Wednesday, October 30, 2013

Teaching Economics: More Diversity Please

Students at Manchester University want more than dogma (excerpt):

Economics students aim to tear up free-market syllabus
Undergraduates at Manchester University propose overhaul of orthodox teachings to embrace alternative theories

Few mainstream economists predicted the global financial crash of 2008 and academics have been accused of acting as cheerleaders for the often labyrinthine financial models behind the crisis. Now a growing band of university students are plotting a quiet revolution against orthodox free-market teaching, arguing that alternative ways of thinking have been pushed to the margins.

Economics undergraduates at the University of Manchester have formed the Post-Crash Economics Society, which they hope will be copied by universities across the country. The organisers criticise university courses for doing little to explain why economists failed to warn about the global financial crisis and for having too heavy a focus on training students for City jobs…

…Next month the society plans to publish a manifesto proposing sweeping reforms to the University of Manchester's curriculum, with the hope that other institutions will follow suit.

Joe Earle, a spokesman for the Post-Crash Economics Society and a final-year undergraduate, said academic departments were "ignoring the crisis" and that, by neglecting global developments and critics of the free market such as Keynes and Marx, the study of economics was "in danger of losing its broader relevance"…

…Earle said students across Britain were being taught neoclassical economics "as if it was the only theory".

He said: "It is given such a dominant position in our modules that many students aren't even aware that there are other distinct theories out there that question the assumptions, methodologies and conclusions of the economics we are taught."

My sentiments and sympathies are with the students (you can check out their statement here). An awareness of different strands of economic thought, as irrelevant as they may seem, should be on the curriculum of every economics department. This is especially true at undergraduate level, where the depth of courses tend to be considerably shallower than at the post-graduate level. You don’t see the richness and diversity of economic thinking over the past two centuries if all you’re getting is Samuelson or Mankiw.

Part of the problem I think is the explosion in financialisation – finance pays the bills, so students had tended to gravitate towards financial economics, which in turn emphasises equilibrium economics. But disequilibrium economics has a place too, and so too does Marxism, Austrianism, libertarianism, institutionalism, monetarism and others like Schumpeter.

While some of these strands of thought have fallen out of favour, or have been conclusively been discredited, it’s still useful to know why that happened. Constructive criticism and debate is how we make the profession – and its credibility – stronger.

And hopefully allow us to see the next crisis before it occurs.


  1. I am currently pursuing Master in Economics and thinking the same thing, too. In most classes, we've always based our assumptions on neo-classical cases. I always wondered about other school of thoughts.

    Anyway, my university do have some extra effort in diversifying the economics syllabus by focusing on Islamic perspective, too.

    1. So what is your thought about Islamic Economic Perspective?

    2. I myself in a bachelor of economics graduate and i can understand how those student felt.

      yeah, what is your perspective syahadaa? especially when it comes to interest rate. I know we muslim are "not suppose" to "collect" interest as part of the loan. It will be considered as Riba. I can understand it if we are using gold or silver standard as currency because it will retain its value overtime, but now our money is fiat money. How do we maintain its value (buying power) without interest?

    3. The solution is to not brand transaction as loan.

      As far as I understood, Bank's loan is WITH profit after factoring in decreasing value of money over time.

  2. nice..! i like this article. I'm no economist but i can certainly reminisced to my college days (i took couple of economics classes for fun). I had 2 very classical minded professors and it was exasperating when I tried to discuss and talk about other school of thoughts, just for discussion's sake. That was in 2008 at the height of economic crises