Home > The Economics Profession > The world’s ten university economics departments most culpable for the Global Financial Collapse

The world’s ten university economics departments most culpable for the Global Financial Collapse

May 6, 2010 Leave a comment Go to comments

We have had the Dynamite Prize to identify the economists who contributed the most to causing the Global Financial Collapse.  But what about university economics departments?  Which ones are the most blameworthy?  It you have a short list and maybe supporting reasons, please comment.  If there is enough interest we can have a poll.

PS: If you have not yet voted for the Revere Award, please do so now.  Voting will close shortly.

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Categories: The Economics Profession
  1. eric
    May 6, 2010 at 11:22 am | #1
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    University of Chicago. Duh!

  2. Jon Cloke
    May 6, 2010 at 11:22 am | #2
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    Chicago, Chicago, Chicago, Chicago, Chicago, Chicago, Chicago, Chicago, Chicago and Harvard, isn’t it?

    I mean, globally speaking, are there even any other contenders for the post of Premier Snake Oil Chemistry department?

  3. Fred Foldvary
    May 6, 2010 at 3:12 pm | #3
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    This is silly. There is not one single department of economics which had a collective publication accurately explaining and predicting the collapse. It would be better to vote on schools of economic thought, not econ departments. The “Chicago” econ department was not any more deficient than any other department. They all failed. Blaming Chicago reveals nothing more than an ideological bias.

  4. JL
    May 6, 2010 at 4:34 pm | #4
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    @Fred,

    The fact is that Chicago drove a very specific economic ideology and was able to greatly influence economic policy in the US for several decades. Policy which has now proven to be a failure, to a large extent because the UC theories and analysis was, as has been proven now, faulty. When an ideology has been proven to be a failure (be it communism, the Chicago School, etc etc) it should be called out. Calling that “ideological bias” and claiming that “everybody failed” is just another way to defend incompetence.

  5. Peter Radford
    May 6, 2010 at 7:21 pm | #5
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    Since Chicago proudly lent its name to a school of thought when that school’s ideas held such sway it should take the biggest hit when those ideas are found wanting. Do we add Minnesota for its complicity? And in answer to Fred: it is not ideological bias to point out intellectual failure. It is being both honest, and, dare I say it, scientific. We won’t learn from our failures if we defend them relentlessly even after they have been exposed as incorrect.

    In addition: should we focus on the journals and their editorial boards to discover the schools who contributed most to the enforcement of the now derelict dogma?

  6. Bernard Mallia
    May 6, 2010 at 7:23 pm | #6
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    I do not think that having a poll about this would be a very good idea as it would deflect attention from the other 2 polls conducted.

    Economics (neoclassical economics) is entirely to blame and this has been shaped by more economics departments in universities than can be allowed for by a poll. We should not find culprits and pinpoint them as the catastrophe catalysts but we should attack neoclassical thought on one front irrispective of where it happened to originate. Attention and focus should be aimed at doing this rather than at trying to find institutions that may be singled out and shamed – it is not a question of the messenger as it is of the message, although some institutions that led the way are definitely more culpable than others which followed.

    • Peter Radford
      May 6, 2010 at 7:39 pm | #7
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      Good point Bernard. It is the ideas and not the universities themselves doing the damage. Maybe we can have a poll on the papers/books that had the most detrimental effect?

      • Bernard Mallia
        May 6, 2010 at 9:36 pm | #8
        Quote

        I would be inclined to ask to have a poll about the ideas that are to blame, but then again, all ideas are interlinked and are responsible as all others.

        With respect to books/papers, I believe that all books written in the neoclassical vein are doing a great disservice to society and to the world. Again there are so many of them that deserve nothing better than to be consigned to the dustbin of history that I would not know where to start from.

        Perhaps, if another poll is to be called for, it might be beneficial to identify an era where economics started going astray or went more astray than had hitherto been the case.

        This would serve non-neoclassicals in getting a feel of what many in the profession think was (or were) the eras following which we should scrap most of the literature that has been accumulated. However, I am not sure that this would be such a good idea since the more polls you make, the less significant polls you have called for already will become. Perhaps it is time to stop polling for some time and to focus our energies on getting the results of the polls in the public.

  7. J. J. Crest
    May 7, 2010 at 2:05 pm | #9
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    Chicago, Harvard, MIT, LSE, Minnesota, Stanford, Yale, Michigan

  8. BruceMcF
    May 7, 2010 at 10:24 pm | #10
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    We can just list the ten most prestigious economics departments among the neoliberal set, and that’d work.

    One thing that makes it hard to pin down is that the influence of a department on the rest of the profession is as much from the doctoral students that it trains as from its publications. What makes the Chicago School, “the Chicago School” is by no means limited to the cv’s of the economic faculty of Chicago.

    But more to the point, the most series problems were the “common ground” flaws than what makes a given school unique. A look at the AFEE page on economists who called it right will yield departments that have one or more economists who did not share some important part of the flawed “common ground” … but often they are an outlier in their department.

  9. paul davidson
    May 11, 2010 at 7:52 pm | #11
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    Someone forgot Yale and Columbia -and all the second rate departments of economics who, not having any courage of their own, hired people merely to emulate Chicago, Yale, MIT, etc.

  10. Steven Earl Salmony
    May 20, 2010 at 5:31 pm | #12
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    That the self-proclaimed Masters of the Universe among us have behaved so arrogantly, consumed so conspicuously, hoarded so selfishly and gotten so many things wrong, all the while mortgaging the children’s future and threatening their very existence, is the most obscene show on Earth in our time.

    Steven Earl Salmony
    AWAREness Campaign on The Human Population, established 2001
    http://sustainabilityscience.org/content.html?contentid=1176
    http://sustainabilitysoutheast.org/

  11. Steven Earl Salmony
    January 2, 2011 at 4:09 pm | #13
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    The human-induced global predicament that looms before the human family today has been allowed to rampantly grow in my lifetime from a challenge that was manageable to a leviathan of a much more forbidding size. With every passing day, the worldwide challenges resulting from, and driven by, the overconsumption, overproduction and overpopulation activities of the human species become larger, more formidable and much more difficult to address and overcome. The demand characteristics of this unprecedented situation appear to require the active involvement of “all hands on deck”. We have to stop denying what is visible to naked eyes as well as ignoring that which we need to confront, and immediately begin changing the ‘trajectory’ of the predominant civilization from what is soon to become patently unsustainable to an alternate path marked by sustainable lifestyles and right-sized human enterprises.

  12. Steven Earl Salmony
    January 26, 2011 at 4:27 pm | #14
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    DEMOGRAPHIC TRANSITION: FACT OR FICTION?

    Please see below a note from a friend on the widely shared and consensually validated pseudoscience regarding human population dynamics and human overpopulation (in quotation marks), followed by my comment on the scientific finding regarding food supply and human population numbers from the research of two outstanding scientists, Russell Hopfenberg and David Pimentel.

    “I agree that the Theory of Demographic Transition is just that, a convenient theory that holds out the promise of lower fertility in nations in due time if they just hop on the capitalistic development bandwagon.

    It’s a non-threatening and positive theory and it’s potentially good for business for the developed world.

    All one need do is take a look at population growth statistics,

    http://en.wikipedia.org/wiki/List_of_countries_by_population_growth_rate
    (2009 CIA table)

    and per capita income statistics of countries,

    http://www.nationmaster.com/graph/eco_gro_nat_inc_percap-gross-national-income-per-capita

    and one can observe that a relatively wealthy country does not necessarily have a low population growth rate. Examples are US, United Arab Emirates, Saudi Arabia, Luxembourg, Ireland, New Zealand, Australia, Kuwait, Bahrain and more. It can also be observed that many of the more developed and thus more wealthy and educated countries, mostly in Europe, have below

    replacement fertility (Italy, Germany, Japan). Many countries with a predominant religion furthering large family size have larger population growth rates like the Arab countries.

    The following paper http://www.jstor.org/pss/2947709 concludes that

    “..that indicators of education, health, and family planning program effort have a significant independent effect on fertility” and that “No significant impact can be attributed to indicators of economic development once family planning efforts and social development indicators are held constant.”

    Yet the National Geographic January 2011 issue on “Population – 7 Billion” features the Demographic Transition Theory, though it does briefly admit that fertility in some countries has fallen dramatically without significant economic development. Bangladesh is a major example.

    As I see it, in the absence of religious or social pressures, most people would prefer smaller families as they can better provide for them. Given the education and means to control their fertility they will readily try to do so.

    In many developing countries, the ubiquitous radio is the major source of news and entertainment. The presence of only a few radio stations makes this an ideal medium for education and behavioral change. Organizations such as

    Population Media Center http://www.populationmedia.org/ and

    Population Communications International http://www.population.org/

    have been very effective on a per dollar basis in getting listeners to

    their culturally-sensitive soap operas educated on family planning

    advantages and seeking means to help them control their fertility.”

    The food availability-population growth finding from the research of Hopfenberg and Pimentel
    http://www.panearth.org/
    shows us that there is NO demographic transition, NO population stabilization, NO benign end to population growth a mere four decades from now. That is the problem with the theory, which is preternatural not scientific and descriptive not predictive. Scientific evidence directly contradicts the demographic transition theory and indicates that human population dynamics could be essentially similar to the population dynamics of other species. More food equals more human organisms; less food equals less human organisms; and no food equals no humans. Skyrocketing absolute global human population numbers in the past 65 years provide bold and unmistakeable evidence of this fact. I fear that when the explosive growth of the food supply for human consumption we have witnessed during my lifetime can no longer be sustained by a planet with the size, composition and ecology of Earth, and comes to an end much sooner than any one of us would want, I believe this relationship between food and population numbers will become much easier for the people to see. And at that future moment in space-time people are not, definitely not going to like what they are seeing, I suppose. I also believe that at that time those with responsibilities to assume and duties to perform will look back in anger and utter disbelief at what those in my not-so-great generation have overlooked and denied, for a variety of self-serving excuses.

  13. Alice
    January 27, 2011 at 10:25 am | #15
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    CHICAGO, Friedman, Fama and their slavish followers including those at the top of the US fed. They all bought the standard lines of neoclasicism and whats worse is they stepped in to intervene to save their precious market (bank bailouts) after preaching freedom for 40 years failed us all.

    Such a shameful lot of hypocrites who call theemselves economists never existed. They cant even follow their own godly doctrines.

  14. Rachelle
    January 28, 2011 at 6:09 am | #16
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    I think it is very important to see that there is a certain group of people that meet regularly to plan the events that happen in the world especially the economic ones, go here to read about their meetings about the core people of that group that vote on the decisions made that effect everyone’s lives.http://republicbroadcasting.org/?p=8795

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