Rethinking Economics


By Lisa Autz

Photo courtesy of Texas A&M University-Commerce Marketing Communications Photography.

When Richard Wolff, a leading economic professor for 25 years, studied economics within the prestigious halls of Yale and Stanford he was shocked to come away without a single read of any alternative economic thought.

“I am the product of as good of an education this country offers, yet I was never asked to read one word of Marxian theory,” says Wolff. “[Marx was] a major figure in critically looking at capitalism.”

Wolff reflects that there was a “great fear and incompetence” in the education of economics. He himself taught the subject at the University of Massachusetts Amherst from 1973-2008, and now, he’s a visiting professor at New School University. Still, it’s made a lasting impression on Wolff the ways in which his professors would endlessly glorify how wonderful capitalism functioned. He says that for decades, teaching economics was a profession of justifiers, rationalizers, and overall celebrators to the system.

Similarly, Yuan Yang began her economics course in fall of 2008 at Balliol College at Oxford and was shocked that her lecturers paid little attention to the global market crash that was taking place just outside their doors.

When put in a historical context, the lack of pluralistic views in the field might not come as a surprise to many. After the World War II, the West made sure to do everything in its power to secure the validity of capitalism in the face of communist overthrow. As a result, the best schools in economics left out any sort of critical take on the system and hammered in neoclassical theory and free market praise into the curriculum.

Following the 2008 market crash, economists couldn’t explain how they never saw the crisis coming. But Yuan Yang, the founder of London’s Rethinking Economics (RE), felt the blindness was largely due to how economics courses were taught. A large disconnect existed between the modern macroeconomic classroom and real-world issues.

The student-initiated network of RE aims at calling reform on the teaching and public debate of the science. So far, it’s gathered a network of professors, students, and citizens from all over the world.

Wolff was thrilled to be a speaker at New York City’s RE conference early this September. In his speech, he explained his struggle with academia and his eventual break away into the study of alternative economic thought. He also highlighted how elements of his experience were tied into the text of his recent book, Contending Economic Theories: Neoclassical, Keynesian, and Marxian.

“In all my adult life, I have not seen this type of initiative,” Wolff says of RE. “The last time the students have become a voice in academic and doctoral curriculum was in the ‘70s and that was unsuccessful.”

The network has brought on economists with not only a more pluralistic view but also an experimental approach that attempts to study the human behavioral element of the science.

Jon Seeman Pedersen, a behavioral economist from Denmark and member of RE, sat down with BTR to speak about the role experiments have in giving economists a clearer understanding about the human decision-making process.

“My specialty in experimental economics focuses on what kind of economic behavior people have in certain situations,” says Pedersen. “The problem is that humans are inherently irrational and have a cognitive bias in making decisions.”

Pedersen goes on to illuminate with a simple example of testing rational/logical thought using the Monty Hall problem. The famous problem proposes there are three doors: one with a car and two with nothing. After the participant chooses one door, say number one, they are shown that number three has nothing in it.

Though mathematical equations prove that the likelihood of getting the door with the car improves to a two-thirds chance if the participant changes their choice, many do not.

“We don’t have that logical calculation power in our brains,” says Pedersen. “We like our own ideas and decisions and feel like we are being deceived otherwise.”

The concept of human psychology is not only left out of classic economic models taught in the classroom, but also when considering the decisions economists make themselves.

“Many economists in the profession have a type of religious notion towards what they were taught,” says Wolff. “If you look at the indoctrination process of a professor, they usually spend 10 to 20 years with their nose to the grindstone and did what professors wanted of them.”

Other leading economists such as Paul Krugman, a Nobel Prize winner and professor at Princeton University, have outspokenly objected the complacency of economics education in the US. In an article for The New York Times in 2009, Krugman wrote, “As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth.”

Currently, over 70 percent of people taking part in RE are in the UK. The remainder are spread over the US and Europe. The organization has gathered a set of aims for the network with main goals of increasing the diversity of disciplinary methods in economics, for instance, incorporating history sociology, and psychology. Additionally, they seek to make economics more applicable to the reality of the world.

Yang said in an interview with the World Economics Association that once community conferences and discussion groups are more integrated, the next step will be in rewriting the educational resources themselves.

“One idea was to produce a sort of anti-economics textbook, written by students for students, which could be used alongside the standard textbooks,” she proposed.

The mission to campaign for a broader take on economic education and discussion has set foot onto a global path that looks to continue in expansion.

Joe Richards, the press officer of RE, spoke to BTR about their worldly goals.

“We encourage a wide network of institutions and individuals in both academia and beyond, from young to old, to campaign for change so fundamental to our understanding of the world,” says Richards. “Our series of international conferences are open to everyone, and we encourage people from all backgrounds to get involved in the aims of RE.”

He considers RE’s efforts to be reparations that will help alleviate the debts of knowledge and open-mindedness in modern societies.