Many thanks to A2 student Annie Huang for this article by Aditya Chakrabortty in The Guardian Newspaper. It discusses the fact that most major degrees in economics still focus on the neoclassical ideology and associates humans as perfectly rational walking calculators working out their utility for each purchase. The main model of consumer behaviour assumes that we never buy anything until we’ve calculated the impact on, for example, our retirement fund, and we’re so good at maths we use interest rates to compute our pleasure, over time, after buying something. He mentions the movie documentary “Inside Job” which showed how some of the best minds at American universities had been paid by Big Finance to produce research helping Big Finance. He tells the story of an economics lecturer being asked by students to discuss the Global Financial Crisis.
“US economist Philip Mirowski recounts how a colleague at his university was asked by students in spring 2009 to talk about the crisis. The world was apparently collapsing around them, and what better forum to discuss this in than a macroeconomics class. The response? “The students were curtly informed that it wasn’t on the syllabus, and there was nothing about it in the assigned textbook, and the instructor therefore did not wish to diverge from the set lesson plan. And he didn’t. In the 1970s at Cambridge “There were big debates, and students would study politics, the history of economic thought.” And now? “Nothing. No debates, no politics or history of economic thought and the courses are nearly all maths.”
Click below for the full article.
Also have a look at this video from the New Economics Foundation – again it debates the value of mathematical models and neoclassical theory. Does the market actually reach equilibrium? I like Steve Keen’s comment – “the pirate obsession of Economics – they love X marks the spot”. It also includes Joseph Stiglitz, Gillian Tett, David Tuckett, Stephen Kinsella, John Kay, David Weinstein, and Dirk Bezemer.