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RWER issue 54: Edward Fullbrook
Real-World Economics Review, issue 54
You may read the whole paper here:
http://www.paecon.net/PAEReview/issue54/Fullbrook54.pdf
How to bring economics into the 3rd millennium by 2020
Edward Fullbrook
Introduction
This paper argues four theses and outlines an action plan.
- The Global Financial Collapse has created a climate among the intelligentsia – left, right and centre – that strongly supports fundamental changes in economics as a discipline, but this climate is unlikely to have significant effect.
- Six basic and interconnected categories of institutions comprise the economics profession: university departments, associations, journals, classification systems, economics 101 textbooks, and its basic narrative. The institutions currently filling these categories are together closed to major change and capable of resisting all attempts at serious reform.
- The combination of digitalization and globalization has rendered economics’ existing institutions in five of the six categories anachronistic and vulnerable not to reform but to being superseded by new institutions within ten years. The exception is university departments, but the existing ones would be reformed as a consequence of the ascendancy of new institutions in the other five categories.
- These new institutions will emerge only if their linked realization becomes the goal of informed, co-operative, non-profit entrepreneurial pursuit. A rough outline of how these goals could be realized is offered.
You may read the whole paper here: http://www.paecon.net/PAEReview/issue54/Fullbrook54.pdf
Categories: real-world economics review
Edward, stirring stuff. I have read it during working hours, so more properly than I will again at home this evening where distraction is even more a rule. I have also forwarded to my boss, Dr Michael Reddy, who I know will appreciate my time as well spent when he reads it (it chimes with much that he is writing now, though his angle is on new ways to measure and value people). I have followed this site only for a few weeks, and already found it to be the best economics destination on the web. If you are, as I see, serious in your plans for WEA, I would be very interested in sharing ideas and and perhaps more as I am currently developing a similar Web 2.0 boundary defying venture in the human capital space (the network/publication platform and library functionality, though nascent, are already stimulating enough for a growing ‘tribe’ across academia and business). I’ll leave it there, as this is more than a mere comment of support and thanks for the insight. You have my email and I would be glad to correspond further.
Well said. Only when the initial steps have been taken will the profession realize that it is not enough to criticize. It is not enough to point at the very obvious failure of the mainstream. Nor is it enough to remain safely within our separate niches. I point, in particular to your quote of David Colander. I think he underestimates the extent that economics is vastly over researched and yet underdeveloped. We need a moratorium on the flood of papers and a new focus on the subject’s basis. Fresh thinking will not arrive without a willingness on the part of everyone to listen rather than persist in repeating the same, and frankly worn, themes that have led us to the current impasse. Nor will it come from those whose reputations are built upon those shaky foundations. I have immense respect for the intellects of those you quote or list. I have far less respect for their courage. It is time to clear up the mess, not sweep it to one side.
With that in mind I endorse your proposal. Let us begin the process now.
The requirements of the economics profession for a new focus and direction are even more obvious since the GFC. A WEA as outlined would certainly meet these requirements and help overcome the profession’s inertia and US focus that are so well described. I would like to help develop the WEA.
Edward, this is a very valuable initiative. I would like to mention one link from journals to economics departments that I see mssing in your proposal. Papers in top mainstream journals have become the paramount measure of qualification used for hiring and promoting economists. The jounrals of the WEA will have to provide an alternative way for ambitious and good economists to earn valuable credentials towards their carreers. Thus, a lot of though has to go into the specifics of a download ranking. Somethin along the lines of what SSRN is providing could do the trick.
Here’s a vision for a “new economics” from outsider, someone who was trained in pure mathematics (Ph.D.) and taught for a few years, practiced applied mathematics for many years (at Boeing), and has been a full time activist now for 8 years, focusing on economic justice, environment, natural resources, and urban issues. From all of these perspectives I have found mainstream economics to be the most moribund academic discipline in the world today.
It is obvious that the fundamental goal of this new economics must be to help guide the world toward a sustainable global economy during the 21st century. In particular, economics must be rooted in an understanding of ecology and natural resources and related technology, combined with an understanding of the psychological, social, and political behavior of humanity and of current cultural forms. Thus I see economics as the science of “human ecology”.
The mistake has been to try to build an all-encompassing theory using only a few simple concepts and models (labor, capital, consumers, investors, supply and demand curves, utility curves, etc.). This approach captures only a few idealized situations and totally misses the big picture of human ecology, which is a complex, dynamic system, beyond the grasp of simple human intuitions. Instead we need a scientific approach, typically using non-linear dynamic models and computer simulations of different scenarios, to capture key qualitative aspects of actual economic behavior.
A premier example is the “Limits to Growth” study, recently updated from the 1970s. We need the same kind of effort in modeling the global political economy that is now going into modeling global climate change. The goal is to identify scientifically the key variables and how they interact, including the full range of possible behaviors under different assumptions. For example, the updated “Limits to Growth” examined 10 “State of the World” scenarios through the year 2100, using the five variables “Resources, Industrial output, Population, Pollution, and Food”. This is the new “macro-economics”.
The new “micro-economics” focuses on developing the social and business structures and regulatory regimes that will best guide economies toward sustainability, whether at the local, regional, or global levels. Many people make ad hoc proposals on how to restructure or re-regulate business and finance. What is needed are proposals with a scientific basis – proposals directly based on the new macro-economics.
The mathematical backdrop is that, according to chaos theory, a system “on the edge of chaos” can be controlled very effectively with very little energy if the right controls are applied to the right variables at the right times. This is an aspect of “sensitivity to initial conditions”, and it may be tested by incorporating controls into the computer simulations of the macro-economic models, developing and validating more detailed sub-models as the controls get more specific. Some of these sub-models would be informed by current economic models, but with great attention to their limitations and how they would fit into a non-linear whole based on natural ecosystems and resources and the development of human institutions and technology related to these.
Whether mainstream economics in its current form could be destabilized by a good push of the kind Edward Fullbrook proposes or not, I like his proposal to leverage the web technology into a vigorous challenge to mainstream hegemony very much. I had two supplementary comments on the proposal.
First, many well-informed critics of mainstream economics are not heterodox economists or economists at all, but are physicists, sociologists, psychologists, philosophers, computer scientists, writers, biologists, geophysicists and even mathematicians. There is an enormous fund of energy, intelligence, methodological sophistication, and expert knowledge to be tapped in these fields. Many of these informed critics from outside the discipline run into the same obstacles in publishing papers in the mainstream journals as heterodox economists do. (Referees question whether, for example, maximum entropy models that explain robust statistical regularities in size distributions of firms, income, wealth and the like are “economics” because they do not explicitly start from rational maximizing individual behavior.) If a World Economics Association/Review is to get off the ground, I think it would be a good idea to reach out explicitly to these communities as part of the effort.
Second, while Edward has covered the bases on the practical aspects of publishing a journal very thoroughly, I think more attention has to be paid to editorial policy and structure. It is widely recognized that the value-added of academic journals lies in the editing and refereeing that provides a filtering functioning. The defects of the peer review method adopted by the “top” economics journals and its deleterious effects in strengthening the hegemonic hammerlock Edward describes are becoming increasingly apparent. Perhaps an integral part of the World Economic Review effort could be the development and adoption of an alternative editorial model. Several such models have been proposed, mostly centering on some version of “open-source” protocols in which draft papers would be posted for open comment rather than sent to anonymous referees. (It would be great if the editors of a WER could also ask experts in the field of papers to post comments along with the general public to help them make final editorial decisions.) In any case, an important dimension of the WER initiative would be its governance structure through an editorial board and its procedures for review of manuscripts.