Three Goals for Pedagogical Change

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.

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11 comments
  1. No doubt these are the great action plans but the problem is implementation especially in Pakistan. The authority lies in the hands of those who don’t even understand where the problem lies — remedy comes afterwards. So in my opinion people like you should be in the authority to serve the best interests …

  2. Yousuf Marvi said:

    Thank you for providing this space for discussing pedagogy in Economics. I believe that pedagogical discussions are completely missing from teaching in Economics. I would like to make few comments in regards to the posting and some recommendations on the subject matter, as well.

    Too often I see pedagogy misunderstood as the discussion about what-to-teach. Fundamentally, pedagogy is about what-and-how to teach. In the above post, I see some great points on shifting the dynamic of “what” to teach, but not “how” to teach it. There have been substantial and meaningful contributions in the diagnosis of neo-classical fallacies; however, few have cracked the holy grail of providing a meaningful, interesting, and purposeful economics education.

    I believe that the biggest mistake of critiquing neo-classical economics is to de-emphasize quantitative methods. In fact, its the lack of quantitative rigor that diminishes the attractibility of heterodox contributions. In my opinion, faculties should first and foremost emphasize pedagogical efforts unto undergraduates. Special emphasis should be made in encouraging students to pursue double majors, especially in conjecture with International Relations, History, Psychology, Politics, and Sociology. Faculties should join to offer inter-disciplinary co-taught seminars. Economics department should really take charge of hosting speakers from other disciplines. Finally, departments must encourage and provide resources for high quality, publication driven independent studies to undergrad students.

    For myself, two distinct interactions made my undergraduate experience meaningful: a) studying economics from a moral perspective as an independent study with my adviser; and b) studying political economy and breaking down growth models with my I.R. adviser.

    • Thanks for your comments. There is no doubt that “How to” is crucial. But before we discuss methods for achieving goals, we must have some clarity on goals themselves. I believe that one reason for the relative lack of influence of heterodoxy is the failure to agree on goals. Everyone is going in different directions, so even though there are a lot of genuine, strong and valid critiques, there is no consensus on what to do. This lack of consensus on an alternative makes heterodoxy ineffective.

      • Yousuf Marvi said:

        Thanks, Professor. Yes, you make a valuable point; however, I still believe that problem lies in the “how” to part. The next generation of economist must be created at the undergrad level. Economics should be taught as a “hard” liberal science. What you are advocating is replacing a philosophical regime with another. Your convictions might be true; however, the focus ought not be regime replacement, but instead fostering a heuristical dialogue within and throughout the student bodies. The weakness in economics comes from it not being a social science; I believe it is not necessarily looking for “an” alternative paradigm.

  3. Summary of comment by Dave Taylor on the RWER Blog (For full, original post, see RWER Blog (davetaylor1))

    July 20, 2013 at 2:30 pm | #1

    The invisible hand is not a myth
    our captains – taught by Adam Smith they are doing the right thing – are pursuing self-interest when they should be seeking the Common Good. Add the common sense (intuition) of this in naive experience and you get the economic doctrines of Laissez Faire and Individualism: do away with captains and paddle your own canoe.

    However, we are not all cut out to be captains, and canoes are not big enough for some of the cargoes we need to carry. What we actually have is captains and CEOs of industry who are being trained by economists to aim at their own (rather than their employers’) objectives. The real myths, then, are the concept of ergodic market forces (as against marketeer’s mistakes), and the resultant solutions proposed by mainstream economists.

    My argument here is that economy has become the logical equivalent of an old-fashioned analog computer controlling the single purpose of making money, yet we ought to be teaching the analogy between what computer systems are becoming and what economics claims to do: freeing us to do our own thing by controlling errors which will create disharmony.

    Chief among such errors, I argue, is mistaking the form of money for power instead of information in Shannon’s sense, or as Erich Fromm put it, worship of the Golden Calf’s breaking the First Commandment of logic: i.e. mistaking the image for the reality. My own analysis concludes it is a mere indicator of value which will be owed for something and to someone else, not a measure of its own or its possessor’s value.
    and my argument is that in

    Dave: I don’t see any real disagreement here — just phraseology. I put “invisible hand” in quotes to refer to the wrong claim of economists that if everyone pursues selfish objectives, this will result in optimal outcomes. Please see my articles on Invisible Hand referenced for clarification. I agree that if all pursue unselfishly what is best for society as a whole that will generate optimal outcomes, and this is what we ought to teach. Your second claim about money is a separate discussion, not related to my post. Asad Zaman

    • davetaylor1 said:

      The problem with phraseology, Fred, it is that can give the wrong impression. I’m trying to further understanding, not disagree. When the self-styled ‘orthdox’ and ‘heterodox’ simply disagree, the ‘orthodox’ win every time because they are not interested in being “right” (thinking they already are), so feel free to pursue (or defend) power and prestige. Discussing pedagogy, I’m pursuing two of Tony Lawson’s themes (ontology and contrast) and one of my own (personality differences). One has to know what an economy IS (what it does: fact as in factory) before one can judge how well it is working, and one has to see differences (cf. relevant ‘information’ as in “differences which make a difference”) in order to be able to choose between them. One of the joys of the McClosky article (http://www.deirdremccloskey.com/editorials/boulding.php) I linked on RWER is that though she criticises Boulding’s lack of precision she (like me) appreciates his contributions as a theorist, not least the nature of organisation and eiconic (pictorial) language, which including not only diagrams but examples as in parables and history.

      This relates to the methodology of pedagogy, but discussion of contrasting views of the nature of money is surely crucial content in a pedagogy of monetary economics? Let me add a further thought. As I wrote, we are not all cut out to be professionals, so perhaps our pedagogy should be aimed not at those already aiming to become economists but at those wondering whether to, or the millions who take short courses to meet their need for an everyday understanding of economics.

  4. Original comment posted on RWER Blog by

    sergio :

    This system of so called “science of economics” is center around idealized utopical model of perfect market capitalism. In their view capitalism is perfect, individuals are irrational, government is bad. Capitalism can not be changed, because it is perfect by definition, individuals must be rational, government must be removed.
    Pedagogy will not change unless system under study, i.e capitalism, will not change.
    Collapse of capitalism will change pedagogy of economics for better.

    Sergio: The question is: What will lead to the collapse of capitalism? I find Foucault’s arguments regarding Power/Knowledge persuasive, in the sense that all power is supported by structures of “knowledge”. Thus one way to undermine capitalism is to undermine the theories which support it. We have all been brought up on materialist philosophies which suggest that change can only be brought about physical interventions. For an antidote to this wrong philosophy, please see my brief essay on The Power of Ideas I am not arguing for reverse causality — that is changing our ideas about it will lead to collapse of capitalism. Rather, the process of changing capitalism to a better system will involve both material and ideological interventions. Asad Zaman

  5. davetaylor1 said:

    On the ‘pedagogy’ as against ‘of economics’ aspect, my friend Stratford Caldecott has been pursuing a rethink at http://www.secondspring.co.uk/. Here are a few details from there:

    “BEAUTY IN THE WORD: Rethinking the Foundations of Education, Stratford’s sequel to Beauty for Truth’s Sake, completing his study of the seven Liberal Arts, was published in 2012. Education is in crisis, and new possibilities are opening up all the time, but any genuine reform will have to be based on an understanding of what education is for. Follow the link to find out more (and read an article on the whole project here). It is published by Angelico Press and available through Amazon. Read the interview”.

  6. Excerpts from Comments by Robert Locke (click on name to get to original post):

    Robert Locke :

    Asad, I too welcome your pedagogy, and admire your enthusiasm and energy in promoting it. It might be a good idea, just to set the record straight, to emphasize how the opposition to the new paradigm in economics, that ensconced itself in academic institutions, has a long history going back to the Methodenstreit of late 19th century economists. More recently we had the apostasies of D. McCloskey who turned her back on econometrics and neoclassical economics (in the influential , “Rhetoric of Economics,” Journal of Economic Literature 21 1983, 481-515), of H. Thomas Johnson in a series of books (which are cited in my recent article in the RWER #64), in Kenneth Boulding’s “What went wrong with Economics?,” The American Economist 30:1 (Spring 1987), 5-12, in my own Management and Higher Education Since 1940, 1989, Cambridge UP, especially Chapters 1 on the New Paradigm and 2 a criticism of the New Paradigm as of the 1980s. And in many others. So there is a body of sustained criticism there. But all of the critics have been crying in the wilderness since the Blitzkrieg takeover of academia by neoclassical economists and econometricians in the 1960s, which is why your pedagogical effort is so important.

    Robert Locke :

    Thread #6 & 7

    Pedagogical reform.

    Boulding … said in “What Went Wrong with Economics: “Perhaps the real villain is the discovery of seventeenth century mathematics some two hundred years later by Cournot, Jevons, and most of all Walras, whose influence and brilliance set economics on a path that increasingly has become a dead end.”

    McCloskey’s “Rhetoric of Economics” severely criticized neoclassical economics and econometrics. But there were others in the 1980s who did the same. Les Hannah, in his inaugural lecture (Entrepreneurs and Social Science, 1983)on assuming his professorship at LSE noted how neoclassical economics had led his colleagues astray …

    Asad, this critical literature for the earlier period is important for students of economics to learn because orthodox economists like to claim that neoclassical and mathematic economics had established itself as a new paradigm in the discipline in the 20th century. If this is accepted, it is easy for the orthodox economists to argue that their heterodox critics … should be ignored.

    Robert Locke: I fully agree with what you have written. For a while, I have had an idea to write a history of thought which would bring out the contested nature of orthodox ideas, but I lack the in-depth background that you have. It would be VERY useful to show how ideas in economics arose in the process of the battle between conflicting interests of differing social classes. Also, how the ideas which came to dominate reflected the interests of the class which had more power. This would provide a demonstration of Foucaults Power/Knowledge thesis within the context of economics, and would weaken the claims of orthodoxy to scientific objectivity. I have done this in some limited contexts – see my article Power/Knowledge and Economic Theories I think it would be very useful to do a more extensive exploration of how orthodox theories dominate because they serve the interests of the powerful, rather than because they are right. If you are game, we could collaborate on such a project. Asad Zaman

  7. Fred Lee said:

    There are a number of ways to chnage how economics is taught. The areas discussed by Professor Zaman are reasonable. However, these improvments do not really strike at the problem of mainstream economics, which is that it is internally incoherent as a body of theory. It is not that free markets do not produce the best outcomes; it is that the theoretical concept of a free market is meaningless. For example, in a partial equilibrium model, under competitive conditions the upward sloping market supply curve is highly problematical (and a supply curve does not not exist outside of perfectly competitive conditions); and a aggregate market demand curve has no specific shape (especially a downward slope); and finally partial equilibrium cannot be theoretically sustained. If recourse is made to a general equilibrium model, there are also welknown problems with it. So the pedagogical change that needs to be made is to critically teach mainstream economics and show that it is theoretically incoherent; and at the same time critically teach heterodox economics. This can be done in an introductory and intermediate micro course–I have been doing this for years. It is hard, but it is better than letting students believe that there is some kind of substance to mainstream theory.

  8. Professor Lee, that is great. I would like to invite you to writeup a separate post explaining how this can be done, so that the rest of us can imitate this methodology in our own courses.

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