How to teach economics if you have a dissenting perspective
from Lars Syll
Issue #1: How do you teach the introductory economics courses if you have a dissenting perspective? Mankiw lays out three alternatives, teaching the mainstream and suppressing your own views, teaching minority or fringe views (i.e. your own), or not teaching introductory econ at all. He says the second option is “pedagogical malpractice” … I opted for an approach neither of them consider, to present mainstream economics in the third person: this is what that particular group thinks. Allow for a critical distancing, which is not the same as critique. I didn’t write “this stuff is garbage”, but “here are the assumptions that conventional economists make that distinguish their approach from others.” Whenever possible, I point out where other disciplines differ, and while I encourage students to judge for themselves, I don’t pressure them into adopting any one point of view. This is called critical thinking, and it barely exists in the world of economics textbooks, which proselytize shamelessly.
Issue #2: What should be the role of supply and demand theory and, in particular, the welfare interpretation of it? Mankiw feels welfare economics gets short shrift in the typical intro econ course and text … I am mostly on Mankiw’s side here, but from a critical perspective. I agree entirely that welfarism underlies virtually all applied econ work outside macroeconomics, and it’s important for students to understand what it means. We just saw a “Nobel” prize awarded to an economist, Bill Nordhaus, whose primary claim to fame is an application of the welfare framework to climate change. Nearly every economist working on climate issues adopts the same approach. It would not be an exaggeration, however, to say that the vast majority of climate scientists regard their work as nuts. Clearly there is a pressing need to present the underpinnings of welfare economics to as wide an audience as possible, so they can understand these disputes.
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Real-World Economics Review Blog 
In terms of the classification above, I fall into the malpractice category —
I have a complete set of 30 Lectures on Advanced Micro I — the first ten lectures are based on Hill and Myatt Anti-Textbook, and these go through conventional theories and explain how these are riddled with contradictions. The remaining lectures are devoted to devoting a broader perspective on Why modern micro is garbage.
https://sites.google.com/site/az4econ/
In the second course, Advanced Micro II – I build a constructive alternative, which replaces the Optimization/Equilbrium paradigm – Human Behavior is taken from Behavioral Economics and from the school of Heurstics. Modelling is done via Agent Based Models, which allow for disequilibrium dynamics. Some elements of evolutionary game theory are taught — these allow for the creation of an entirely new approach to Micro.
https://bit.do/ee2018
https://www.researchgate.net/publication/267151457_Necessary_pluralism_in_the_economics_curriculum_the_case_for_heterodoxy
Pedagogy and content are different issues and pluralists as teachers should recall that this is important, it is the job of a teacher to give you something to think about not tell you what to think
Jamie
Mankiw’s view “pedagogical malpractice” is almost refreshing in its insane brutality.
I was trained by gentler folk in the 60s. As an undergrad I recall virtually no dissent about the b. s. we were being spoon-fed. Even the socialist of the year, Abba Lerner, was gentle, presenting his views in story form, very enjoyable.
In grad school we were simply told what ideology was relevant and what was not, although no one would dare refer to the market fundamentalist orthodoxy as an “ideology”. I recall only one dissenter, a student who stomped out of the program in disgust.
So the cost of both programs was very low: an excess supply of b. s. and almost no demand for it.
“Boredom” is a perfectly respectable phenomenon, particularly with these self-praising models of ours that ignore the most pressing issues of our times. If Einstein himself was still around, he would be bored to death by now.
A good teacher leaves you with so many “messy” things to ponder upon that you hope to sleep on a couple, getting one right when you awake. And that is how progress is made.
Climatic mayhem is bottom line for all, including the younger generations who are all calling for “socialism” and social justice. They know they will lose whatever their predecessors claim to have left them with.
When I encountered students in college who found their studies boring, I answered that the studies were not boring, they were boring, because they did not have the imagination to find out that almost any subject, if you get into it, is not boring.
Helen, that is why I praise G K Chesterton as a great teacher, though it took me a lot longer than overnight to work out what he was on about, and indeed to discover the key to it in my own and his earlier work. His heretical “Orthodoxy” has been described as “Without any doubt, the greatest work in English Literature in the twentieth century”. By 1924 it was already rated in the best 10 in Dickenson’s “1000 Best Books”. On economics, Schumacher eventually saw the point of his “The Outline of Sanity”, and Aussie Ted Trainer (in RWER 87, the special issue on the ecological crisis) probably would too. When a physicist looked at his “Whats Wrong With the World”, his reaction was simply “Cant!”, showing he hadn’t begun to understand its intended lay audience and what it was challenging. Most academics find him boring, for most of them were students like those Robert refers to.
To this day, economists have produced NOT ONE textbook that satisfies scientific standards
Comment on Peter Dorman on ‘Introductory Econ Textbooks: A Different Take on the Issues’
Peter Dorman summarizes: “Mankiw lays out three alternatives, teaching the mainstream and suppressing your own views, teaching minority or fringe views (i.e. your own), or not teaching introductory econ at all. … Whenever possible, I point out where other disciplines differ, and while I encourage students to judge for themselves, I don’t pressure them into adopting any one point of view. This is called critical thinking, and it barely exists in the world of economics textbooks, which proselytize shamelessly.”
No, this is NOT critical thinking. This is post-modern anything-goes, i.e. the pluralism of provably false theories. Economics is scientifically indefensible: “In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum)
And this is the crux of the matter: economists do not have the true theory. This is where we stand today: provably false
• profit theory, for 200+ years,
• microfoundations, for 140+ years,
• macrofoundations, for 80+ years,
• the application of elementary logic and mathematics since the founding fathers.
Economics is what Feynman called a cargo cult science and the textbooks reflect this. Economics is in need of a Paradigm Shift.#1 Since Samuelson started the textbook industry in 1948, economists have produced NOT ONE textbook that satisfies scientific standards.#2 Since generations, economics students swallow proto-scientific garbage without batting an eyelid. Not very smart, these folks.#3
Needless to emphasize that there have been multiple attempts to improve the situation. The latest initiative comes from MMT. MMT claims to be the new approach that beats failed Orthodoxy. This is accurate with regard to the long overdue shift from microfoundations to macrofoundations. Microfounded approaches are dead already since Walras/Jevons/Menger.#4 The problem is that economists messed up the shift from microfoundations to macrofoundations.
MMT is NO exception. And the proof is in the new MMT Textbook, more specifically in the premises of MMT.#5 The premises are laid out on pp. 13-16 and pp. 83-86.
“One of the most basic propositions in macroeconomics that MMT emphasizes is is the notion that at the aggregate level, total spending equals total income and total output.” (p. 14)
Unfortunately, the most basic proposition in macroeconomics is false since Keynes, and MMTers have not realized it to this day. Here is the short proof that economists in general and MMTers, in particular, get the elementary mathematics that underlies macroeconomics wrong.
(i) The elementary production-consumption economy is given by three macroeconomic axioms: (A1) Yw=WL wage income Yw is equal to wage rate W times working hours. L, (A2) O=RL output O is equal to productivity R times working hours L, (A3) C=PX consumption expenditure C is equal to price P times quantity bought/sold X.
(ii) The focus is here on the nominal/monetary balances. For the time being, real balances are excluded, i.e. X=O.
(iii) The monetary profit of the business sector is defined as Q≡C−Yw,
(iv) The monetary saving of the household sector is defined as S≡Yw−C.
(v) Ergo Q+S=0 or Q=−S.
The balances add up to zero. The counterpart of household sector saving S is business sector loss −Q. The counterpart of household sector dissaving (-S) is business sector profit Q. Both Q and S are measurable with the precision of two decimal places.
For the elementary investment economy holds Q=I−S. For the elementary investment economy plus government holds Q=(I−S)+(G−T). And so on with growing complexity.
In sum: (1) profit is NOT income, i.e. a flow, but a balance, i.e. the difference of flows,#6 (2) distributed profit Yd is income and adds up with wage income Yw to total income, (3) total income is NEVER equal to total spending, (4) in the most elementary case, the difference between total spending of the household sector C and total wage income Yw is saving/dissaving, (5) profit/loss of the business sector is the mirror image of dissaving/saving of the household sector, i.e Q=−S, (6) saving and investment are causally INDEPENDENT and NEVER equal, (7) all I=S/IS-LM models are false since Keynes/Hicks, (8) Keynesianism, Post-Keynesianism, New Keynesianism and all variants are scientifically worthless, (9) the foundational MMT sectoral balances equation (I−S)+(G−T)+(X−M)=0 is false because it lacks the balance of the business sector Q, (10) because profit is false, the whole of MMT is false, (11) because the theory is false, MMT policy guidance has no sound scientific foundations.
What holds for the new MMT Textbook holds mutatis mutandis for ALL predecessors including Peter Dorman’s Microeconomics and Macroeconomics: A Fresh Start.
Egmont Kakarot-Handtke
#1 New Economic Thinking: The 10 crucial points
https://axecorg.blogspot.com/2017/07/new-economic-thinking-10-crucial-points.html
#2 The father of modern economics and his imbecile kids
http://axecorg.blogspot.com/2016/11/the-father-of-modern-economics-and-his.html
#3 There is NO such thing as “smart, honest, honorable economists”
https://axecorg.blogspot.com/2019/01/there-is-no-such-thing-as-smart-honest.html
#4 The problem with macro in two words
https://axecorg.blogspot.com/2016/04/the-problem-with-macro-in-two-words.html
#5 William Mitchell, L. Randall Wray and Martin Watts, Macroeconomics
https://www.macmillanihe.com/companion/Mitchell-Macroeconomics/
#6 The Profit Theory is False Since Adam Smith
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2511741
My dissenting perspective, as below, would determine how I taught economics if I was an economist and a teacher. I am neither an economist nor a teacher by the way.
1. The trend to oligopoly and monopoly in global capitalism is continuing and even accelerating. There are plenty of sources where one can get empirical data about this trend. If people on the course in the rest of academia wanted to commence an evidence based argument on that matter, they could feel free… to lose the argument.
2. Given point 1., any further argument that classical or neoclassical free-market, ideal-competition theory had anything to do with what is happening currently in the real economic world, in industries which have already oligopolized, could be shown to be fallacious. People who still believe that ideal free market (many small firms) competition theory has any relevance to oligopolist capitalism are at best living well in the past. At worst, they have taken up a faith-based position, not an evidence-based position. Hence their economic stance is of an ideological or even a religious nature. It certainly has nothing to with empirical evidence or objectivity or science.
3. Complaining about the latest oligopoly-induced phenomena in any industry (for instance) is a complete waste of time. It’s like complaining about the torrential rain and high winds in a cyclonic depression. In each case, the condition(s) of the overall system guarantee the extant empirical outcomes.
4. I expect the cyclone… erm, I mean.. the capitalist oligopolist system to intensify. Expect more torrents of the very same phenomena. With a cyclone, it’s the heat (energy) and moisture (matter) feeding into the system, when it’s over water, which make it grow. With capitalism it is again (in raw physicalist or thermoeconomic terms) the energy and matter being fed into the system which make it grow. However, an economy is, of course, a human agency determined system too. This presumes that we have choices about our system drivers – meaning choices about the forces we use drive our system and which way we drive it.
5, However, the arguments re choices about our “drivers”, and even identifying the real system and formal system drivers in the first place, are not simple in intellectual terms. Then, final determinations (when a choice is made and action is determined) are not easy to carry out either. We are locked in by a lot of historical choices. What locks us in, perhaps more than anything, are our choices about the axioms of mainstream economics and of the attendant financial and capitalist accounting, including capitalization.
6. No doubt, I will be met by the standard incomprehension of mainstream economics practitioners (not the heterodox here though) when I assert (yet again) that mainstream economics is an axiomatically determined system, not a system of empirically demonstrable laws. As an axiomatically determined system it;
(a) is NOT based on an empirical or scientific ontology;
(b) is prescriptive not descriptive (normative not positive in economic parlance).
(c) is subject to endogenous axiomatic outcomes contained in its axiomatic and algorithmic formulae;
(d) suffers from empirical reality as an exogenous nuisance both in theoretical and applied terms.
7. The conflicts of (c) and (d) above lead and/or will lead to the largest crises it faces. Unless and until we can develop a consequentialist ethics guided, yet empirically descriptive economics as opposed to deontological-axiomatic economics, expect more of the same until the system collapses from external limits or is reorganized radically through human agency decisions. This current system can only give us more of the same, and intensifications of the same, including oligopolistic outcomes as it approaches its algorithmic asymptotes endogenously and its physical limits exogenously. Not only ecological nature but also human nature (including human agency) are both strictly speaking “nature” as such and both exogenous and “polymorphously complex” in relation to the programmed, programmatic and relatively simplistic “machine-logic” of applied axiomatic-algorithmic (mainstream) capitalist economics.
Teaching the mainstream should be considered fraud. It is not a science.
The simple answer is teach something your students can use. – Financial Literacy.
If your state government won’t let you teach Financial Literacy – get after them. If you live in Texas call the Lt Governor Dan Patrick (512) 463-0001 and ask him to pass SB 686.
Orwell would recognize economics as thought control with a few obvious objectives:
1. Remove any moral judgement around a firm that is profiting at the expense of society. (wage suppression, price gouging, pollution, lack of worker safety etc…)
2. Identify “free markets” as the solution to everything. i.e. no regulations
3. Identify Labor Unions as distortions to “free markets” that provide no benefit to the worker and harms workers not in a union. (probably primary reason labor union participation has gone down)
4. sow confusion about money and bank loans. Tell society that loans create money – this is false. A loan is simply an asset on the lenders balance sheet and a liability on the borrowers balance sheet. There is no money creation associated with a loan.
5. Distract the discussion away from profits and only discuss price. (no profits in the long term – what bs.)
People that take an economics class are dumber and greedier than people that don’t take an economics class.
one of many articles
https://www.npr.org/2017/02/21/516375434/does-studying-economics-make-you-selfish
Economic theory was developed to cover up the moral issues involved in running a business.
Economic theory provides cover for billionaires, tycoons, and others to steal from society. Just look at the pharmaceutical business and the health care field in the US. These guys should be thrown in jail, instead they are worshiped for their business leadership as they buy our democracy to further steal from society.
The biggest problem is it distracts from what is important – too much debt. Debt will destroy a business. Just look at all the mergers that go belly up. And it will destroy the US economy and society if our current trend continues.
Here are the list of lies you will find in classical economics:
1. Economic profit is different than accounting profit. Total BS.
2. Accountants don’t under understand implicit costs.
3. Opportunity cost is an implicit cost that reduces economic profit to zero
4. Free markets prevent exploitation.
5. Labor Unions disrupt free markets
6. Bank loans create more money
7. low unemployment i.e. labor constraints cause inflation
8. Marginal cost is something new – in fact marginal cost and variable cost are exactly the same thing. This ruse allows them to make up data to support their stupid curves.
This bs was largely promoted by the Rockefeller family. Recall the Ludlow labor strife and the massacre of over 100 strikers. Rockefeller owned the coal mines where the miners worked. For every dollar paid in wages, profits go down by a dollar. Rockefeller wanted more money at the expense of the working class. Same thing today…
In the 1890’s Rockefeller provided half of the funding to start the University of Chicago. In the early 30’s Rockefeller saved the University of Chicago from financial failure. In return for his largess, the school promoted Rockefeller’s view of life and society in their teachings – most notably Economics. Paul Samuelson graduated from Chicago and clearly understood his role in creating Rockefeller’s propaganda. He went on to publish one of the largest selling Econ text books of all time. The books are stuffed full of philosophy that supports the wealthy.
Samuelson and all the other economists claim science as the basis for their philosophy – this is just cover for their BS. In the field of psychology it is called framing. If you present data in a certain way, such that the “frame” has been carefully constructed, the person is more likely to believe the data/theory. The frame was science and a manipulated break even model was the delivery tool.
lies lies lies. If someone would just step up to the plate and file a lawsuit against a major University for education fraud, we will have taken a step in the right direction.
Thank you. I shall think about all comments above, although I intuitively agree with some more than others.
I do think though that a very good starting point for a new dialogue would be to ask questions such as: What is the difference between “Green Fascism,” “Beauty Fascism” and old style Fascism? Surely, that would be something to stimulate the minds and bodies of the new generation of lost economists.
Alternatively, we could ask them to distinguish between the various scenarios for a Brexit deal and confuse or bore them to death. Here at least, we can rest assured that in theory and in practice, the voices of the one million people who asked for a people’s vote today would be a very recent point of reference in European and global history.
More floods, earthquakes and human and natural tragedies and more is yet to come. These are still the most urgent questions we must face up to. Lies indeed! Let us see when the day of repentance might come!