Sunday, June 25, 2006

The Neoclassical Cult

They're advertising a book called A Guide to What's Wrong With Economics on the Post Autistic Economics Network. Looks quite good - they've put the full introduction up on the site here. Here's a bit:

From the 1960s onward, neoclassical economists have increasingly managed to block the employment of non-neoclassical economists in university economics departments and to deny them opportunities to publish in professional journals. They also have narrowed the economics curriculum that universities offer students. At the same time they have increasingly formalized their theory, making it progressively irrelevant to understanding economic reality. And now they are even banishing economic history and the history of economic thought from the curriculum, these being places where the student might be exposed to non-neoclassical ideas. Why has this tragedy happened?

Many factors have contributed; I will mention only three. First, neoclassical economists have as a group deluded themselves into believing that all you need for an exact science is mathematics, and never mind about whether the symbols used refer quantitatively to the real world. What began as an indulgence became an addiction, leading to a collective fantasy of scientific achievement where in most cases none exists. To preserve their illusions, neoclassical economists have found it increasingly necessary to isolate themselves from non-believers.

Second, as Joseph Stiglitz has observed, economics has suffered “a triumph of ideology over science”. Instead of regarding their theory as a tool in the pursuit of knowledge, neoclassical economists have made it the required viewpoint from which, at all times and in all places, to look at all economic phenomena. This is the position of neoliberalism.

Third, today’s economies, including the societies in which they are embedded, are very different from those of the 19th century for which neoclassical economics was invented to describe. These differences become more pronounced every decade as new aspects of economic reality emerge, for example, consumer societies, corporate globalization, economic induced environmental disasters and impending ecological ones, the accelerating gap between the rich and poor, and the movement for equal-opportunity economies. Consequently neoclassical economics sheds light on an ever-smaller proportion of economic reality, leaving more and more of it in the dark for students permitted only the neoclassical viewpoint. This makes the neoclassical monopoly more outrageous and costly every year, requiring of it ever more desperate measures of defense, like eliminating economic history and history of economics from the curriculum.

It's aimed at economics undergraduates and the authors say the book aims to provide 3 things:

First, it offers you some protection against the indoctrination process to which you are likely to be subjected as an economics student. There are many things that your teachers should tell you about the brand of economics they are teaching you, but, in most cases, will not. This book will make you aware of some of the many worldly and logical gaps in neoclassical economics, and also its hidden ideological agendas, its disregard for the environment and inability to consider economic issues in an ecological context, its habitual misuse of mathematics and statistics, its inability to address the major issues of economic globalization, its ethical cynicism concerning poverty, racism and sexism, and its misrepresentation of economic history.

Second, if you are brave you may want to bring up some of the points raised in this book in your classes. It is sure to make them more interesting. It may even provoke lively discussion and, for a while at least, convert the indoctrination process into an educational one. If it does you will be doing a good thing: we live in a time when bad economics probably kills more people and causes more suffering than armaments.

Third, this book is intended to appeal to your imagination and humanity by showing you how interesting and relevant, even exciting, economics can be when it is pursued, not as the defense of an antiquated and close-minded system of belief, but as a no-holds-barred inquiry looking for real-world truths.

What's the betting this book won't get itself onto many economics dept. reading lists?

In fact, on re-reading these extracts it struck me that there is perhaps a problem with this book from the very start. Most economics undergraduates have probably never heard the term 'neoclassical economics'. The Introduction, however, starts off with the assumption that undergraduates are at least dimly aware that there is more than one way to study economics. In my experience this isn't necessarily the case. For many, it seems, neoclassical economics is economics and the students don't require any specific term for it. Things have gone that far. The high priests of econometrics have created a self-policing, hermetically sealed discourse - a totalising ideology that denies and conceals that it is, in fact, a totalising ideology. Most socialists in the world of academia have probably been confidently informed by an economics student at one time or another that we 'clearly don't understand economics' - because 'economics', of course, is completely synonymous with that neo-classical pseudo science, that theological system, into which they have been indoctrinated.

A group of Argentinians from a factory under workers' control (Fanon) held a little question and answer session, here, not long ago. They explained how their factory was democratically managed and run along lines other than those of the profit motive. I well remember a couple of students at the back of the room trying to explain to these workers that what they were doing was not, in fact, possible since it ran counter to the tenets of 'economics'. The fact that these workers were actually running a factory along proto-socialist lines seemed to make little difference. If concrete reality and neoclassical theory conflict, it seems, well then, so much the worse for the former. Concrete reality must be wrong.

<< Home

This page is powered by Blogger. Isn't yours?