Home > New vs. Old Paradigm > Bubbles, Panics and Crashes module cancelled

Bubbles, Panics and Crashes module cancelled

from today’s Guardian

Manchester University move to scrap banking crash module angers students

Course leaders cancelled the Bubbles, Panics and Crashes module developed as counterpoint to free-market teaching
Manchester University students

Joe Earle, front and centre, says students are upset by what they believe are the university’s attempts to obstruct teaching of alternative economic perspectives. Photograph: John Super


Manchester University bosses came under fire from angry economics students after they scrapped a groundbreaking course that examined the effects of the 2008 banking crash.

In an escalation of the crisis gripping university economics departments, the course leaders cancelled the Bubbles, Panics and Crashes module developed to answer protests at the dominance of orthodox free-market teaching.

Students said the U-turn undermined the credibility of senior staff who promised reforms and meant the department was actively obstructing debate over the causes of the financial crash and why economists failed to see it coming.

Next week, they will hold a day of debates to run alongside the Royal Economic Society’s annual conference, which is held over three days at Manchester University. A manifesto for reform – The Revolution in Economics – will also be published with a foreword by Andy Haldane, the Bank of England’s director of financial stability.

The row broke out last year when students claimed that mainstream economic teaching failed to address the underlying causes of the banking crash, and was in part responsible for politicians and financial watchdogs relying on free-market theories and light-touch regulation.

Undergraduates in Manchester formed the Post-Crash Economics Society and joined groups at the London School of Economics, Cambridge University and University College London to rebel against what they saw as the dominance of discredited theories that rely on mathematical formulas and not real-world examples.

In response, several university departments agreed to implement a new curriculum that would incorporate a wider range of viewpoints, including Keynesian economic thinking. Sponsored by the Institute for New Economic thinking, based in New York, the Curriculum in Open-source Resources in Economics project was set up to develop “a new approach to economics teaching for undergraduates”.

Manchester University’s economics department, which faced the brunt of student criticism, went further when it agreed to run the Bubbles, Panics and Crashes course. The decision to close it down after only one year has dismayed students.

A Manchester University spokesman said: “Our students have been leading a national debate on the way economics is taught in higher education, and the ensuing debate has been positive, useful and informative in terms of our extensive consultation with key stakeholders, including students.

“We have decided not to run the Bubbles, Panics and Crashes module next academic year, but will launch other new economics-run modules to address broader areas of the economics curriculum. These include a new module on economics for public policy led by the renowned and newly appointed professor Diane Coyle and a module on behavioural economics. Students will also now be able to take a second-year module on the financial crisis offered by Manchester Business School and two third-year modules on global capitalism by the politics department.

“Looking further ahead, economics is exploring the possibility of running a module on alternative economic theories from 2015 to 2016.”

Coyle, who runs a consultancy and is the author of The Economics of Enough: How to Run the Economy as if the Future Matters, is writing some of the Core curriculum, which she is expected to teach when she joins the university.

Joe Earle, a spokesman for the Post-Crash Economics Society and a final-year undergraduate, said the new courses and Coyle’s appointment showed that the university was responding to student and employer concerns about the lack of “real-world application” in economics education.

“However, its decision to reject Bubbles, Panics and Crashes shows that it is actively obstructing attempts to provide optional modules that teach students about alternative economic perspectives such as institutional, post-Keynesian and Austrian economics.

“This does nothing to reverse the elevation of one school of thought to be the sole object of study in economics and means that the assumptions, methodology and values of what we are taught are not in question. We are simply taught the ‘scientific’ way to do economics.”

  1. April 3, 2014 at 4:51 pm

    Just too bad. A course like that would have been useful at the undergraduate level. Because of the cancellation of antitrust legislation, globalization, the cancellation of Glass-Steagall legislation, and the Commodity Modernization Act, Western economies are expected to generate bubbles after bubbles, after bubbles.
    At the graduate level, however, students should move to econophysics if economics is to be a social science.

  2. colon
    April 3, 2014 at 7:54 pm

    What I dont understand is that does’t the university administration or whomever is in charge care if its economic department teaches complete BS?

  3. April 3, 2014 at 10:30 pm

    Reblogged this on Parchment in the Fire.

  4. April 3, 2014 at 11:28 pm

    Justaluckyfool on April 3, 2014 at 3:46 PM said:

    Cause of crash and why not seen coming.

    Please challenge, improve, endorse or debunk.
    by Justaluckyfool ( http://bit.ly/MlQWNs )
    ( “You are always welcome to share, copy, plagiarize, improve, etc..any comments.)

    The Private For Profit Banks using the special privilege legislated to them, that is ; issuing new money by way of loans, put into action a method of creating immediate excessive cash profits while at the same time
    having the initial asset remain unchanged.
    They sold today “the future income known as ‘interest income gain’”,
    and received real money while requiring no change in the assets value.
    The $1 trillion value of the “Ms” of the “MBSs’ were still worth $1 trillion, the PFPB received from others more than $200 billion as payment NOT for the asset but rather for the receiving of the assets future income gain of interest on $1 trillion in notes that remained on the banks balance sheet at $1 trillion.
    How do you suck $200 billion from investors for your own personal gain ?
    Sell them a dream while using OPM !
    Who would not want to pay $200 billion today for a guaranteed return of over
    $1 trillion over the next 30 years—AAA rated !!!

    justaluckyfool says:
    04/02/2014 at 7:28 PM
    Yes, maybe, perhaps,
    “The future of money will become increasingly digital. I think cash and coin will probably cease to exist entirely at some point. There’s simply no need for it. And that means we’ll have one big electronic system. ”
    Please mark that date for should that happen:
    Electronic money ‘bad money’ will have driven ‘good money’ out of circulation, and once again all the ‘economists will say,
    “Why didn’t we see that coming?
    That a simple computer glitch would cause ” a systemic failure”, a total collapse of the currency.’

    • davetaylor1
      June 21, 2014 at 9:38 pm

      Yes, but … isn’t there the option of selling the business a better business plan?

      • davetaylor1
        June 21, 2014 at 10:14 pm

        Sorry. that was intended for Lyonwiss. Lucky, what you say justifies my argument, that money is a form of an authorisation of credit, and that a credit card economy can and should be kept local, resetting credit card limits for individuals and businesses locally and recording local IOU transactions for settlement with possibly distant receiver accounts as convenient. The local servers don’t need to be online globally all the time, so one doesn’t need “one big electronic system”, one merely needs one type of local system with local standby arrangements, which is compatible with all the others and can communicate globally when necessary. Little more than PC’s and Internet?

      • June 23, 2014 at 7:11 pm

        ” Lucky, what you say justifies my argument, that money is a form of an authorisation of credit, and that a credit card economy can and should be kept local, resetting credit card limits for individuals and businesses locally and recording local IOU transactions for settlement with possibly distant receiver accounts as convenient.”, davetaylor1.
        All fiat currency is a form of money that is an authorization of credit; only that portion of wealth that is measured by the fiat notation recorded. All money is wealth. Not all wealth is money.Money is a concept, a non physical perception of a measurement of a wealth that money can transform into anything else.thing
        Those who use any fiat currency should be aware that they have placed “wealth” into an agreement for redemption by the issuer of the currency; be it paper, coin or printed dots
        and that it has no real value until redeemed..

  5. April 6, 2014 at 12:47 am

    The idea that there is anything to understand about bubbles, panics and crashes undermines the orthodoxy which assumes that bubbles are unknowable, unpredictable exogenous events.

    The bubble course contradicts all other courses which are based on the equilibrium assumption, without endogenous destabilizing forces. The bubble course has led probably to students to question, challenge and confront the traditional courses. Other lecturers would complain about the subversive nature of the bubble course, which would have been disruptive of their own teaching plans. A course on global capitalism would be less confronting.

    This episode provides evidence that as a commercial enterprise (which it is today), education can only impart knowledge (like downloading a piece of software) for a fee, but cannot allow critical thinking which is disruptive of its business model.

    This also suggests that pluralism in education is a pipe-dream and that there is no such thing as a gradual paradigm shift, a smooth transition from one set of ideas to a newer set of ideas. New economics requires the existing paradigm to be wholly replaced in a scientific revolution:


  6. June 21, 2014 at 9:02 pm
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