Economic analysis should concern institutions and not focus on markets. The top academics know this and do outstanding work recognising these features of the world, but it has not changed the basics. For example, the instinct is to start with ‘the market’ and find ‘failures’; but it’s all failures out there and we should be starting with ‘institutions’. And the academic discipline concentrates on quantitative answers to narrow, well-defined problems, instead of tackling the big questions of today.…
Duh. This is what heterodox economists have been saying since the days of Marx and Veblen. It's about asymmetry and and the source of asymmetry is traceable to asymmetry in class structure, class power, and income and asset distribution that is both cultural and institutional. Under such conditions, markets left to market forces are going to result in highly asymmetrical outcomes that are the consequence of imperfect markets, for markets also have an institutional basis, e.g., in law, and property rights in particular.
There are lots of parallels between the Econ and tech worlds, including His being coded as ‘homo economics’. But at least everyone is talking about AI ethics. This needs to happen in economics too, reviving political economy and rebooting welfare economics.
I expect critics of economics to agree and lots of economists to disagree. They will point to great papers about X, Y and Z, and will be correct. But the complacency troubles me, the failure to recognise that so few people want to study economics because of the way it is, and that so many blame it for the state of the world….
I recall taking Econ 101 using the Samuelson textbook that was popular at the times. I and many of my friends were, like, WTF? It was clear that the assumptions were not in accord with the way the world worked from our experience. But you kept your mouth shut and provided the answers expected. At least the world was working then (for our class). Now more students are recognizing that it is not working for them are speaking out and demanding better. (Note: Robert Heilbroner's The Worldly Philosophers was required reading though, so we did get some other points of view.)
Interestingly, I did not run into C. Wright Mills' s The Power Elite until I was studying social and political philosophy in grad school.
Diane Coyle | freelance economist and a former advisor to the UK Treasury. She is a member of the UK Competition Commission and is acting Chairman of the BBC Trust, the governing body of the British Broadcasting Corporation
5 comments:
Wrong methodology…
“ I and many of my friends were, like, WTF? It was clear that the assumptions were not in accord with the way the world worked from our experience.”
Yo, because you were in a Jesuit school which nobody material competent goes to…. Land grant institutions using a didactic science methodology are dominant since they were first established in 1860…
Jesuits are of course going to still be employing the old dialogic method from Socrates and Plato if you train there…
So that’s not what you saw before you went to train under the Jesuits and then you get out and everyone else is operating under a different method… so when you get there you are like “wtf?” and when you get out you are like “wtf?” too….
You are not discriminating (“use the narrow gate”) between the 2 methodologies… because under the Jesuit’s dialogic method you are not trained to discriminate you are trained to synthesize…
The Land grant institutions are not synagogues…
According to Richard Wolff, many institutions have a School of Economics and a School of Business. If you intend to go into business, you attend the one that is connected to reality. That would be the latter one.
Bachelor of Art in Economics …
Bachelor of Science in Business Administration…
You are not discriminating (“use the narrow gate”) between the 2 methodologies… because under the Jesuit’s dialogic method you are not trained to discriminate you are trained to synthesize…
Matt, the textbook was Samuelson's, which was the standard text at the time. Those same assumptions are the basis of Econ 101 as far as I can tell from similar criticism today. The problem seems to be with the approach to economics, and teaching econ in general.
I doubt very much whether Econ 101 is much different in science degrees and art degrees. The basic texts on the market appear to be pretty homogenous. The choice is largely between New Keynesian (Krugman) and New Classical (Mankiw). If anything the science version is more mathematical, but the underlying assumptions and approach is the same.
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