Philip Pilkington: Beware the Scholastics! Thoughts on the Economics Curriculum Reform Movement

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Yves here. As Pilkington explains below, the movement for reform in the economics curriculum is getting traction. If you think this doesn’t matter to ordinary citizens, think twice. Economists are the only social scientists that have a seat at the policy table, and the ones that have any clout have serious academic chops. Yet as many know, the economics curriculum is narrow, or to use the term of opprobrium popular in Europe, autistic.

One reason that education is such a hot topic generally is that it is a means for shaping the values of the next generation, and various studies have shown that studying economics makes people more selfish. Yet as Pilkington mentions in his post, budding academicians themselves are in revolt so it appears that rising economists are already taking exception to the standard teaching menu. That increases the odds that there will at be at least some salutary changes in how economics is taught.

By Philip Pilkington, a writer and research assistant at Kingston University in London. You can follow him on Twitter @pilkingtonphil. Originally published at Fixing the Economists

economics curriculum reform picture of monks

With the Rethinking Economics student movement in full swing, the topic of economics curriculum reform is once again on the table. For those of you who read this blog and are uncomfortable with this: sorry, you’ve already lost that debate, you just haven’t realised it yet. The question is now which direction this curriculum reform will take.

The Institute for New Economic Thinking (INET) looks set to be the organisation that will build the platforms and generate the content which will be made available to those who are self-interested enough to notice that they will rapidly slip into obscurity if they don’t change with the times. The debate within INET on this topic, however, is nothing short of fierce; or, at least, without going into too much detail that is what I have heard.

Perhaps then it is worthwhile rewinding the cassette tape of history to the moment when INET curriculum reform was first publicly conceived. This moment was at INET’s Bretton Woods conference that took place between 2010 and 2011. Thankfully the relevant sections were recorded and uploaded to Youtube and can be viewed at the bottom of this webpage.

At this moment in history the two key participants were Lord Robert Skidelsky and Perry Mehrling. Skidelsky was dealing with curriculum reform in the UK and Mehrling was dealing with curriculum reform in the US. I will deal with each in turn.

Mehrling is not an orthodox economist by any stretch. So far as I can tell from his published work he was trained as an orthodox economist and gradually broke through the confines that this necessarily imposes today. His main interest appears to be in financial theory and he seems to be something of a follower of Fischer Black — an economist whom I have not said very nice things on this blog in the past (see here and here).

Mehrling’s talk is rather more pragmatically American than Skidelsky’s. Rather than putting forward a Grand Vision he talks about how to disseminate new economic thinking. His thoughts on these matters are very good and I believe that INET has since adopted them to a large extent. On matters of content I think that Mehrling was slightly more vague. He did emphasise his own hobbyhorse, namely real-world money and finance — a topic that readers of this blog will know is also my own hobbyhorse — but he did not really lay out a vision as such. This left Mehrling’s diagnosis of the problem rather weak. Something similar could be said of the short history he gives of the root of the problem at the start.

Skidelsky’s talk is far more visionary. He has in mind the type of economic student that he would like to see emerge from universities. He says that most of these students will not go on to be professional economists and yet contemporary teaching implicitly assumes that they will. I completely agree with Skidelsky on this point. So he wants the average student to come out the other side of an undergraduate degree being economically literate and able to critically evaluate and deconstruct an economic argument put forward in, say, the Financial Times.

I cannot stress how important I think this is. In my experience most PhD level economists, professors even, cannot actually do this. They can learn mathematical formulas by rote and they can manipulate these to no end, but when it comes to the theories that underlie the formulas they get completely and utterly lost. Often they speak a language that resembles meaningless bureaucratic babble: a collection of terms (‘output gap’, ‘natural rate of X, Y or Z‘, etc.) that they do not properly comprehend the meaning of and cannot explain in any theoretical detail. The face of Orwell’s Big Brother often bubbles up to the surface of my mind when I am forced to listen to this.

This leads may “economic experts” to become like jellyfish floating on the tide of whatever is popular at a given moment in time. Thirty years ago they favoured monetarism; twenty years ago, inflation-targeting; today some sort of NGDP-targeting and so on. At social gatherings this becomes nothing short of embarrassing. The number of times I have felt socially obliged to change the subject because I could see in an “economic expert’s” eyes that they did not want to be pressed on the underpinnings of their argument is a very sad metric to consider indeed.

“Oh, you favour monetary expansion,” I might ask a seemingly passionate advocate, “And how do you conceive of the transmission mechanism? How does the money get from the banking system into the real economy.” Their previously held confidence and boisterousness fades in an instant and a look of  something between fear and anger clouds their eyes. “Actually that is a rather boring topic,” I interject before an emergency bathroom break ensues, “So, you say you flew in this morning…?”

Skidelsky wants to train students not to be jellyfish. He wants to give them fins and allow them to swim. In his vision students should be able to take apart economic arguments and put them back together again. They should be able to read and critically examine the news, not swallow it whole as an idiot would an anchor. This, I think, is the most important reformation that needs to take place in economics education. But it requires a much broader education than the one now offered. It requires a plurality of different intellectual approaches; raising questions as to the status of methodology and economic modelling; some philosophy of the underlying mathematics being used; a more than passing account of the NIPA and Flow of Funds accounts; real-world knowledge of the banking systems and how financial markets really work; the list gets long rather fast. But students are keen to learn this stuff. At the Rethinking Economics conference I chaired a panel hosting Donald Gillies and Tony Lawson that dealt with the status of mathematical modelling in economics. I thought that this was just a slightly idiosyncratic focus of mine but the room was completely packed and the amount of questions — together with their depth and penetration — made a substantial imprint on my mind that will not quickly go away.

What is offered today in economics departments today, on the other hand, is somewhat similar to learning Medieval Latin in the Middle Ages, except that Latin has been replaced with differential equations and linear algebra. Yes, this ‘learning’ gives one social prestige but it does not give rise to either wisdom or knowledge. As Montaigne said of the Scholastics of his day:

Let him remove his academic hood, his gown and his Latin; let him stop battering our ears with raw chunks of pure Aristotle; why, you would take him for one of us — or worse. The involved linguistic convolutions with which they confound us remind me of conjuring tricks: their slight-of-hand has compelling force over our senses but it in no wise shakes our convictions. Apart from such jugglery they achieve nothing but what is base and ordinary. They may be more learned but they are no less absurd.

Replace ‘Latin’ with ‘calculus’ and ‘linguistic convolutions’ with ‘mathematical constructions’  and you have a pretty good summary of economic discourse today.

Where Skidelsky’s talk failed was that he had no real vision for how to implement his reforms. Mehrling was far ahead on this count. But even if Skidelsky had taken over Mehrling’s framework it is unclear that things would have been straightforward: after all, many economists today cannot teach a student to read the Financial Times because they cannot do so themselves.

This is why I find the student movement so refreshing. They are learning on their own. These students are not fooled by piecemeal reforms. They have tapped into an internet with seemingly unlimited resources. That is why they cry out for pluralism.

That said, such autodidacticism will not replace higher education. It saddens me when I meet students that have to ‘fake it’ in university and then teach themselves in their own free time, only being rewarded by the recognition they receive when their meet their fellow dissenting students. Recently a student told me that he had put forward an alternative conception of how the banking system functioned in a university essay — one that is now accepted by the Bank of England — and his lecturer marked him down without explaining why the theory was supposedly wrong. Being an extremely bright student the lower grade did not affect him greatly but it was the principle of the matter that irked him so much: “Why on earth should I pay exorbitant amounts of money for this degree?” he asked me, “When I know that the man teaching me is dinosaur and a closed-minded fool?” (I paraphrase for effect, but this was the essence of it…).

This is why the groundwork for curriculum reform still needs to be firmly laid out. The students know what they want, their future employers know what they want, now it is up to the profession and pressure groups to ensure that they get it. They do not want piecemeal reform. They want a truly pluralist education. And if the profession continues to bury their heads in the sand they will find themselves rendered redundant and overtaken by a new generation of economists who find them, as Montaigne did his hooded Scholastic mumbling meaningless babble in Medieval Latin, absurd.

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  1. John

    The over-rated study of economics…. They need to abolish the Nobel prize for Economics. The studies which lead to the prize usually amount to a hill of beans. Society rarely benefits.

    Good metaphor. The curriculum is a study of jellyfish. Case in point is Mr Krugman, although he is not the exception. He regularly authors articles he has a vague idea about, which is then taken as gospel by millions of word grabbing folks. He gets away with it because of his award winning Nobel prize and broad audience. But when his assumptions are challenged he can count on squadrons of economists to dive bom-b the perpetrator and thwart the discussion. Nothing worse for the high-priests of economics than to have their work peer reviewed — in public. Reich is another one.

    Back to Krugman. The other day he wrote an article on The Secret of Belgium’s Success which was riddled with holes. First off he channels Reagan’s old meme: government is the problem. He attempts to link Belgium’s better economic performance to it’s neighbours due to a lack of government. Ahem, I lived through the tax increases and budget cutting the government ramrodded on the public once the parliament was formed. Some of the taxes were implemented retrospectively. The government was live and well. When you look at the data, France consistently spent more per GDP than Belgium.

    The economics field does need a serious review.

    1. Carolinian

      I always cringe when Krugman writes “warning: wonkish.” You know he is about to invoke the priestly chanting. For example he has been known to pooh pooh commodity price manipulation–even when commonsense says otherwise–by referring to economic theory. Of course Krugman may be right and commonsense wrong (I’m here to learn), but I often don’t find his arguments very persuasive.

    2. Fair Economist

      You completely misunderstood Krugman’s article. He said nothing about government, in the sense Reagan was using it, being the problem. He said that the disorganization in the Belgium government kept it from messing up its own activities. You may have been confused by the difference between government in the broad sense, the entity with taxing and regulatory authority, and government in the narrow sense, a ruling party or coalition in the parliament (for Belgium). Both senses are used all the time. When people say, because a parliamentary government lost a vote of no confidence, “the government has fallen” they mean there’s going to be an election, not anarchy in the streets.

  2. Newtownian

    Thanks for this article on the problematic state of economic theory Philip. I used to think it was ‘Aristotelianism’ reflecting the troubles Galileo had with the Inquisition. But I gather your thesis implies it was the misuse of Aristotle by devotees of ‘Scholasticism’ ( that was Galileo’s great problem – along with the fact he was implying that the powerful were a bunch of ‘autistics’ too? (another great analogy – apologies to genuinely autistic people).

    Watching this debate from the sidelines it appears at bottom to be about whether economics is fundamental, or instead as your critique implies, a bag of empirical interpretation which claims to have yielded a discipline as fundamental and insightful as Newtonian physics or quantum mechanics (have heard this outrageous contention argued sincerely by right wingers further trying to legitimize neoliberal ideas).

    If indeed your thesis is correct, as it seems to me watching from a science background, that is very scary.
    – If Wiki is correct Scholasticism did not die with the trial of Galileo as it should have, but lingered on for another 100 years at least and in some quarters (e.g. Catholicism) the method of arguing from an ‘idee fixe’ is still relatively strong to this day.
    – Economics still appears to lack its paradigm shifting Galileo – at least someone that is as yet recognised by having that rare gift of genuine brilliance + showmanship. I’ve sought hints of an emerging messiah or just( a naughty boy) in NC, in RER and the web sites and books of progressive Australian economists. But I’m seeing still this inward looking way of thinking even from progressives, even though there seems to be a hunger for a harder science approach.
    – Coming from science with a tincture of ecological economics (which like Marxism is good on the diagnosis but less successful in the solution department – so far) I suggest the problem may be the insularity of economics generally and the way its language and concepts are locked out of the real world, which is covered by the distorting use of mathematics as you point out. By way of evidence I’m reminded of discussions with a few friendly environmental economists who speak a language which few hard scientists can understand and I can only just fathom after 6 frustrating years of trying to.

    Still – great article and I hope you explore this Scholasticism theme more – perhaps to find out if its possible to extricate the academy from it or whether its more a case of it having to let it wither on the vine while the revolution takes place somewhere else – an emerging economy without an established and self serving economic priesthood??

  3. jgordon

    “Economists are the only social scientists that have a seat at the policy table, and the ones that have any clout have serious academic chops.”

    I think you have it backwards. Economists are the only “scientists” to have a seat at the table because they say things that serve the perceived interests of the elites. Were they to stop saying things that serve those interests a new set of quacks would be brought in to do it. Not that there is any danger to economists of that happening though; at best we will just end up with the favored group of economists who tow the corporate state party line–those who favor wars, resource plundering, oppressing indigenous peoples, consumerism, etc–and all the other “fringe” economists who don’t.

    1. Yves Smith Post author

      Actually, no. Economists having influence on policy dates to the Cold War era (Marriner Eccles, who designed a lot of Depression response policy, was not an economist). The US was freaked out by the way Russia had gone from a peasantry to an industrial power in a generation. No country had industrialized so quickly. There was real concern that a “free” economy could not compete effectively, in terms of industrial production, which translates into military power, with a command and control economy. So the advice of economists was prized, since they were believed to be able to devise policies that would increase growth and thus keep those evil Russkies at bay.

  4. craazyman

    Looks like the gloves are finally coming off!

    Who’s the dude in the blue robe in the lower right of that painting? Or is it just a metaphor? LOL

    What is economics trying to do and what’s a standard for success? What does society owe a man and what does a man, in turn, owe society? It seems that’s the alpha and the omega, and anything worthwhile is built on that.

    1. Martin Finnucane

      Not sure what you’re getting at, but I thought the dude in the blue on the lower right was taking a nap. After all, big serious topics (Aristotle, DSGE) tend to be really boring.

  5. cnchal

    “Why on earth should I pay exorbitant amounts of money for this degree?” he asked me, “When I know that the man teaching me is dinosaur and a closed-minded fool?” (I paraphrase for effect, but this was the essence of it…).

    The student is being trained in how the system works, instead of being educated.

    jgordon has it right. Economists will prostitute themselves to perpetuate a corrupt system, and it starts right at school.

  6. JCC

    I usually avoid your posts, Philip… not because they are bad or that I fundamentally disagree, but because they end up becoming very time-consuming. I started this one at 6:30 AM (local time) and after 3 wikipedia reference reads, 1 of your article reference reads, and 2 at BOE I’ve finally finished!

    Unfortunately, as one who lives in the trenches (and not the Economic Trenches – my total University economics training is Economics 101 and 102), no light bulb flashed on… as usual. Which, I suppose, is one of your prime points here. At least I learned more about the IS-LM model, though, and while reading did notice an exogenous night-light bulb in the hallway behind me flash on and off a few times :)

  7. Perry Mehrling

    INET’s curriculum reform efforts have continued since the Bretton Woods conference, and there is video reporting on the range of efforts from the Toronto conference 2014:

    Because you mention reading the FT, I cannot resist a plug for my online course, “Economics of Money and Banking”, produced by INET. One of my central goals is exactly to teach students to read the FT. We are in the middle of the second running of the course right now, starting Part Two next Tuesday.

  8. Michael Hudson

    The Nobel Prize is a public relations subsidy for “free market” economics, such as Krugman’s free trade ideas and related neoclassical and above all pro-financial “hard money” economics. It thus is a lobbying effort.
    The problem with ANY proposed academic reform is that it also has an implicit policy conclusion. Any economic theory has. And because INET is sponsored by financial contributors, its guiding idea is how finance can save the world.
    It’s good to see financiers trying to develop a moral sense. but can finance REALLY save the world by taking it over, privatizing wealth and replacing government with central bankers. we all know how brainwashed they are with tunnel vision.
    What is left OUT of proposals for curriculum reform is the history of economic thought — classical economics with its doctrine of economic rent (and hence, analysis of rent extraction) and its concept that much income is UNEARNED and hence predatory rather than productive.
    The question is, where will such an alternative economic critique come from. I don’t see it yet.

    1. Tom Hickey

      Points well taken. Economic rents — land rent, monopoly rent, and financial rent are assumed away in conventional economics for the most part. Rent extraction is the result of application of social, political, and economic power. Without a consideration of power and its consequences, economists are dealing with imaginary worlds and have no business sitting at the policy table.

      INET was founded by George Soros who was sore at the reception that conventional economists gave to his theory of reflexivity, which is an aspect of complex systems characterized by adaptation and emergence. He was correct in insisting that conventional economics take complexity into consideration, but while that is necessary in reforming the curriculum, it is far from sufficient.

      INET is turning into an astroturf attempt to direct change toward a particular version of heterodoxy, while preserving “the best” of conventional economics.

      Hopefully, the grassroots comprised of students and concerned professors won’t be satisfied with anything but a replacement of the current curriculum with one that takes the best of all economic thinking into account and integrates it with knowledge in other disciplines, allowing students to decide what the best is in their view independent of groupthink that rewards conformity and penalizes independent thinking. Grad school is not so much about what to think but how to think creatively and constructively as well as critically, which requires a broad base of knowledge and a variety of tools and techniques.

      Keynes on the requirements of a good economist:
      “The study of economics does not seem to require any specialised gifts of an unusually high order. Is it not, intellectually regarded, a very easy subject compared with the higher branches of philosophy and pure science? Yet good, or even competent, economists are the rarest of birds. An easy subject, at which very few excel! The paradox finds its explanation, perhaps, in that the master-economist must possess a rare combination of gifts. He must reach a high standard in several different directions and must combine talents not often found together. He must be mathematician, historian, statesman, philosopher—in some degree. He must understand symbols and speak in words. He must contemplate the particular in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future. No part of man’s nature or his institutions must lie entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood; as aloof and incorruptible as an artist, yet sometimes as near the earth as a politician.”
      — John Maynard Keynes
      ‘Alfred Marshall: 1842-1924’ (1924). In Geoffrey Keynes (ed.), Essays in Biography (1933), 170.

      1. Yves Smith Post author

        A bit of this record needs correcting. Soros is indeed not keen about conventional economics. However, he was arm-twisted to fund INET, and at its first and second conference, often remarked that he wasn’t sure that he should have backed INET, in that he doubted economics could be reformed. So it is not as if he has some burning desire to change the discipline because it ignored his reflexivity theory, which is something you seem to imply.

        And I don’t think INET favors “a particular version of heterodoxy”. They have even included non-economists as speakers and panelists.

  9. WorldisMorphing

    [“Yet as many know, the economics curriculum is narrow, or to use the term of opprobrium popular in Europe, autistic.”]

    I remember when I first heard that word to describe economics. It was in 2009 or 2010 when wandering about on Steeve Keen related websites. I had stumbled upon a page of “The Post-Autistic Economics Movement “, and thought to myself…is that the most brilliant sarcastic metaphor that I think it is ?
    Indeed –autistic is exactly the right analogy to describe the behavior of an academic sect that cannot bear to contemplate the mere possibility that they had ingurgitated (with great effort …and probably much intellectual drudgery) a great quantity of theory that neither stand the test of time, nor scrutiny, and for which a few fatally flawed assumptions have poked holes the size of a crane in this edifice of political management\control….
    Similarly, I thought this word–autistic, to perfectly describe the mindset of libertarianism.
    June 14th, an article in Salon, “Why I left libertarianism”, Will Moyer clearly put his finger on the aspect which best evokes it:
    [“All of these deficiencies of libertarianism result in one thing: a limited vision for the future.

    Libertarians want a world without a state. Beyond that, the philosophy says little about the shape of human culture. It should be based on property rights and non-aggression. How can we combat racism? Property rights and non-aggression. How should humans approach sexuality and gender? Property rights and non-aggression. What is the place of hierarchies in society, whether it’s families or workplaces or financial classes? Property rights and non-aggression. What role  —  if any  —  should religion and superstition play in society? Property rights and non-aggression…. “]
    [“…But for libertarians who see the dismantling of the state as the ultimate goal, I have to disagree. It is not enough.

    While eliminating the state is a massive multigenerational project, it is in many ways only the first step. Human flourishing is the ultimate goal. And if libertarians think they can dust off their hands and head home just because the state is in ashes, they’re wrong. The state is the most obvious and brutal source of power and hierarchy, but it’s far from the only one. The state is a giant engine for deforming human culture, and what’s left over once it’s smashed isn’t a foregone conclusion. It will be up to humans to reshape and remake culture and society in the way that suits us best. This will have to include examinations of race, class, gender, sexuality, relationships, religion, social institutions and traditions in the absence of the state apparatus. It will have to include disassembling other forms of hierarchy  —  both violent and nonviolent.

    Having this perspective now and beginning the work on every other issue facing humanity isn’t a waste of time or moral misprioritization. Toxic social and cultural norms are much less concrete an enemy than the state, but they must be battled all the same.

    The degree to which I’ve moved away from libertarianism is the degree to which I think the ideology is ill-equipped to fight those battles. Once you move your goals beyond the elimination of the state, the ethical framework of libertarianism falls far short. Its black-and-white view of choice is shallow and inadequate when judging the nuances of human interaction and of how power and exploitation affect us.

    My goal isn’t a society based on property rights. My goal is human flourishing…”]
    Per Wikipidia
    Autism is a neurodevelopmental disorder characterized by impaired social interaction, verbal and non-verbal communication, and by restricted and repetitive behavior.

    I think economics and libertarianism as an analogue of two strains of autism is more than good enough and that it would probably be a good idea to consistently start using the term “autistic economist” instead of “orthodox economist”. I think one could even argue that spreading the meme has become necessary and perhaps, could potentially offend in a civil but potent enough way as to pressure a few into into reexamining their confortable delusion, (even if only in trying to defend it).

    Planting seeds of free floating hostility, you never know…you try, you do what you can….plant some seeds …

    1. WorldisMorphing

      …as for the issue of the economics curriculum, I think it goes without saying that a -t h o r o u g h- class of history of economic thought must be a mandatory element of not only any finance\economics program to be recognized, but I think it should mandatory for the obtention of ANY college degree.
      Hell, I’m even pondering the possibility that something akin to John Kenneth Galbraith’s “The age of uncertainty” be mandatory high school curriculum. When I watched that thing, a 1977 production, I realized quickly how woefully inadequate my economics class had been. Knowing your place on the timeline is an immeasurable benefit.

    2. nobody

      Per Wikipedia, use of the term “autistic” “to characterize mainstream economics is considered by many to be highly insensitive and indicative of a lack of empathy and understanding on the part of self-described post-autistic economists for actual autistics.”

      Your notions about autistic people are ignorant, bigoted, and harmful.

  10. Vatch

    So far, two commenters have mentioned the “Nobel Prize in Economics”. There is no such thing. Rather, there is the “Swedish National Bank Prize in Economic Sciences in Memory of Alfred Nobel”, which in Swedish is “Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne”.

    The short version should be the “Swedish National Bank Prize in Economics” or the “Quasi-Nobel Prize in Economics”, or maybe the “Pseudo-Nobel Prize in Economics”.

    1. Newtownian

      The good news is increasing you see it referred to the Nobel ‘Memorial’ Prize. One can hope eventually your short version will become the norm – and illustrate transparently its a bankers prize given to their scholastic supporters.

    2. MaroonBulldog

      I speak Swedish “lite gran,”, but I don’t translate the name of the prize so literally: “Sweden’s Central Bank’s Falsely So-called Nobel Prize” is the meaning those words convery to me.

      1. MaroonBulldog

        Also, Swedish “vetenskap” is cognate to German “Wissenschaft”–“veta” being cognate to “weissen”–and does not so necessarily convey the meaning “sciences” that it could not be rendered by some English word with broader meaning. The list of prize recipients belies the suggestion that Swedes think economics is ‘science’ in the English sense of the word: Hayek, Coase, cases in point.

      2. Vatch

        I like your translation! I don’t know Swedish; I just copied what was in Wikipedia.

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