Why economics needs a revolution
May 25 2014
Yilmaz took it upon himself to teach students some things that weren’t on the ordinary syllabus. In the evenings, he offered an informal, noncredit course covering topics relevant to the recent economic crisis. They included Hyman Minsky’s work on market instability and some history of financial bubbles, manias and crises.
The university’s economics department refused to allow the course as an official offering — even though more than 250 students explicitly stated their interest. More recently, it ended Yilmaz’s teaching contract, much to the students’ dismay.
The controversy surrounding Yilmaz reflects a broader revolt spreading among economics students. They have formed some 42 distinct protest associations in the past year or so, involving members from 19 countries. They’re fed up with what they see as a perverse narrowing of the economic curriculum over the past few decades.
Judging from blog discussions, many economists think the university was right to resist. Young and impressionable minds, they reason, shouldn’t be exposed to different approaches to economic theory. Instead, students should absorb a standard canon founded on rational behaviour and convergence to a benign equilibrium — the very ideas that failed so spectacularly in the past decade.
Yilmaz isn’t a naive undergraduate who doesn’t yet appreciate the elegance of the field’s advanced mathematical techniques. He is a PhD who knows the theories well and is distinctly unimpressed. In one online discussion, he explained that students need more exposure to different mathematical methods and basic principles of science. That way, they’ll be better equipped to judge the empirical plausibility of a theory —and able to spot the absurd assumptions hidden in so many of the models economists use to explain the world.
Yilmaz also argues that many students graduate with a mistaken belief that the core ideas of economics offer an objective and “value neutral” way to judge the world, allowing them to make bold pronouncements about the social welfare of different policies. They remain blithely unaware that they assert their own hidden values in making such assessments. He’s certainly right about this. Prominent economists even raise the issue from time to time, then typically go on practicing as if it didn’t exist.
Such criticisms mystify and befuddle most mainstream economists. Like the members of a regime ripe for revolution, they have been conditioned not to understand the complaints. As Yilmaz rightly notes, you can’t realistically expect people who have spent their entire lives working in one paradigm to accept that they’ve been wrong all along.
The good news is that a few are trying to listen. Wendy Carlin of University College London is leading a project to reform the UK university economics curriculum. Also in the UK, economist Diane Coyle has tried to distinguish areas in the present mainstream that are legitimately useful — auction design, for example — from those where absence of real understanding opens the door to ideology (most of macroeconomics, in her view).
The students aren’t asking for anything really revolutionary. They want more openness to insights and methods from other disciplines, and more honesty about what economists really know and what they do not. Anyone would be impressed by the eloquence of their analysis of the need for educational change.
The students “don’t claim that mainstream economics is wrong, but that its monopoly position is detrimental to our education and unjustified by any reference to its superior usefulness or value,” one member of the Post-Crash Economics Society, a protest group at the University of Manchester, wrote in a blog discussion. “Students should be given the toolkit necessary to evaluate alternative economic perspectives, not just told that any one approach is the right one.”
A spokesman for the University of Manchester said that Yilmaz’s termination had nothing to do with his extracurricular teaching activities, and that it is planning to add an “alternative approaches” module to its economics curriculum. Still, if the university’s approach so far is any indication of what the establishment response will be, then it may yet take a revolution to change the way economics is taught.
(Mark Buchanan, a
physicist and Bloomberg View columnist, is the author of the book “Forecast: What Physics, Meteorology and the Natural Sciences Can Teach Us About Economics”)