Bill Mitchell — MMT and pluralism in economics

I am recording some promotional videos in London today for Macmillan Higher Education who will publish our forthcoming textbook – Macroeconomics on March 11, 2019. These will be the first of many short videos to support the teaching program outlined in the textbook. At last Friday’s very successful launch of the – Gower Initiative for Modern Money Studies (GIMMS) – I was asked a question at the end of the first formal workshop I presented, which I was unable to answer due to time constraints. The question went something like – “What do you think of the movements to instill pluralism into the teaching of economics?” The corollary was whether our forthcoming textbook adopts a ‘pluralist’ approach. The question implied that ‘pluralism’ was a desirable characteristic for a macroeconomics course to feature. In this blog post I discuss this question. It outlines what I might have said by way of answer to that question. But, given the medium, in a lot more detail than I would have provided at the actual event. Generally, we adopt a ‘pluralist’ approach. But it all depends on what we mean by that term. What we do not do is privilege the mainstream macroeconomics in any way. Too often, those who call for ‘pluralism’ in economics think it is appropriate to force students to learn swathes of the mainstream theory and practice as if it is knowledge. They think this is somehow a liberal approach to learning. Our view is that learning is about knowledge accumulation. Universities are not places where ‘fake knowledge’ should be disseminated. That is what propaganda is about....

Bill Mitchell – billy blog
MMT and pluralism in economics
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Julie Nelson — The void in neoclassical orthodoxy

Femonomics. Important to critique of mainstream neoclassically based economics along with other forms of pluralism in contrast to mainstream orthodoxy.

Real-World Economics Review Blog
The void in neoclassical orthodoxy

Julie Nelson

Steve Keen — Teaching Economics the Pluralist Way

This is a talk I gave in Amsterdam to launch the Amsterdam Rethinking Economics critique of the current state of economics “education” in the Netherlands. The text of my slides is reproduced below.

Steve Keen's Debtwatch
Teaching Economics the Pluralist Way
Steve Keen | Professor and Head Of School Of Economics, History & Politics, Kingston University, London

Jason Smith — Chris Dillow, information equilibrium is the framework you're looking for

I think Chris Dillow makes a fine point at the end of his review of The Econocracy about the role of the media with regard to how macroeconomics is disseminated and perceived. I just wanted to add a bit to something he said earlier in his post regarding teaching economics:

For example, some important basic facts in macroeconomics are that: there’s no such thing as a “representative firm” (see this great paper (pdf) by Nick Bloom and colleagues); that GDP growth in developed nations is often stable but interrupted by occasional crises; and that recessions are unpredictable. The sort of theory that can account for these facts is very tricky. A shift away from equilibrium theories towards complexity, evolutionary models and agent-based modelling would require massive changes for which students and perhaps academics are ill-prepared.

I'd like to proffer the information equilibrium/statistical equilibrium framework as a theory that can account for these facts without being "tricky"....

Awhile ago, I put together an outline of an "Economics 101" course that could be taught using the information transfer framework. You might think the math is tricky, but overall it can be understood in terms of the regular supply and demand diagrams with a couple changes: there's another "solution" where supply and demand are tightly linked and move together, non-ideal information transfer turns the supply and demand curves into bounds, and to understand macro you might have to look at ensembles of diagrams (a picture from this link is at the top of this post).

Since this isn't throwing out all of ordinary economics and has a simple diagrammatic representation, it might stand a chance. And it keeps all the hooks for complexity and agent-based modeling. You can even use the framework to understand the classic microeconomic experiments (here, here) and do real forecasting making it more empirical in light of the "credibility revolution".

But one important aspect of the information transfer framework is its plurality. It's a framework, not a specific theory. While I have taken to writing my own models in this framework, there is nothing preventing you from writing down a New Keynesian DSGE model, a stock-flow consistent model, "market monetarism", or even understanding completely different schools of economics.

This last paragraph is significant because it allows for a plurality of approaches in economics in terms of a single framework, where this is hardly possible now with no overarching framework in terms of which economics is pursued as a science.

Information Transfer Economics
Chris Dillow, information equilibrium is the framework you're looking for
Jason Smith

See also

Information transfer economics is getting some traction.

Information transfer economics: a year in review, and thanks

Andrea Terzi — Macroeconomics Is Shifting. What’s The Right Direction?

Paper presented at Anniversary Conference of the Macroeconomics and Macroeconomic Policies (FMM) Research Network, October 20-22, 2016, Towards Pluralism in Macroeconomics?

Macroeconomics Is Shifting. What’s The Right Direction?

Andrea Terzi, Professor of Economics, Franklin College, Switzerland

Perry G. Mehring — Channeling Charles Kindleberger on Brexit

What would Charlie have made of Brexit?

Charles P. Kindleberger’s very last book-length effort was the slim volume titled Centralization versus Pluralism, a historical examination of political-economic struggles and swings within some leading nations (1996). In his frame, the historical struggles and swings he recounts–in the Dutch Republic, Germany, France, Britain, Canada, The United States, Japan and China–were all driven by a fundamental contradiction between the logic of economics and the logic of politics.

From a simple-minded [economic] viewpoint, the world is the optimum economic area, with its constituent countries committed to free trade, a single international currency, and harmonised standards, whereas the optimum social area is much smaller, and based on the criterion that a social unit should be small enough for an individual to know that he or she counted.

The record of history, at least within individual nations, seems to be about swings between each of these separate logics, now one way and now the other, with no sense that one is a more fundamental force than the other.…

INET
Channeling Charles Kindleberger on Brexit
Perry G. Mehring

ht Mark Thoma at Economist's View

Dirk Ehnts — Supply and demand in the academic discipline of economics

The University of Greenwich has reworked its economics curriculum to include pluralist perspectives:

econoblog 101
Supply and demand in the academic discipline of economics
Dirk Ehnts | Berlin School for Economics and Law

An international student call for pluralism in economics

International Student Initiative for Pluralism in Economics
 

An international student call for pluralism in economics

It is not only the world economy that is in crisis. The teaching of economics is in crisis too, and this crisis has consequences far beyond the university walls. What is taught shapes the minds of the next generation of policymakers, and therefore shapes the societies we live in. We, 42 associations of economics students from 19 different countries, believe it is time to reconsider the way economics is taught. We are dissatisfied with the dramatic narrowing of the curriculum that has taken place over the last couple of decades. This lack of intellectual diversity does not only restrain education and research. It limits our ability to contend with the multidimensional challenges of the 21st century - from financial stability, to food security and climate change. The real world should be brought back into the classroom, as well as debate and a pluralism of theories and methods. This will help renew the discipline and ultimately create a space in which solutions to society’s problems can be generated.

United across borders, we call for a change of course. We do not claim to have the perfect answer, but we have no doubt that economics students will profit from exposure to different perspectives and ideas. Pluralism could not only help to fertilize teaching and research and reinvigorate the discipline. Rather, pluralism carries the promise to bring economics back into the service of society. Three forms of pluralism must be at the core of curricula: theoretical, methodological and interdisciplinary.

Theoretical pluralism emphasizes the need to broaden the range of schools of thought represented in the curricula. It is not the particulars of any economic tradition we object to. Pluralism is not about choosing sides, but about encouraging intellectually rich debate and learning to critically contrast ideas. Where other disciplines embrace diversity and teach competing theories even when they are mutually incompatible, economics is often presented as a unified body of knowledge. Admittedly, the dominant tradition has internal variations. Yet, it is only one way of doing economics and of looking at the real world. This is unheard of in other fields; nobody would take seriously a degree program in psychology that focuses only on Freudianism, or a politics program that focuses only on state socialism. An inclusive and comprehensive economics education should promote balanced exposure to a variety of theoretical perspectives, from the commonly taught neoclassically-based approaches to the largely excluded classical, post-Keynesian, institutional, ecological, feminist, Marxist and Austrian traditions - among others. Most economics students graduate without ever encountering such diverse perspectives in the classroom.

Furthermore, it is essential that core curricula include courses that provide context and foster reflexive thinking about economics and its methods per se, including philosophy of economics and the theory of knowledge. Also, because theories cannot be fully understood independently of the historical context in which they were formulated, students should be systematically exposed to the history of economic thought and to the classical literature on economics as well as to economic history. Currently, such courses are either non-existent or marginalized to the fringes of economics curricula.

Methodological pluralism stresses the need to broaden the range of tools economists employ to grapple with economic questions. It is clear that maths and statistics are crucial to our discipline. But all too often students learn to master quantitative methods without ever discussing if and why they should be used, the choice of assumptions and the applicability of results. Also, there are important aspects of economics which cannot be understood using exclusively quantitative methods: sound economic inquiry requires that quantitative methods are complemented by methods used by other social sciences. For instance, the understanding of institutions and culture could be greatly enhanced if qualitative analysis was given more attention in economics curricula. Nevertheless, most economics students never take a single class in qualitative methods.

Finally, economics education should include interdisciplinary approaches and allow students to engage with other social sciences and the humanities. Economics is a social science; complex economic phenomena can seldom be understood if presented in a vacuum, removed from their sociological, political, and historical contexts. To properly discuss economic policy, students should understand the broader social impacts and moral implications of economic decisions.

While approaches to implementing such forms of pluralism will vary from place to place, general ideas for implementation might include:

• Hiring instructors and researchers who can bring theoretical and methodological diversity to economics programs;
• Creating texts and other pedagogical tools needed to support pluralist course offerings;
•  Formalizing collaborations between social sciences and humanities departments or establishing special departments that could oversee interdisciplinary programs blending economics and other fields.

Change will be difficult - it always is. But it is already happening. Indeed, students across the world have already started creating change step by step. We have filled lecture theatres in weekly lectures by invited speakers on topics not in the curriculum; we have organised reading groups, workshops, conferences; we have analysed current syllabuses and drafted alternative programs; we have started teaching ourselves and others the new courses we would like to be taught. We have founded university groups and built networks both nationally and internationally. 

Change must come from many places. So now we invite you - students, economists, and non-economists - to join us and create the critical mass needed for change. See Support us to show your support and connect with our growing networks. Ultimately, pluralism in economics education is essential for healthy public debate. It is a matter of democracy.

Signed, the founding organizations of the International Student Initiative for Pluralism in Economics:

 (h/t Steve Keen)

Chris Dillow — On Intersectionality

Stumbling and Mumbling

On Intersectionality

Chris Dillow | Investors Chronicle

Wikipedia - Intersectionality

Why is intersectionality important socially, politically and economically?

Because of the pressure of pluralism toward homogeneity and the interest groups affected by it.