Published Dec 2, 2014
A lecturer from the University of Manchester, Dr Terry Peach, whose research area is primarily in the History of Economic Thought, comments on one of our recent panel debates and how economic thought came to be the way it is today.
I congratulate the PCES for organising the debate on “How Should Economics Change?” As is so often the case, however, the occasion only really came to life towards the end, when the panel were pressed to explain why university students were not exposed to non-“mainstream” (or “neoclassical” or “marginalist”) schools of economic thought, if only to allow them to make an informed judgement about the relative merits of the different approaches. The question drew the following response from Professor Diane Coyle: “I find it slightly bizarre that there should be a reaching for 70 or 100 year-old historical models of thinking about the economy when the economy has changed so much”. Professor Coyle’s position is doubtless shared by many “mainstream” economists, and it is the position itself that I challenge in the following comments, not any particular spokesperson on its behalf.
“Mainstream” economics did not suddenly come into being ex nihilo. It was a product of “historical models of thinking about the economy” that were developed in the last quarter of the nineteenth century, which were themselves developments from, and reactions to, earlier “models of thinking”. Keynes’remark is apposite: those who “believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist”. Although Keynes’ barb was directed at “practical men”, there seems no reason why we should exclude many contemporary economists from suffering the same delusion.
I am certainly not denying that “mainstream” economics has developed over time, but the same applies to non-“mainstream” schools of thought. I am not myself a post-Keynsian, neo-Austrian, Marxist or “Sraffian”, but I am aware that adherents to these and other schools do exist (if not any more at the University of Manchester, alas) and that the adherents are perfectly sentient human beings, not to be dismissed with facile quips about their mathematical incompetence or their antiquarianism. In any case, how can the “mainstream” consider itself fit to pass a verdict of exclusion on “dissenters”when it has proved itself to be so singularly inept at predicting, explaining, or even discussing the most traumatic economic event (the financial crisis) since the Great Depression? Is it really conceivable that other schools of thought could have fared any worse? At any rate, it seems to me that the “mainstream” has no moral or intellectual authority to gag dissenting voices, and that unless we subscribe to some kind of Platonic dystopia in which a power elite enforces the dissemination of a single “truth”, we should welcome and encourage, not stifle, the articulation of different and opposing perspectives.
As to my own area, history of economic thought, I question the idea that changes in external circumstances have somehow made irrelevant the “models of thinking” of figures such as Adam Smith, David Ricardo, J.S. Mill, or Karl Marx. Through studying the history of the subject we may come to appreciate, among other things, that the idea of the economic problem is a self-serving fiction; that there are alternative and arguably more interesting conceptions of “welfare” than the simplistic utilitarian conception advanced by Jevons; that the “classical” study of economic/financial crises would have given students a far better understanding of recent events than anything they were told in their “mainstream” lectures (“Unemployment does not happen in my lectures”, joked one of my colleagues in 2008); that the relentless “mainstream” (post-Jevonian) emphasis on the allocation of given resources has diverted attention from more interesting problems of capital accumulation and growth; that a class-based analysis may open up quite different perspectives on economic phenomena than an analysis based on individual consumers; that an appreciation of the forces determining the rate of profit may be key to understanding the evolution of a capitalist economy; and that no amount of mathematical sophistication can substitute for empirical relevance.Indeed, studying the history of the subject may prompt us to ask possibly the most enduringly relevant question of all: What on earth is the point of this subject?
Professor Coyle believes that the so-called “Core” curriculum (available at http://core-econ.org/the-core-curriculum) is “a decent place to start” in reforming the teaching of economics. But apart from the ad hoc inclusion of bits and pieces of economic history, the “Core” is nothing other than un-reconstituted “mainstream” economics, attractively repackaged in more empirically oriented bundles. For those who are hoping for a more pluralistic curriculum in which alternative schools of thought are allowed even passing mention, the “Core” is an abject disappointment. Much as they preach the virtues of competition, it seems that the last thing some academic economists want is competition in the area of ideas. It is, to me at least, a depressingly anti-intellectual, hegemonic attitude that deserves to be challenged.
Terry Peach
30/11/2014