This afternoon I joined a debate organized by Room for Discussion at the University of Amsterdam (UvA). The topic was ‘rethinking economics: the future of our economic schooling’. Since the outbreak of the 2008 financial crisis, a bunch of academics have been calling for a revision of the way economics is currently taught at universities. They argue economic curricula should reflect the idea of pluralism: the teaching of a broad range of different schools of thought – alongside the Neoclassical school that has been dominant for the past decades. This plea is clearly admirable but too often falls on deaf ears. If economics is ever to embrace pluralism, its students should do so first.
Why do we need pluralism in economics anyway? One reason is that, without pluralism, economists tend to employ a rather narrow view of what their discipline is about. From the Neoclassical perspective, economists are used to design models with unrealistic assumptions and a lot of mathematics. For example, we’re all supposed to be rational agents who maximize our (expected) utility. Although not one single economist actually believes this is true, these kinds of assumptions and methods are still used extensively – and for good reasons. Given that economics deals with such complex subject matter, simple (even false) models are at least able to provide some useful insights into actual economic processes.
Despite the fact that the Neoclassicists have proved their worth, they are not the only game in town. The danger lies in – to speak in economic terms – the monopolization of one school of thought and the marginalization of all the others. Stressing the success of one particular economic school does not mean you can ignore alternative schools, no matter how tempting this may be. In fact, if the crisis has shown us anything it is that the virtues of Neoclassical principles cannot be taken for granted. In the famous words of Nobel-Prize winner Paul Krugman:
“As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive looking mathematics, for truth.”
While this kind of criticism echoes across the economic community, it is surprisingly quiet among the student population. During today’s debate one of the professors claimed that curricula already incorporate many pluralist aspects, like electives in economic methodology. The problem, according to him, is not supply but demand: students show no serious interest in alternative theories and models by way of low subscriptions for electives, for instance. Instead of discussing Karl Marx’s labour theory of value or the concept of conspicuous consumption coined by the Institutional economists, students prefer to busy themselves with the optimization of some obscure financial model or setting up effective marketing strategies.
I think he has a point. Universities could, of course, make courses that deal with different economic schools of thought mandatory. Still, apart from those who are active in movements like Rethinking Economics, how many of us are genuinely interested in economic thought? Some of us are, to be sure. Yet this is simply not enough to bring about the pluralist revolution that is silently hoped for. The UvA now considers to reinstall the course History of Economics Thought in its curriculum, but only because students expressed concern for the demise of pluralism in economics. So if we really believe that pluralism will benefit economics as a discipline, and will help prevent future crises, then we better start acting like it.