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Transforming economics education

from David Ruccio

After the crash of 2008, in the midst of the Second Great Depression, students around the world have been calling for radical changes in the way economics is taught. They know that the discipline of economics, today as in the past, includes more than neoclassical economics—but, for the most part, students are not being exposed to concepts and methods other than those of neoclassical economic theory.

There are, of course, a handful of departments where non-mainstream theories have been developed and taught, alongside and in addition to neoclassical (and, for that matter, traditional Keynesian) economics. In the United States, in terms of Ph.D.-granting institutions, they include the University of Massachusetts at Amherst (where I received my degree), American University, the University of Missouri-Kansas City, the University of Utah, and New School University.

As Aaron Steelman recognizes, that handful also once included the University of Notre Dame. But that is no longer the case, since the current Department of Economics advertises itself as as purely neoclassical department.

Unfortunately, Steelman gets the history wrong.

In 2003, administrators at the University of Notre Dame decided to split the Department of Economics into two: the Department of Economics and Policy Studies (DEPS) and the Department of Economics and Econometrics (DEE). Why the divide? In large part because there were significant differences in methodological approaches and fields of study within the department.

Those who considered themselves within the “mainstream” of the profession, generally using a neoclassical framework to examine issues such as economic growth and industrial organization, tended to move to the DEE. Those whose work was generally considered more “heterodox” or “pluralistic,” employing a variety of methodological approaches to address questions regarding race and gender, inequality, and the development of economic thought, among others, tended to form the nucleus of the DEPS. Less than a decade later, the DEPS was closed by university administrators and what was simply called the Department of Economics emerged again.

Faculty within the DEE tended to neatly fit into the new department, while many faculty members within the DEPS moved to various departments throughout the university.

First, the university administration decided to split the existing department of economics into two not because there were “significant differences in methodological approaches and fields of study within the department.” Those differences had existed for decades, which was precisely one of the strengths of the department. Graduate and undergraduate students, within and across courses, were regularly exposed to and encouraged to think critically about both mainstream (neoclassical and Keynesian) and heterodox (Post Keynesian, radical, Marxian, and institutionalist) approaches to economics. No, the decision was made in order to eliminate the heterodox component of the economics program: by splitting the department in 2003 (and giving all new hires and control over the Ph.D. program to a new department, Economics and Econometrics) and then dissolving the original renamed department (Economics and Policy Studies) in 2010.

Second, there were no particular differences, then or now, in terms of areas of study. Faculty members in the original (pre-2003) department of economics conducted research and taught courses on a wide range of subjects: microeconomics, macroeconomics, labor, development, public policy, industrial organization, and so on. Just as faculty members do now, in the new (post-2010) department of economics. The only difference was students who took courses in the original department were exposed to many different methods and approaches; students today only learn one approach.

Finally, faculty members were not assigned to the two departments in 2003 according to their different methodological approaches. There were plenty of neoclassical economists in Economics and Policy Studies. The sole criterion was how faculty members voted: the 16 members of the original Department of Economics who voted against splitting the department were assigned to Economics and Policy Studies, while the 5 members who voted in favor of splitting the department comprised the nucleus of Economics and Econometrics. In other words, the decision was political not methodological.

That’s how the long tradition of the eclectic, pluralist Notre Dame approach to economics was brought to an end—exactly when students around the world are calling for a new approach to economics education, one that includes a wide range of methods and theories. Students today correctly understand that the neoclassical economics they’re being taught as the only viable approach is both responsible for the crises that broke out in 2007-08 and has had little to offer once the crises broadened and deepened across the world. They want to see what else economics has to offer.

The problem, of course, is that many of their professors either don’t know about those alternative theories and approaches (because they themselves were never exposed to them in graduate school) or simply dismiss them (with the excuse that neoclassical economics is the only game in town if students want to be successful). That’s because most departments don’t offer anything other than neoclassical economics and, as Steelman correctly observes, students from programs that do offer heterodox economics are not hired “into departments at highly ranked research universities.”

All the more reason, then, for economics education to be transformed

  1. December 16, 2014 at 2:47 am

    One of the reasons that heterodox economics has failed to make a dent in the rule of the neoclassical orthodoxy is that they have accepted too many of the same assumptions to make a real revolution. To make significant changes requires a radical re-thinking of many fundamental assumptions taken for granted by both parties to the debate. Some of these are outlined in my contribution entitled “Creating Challengers and Change” to an edited volume of readings with the title: Challenging the Economics Curriculum” currently being compiled and edited by Jack Reardon and Maria Alejandra Madi A pre-publication draft of this paper is available from:
    http://ssrn.com/abstract=2469546

    • December 17, 2014 at 7:58 am

      I don’t see much in that paper besides vague ideas like economics and science lost their way, we need to have a cooperative project to reformulate goals and methods, etc. (see ‘international project for a participatory society’ deriving from the ‘parecon’ model developed by a US economist; or ‘altruists international’ (both are on the web) and there are likely millions more. IOPS says sort of the same sort of thing, but ‘they aren’t up to the task either’ as evidenced by their disfunctional factionalism. (Remincent of, though less violent than, issues involving Lenin , Stalin, Trotsky, and Kronstadt rebels back in the day.) I tend to think actually ‘science’ should go back to being natural philosophy (except philosophy now is just another industry, and to an extent nature is also—h Daly (see CASSE, also on the web)) .And maybe the economics professionals may need to consider spending some time growing food in gardens, rather than commuting to their offices to write more derivative papers.

  2. Macrocompassion
    December 16, 2014 at 10:06 am

    It is about time that more recognition be given to the differences in kind of economics which is political in nature and may be regarded as an humanity subject and the kind of economics which is analytic (even mathematical) and logical by nature, and which particularly deals with how our social system actually works. This second kind is split between the micro- and the macro-economics kinds too as well as some statistical econometrics of past behavours.

    The latter macro- kind is to be regarded as a partly theoretical logical science whilst all of the rest, not being so carefully arranged or exact in its definitions and assumptions, still does not qualify as more that an humanities subject. What shines in theoretical macroeconomics is the ability for it to be expressed in an exact manner, which most people including its teachers have yet to see as a virtue. By modelling the subject as a system of related entities (each of which represented and idealized and aggregated role player within the system) one can begin to understand how it fits together in a more exact way than what the other kinds of treatments have previously achieved.

    So the new science of macroeconomics needs encouragement and serious explanations, some of which may be gleaned from my model in: DiagFuncMacroSyst.pdf which may be found in Wikimedia, commons, macroeconomics along with a whole lot of other models all of which without exception are in error because unlike this above model they do not have all 3 of Adam Smith’s factors of production properly included, along with the returns that are implied in the value of the produce, namely: ground-rent, wages and interest or dividends.

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