If you want to meaningfully rise in economics–instead of having a decline and fall like that of the Roman Empire– in matters affecting people at large, you must know what rebellious econ students in some parts of the world have already done.
As Hills and Myatt (2010) inform us, in 2000, a group of econ students in France circulated an open letter to their professors declaring, “We wish to escape from imaginary worlds!” and deploring the “disregard for concrete realities” in their teaching. They asked for less dogmatism and more pluralism of approaches. Since then, petitions and open letters have appeared in the United Kingdom and in the United States (for details, see www.paecon.net). Don’t miss reading the rebellious letter from Harvard econ undergrads to Hon’ble Professor Gregory Mankiw (see HPR, 2011).
You must know that “Rethinking Economics” is a movement that has emerged as an international network of students, academics and professionals are building better economics in society and the classroom. The book, “Rethinking Economics” by Fischer et al. (2018) is unique in that it is an outcome of this activism and the participation of these students who were unhappy with what they were being taught in their undergraduate economics degrees! This is not all. These rebellious students, dispersed in different parts of the world, have produced interesting learning sources— www.ecnmg.org, a news and entertainment platform called Economy; a book titled The Econocracy which is all about the “perils of leaving economics to the experts” and the “struggle for the soul of economics”; and www.exploring-economics.org, which is an incredible open-source e-learning platform.
These students are asking you and me to “Become a Rethinker” and join, widen and enrich this movement by working for its loads of upcoming projects. They want this book to be used as an alternative Introductory Economics textbook by bringing to our notice these points: Marxists are good at analysing power relations and large historical trends; Post-Keynesians deal with uncertainty, stagnation and crisis; Feminists bring gender into the equation and challenge our notions of what qualifies as work; Institutionalists situate economics in historical time and space, filling in detail where other schools just leave broad strokes; Austrian economists consider the problems inherent with government power; Behavioural economists probe the depths of human psychology to better understand how we make decisions; Complexity economists use cutting-edge maths to find patterns in the chaos of modern economies; Cooperative economists work out bold and innovative new ways to organize production and consumption; and finally, ecological economists offer a challenge to all schools of economic thought by insisting that human econ activities are embedded in a broader ecological context, one in which sustainability becomes the central concern.
Rethinking Economics is indeed an anti-textbook we must consult. So is the contribution of Hills and Myatt (2010). In the conventional texts, such as that of Mankiw which is read by the Delhi University econ students, a world of perfect markets is theorized in which given resources are allocated as if by an invisible hand in a way that maximizes the value of total production. The belief that this model approximates how markets operate in the real world is often referred to as “market fundamentalism”, which assumes perfect and cost-less information. But the anti-text of Hills and Myatt highlights how the market economy systematically fails to produce the efficient allocation of resources with pervasive informational problems—a setting of imperfect information, where some guys know more than others (termed ‘asymmetric’ information).
“Furthermore, the perfect markets of the texts are populated by large numbers of small firms, producing identical products, with no power to set their own product price. Does it matter that very few actual markets resemble this? Many economists think it does. In recent decades, a great deal of research has been devoted to markets in which there are a few large firms, or in which firms produce different products. Theories of international trade are now dominated by such approaches. The efficient allocation of resources that occurs in the perfect markets story does not happen in these more realistic approaches. The focus on ‘efficiency’ that runs through the texts comes at the cost of neglecting issues of the distribution of income and wealth and of economic justice, which get short shrift in virtually all texts….Another neglected topic is the problem of externalities. Even when people make their decisions with perfect information, they can still choose not to take into account the effects of their actions on others. Every kind of pollution from the local to the global, is an example of this…Questions of power are absent from the texts. Yet in reality sellers try to shape and to influence the preferences of consumers, while consumers may try to exert their power to get producers to produce products in more ethical or environmentally sustainable ways. Managers exert power over workers if business organisations are authoritarian and hierarchical, as is typically the case. Corporations, labour unions, citizens’ groups and non-governmental organisations may struggle to influence the ‘rules of the economic game’—tax law, regulation, government programmes and so on. A similar struggle takes place at the international level. Economics textbooks often present hypotheses and policy prescriptions with surprisingly little or no supporting evidence, or (worse) they ignore inconvenient contrary evidence…Finally, the whole textbook structure is built on a view of human beings as rational calculators—a view that is increasingly being challenged. It is being replaced with a view of human beings as having limited rationality, and capable of irrational exuberance and exaggerated herd-like reactions to economic events.”
The microeconomics anti-text of Hills and Myatt attracts you to examine many of these neglected topics in order to understand, for example, the 2008 global financial meltdown—“Despite the existence of competition in credit markets and despite the existence of theories telling us that stock markets are efficient, we have seen a huge financial and real estate bubble burst and threat to plunge the world economy into another Great Depression. This would be hard to explain using the textbook model of rational economic actors operating in perfectly competitive markets where there is perfect information.”
I hope, by now, you are motivated and enthused to appreciate the econ student-rebels, and read the anti-texts in economics even as you just do the texts for clearing exams.
Fischer, Liliann et al. eds. 2018. Rethinking Economics: An Introduction to Pluralist Economics. Routledge. London and New York.
Hills, Rod. and Myatt, Tonny. 2010. The Economics Anti-Textbook: A Critical Thinker’s Guide to Micro-economics. Zed Books. London and New York.
HPR. 2011. An Open Letter to Greg Mankiw. Harvard Political Review. Novermber 2.
By Annavajhula J.C. Bose
Department of Economics, SRCC