicians, economists and citizens understand the world must first be opened up, and the first step towards this is a pluralist curriculum.

Power to ’em.

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