An expression that I coined in recent years is “If you want solutions to the economic crisis, don’t ask an economist” (it hasn’t caught on, in case you werere wondering). All humour aside, there is a much deeper point behind this rather facetious statement. Six years after a massive finance crisis and we have not attempted in any way to move away from the dogmatic neoliberal policies of free market economics.
Why? What is it that has to happen before we seriously start looking for solutions? Another crash? Perhaps more? What’s even more worrying is that in such a time of crisis, one would hope that soon the next generation of economists would be able to take to the stage with new ideas and a fresh perspective. Think again.
Now I do not study economics but I do know people that do, and from what I can tell it does not appear be the most fluid of subjects. For example, I was once discussing employment with one of my friends and he said that we could never have full employment, because there is this graph that says if we do the sky will fall in (or something like that). My first reaction to this was why? Why is it that there is this higher power dictating how our society is structured? Economies are not like molecules, they do not have a set structure. Surely there are plenty of ways we can manipulate these systems to achieve what we want from them?
Often I find this is not the way economists think. It seems that these ‘rules’ dictate policy, in some cases social as well as economic, rather than the other way round. Even six years after the finance crisis The Guardian recently reported that not one of the Russell Group universities teaches the crash in any depth. Basically, economists seemed to be carrying on like it never happened. They seem to be acting as if their discipline is not fundamentally flawed, when it clearly is.
Take, for instance, the new book by Thomas Piketty: ‘Capital in the 21st Century’. It is a deep look into inequality over the past three decades in a number of countries. What makes this book perhaps one of the most important of its kind is the focus on the data. Thomas Piketty himself has said that he finds American and British economics focus too much on mathematical modules abstracted from reality and not enough on empirical data. In a sense, Economics is becoming detached from its social scientific roots. It is pretending to be a science when it isn’t.
The lack of accepting the flaws and facing up to them in the field means that students studying Economics will be ill-equipped to deal with the problems in the future. As a critic of neoliberal economics myself, I often hear that I ‘don’t know what I am talking about’ and that ‘Thatcherite economics is just accepted now’ and, to me, nothing is more worrying. This lack of engagement with alternatives can only be a bad thing.
Whatever you believe about free market neoliberal economics you cannot argue that the theory has not matched the reality. What we were promised by Thatcher in the eighties has not occurred. Furthermore there is a much deeper point that our current economic thinking seems to be vastly ill-equipped to deal with some of the biggest issues we face in the current century: climate change, overpopulation and food shortages, to name a few.
Economics needs to return to its social scientific routes. It must engage with the reality on the ground rather than obsessing over speculation and mathematical models. Students need to learn to think out of the box rather than be trained to follow rules presented as scientific fact. Only then will we train the next generation to be able to effectively deal with the problems the world faces.
“I do not study economics” – Right, well you can stop there. You are not well-placed to criticise the content of a course you not only do not take, but clearly know nothing about.
The problem with ‘full employment’ is that it massively increases the bargaining power of workers. There are no unemployed people to replace them, so they can basically ask for whatever wages they want, and threaten to quit knowing that they could immediately find employment elsewhere. New businesses would find it hard to begin, as they would have no pool of labour to draw workers from. This might not seem so bad from a lefty perspective, but the people who lose out would be the young, the old, the disabled – in short, all those who are not in a position to work – with wages ever-increasing, prices would follow suit, and then we’d have a real ‘cost of living’ crisis to worry about. Not to mention that some frictional unemployment – when people are between jobs for brief periods – is the sign of a healthy and flexible labour market, where people have the confidence to hold out for a better offer.
Neoclassical economics is not the same as neoliberalism. Neoliberalism is political more than an economic concept, and while it has roots in Austrian economics and the Chicago school, its ideological purity (as represented by lefty academics: I know very few self-identified neoliberals) is very unlike modern economics. Government austerity is often described as being ideological in nature, and this would be the ideology of neoliberalism, but generally economists disagree.
In fact, the economics course taught at York is broadly Keynesian, considering a variety of models considered ‘mainstream economics’. While some modules are more theoretical and abstract than others, none of them are as simple as you seem to think they are, and outside of mainstream macroeconomics, microeconomics and basic maths and statistics, we have a wide choice of modules. For example, this year I’ve taken Development Economics, which looks critically at international and domestic influences on development (and the lack thereof) including the relative failure of neoliberal structural adjustment policies in Africa, and the impact of colonial institutions which have left harmful legacies modern independent states. Next year I’m studying a module in Alternative Perspectives in Economics, which is specifically focused on the failures of and gaps in mainstream economics, and discussing alternatives such as Austrian and Marxist economics. There are also modules offered in economic history, bubbles and crashes, and political economics.
There is no lack of engagement with alternatives, certainly not at York. Lecturers will criticise theories as they go, and while we must know and apply various models, there is no requirement to believe them if the facts do not agree.
Neoclassical economics is not perfect, economic teaching is not perfect, the course at York is not perfect. Nothing is. The problem you have is not with economics as a discipline, I think, but with how it is represented and misrepresented by politicians, the media, and now yourself.
I wholeheartedly agree with the above comment from Rachel.
I would add two further points about the article’s statement on a lack of university coverage of the recent crisis.
Firstly, in my three years at York, there has been at least some mention of the recent recession in all applied modules that I have taken. Admittedly, some have had more mention than others, and the best modules at doing this have optional courses been taught by Sue Bowden and Mattias Morys.
Secondly, and most importantly, it is a flawed criticism that university courses and academic circles should study an event which has only just occurred, in as much detail as events that occurred over 10 years ago. The world is still feeling the effects of the recession and there are still economists with bias and vested interests in how it is perceived by the eyes of history. One simply can’t analyse an event of this magnitude, without giving some time for complete data, hindsight and objectivity to develop.
There are some deep-seated assumptions in economics in terms of modelling and methodology. Mainstream models only consider rational choices made by individual actors, models that don’t are ignored by academia and there is no critical analysis of whether this is the best way to model markets and economies. The other major assumption is in how to treat empirical data. It is, again, assumed without critical analysis that there is an objective ontological reality to be discovered in economics, and that the way to discover it is by studying only observable phenomena. This a brilliant philosophy for natural science, but in most social sciences it is very contentious, and yet it is not discussed by economists. Our lecturers do critically discuss the theories we study, but within very strict constraints set by the Foucauldian regime of the discipline.
so basically you read the guardian?
Wow, this is probably the biggest load of bullsh*t I have ever read in my life.
“I don’t study economics” just stop there, you sound like a prat as soon as you carry on from there.
“Economies are not like molecules, they do not have a set structure. Surely there are plenty of ways we can manipulate these systems to achieve what we want from them?”
That there, is the biggest heap of wank I have ever set my eyes upon. You truly are a naive moron and you have embarrassed yourself here Michael. Give up writing for York Vision, your philosophy degree is still sh*t even if you polish it with newspaper writing on your CV.
You know how smug and ignorant you sound right?
Just to add another criticism:
“Economics is becoming detached from its social scientific roots. It is pretending to be a science when it isn’t….Economics needs to return to its social scientific routes. It must engage with the reality on the ground rather than obsessing over speculation and mathematical models.”
I’m pretty sure that modern economics is actually far more based on ‘the reality on the ground’ than any economics of the past. Why? Simply because it is about a million times easier to get hold of data these days in order to test theories and models.
Economics as it is taught — unless it is Austrian economics (eg. Mises, Rothbard) is completely and utterly wrong and a shambles. One has to remember that it is really a failed subject that exists only to advance the state and apparatus of state (unless, as I said, it is free-market economics).
In other words, most so-called economists churned out by universities really know nothing and really have business running anything of importance on behalf of a country whose people they seem to think they’re better. They’re just jobsworths and parasites.
Call yourself York Vision, more like York Blind. HAR HAR HAR HAR!!! DO YOU GET IT?!?
“dogmatic neoliberal policies of free market economics.”
“Now I do not study economics ”
Says it all really
Fuck it I’ll offer some critcism.
You do realise that this is one of the most stereotypical, groan-inducing criticisms of economics right?
“neoliberal economics” isn’t based on the idea that humans are atoms, the whole point of free market economics is that humans are diverse and subjective. All of your arguments are circular and run into each other.
More wanky Guardian-esque illiterate tosh
Left wingers don’t like the “rules” of economics because it prevents them from fulfilling their utopian pipe dreams where scarcity, cause and effect don’t exist, there’s so such thing as time and we can all live in this static society full of unicorns and orgies where nobody has to worry about individual action
FOR FUCKS SAKE HARDCORE FREE MARKET ECONOMICS DOESN’T RELY ON MODELS