destabilizing stable economics

Ending the Econocracy: The Need for Pluralism in Economics

Ending the Econocracy: The Need for Pluralism in Economics

To understand why economics students around the globe are calling for Rethinking Economics, the book The Econocracy is a thoughtful and accessible place to start. An econocracy, as defined by authors Joe Earle, Cahal Moran, and Zach Ward-Perkins is “a society in which political goals are defined in terms of their effect on the economy, which is believed to be a distinct system with its own logic that requires experts to manage it.” Their work carefully explains why our current system is an econocracy and discusses possible ways to change that. Based on my own experiences so far, I can’t help but agree with them. 

The Econocracy argues that the current definition of economics is limited to a narrow, neoclassical viewpoint. Institutions of higher education have accepted and helped reinforce this tendency, at the expense of the discipline. The neoclassical approach to economics requires an understanding of complex mathematical models, which leaves many citizens feeling unable to engage with it at all. However, they should not be intimidated by those who do possess the necessary quantitative skills. While today’s economic experts hold prestigious positions, their understanding of math is often greater than their understanding of the economy. As the 2008 recession demonstrated, the majority of current experts didn’t get things right. This shows “the perils of leaving economics to the experts.”

The authors’ critique of economics curricula at colleges and universities necessarily extends to a critique of the higher learning system where these curricula are taught. Interestingly enough, they argue neoclassical arguments have helped shape this system to become what it is today. “Human capital” theory has its roots in neoclassical utility maximization. One of the first exercises in standard econometrics classes is to calculate the “returns to education,” which shows that incomes are higher for those who have completed college degrees.

These type of theories are problematic because they frame education as a “financial investment” which encourages students to give “the minimum effort and engagement necessary to get a satisfactory grade.” Such a mentality “undermines many of the core principles of a liberal education.” The authors look through history at the UK’s higher education system, and show how rising tuition costs financed by personal loans also has its roots in neoclassical thinking. This type of change is symbolic of the econocracy’s influence throughout all spheres of civil life.

While studying at UC Berkeley and Bard College, I met many students who thought and acted this way. As long as you put in a minimal effort, there was little chance of failing or being expelled. Second and third chances were given out often. Teachers did not give a lot of room to think critically about what you were learning, and worksheets and one-size-fits-all curricula were the norm. Nearly every class I had was in a lecture/tutorial format, and nowhere was the socratic method used for teaching. Still, there were some great professors and fellow students who shined the light in the right direction for me. I finished school feeling like I missed out on something, but I’m glad I have my entire life to continue learning.

The Econocracy does more than offer a critiqueit also puts forth a new direction, albeit one that might be tough to achieve. For the authors, reform should start with the education system. They pose it’s necessary to shift away from “a passive student body—whose only input into their education is a tick-box feedback form—to an “active student co-production of education.” Debate and dialogue should be encouraged.

A shift needs to happen within economics curricula too. The authors recommend economics departments teach with a pluralist approach, which would place post-Keynesian, classical, Marxist, feminist, Austrian, historical, ecological, and other perspectives front and center next to neoclassical economics. This way, students would be able to see neoclassical views as one of many ways to look at things. They would recognize that scholars have debated alternative points of view for decades, often on the fringes of the institutions they call home.

As Joan Robinson quipped in Marx, Marshall and Keynes: “The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” It doesn’t have to be this way. The Econocracy offers a different vision for economics. One where it is not only for the experts but for everyone.  They want to “democratise economics because [they] believe at its core economics should be a public discussion about how to organise society.” That’s something we should all get behind.

At The Minskys, we too hope to help advance a jargon free view of the economy that everyone feels empowered to engage with. Economics can’t just be left to the experts, because “the economy” affects us all.

Be sure to grab your own copy of The Econocracy, read it, and comment down below with your thoughts.

8 thoughts on “Ending the Econocracy: The Need for Pluralism in Economics”

  • This article is good in parts, but it does suggest that the subject of economics at present is too academic for most of us to properly understand. I don’t agree and I feel that it all depends on how you start to study it. One’s first impression can be very off-putting so it is important to begin at a level for easy understanding. How can this be achieved? By looking at economics (and by this we usually mean macroeconomics, since it is about our whole social system that we mostly need to begin an understanding) as a whole integrated subject and not as is common, as a number of separate and difficult to connect parts.

    In my recent book “Consequential Macroeconomics” and in two associated working papers, I have tried to explain more simply how our social system works. I wish to share this information freely with students and teaches who are still interested in getting a different and improved grasp about of what it comprises and operates. Even before this stage is reached the would-be student might like to see the model I use and how it is created so instead of writing tom for a free e-copy of my 320 page book, the learner could look at SSRN 2600103 “A Mechanical Model for Teaching Macroeconomics” and SSRN 2865571 ” Einstein’s Criterion Applied to Macroeconomic Models” first. These latter two are easily found on the internet.

    It is my impression, from the kinds of language economists often use, that they don’t properly understand the whole subject themselves. I aim to change this situation.

  • Kate Raworth is absolutely right, when she stated that Economics is the lingua franca of public policies. So we ALL need to start thinking and behaving like Doughnut Economists if we want to influence and change ANY public policies. After all, 7.5 billion economists can’t be wrong all the times, can they?? 🙂

  • Yes 7.5 billion economists can be wrong and are wrong, and past claims have shown that the knowledge they apply is based on pseudo science instead of the real thing! (See for example “The Corruption of Economics” by Prof M. Gaffney and F. Harrison)

    The main point however, is that 7.5 billion economists (particularly the newer ones) DON’T HAVE TO BE WRONG. They should begin to treat our subject as a non-intuitive, non-illogical, non-emotional and cool, more seriously exact science, for which a true scientific theory using some relatively simple but essential mathematics has at last become available! The references that I have noted above should set them on the right course.

    Naturally this is all so new and unwanted that the majority of teachers and their universities don’t wish to know! I don’t blame them for being ignorant (after they did bring us out of the pre-Keynesian stone-age), but I do blame newer students whose minds are still open to more recent and more intellectual thinking, not to be biased and hood-winked by these older fogies, whose interest in the subject has been swayed by their own need (as economists) for personal gain and for making the least effort to obtain it.

  • Here is the more of Joan Robinson’s quote in context, where she uses the word propagandists.

    “In short, no economic theory gives us ready-made answers. Any theory that we follow blindly will lead us astray. To make good use of an economic theory we must first sort out the relations of the propagandists and the scientific elements in it, then by checking with experience, see how far the scientific element appears convincing, and finally recombine it with our own political view. The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.,+but+to+learn+how+to+avoid+being+deceived+by+economists.%E2%80%9D&hl=es-419&sa=X&ved=0ahUKEwiNk_KF0PTYAhXPylMKHcH0BA0Q6AEINzAB#v=onepage&q=%E2%80%9CThe%20purpose%20of%20studying%20economics%20is%20not%20to%20acquire%20a%20set%20of%20ready-made%20answers%20to%20economic%20questions%2C%20but%20to%20learn%20how%20to%20avoid%20being%20deceived%20by%20economists.%E2%80%9D&f=false

    I did a google book search for the quote, then clicked on the Author Joan Robinson. Chose the first book and used the search bar on the left to search for the phrase in the book.

    • Studying economics does not logically follow from the argument that one does not wanting to be deceived by economists! If one studied economics one should have non-deceptive teachers and subject matter.

      Perhaps, if one wants to avoid being deceived by economists one should make sure to learn outside of economics. And, not get trapped in poor semantics. Or, study some thing else more correct or that has a better vantage point, or more personally practical.

      A few ideas of other things to study are {accounting, bookkeeping, finance, business, calculus, systems, ODEs (dynamics) (all deal with stocks and flows/ stocks are often ignored in introductroy macroeconoimcs)}, science with laboratory, math, engineering (a bit much), and there could be many more subjects, or anything practical like a trade.

  • Thats right! as an outsider and engineer, my way of looking at the Big Picture is able to go where no other humanist theory does. We shold rely on logic, careful definition which follow sensible axioms and assumptions, not intuition.

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