The Post-Crash Economics Society, Manchester

Plan for this presentation

1) Why economics is important?

2) Where do students come in?

3) Tools we have used

4) The Possible Limits of Student Actions – are there institutions that are too big to fail?

Why is economics important?

“The ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist”John Maynard Keynes

Ideas that have changed the world

• Foundations of the discipline – Adam Smith – 1776

- Ricardo – comparative advantage (abstract/simple model)

• Ricardo inadvertently inspired Marx – Labour theory of value

• Keynes – post WW2 Consensus

• The creation of Derivative Markets – model that then created the market (Mackenzie, 2007)

Why is economics education important now?

• “it’s the economy stupid” • Graduates fill top positions – Cambridge • A subject that dominates our thinking – “good

politics, and bad economics”• Crowding out of other disciplines – Economics

Imperialism (Ben Fine, 2009)

Different visions of economists• “The master-economist must possess a rare

combination of gifts .... He must be mathematician, historian, statesman, philosopher”

• John Maynard Keynes, 1936

• "The combined assumptions of maximizing behaviour, stable preferences, and market equilibrium, used relentlessly and unflinchingly, form the heart of the economic approach as I see it.

Gary Becker, 1976

What does undergraduate degree in economics consist of?

• Dominated by Neoclassical Economics – not an official term – see Becker’s definition

• Models and mathematics – rational agents• Little to no place for real-world application,

ethics, history, philosophy of social science or, crucially, other forms of economics

Real start to a question from Final Exam, of 3rd Module at top 3 University

This dominance led to thinking such as

……..

• “Macroeconomics…..has succeeded: its central problem of depression prevention has been solved for all practical purposes and has in fact been solved for many decades”

Robert Lucas, 2003 (Nobel Prize Winner)

• “The state of macro is good” Olivier Blanchard, 2008 (Chief Economist IMF)

• Bernanke’s Great Moderation

…..And then to……

“the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics for truth”Paul Krugman, Nobel Prize Winner, 2009

What do we need in economics

• Real World Application• Ethics• History• History of Economics• Philosophy of Social Science• Crucially, other forms of economics –

importance of framework and methodology

Why do we need pluralism in economics?

• Not denying that mainstream economics has important elements

• However, monopoly led to hubris• Failed to predict the financial crisis or warn

about debt - Minsky• Problems even if crisis didn’t occur –

PART 2

THE ROLE OF STUDENTS

Why student opposition is necessary

• Economics education should in some sense be seen as a public good

• Yet difficult for the public to engage with it – technical discipline• “I would devote time to discussing rational

expectations, monetary, overlapping generations models of fiat money, in which one can see that money acts like a ‘bubble’, and which serve to explain in the purest sense what a bubble can mean, of the kind recounted in the famous conference volume edited by Karaken and Wallace”

Former Bank of England Economist in response to our campaign

Students can engage

• Students are not yet fully indoctrinated

• Institutional factors stop the discipline from radically overhauling itself

• Kuhn’s idea of a paradigm shift

Pupil vs. Expert Dynamic

• Can’t definitively say that it’s wrong• Circumstance suggests that it is• Can definitively say that it doesn’t

help us to understand the real world at this level

The Actions of Student

Three options:1. Self education2. Curriculum reform campaigning

Both can happen on a local, national and a international scale

Self -Education

• National and International level – podcasts etc.,

• Local level – e.g. the case of Bubbles, Panics and Crashes

• Limitations to this model – risk for lecturers, students only have limited time for outside study

• Conclusion: doesn’t reach enough people

Curriculum Reform

• Local level – very difficult

• National/International – powerful curriculum reform movements from big institutions – CORE shows that movement can be hijacked

• Need new ideas

Tools we have used

1. Petitions• Can be useful in the short term – particular

reform/gain attention • Can unite students (ISIPE)• often flawed for long-term reform due to the

quick turnover of students

Tools we have used

2) The Media- Great for getting public attention- Departments scared about public image- The importance of a narrative – Post-Crash- Can be misrepresented/understandably

simplifies the debate- Alienates economists – us vs. them

Tools we have used

3) The National Student Survey (NSS)- Particularly controversial – ‘strategic’- Department allowed to tell students why to

give them a positive review but the opposite not allowed

- What do we want the NSS to be? A call for comfy sofas or a reflection on our education

PART 4 - CONCLUSION

IS ECONOMICS TOO BIG TO FAIL?

Conclusion – Is economics too big to fail?

Reasons to be pessimistic for the future of the movement:1) The case of Bubbles, Panics and Crashes2) The adoption of CORE at several universities 3) Some institutional factors that are difficult for

us to affect – REA/REF4) As the financial crisis fades from memory, will

people stop challenging the orthodoxy?

Conclusion – Is economics too big to fail?

Reasons to be optimistic:1) A movement growing ever larger – new

groups/supporters2) Funding makes campaigning easier and

turnover less of an issue3) Alternative curriculums already exist4) The possibility for a new CORE- Skidelsky5) Post-Crash Generation – crisis will not be

forgotten

New directions for the movement - Public Education

• Parts of the movement have moved beyond simply advocating curriculum reform

• Economics education is linked to democracy• Conferences• Publications