This blog has always believed that the 2008 crisis is much more than usual collapse and recovery. The real issue is teaching of economics which has become so narrow and mechanised that it makes for unbelievable reading. A field which grew so much from philosophy and debate is just reduced to solving equations.
Though, some corners of the world are looking at reforming economics education. Actually not some corner but UK where economics seems to have started as a formal discipline (it started from Scotland, part of UK):
Students of economics are up in arms about what they are being taught, and how. They are not just protesting – they are doing something about it. The movement seems to have started in Manchester around 2010. Many university economics departments received a notable increase in applications from would-be undergraduates as a result of the great financial crisis that broke cover in 2008.
They were – say the new students – alarmed by the world they found themselves in. They wanted to find out more about the crisis, and what could be done to prevent another one. So they signed up for economics. But a year of teaching left them frustrated and surprised. There was scarcely a mention of the crisis, or of the real world that it so badly jolted. Typical economics undergraduate teaching – they said – concentrated on a model of economics that almost ignored the booms and busts they had experienced as school students.
They further claimed that they were taught by specialists who concentrated on the concept of theoretical economic men or women who took rational, optimal, decisions, when confronted with great big problems, or little ones. Mathematics was often a central part of the economics course.
The odd, unpredictable ways that people behave was ignored. And so were lots of other schools of economic thought.
Hmm.. What is the key idea?
The main concern of the “rethinkers” seem to be the lack of what they call “plurality” in the way the subject is taught. As I said, in recent decades, a single economic school of thought – neo classicism – has come to dominate university teaching. The academic world is as subject to fashion as are most other walks of life. Despite its sometime aspirations to be a hard science, dominant economic ideas come and go.
For some time this appeared to be implicitly recognised in the way that the Nobel Memorial Prize for Economics was seemingly awarded – one year to a follower of JM Keynes, and then to a market forces supporter inspired by the monetarist views of the late Professor Milton Friedman of Chicago. By caricature, a pendulum swing from left to right and back again.
But the idea of pluralism goes wider than caricature. Many students would like to hear about the applicability of other different approaches to economics – about Marxism, Schumpeter, classical, Austrian, Keynesian, behavioral, developmental economics. Some would include something called feminist economics.
In answer to the student challenge, university economics faculties argue that they are changing parts of their approach. Some are readmitting the history of economics into their syllabuses, a very welcome inclusion.
This needs to be a much broader thought and countries need to chip in with their own changes in their own curriculum. Much of economics is taught from just the paradigm of developed world. There is hardly any care for institutional and social norms in different countries.