Home > Uncategorized > “They aren’t laws of nature”

“They aren’t laws of nature”

from David Ruccio

Nicola Headlam is, I think, right with respect to “how the rules of the economy are set”:

“Somehow, someone, somewhere made these rules up. They aren’t laws of nature.” And they determine “who’s got what and where and why”.

The question is, how do we teach economics so that that message gets through?

Aditya Chakrabortty [ht: ja] reports on one way of doing it—a makeshift classroom in a converted church, with nine “lay people” and two facilitators (Headlam and Anne Hines, who are donating their time), in the Levenshulme area of Manchester, England.

Part of what makes the course interesting, at least to me, are the participants:

Those doing the Levenshulme crash course don’t look like your typical seminar room attendees. Not only are they decades older; all but one is a women. The average undergraduate economics course, according to the Royal Economic Society, is about 67% male and 25% privately educated (compared with 7% of the population). After the class, a charity van pulls up outside, offering three bags of short-dated food for £6. Several “students” collect their groceries for the week.

Everyone here brings their own lived experience of economics. In her motorised wheelchair, Joanne Wilcock notes how “everything is much more expensive when you’re disabled”. Bang on, yet you hardly ever read that in an article on the latest inflation figures. Bhatt knows that Levenshulme is supposed to be gentrifying – “fancy cars, flash weddings” – but notices his neighbours can’t afford to do up their own houses. “All fur coat and no knickers!” he concludes, and the room cracks up.

Another is the pedagogy: 

That impulse may now be dressed up in polite euphemism – but it lives on. “So many thinktanks and MPs come up with good ideas to change our economy, but they’re all stuck in their political bubble,” says the head of Economy, Joe Earle. “Ordinary people barely get a say in the thing that rules their lives.”

Contrast that with this class and its polite horizontalism, where no one is presumed to be a total expert and everyone is treated as if they have something valuable to say. . .

At the end of the class, each participant tells the rest the best thing they have learned. There’s a pause when it gets to Aklima Akhter, who only came to this country in 2013 and has been sitting so benignly quiet in her white headscarf. She starts haltingly: “It is difficult for me, you know … the subject, the language.”

All around her are faces pursed in little moues of encouragement, but then Akhter speeds up with fluency. “But my favourite word was ‘nationalisation’. Because when things are privatised it is the rich who get all the benefit.” And for once in this room, no one is laughing.

The contrast to the usual economics classroom couldn’t be more stark—in terms of both the diverse backgrounds and experiences of the students and the commitment on the part of the facilitators to recognizing the “everyday” questions and viewpoints the students bring to learning about economics.

The usual method, at least these days (and outside of for-profit colleges and universities, which tend to attract older students), is to teach mostly young male undergraduates (according to Claudia Goldin [pdf]) in a vertical manner.* What I mean by the latter is the presumption that the ideas students bring to the classroom are probably wrong, and need to be replaced by the “correct” methods and models. And, for the most part, that means pushing students through the chapters of a traditional textbook of economics, and therefore teaching them a narrow version of economics, consisting almost entirely of neoclassical and Keynesian theories, approaches, and policies.

That way of teaching economics has the effect of naturalizing a capitalist economy. First, it reduces the universe of relevant economic thought to contemporary mainstream economics. No other economic theories, now or in the past, need apply. (Nor, for that matter, should knowledges about the economy beyond mainstream economics, from either disciplines or from outside the academy.) Second, the methods and models are taught in a “common sense” manner. As I discussed back in May, markets have a magical, quasi-mystical status within mainstream economics. They are the original starting-point of neoclassical theory—presented as being “just there,” with the requisite price and quantity axes and supply and demand schedules, as the origin and focus of economic analysis. As for macroeconomics, which I discussedthis past April, the premise and promise of both Keynesian and neoclassical macroeconomics is that, with the appropriate institutions and policies, capitalism can be characterized by and should be celebrated for achieving full employment and price stability. In both cases, at the micro and macro levels, the rules governing the economy are considered to be natural laws, which are correctly captured within the models of mainstream economics—and then, of course, meant to be respected and obeyed.

As I explained in 2011, after 70 students walked out of Gregory Mankiw’s Principles of Economics class, my approach couldn’t be more different (all of my course syllabi are publicly available here):

For almost 30 years, I have focused on teaching neoclassical economic theory, which I present both as one story about the economy among many and as the hegemonic story among economists inside and outside the academy. I start with economic history and then present neoclassical theory from its basic assumptions (such as the assumptions about human nature) through its most important theoretical conclusions and policy recommendations (such as general equilibrium and Pareto efficiency). Then, after I present some of the extensions of neoclassical theory (such as imperfect competition, game theory, and international trade), I discuss some of the basic criticisms of neoclassical theory (from the endogeneity of preferences through the concept of capital to the distribution of income), a couple of lectures on Marxian economic theory, and the consequences for theory and policy of the differences among economic theories.

Now, I understand, my approach to teaching economics is specific to its context (in an American research university, with full-time undergraduate students, during the past three-plus decades). It might not work in a Levenshulme community center or a labor college or elsewhere. But, even in those circumstances, I would insist on history (and thus highlight the radical changes in both economic thought and economic institutions over time) and a discussion of the differences among economic theories today (neoclassical, Keynesian, and Marxian, based on different entry points and methods), as well as the different theoretical and social consequences of those theories.

My hope is that students would learn, if nothing else, that the rules of the economy aren’t—and never have been—”laws of nature.”

 

*Chakrabortty refers to the fact that “Not so long ago, a Levenshulme resident could learn economics – or any number of other subjects – through the adult evening classes offered by the University of Manchester. The extramural programme stretched as far afield as Wigan and Burnley, and by the 1970s employed more than 30 academic staff. Then followed decades of cuts, until the entire department was shut down in 2006.” In the United States, students haven been able to study economics in a variety of settings, such as labor colleges (including the Work People’s College [1904-41] in Duluth, Minnesota, Brookwood Labor College [1921-37] in Katonah, New York, and Commonwealth College [1923-41] near Mena, Arkansas, as well as the National Labor College, sponsored by the AFL-CIO, which closed in 2014) and centers of popular education (including, still, the Center for Popular Economics and the Highlander Center).

  1. Helge Nome
    July 2, 2018 at 11:35 pm

    Substitute “God” for “Nature” and you get the basis for all religion: Servitude. In this case, servitude to the financial system of the day. Snaring the mind of common people is the oldest trick in the world.

    • July 3, 2018 at 3:29 pm

      I echo David’s “the commitment on the part of the facilitators to recognizing the “everyday” questions and viewpoints the students bring to learning about economics”, but also what he makes of it, discussing “the consequences for theory and policy of the differences among economic theories”. Incidentally, I was raised within walking distance of Levenshulme.

      Helge, have self-serving “economic men” substitute a false “Law-imposing” concept of “God” for “Nature” and you have a false basis for some religious institutions [not “all religion”], which has indeed led many [but not “all”] into servitude. However, the revelation of God as a loving Father who died so that we might live changes the whole concept of Law from an imposition to Fatherly advice about the Laws of Nature. Service then becomes grateful re-ligature (commitment, re-tying of the bonds loosened) rather than fearful servitude. An on-looker may not be able to to see the difference [e.g. between a cooperative and a capitalist factory].

      I like the irony in this book title, Helge: “It must be true because I saw it in the papers”. Is truth about descriptions matching appearances, or about concepts working out in practice?

  2. Helen Sakho
    July 3, 2018 at 12:58 am

    The God of Humanity cannot be cruel, not to this extent, anyhow.
    As for Economics, and those who insist on the indoctrination of fallacies for ever to come, it is an entirely different matter. Common people have common sense, which is more than enough to avoid such indoctrination altogether.

  3. Edward K Ross
    July 3, 2018 at 2:41 am

    In reply to David Ruccio July 2 2018
    As a non academic have always questioned who made the rules and who was going to benefit from those rules regardless wether they were academics seeking praise from their elite masters or academic kudos. Apart from that for a long time I have been arguing that the public need to be involved in the conversation to make economic theory and conversations relevant to real people in the real world. Hence the Levenshulme story in Manchester England, where ordinary citizens were able to engage in meaningful conversations and express there concerns with the current economic system. From my experience this process benefits both the public seeking answers to their concerns, as well as giving the academics involved the opportunity to hear first hand, the concerns of some members of the public.Ted

  4. Craig
    July 3, 2018 at 3:43 am

    When an animal comes upon something edible does it hesitate to partake of it? Of course not, and humans although being discerning and capable animals should not be forced into considerations about same. We have long ago been capable, especially in modern economies, to provide a satisfactory lifestyle for everyone, and to do so while enterprise also makes a fair and very lucrative profit for their efforts. As it is the heritage of all life to live in the abundant environment of the earth, so past technological and productive process is the cultural heritage of mankind, and finding ways to not only increase everyone’s share of that, but to make the profitable operation of enterprise less onerous should be both a reasonable and ethically humane goal. This is what a dispensation of love and its active form grace can easily accomplish given that heritage and its further ability to create abundance.

    The “curse of Adam” was perhaps an honest evaluation of productive capability 6000 years ago, but not now and even less in the future. Mankind and economists must update their philosophy/thinking and policies/actions to recognize this both as the new ethic…and the way to resolve the economy’s instabilities and eventual complete non-functioning.

  5. Nancy E. Sutton
    July 3, 2018 at 5:34 am

    Wish Craig could translate that to common English. Is there a hidden agenda in his …. ‘language’? It is inexplicable, otherwise.

    • July 3, 2018 at 7:03 pm

      I’m not sure he can, Nancy. He using common English words, but I agree, it is not obvious what he means by them. When our philosophical discussion refers to “paradigm change”, what non-philosophers might understand better is the idea of our own as well as a foreign language being encoded, so only those knowing the right codeword are able to understand it. Craig has changed the codeword for understanding economics from ‘money’ to ‘grace’. As a Christian I am familiar with that, so I understand most of what he is saying. To me his ‘agenda’ is obvious enough, though I don’t entirely agree with it:

      “Finding ways to not only increase everyone’s share of [our cultural heritage] but to make the profitable operation of enterprise less onerous, should be both a reasonable and ethically humane goal”.

      In this the word ‘profitable’ is undefined in ‘money’ terms, but for a ‘graceful’ mankind it has to be advantageous in real terms to both mankind and nature. ‘Less onerous’ in ‘money’ terms means less monetary debt, whereas in terms of ‘grace’ love is not just about giving us things to make life easy, it is about enabling us to see our own self-worth by meeting challenges.

    • Craig
      July 3, 2018 at 7:24 pm

      Ask me a direct question, I’ll try to give you an answer.

    • Craig
      July 5, 2018 at 8:09 pm

      Nancy,

      Combining a universal dividend and a policy of equal monetary debits and credits at the point of sale throughout the entire economic/productive process including final retail sale is the way to:

      1) implement the new paradigm of Direct and Reciprocal Monetary Gifting

      2) end the reign of Finance’s monopoly paradigm of Debt/Burden/Cost Only

      3) with a 50% discount-debit/rebate-credit policy double everyone’s purchasing power and double the amount of debt free and available demand for any and all enterprise’s products and services

      4) not only end modern economy’s chronic problem with inflation, but within the current paradigm miraculously, painlessly and beneficially integrate price deflation into profit making systems

      5) eliminate the “necessity” of transfer taxes for welfare, unemployment insurance and quite quickly even for social security thus further reducing costs for business and increasing individual take home pay

      6) except for a smallish but sovereignty establishing percentage, end the ruse that taxes are necessary to prevent inflation and to fund government on all levels, thus enabling a monetarily sovereign government to fund itself (guided by the many aspects of the pinnacle natural philosophical concept of grace) and thus vastly reducing personal and business taxation

      7) combine and integrate the best aspects and highest ethical considerations of the alleged agendas of the political left (monetary and economic democracy) and right (the protection and furtherance of free enterprise) thus exposing any objection to such integration as a covert or unconscious means of maintaining the current monopoly paradigm of finance

      8) make entirely possible the vital financing for environmentally cleansing technologies and energy and resource efficiency innovations so badly and urgently needed

      9) end the failed and oppressive experiment/covert enslavement of homo economicus and begin the civilizationally transformational move toward man having under girding systems that enable and encourage the self actualization of his true species designation of homo sapiens sapiens, wise and discerning man

      Look at it, keep looking at it, especially number 3….until you actually see it and all of the rest of its benefits….and go OMG!

  6. Helen Sakho
    July 13, 2018 at 1:29 am

    To end on a precautionary note, in addition to previous posts just now, it is Friday the 13th here, so let us wish everyone a “good eye”. Please avoid black cats, ladders, open scissors, or an authentic WUDU might curse us all from lands, rivers and mountains so far away that we won’t know what has hit us, short of a sudden thunder or unexplainable lightening in the clear bright skies!

  7. July 16, 2018 at 11:44 am

    Think about it this way. People of all sorts create economics, the economy. Academics have no special, inherent, or accepted place in this work. That they attempt to grab such a place tells us about the rules they invent for themselves and the place in the larger scheme of things they give themselves. It tells us little about the actual work of invention that goes into economic actions. This should be the study of economists. Unfortunately, economists seem interested in just about everything else – from mathematics to logic to tracking wealth – than in the actual work of inventing and reinventing economics. Might have something to do with economists losing their self-granted place as the only inventor of economics. The public mostly has no such delusions. They see everyday the self-promotion of economists and the unfeeling of those who control money and other resources. So, they are made to feel irrelevant, despite their central place in economics.

  8. July 18, 2018 at 10:16 am

    (omitted from my previous comment)
    Just as “laws of” are constructed among everyday humans in economics, so they are as well in all the sciences, including that deity physics. Based on his reading of Wittgenstein sociologist/physicist Andrew Pickering places the contents of mathematics and natural science at the disposal of the sociologist, since the most elementary procedures of arithmetic and the theoretical laws of physics can now be seen to express “the common behavior of mankind,” and not the transcendent laws of reason or the intrinsic relations in a Platonic realm of pure mathematical forms. The externalism implied by this argument is first step in creating explanations of the behavior of scientists or mathematicians based on norms or ideological forces arising from the “outside” society. This argument also permits relatively small and closed disciplinary communities to be held responsible for their members’ conventional practices. Controversies within scientific fields take on special significance
    in the social studies of knowledge (SSK), since they exhibit fissures within the relevant epistemic communities on fundamental matters of theory, fact, or procedure. An established procedure in SSK is to use historical study (supplemented with interviews whenever possible) to demonstrate the process through which “closure” is reached in each controversy. According to such studies, interpretive possibilities that remained open while the controversy raged are closed when a successful theory gathers force in the community. After the
    fact, the victorious theory may seem to have vanquished its rivals by superior performance in experimental tests, but SSK argues that most of the time no such direct confrontation takes
    place. Theoretical possibilities that were never definitively tested or falsified are simply shut away in a black box, and from then on, the successful theory is treated as a correct theory whose major justification is its correspondence to “reality” and/or its congruence with
    “reason.” The difference, then, between normal and revolutionary science becomes a matter of whether some of the open possibilities for developing science or mathematics are explicitly disputed or remain submerged within the taken-for-granted habitus of “ready
    made science”
    Cartwright, N. 1983. How the Laws of Physics Lie. Oxford: Oxford University Press.
    Latour, B. 1987. Science in Action. Cambridge: Harvard University Press.

  9. Craig
    July 18, 2018 at 11:57 pm

    Economic theories are nothing compared to economic policies and their actual effects. Desired economic effects depend upon their being implemented in the temporal universe at significant and relevant places and times within the economic process that also have direct, immediate and the desired effects.

    There is absolutely nothing wrong with theorizing, but if you desire individual and systemic abundance instead of austerity, a definitive way of ending inflation instead of enduring it or claiming some conservative orthodoxy that it can’t be dealt with or liberal orthodoxy that it won’t occur…..then YOU’RE JUST NOT LOOKING at the integrative infrastructure of all commerce, i.e. double entry bookkeeping and the significant places and times where policies can be implemented that all heterodox economists here would agree….IS WHAT THEY’D LIKE TO SEE HAPPEN IN THE ECONOMY……ON A CONTINUING BASIS.

    Is it okay here to have a discussion about the nature of accounting, economic policies that are possible from that nature and an economic analysis of the direct temporal universe effects of those policies implemented at specific points???

  10. July 19, 2018 at 9:11 am

    Craig, what scientists do we all do. Theories are what we want to happen, what we believe will happen. They’re goals that a community has agreed to and orients their lives around. Whatever effects they have when carried out are mostly unpredictable. When humans apply their theories, they play off the results to orient those back to the original goals. Until the consensus is reached that the results are “successful,” or alternatively either the goals must be replaced or how they are pursued is failing. At which point the pursuit of consensus begins again. This always begins with a specific interpretation of the world around us which, until shown differently is reality. And the showing is not precise or clear. It’s always a foggy determination “works well enough” or “does not work well enough.” Human judgement is the main factor in all this. Human judgement in a community.

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