Bubble, panic, crash: How students are changing economics teaching


Gordon Nardell, Islington North CLP, talks to Joe Earle of Manchester University’s Post-Crash Economics Society.

Crash“GIVE ME THE CHILD for seven years and I care not who has him thereafter” boasted Jesuit founder Ignatius Loyola. Neoclassical economists might make a similar boast about the effect of a 3-year degree course. In recent years, their thinking – built on “liberal” theories of achieving “equilibrium” through competition and market forces — has dominated UK teaching of the subject, filling banks, regulators and Treasury corridors with hordes of graduates for whom economics is neoclassical theory, to the exclusion of any other school of thought. But change is on the way – from below.

I’m with final year Philosophy, Politics and Economics (PPE) student Joe Earle, campaigns manager of the Post-Crash Economics Society. The Society leapt to public attention in October when a Guardian article described its formation by economics undergraduates frustrated at the inability of “mainstream” teaching to answer fundamental questions about the crash. Joe points out that many students chose economics after experiencing the crash and wanting to understand it, but were swiftly disappointed. The syllabus, focusing on topics like marginal cost, had little real-world application. One of the few modules to mention the crisis concluded that it was an “exogenous shock”: the possibility that the causes might be inherent in the very theories that underpinned light touch regulation and dependence on private debt was simply not canvassed.

Inspired by the Bank of England debate, “Are Economics Graduates Fit for Purpose?” the group held an event with the same title, inviting speakers from a range of viewpoints. “We wanted to introduce other economics students to ideas that were just not being taught” explains Earle. 150 attended – a huge number for a voluntary event. Despite the obvious thirst for ideas beyond the syllabus, the faculty showed little willingness to make changes. The group realised that if they wanted teaching of alternative ideas, they would have to take the initiative. They did, with conspicuous success, arranging a series of lectures by economic theorists from a range of perspectives, including Marxist Ben Fine, feminist Bina Agarwal and institutionalist Geoffrey Hodgson.

The Society calls on economics teaching to respect not only the principle of pluralism, but also critical thinking and real world application. Multiple choice rather than essay questions dominate exams in many modules, diminishing the space for critical thinking. So: what about the “real world” application of economics to politics?

Joe explains that alternative viewpoints struggle against a problem of definition: the neoclassical mainstream likes to dismiss alternative theories as not really “economics” at all. So it’s important to the Society to win the debate in its own terms, using rigorous arguments from within economics rather than an overtly political critique. Nevertheless, they recognise the connections between economics and politics, the ideological narrowness of one reinforcing the other. Joe cites allocation of research funding by the Research Excellence Framework. The economics sub-panel is staffed entirely by “mainstream” economists, while the major journals in which the REF values publication are editorially mainstream; as Joe puts it, “a political mechanism by which the dice are loaded against non-mainstream economists seeking work in big departments”. So most academic economists, and the graduates they turn out, “produce a limited set of policy prescriptions, narrowing the field for politicians casting around for ways to do things without being labelled `extremist’”.

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Where to from here? Joe reminds me that the Post-Crash Economics Society isn’t politically aligned. But in an interesting echo of the growth of consciously political movements like the Word Social Forum and Occupy, the Manchester group have found themselves forming networks with students in other institutions. There are now similar societies at Cambridge, Nottingham, Exeter, Glasgow, LSE and UCL. Links have been established with France and Germany. The French government have established a commission on economic education. Sadly I have to decline Joe’s invitation to today’s lecture in the Society’s latest series, “Bubbles, Panics and Crashes”. But I leave impressed by the commitment and energy of this thoughtful, astute group; delighted that the self perpetuating cycle of neoclassical economists preaching their bleak “no alternative” message is beginning to falter; and convinced that an incoming Labour government must make changing economic education as much as a priority as changing economic policy.

» For further details see: post-crasheconomics.com

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