1982. Can economics break out?

Economics Journal articles are mostly written at a level of detail within an argument about a technical point. If one is interested in large questions: capitalism and governance under climate change for example, there is no place within the article, or most articles, to fit that perspective. Its like trying to get a regular screwdriver into the slots on a Phillips. Just won’t fit.

Economics has become the most common language to discuss the current state of society but that vocabulary does not do well at helping us deal with current problems – the big ones: climate, inequality (really immiseration of a significant part of the population.), automation, governance, population, international conflicts. Nor the really big ones: culture, values, the meaning of life, nor the way to establish a community of conversations around these questions. That is what politics was meant to be to be about. We have nothing like the generation of founding fathers who could discuss the history of republics for hours at the Constitutional Convention.

Economics has a hard time dealing with large issues about the economy (what its purpose is, how to get to that purpose) because it is configured to help elites manage quantities without reference to visceral human beings. Issues of value are hard to get into a discussion that is dominated by questions of technical detail. Issues of value might raise uncomfortable questions about ownership and distribution. Thee is no possibility of discussing class in either micro nor macro economics.

It is striking to me how much progressive economic discussions stay close to the technical level where it is hard to raise big questions.

How can we break out of that cocoon? Is it turning out to be harder to change the direction of the economics monster than we thought? Are careers and department management so aligned with neoclassical economics that people can’t see how to break loose? Are the proposals being made powerful enough to reach escape velocity? Perhaps trying to break out by looking at where we are is not enough. We have to have a vision of what might be out there to get the motive to risk the changes.

From the Recent INET paper

The Focus of Academic Economics: Before and After the Crisis
Ernest Aigner1, Matthias Aistleitner2, Florentin Glötzl1 and Jakob Kapeller2, 3, *
May 22, 2018

Our results suggest that – unlike the Great Depression of the 1930s – the current financial crisis did not lead to any major theoretical or methodological changes in contemporary economics, although the topic of financial instability received increased attention after the crisis.

In this paper, we document that the financial crisis did not have much impact on the paradigmatic development of contemporary economics. In contrast to the experience of the Great Depression, which led to the emergence and acceptance of novel theoretical concepts on a large scale, the financial crisis and its consequences have, by and large, been rationalized with reference to existing theoretical concepts. Although we do observe a slight shift away from the idea that financial markets are efficient by default and prices only follow random walks, the basic conceptualization of (financial) markets as being efficient and equilibrating in principle seems unquestioned. On the contrary, the rising prominence of the concept of “liquidity” – understood as the availability of funds to absorb financial assets to be sold – in the aftermath of the crisis indicates that the financial crisis is seen by economists as a major external shock, unforeseen because of the limits imposed on rational behavior by asymmetric information, and not as something intrinsic to the economic process. Similarly, our analysis of the reception of major crisis-related books shows an only temporary increase of interest in classic contributions dealing with financial and economic instability, which was even weaker for more distinguished journals. These observations signify a key difference in terms of the ‘lessons learned’ from past crises when compared to the Great Depression, which gave rise to a broad consensus that capitalist economies are not self-sustaining, a consensus that eventually helped to forge the mixed economies dominating the richer parts of the planet.


From the Durham report on Educating Economists with an introduction by Robert Skidelsky, from the Durham Society for Economic Pluralism.


1 Introduction The economy is changing at increasing speed. Automation questions the role of labour and production. Money is changing form. Environmental change challenges our understanding of economic growth, while the digital economy confronts the way we understand ownership and property. The global economy raises issues of trade and regulations. Distribution of wealth is increasingly unequal. Understanding the economy as an integrated part of an increasingly complex society has never been more important. Nevertheless, whilst the economy is increasingly complex, what economics students are taught is increasingly narrow. Economics teaching is separate from the other social sciences, and has less diversity in theories and schools of thought. Students of economics insufficiently examine history, ethical frameworks, or what is happening in the world around them. Not so long ago, understanding the development of economic theories – the history of economic thought – was a core part of an economics degree. Now, most economics degrees do not include this content at all…. Modern curricula tend to focus heavily on just two aspects: quantitative skills and teaching a particular neoclassical brand of economics.



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