Home > The Economics Profession > Studying economics at UWS

Studying economics at UWS

from Steve Keen

I gave the talk below last Sunday at UWS’s Open Day, as an intoduction to economics for prospective university students. Preparing it made me reflect on the great good fortune I had to be appointed to UWS.

This might evoke a “Huh?” response from the usual suspects on such issues–why be pleased about being appointed to a second-rate University (and in an out-of-the-way place like Sydney to boot)? It’s because the Economics & Finance program at UWS has been almost unique amongst economics departments around the world in deliberately pursuing a “pluralist” approach to economics. 

We decided a decade ago to teach a wide range of approaches to economics in the one department. So we have core subjects in Micro and Macro economics that teach the standard Neoclassical canon, subjects like Political Economy and my own major subject Behavioural Finance that provide a distinctly different analysis, the foundational subject History of Economic Thought (which I believe is vital for a proper understanding of economics today–and a major reason why so few economists really understand economic theory is that this subject has been abolished at almost all other universities around the world), and a range of subjects such as Government and the Economy where a non-standard approach is presented, along with conventional Neoclassical thought on the topic.

This could never have happened at an “Ivy League” University: the gatekeepers of the subject would have fought vigorously to undermine the program, which they would have seen as unprofessional–a topic covered at length in a (yes, I’m serious) Playboy article recently. That’s why places like UWS and the University of Missouri Kansas City (UMKC) are where non-Neoclassical work flourished over the last 20 years–the mainstream ignored us.

For me, it gave me an environment in which I could work on my dynamic approach to economics, and apply that knowledge in my lectures, with the backing of my Head of School. In other universities, I would not have had the opportunity. I doubt that I could have been as successful in developing my alternative approach if I hadn’t had four consecutive supportive Heads of School, and many colleagues who were also outside the mainstream themselves.

This is an important point here for students considering where they might study economics. Normally, the better the University, the better its academic programs will be. But in economics, often the better the University, the worse the economics program will be because it will teach Neoclassical economics to the exclusion of all other approaches.

Before the world hit the economic wall in 2007, only renegade economists like myself were aware of this, and students would happily sign up to “Ivy League” Universities in preference to out-of-the-way places like UWS and UMKC. Now that the global economy has fallen into the debt crisis that Hyman Minsky warned could happen in a deregulated economy, the gamble that our Departments took to not follow the beaten path is paying dividends–both to the academics and their students. You’ll get a broader, better education off the beaten track than you’ll get on it–and your instructors will include people like me who saw the financial crisis coming.

  1. September 6, 2012 at 2:19 pm

    Dear Steve, I do hope you try to open the students’ eyes to the special role which land plays in the economy:o)

  2. September 6, 2012 at 2:23 pm

    Great article. Any chance mentioning Frederick Soddy 1926,1933 “Wealth, and the Role of Money”
    Maybe even deserves credit for predicting 2008 crash,since he predicted the role of “genuine loans and fictious loans”., role of private for-profit banks.
    Is there any chance (luck) that Steve Keen and Michael Hudson could do a book together,
    OMG with Michael Lewis and go off the charts. Perhaps a great title could be –

    “Yes, You Can Legally Grow a Money Tree”

    Google-“Justaluckyfool, Wealth is redistribution”

    • davetaylor1
      September 6, 2012 at 4:01 pm

      Interesting! I’d just come across atomic chemist Professor Soddy in a 1940 “Background to Modern Science”, who it turns out was called Frederick. If the same one, he knew what he was talking about, and it is very interesting that he would turn to economics in the year of the UK’s General Strike and shortly after it was forced off the Gold Standard. Robert Locke might enjoy that after his suggestion (as I remember) of engineers running the German economy.

      An interesting aside when looking Soddy up:

      “As an economy’s productive capacity grows, then so should its money supply. Because a gold standard requires that money be backed in the metal, then the scarcity of the metal constrains the ability of the economy to produce more capital and grow.” [David Mayer]

      Is this an economic writer committing himself to a definition of Capital, or the money tree again? Do your diverse economists at UWS, like the rest, still argue about this, Steve? But yes, I hope your student read off the beaten historical track too: beauties like Ruskin’s “Unto This Last” and G K Chesterton’s “The Outline of Sanity” from the year of the UK’s General Strike.

      • September 6, 2012 at 4:08 pm

        It is indeed the same Soddy, according to my chemist turned economist friend.

  3. Keith Wilde
    September 6, 2012 at 4:11 pm

    A very welcome lecture to share with many acquaintances who are baffled by economists and economics, Steve. And your comments re UWS remind me that one of my most cherished colleagues retreated there after finding that his wonderful efforts to promote ecological agriculture and food at Canada’s McGill University were not being warmly embraced. I hope you know Dr. Stuart B. Hill, or have known of him. He would be a very welcoming and, I believe, productive colleague for you.

  4. BFWR
    September 6, 2012 at 9:33 pm

    Soddy is good, but C. H. Douglas is even better and even more insightful. In his recognition of the value and productive factor relevance of the accumulation of technological progress (a truly commonwealth asset) he will be recognized more for the progression of economic theory and the eventual economic and monetary freedom of the individual than Marx, Smith et al. ……when the rest of the world becomes aware of it, that is. Likewise his open mind, unburdened by economic orthodoxy was able to do an Occam’s razor treatment of economic and monetary policy which has the power to reverse the centuries, if not millenia long intention of the current systems which is the will to power of the traditional business and financial entities into the balanced, humane and sane intention of the will to freedom for the individual. All current theoretical pretenders to such intention have actually lacked these insights and/or unconsciously allowed the dominant economic system’s primary purpose and cultural biases to invade and pervert such. Douglas’s prescriptions are a perfect fit for our current crisis and for the continuing stability of not only our economic, financial and monetary systems, but indeed all of human systems for his economic and monetary mechanisms are actually “the policies of a philosophy.” And that philosophy just happens to be the condensation of the last 6-8000 years of human wisdom. Wisdom, the appropriate basis for BOTH individual development AND economic and monetary systemic policy. You cannot trust profit and /or work as PRIMARY policy intentions, neither can you trust organized religion, but you CAN trust the ideas, values and experiences of Faith as in confidence, Hope, Love and a sense of grace.

  5. Alice
    September 7, 2012 at 10:41 am

    I might add I very much like John Lodewijcks (and I am still not sure Ive got the spelling right) and his presence at UWS.
    Nice guy, nice economist too. Sorry Steve -I havent met you but Ive read you and I like you too.
    The entire world needs more like both of you in economics departments and less like …well you know that already (the economists who work for banks who have populated economics departments as a step up the bank ladder to higher pay and from there to Treasury / politics and revolving door pat on the back stuff back to banks – wank wank – a name like Hogan springs to mind).

    • September 7, 2012 at 8:10 pm

      Yes John Lodewijks is a great bloke, the last of four consecutive Heads of School who were in favour of heterodox economics and pluralism at UWS; the others were Colm Kearney, Raja Junankar and Brian Pinkstone were the others.

      Since the staff played no role in selecting Heads, we were incredibly lucky to get 4 in a row who supported non-orthodox work like mine.

      The School is now subsumed inside a much larger School of Business. Our main problem is chronic underfunding–the UNIVERSITY travel budget is $0!–but we still have a Dean (Clive Smallman) who recognises the need for pluralism in economics.

  6. Alice
    September 7, 2012 at 10:44 am

    Was your head of school Lodewijks by any chance?

  7. September 7, 2012 at 9:08 pm

    in one of his many biographys, J K Galbraith remarks to Lyndon B Johnson that the U Texas has the most interesting economics dept in the country.
    LBJ shoots back, just noticed that , did you John ?

  8. September 7, 2012 at 9:09 pm

    Didn’t solzhenitzn, or someone like that remark that the top soviets on the politburo got worse medical care, cause only doctors adhering to the party line could treat politburo members ?

  9. September 7, 2012 at 9:13 pm

    i must say, the uws website, to use a technical software engineering term, sucks….people doesn’t give you a simple table with links to papers, research summaries, etc, but to something else; when you finally find a list of faculty, you have to click on each one to seee what they are doning…

    • September 8, 2012 at 11:29 am

      Does it ever! And that’s the new (as in two weeks old) improved version…

  10. September 10, 2012 at 10:26 pm

    For the last five years I have been teaching a year-long course of my own design, “Understanding our Political Economy.” The course is offered by an institute hosted by my former university but with no academic standing. In this environment, I am able to offer students a critical analysis of economics as a scientific discipline. Equally important, I am able to return political economy to its standing as an arm of moral philosophy. In this course, the perspectives of Adam Smith and his Physiocratic contemporaries are presented because they provide us with important truths concerning, for example, the moral distribution of wealth. As a serious student of the political economists and their works, I provide students with reasons — including the words of modern economists — why neoclassical economics has little to offer when it comes to the design of public policy IF the objective of public policy is justice and the common good.

    • September 11, 2012 at 4:36 pm

      IF the objective of public policy is justice and the common good, That says it all.
      That is the human flaw-They believe that is the motive.
      In Fact the real motive is for a small group “to gain all of the wealth of the planet
      for them selves and to leave all others in servitude”.
      Perhaps it should be stated as, “The object of public policy Today has been legislated as
      unjust and not for the common good”
      This demands correction or servitude.

  11. March 2, 2014 at 10:02 pm

    On Debunking Economics
    Steve, while we are at it, let us consider the Sonnenschein-Mantel-Debreu Theorem together with Debreu’s (1970) Regular Economies, applied to a pure exchange economy as per Nagata (2001). If it is a question of theorem, it suffices to find one counterexample.
    Consider a pure exchange economy with i  m consumers and j  n goods; aij is the budget share of i going to good s.t. aij 0, i  j is also sufficient. In other words, starting from any non negative initial condition (p0) > 0, the solution will remain nonnegative. In fact, even the weaker condition mij  0 is also sufficient.
    Then
    1) In a transient phase, the excess demand vector can have any slope (who cares?);
    2) to have a finite number of equilibria one must be outside the theory of nonnegative matrix and enter the world of nonlinearity;
    3) the equilibrium of a pure exchange economy is a stable fixed-point. Period.
    Ref.:
    Ryo Negata (2001). Theory of Regular Economies, World Scientific Pub. Co.
    Debreu, G. (1970). Economies with a Finite Set of Equilibria, Econometrica, 58.
    If this post is not too clear, see, Dominique, C-Rene (2008). Walrasian Solution Without Utility Functions. Working Paper 8906 http:// mpra.ub.uni-menchen.de/8906/MPRA

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