While there exist many books, journals and forums discussing improved teaching of neoclassical theories, our goal at WEA Pedagogy blog is radically different. Our goal is to change the teaching of economics in ways that will help all human beings on this planet lead richer and fuller lives, and enable them to realize the potential for excellence possessed by all humans. We would like to eliminate hunger, poverty, economic oppression and injustice, and move towards greater equality in standards of living. We would like all children to have equal opportunities for education, and access to health care.
Is it possible to do this by changing the way we teach economics? Many people, including myself, believe that it is. Indeed, among the major props which support the current extremely oppressive global economic system are the wrong economic theories currently being taught at universities throughout the world. Below I discuss three major obstacles to creating positive changes posed by conventional economics theories. Each of these obstacles provides us with a pedagogical goal: we should change our teaching of economics so as to remove these obstacles.
See link for collections of articles on UNLEARNING ECONOMICS.
FIRST Obstacle to improvements: Normative Positive Distinction
In my paper entitled “The normative foundations of scarcity,” published in issue 61 of Real World Economics Review (download pdf) I have shown that even what is currently taken to be the fundamental defining concept of economics is deeply normative. This is an application of an argument of Hilary Putnam, who showed that facts and values can be entangled in such a way that it is impossible to separate the two. Only after we come to the understanding that economics is not an objective and value-free scientific endeavor, does it become possible to formulate a goal for teaching and studying economics.
ACTION PLAN 1: To remove this obstacle, we need to show that norms are everywhere involved in current economic thinking. An excellent textbook for this purpose is Hausman and MacPherson: Economic Analysis, Moral Philosophy, and Public Policy. We should try to make this text the basis of a compulsory course everywhere that we can. Where we cannot change the syllabus, we should introduce this as an optional course and popularize it among teachers and students. In addition, we should learn how to bring out and highlight normative assumptions hidden within the framework of the economic theories we teach. My paper referenced earlier makes a start on this aspect. This will allow us to bring normative concepts into discussion in virtually all economics courses.
SECOND Obstacle to improved pedagogy: A-historical Methodology
A second obstacle to making changes arises from the related idea that we should use scientific methodology in economics. What this means is that we should look for universal economic laws which are invariant across time and space. What kind of economic laws can we find that apply equally in modern Australia, ancient Maya, colonial India, and nineteeth century Britain? In fact there are none. Nonetheless, the methodology prevent economists from studying history, which is the key to understanding economics. See How Economics Forgot History by Hodgson for a detailed argument. I have made an entirely different argument but for similar purposes in my paper: Deification of Science and its Disastrous Consequences (download from: http://ssrn.com/abstract=2260052 ) – this is a rather complex argument, and I am working on simplifying it to make it more accessible.
I have found that discussions of methodology are perplexing to many audiences. Furthermore, scientific methodology is such a sacred cow that to suggest a different methodology for economics evokes gasps of horror. The simple solution is to just re-introduce history into the economics syllabus, both in separate courses, and also as additional material in conventional courses. One must differentiate between history of economic thought, and a global history which describes economic events of importance. It is the latter that is of importance to us. As currently taught, history of economic thought just supports conventional framework of economic thought, though this can be changed and modified.
ACTION PLAN 2: Personally, I learnt more economics from Naomi Klein’s book The Shock Doctrine: The Rise of Disaster Capitalism than I did from the four year Ph.D. program at Stanford. Incorporating and teaching major economic events of the twentieth century in their historical aspects would substantially enrich a conventional economics education based entirely on mathematics and theory. Many books can be of substantial value in this effort. An excellent book which shows how to merge history with economics of trade is Power and Plenty: Trade, War, and the World Economy in the Second Millennium by Ronald Findlay & Kevin H. O’Rourke. For teaching about development, there is currently no alternative to L. S. Stavrianos: Global Rift The Third World Comes of Age. Here work is needed, in terms of simplifying the materials, bring out the connections with conventional development theories, and making it available in textbook format, as a basis for a course in economics department. I am sure that there are many other books of history which would be of great use in teaching Real World economics. I would very much appreciate hearing from readers who have made progress in these directions.
THIRD Obstacle: Free Markets generate best possible economic outcomes.
From conversations with other first year graduates in the Ph.D. Economics program at Stanford, I remember that many of us were idealists and hoped to solve the economic problems facing human beings. However, we were trained into thinking that competitive markets self-regulate to optimal outcomes, and all we need to do is remove obstacles to perfect competition. This idea, encapsulated in the “Invisible Hand”, prevents efforts for positive change by suggesting that they are un-necessary. All we need to do is to get out of the way of the free workings of the market, and excellent economic outcomes will automatically result. It was this delusion that led to disastrous results in Russia when Jeffrey Sachs implemented “Shock Therapy” – remove all governmental support institutions, and wait for free markets to create economic prosperity.
ACTION PLAN 3: Because of its crucial importance, I have written two papers on the topic which summarize the failings of the invisible hand philosophy. The easier and more accessible one is entitled “Failures of the Invisible Hand” . The somewhat more complex paper has been published as: “Death of a Metaphor: The Invisible Hand,” International Journal of Pluralism & Economic Education Vol. 4(1), March 2013, p. 15-29. Both of these papers can be download from my SSRN Author Page Asad Zaman. A lot more work is needed to counter the myth of self-regulating markets, and these papers are just pointers to the literature. Again this material needs to be incorporated into courses, though this will be difficult to do since it is directly in conflict with what is currently being taught. Suggestions for how to accomplish this would be most welcome.
SUMMARY: As discussed, there is a huge amount of work necessary to reform the economics curriculum to make it people friendly, instead of capital friendly. Three necessary initial steps have been outlined above. There are many other ways of proceeding, and the purpose of this blog is to initiate a discussion on how to make pedagogical changes for improved economic outcomes.