Sueddeutsche Zeitung

April 3, 2002, p.25

Distorted economic relations:

A new movement – the post-autistic economists – wants to renew economics

Nils Goldschmidt

Initially published in: Sueddeutsche Zeitung, April 3, 2002, p.25.

Translated by Benedikt Szmrecsanyi.

Autistic people are characterised by their distorted relations to the world and by their incapacity to communicate with other people. These are also the symptoms shown by modern economics – that, at least, is the diagnosis made by a new movement, known as “post-autistic economics”. According to this movement, economics suffers from the proliferation of mathematical models and of their stereotypical application, while economics curricula are dominated by a single method, the neoclassical method, and studying economics actually discourages any critical thinking and reflection.

It all began in June 2000, when a group of French economics students started an Internet petition aimed at their professors: they wished to “escape from imaginary worlds”, they opposed “the uncontrolled use of mathematics”, and called for a “pluralism of approaches in economics”: “We no longer want to have this autistic science imposed on us. We do not ask for the impossible, but only that good sense may prevail.”

The repercussions were overwhelming. The French Minister for education, Jack Lang, set up a reform committee, presided by Paul Fitoussi, president of the OFCE (Observatoire français des conjonctures économiques), an institute for economic analysis based in Paris. In its final report, this reform committee recommended sweeping reforms in the teaching of economics, both content-wise and structurally. In September 2000, the first Internet edition of the post-autistic economics newsletter was posted and rapidly spread around the world among students, assistants and professors. Further issues of this newsletter have found a lasting platform for discussion in the website of the post-autistic economics network (http://www.paecon.net). In June 2001, 27 students from Cambridge University published a document calling for the “Opening Up Economics”, which was signed by more than 600 economists. Among them are such renowned academics as Mark Blang, Bruno S. Frey, James Galbraith, Geoffrey M. Hodgson, Kurt W. Rothschild, and Warren Samuels.

In a similar way, an open letter, the so-called “Kansas City Proposal” of August 2001, asked economists from all over the world to overcome the rigid conceptions of human behavior, to take serious cultural, historical and methodological aspects in their work, and to start an interdisciplinary dialogue. In June 2003, the world conference of the International Confederation of Associations for Pluralism in Economics (ICAPE) will be held at the University of Missouri, Kansas City, during which participants will confer on the “Future of Heterodox Economics”. For the time being, more than forty associations are collaborating within the ICAPE.

Neoclassicism as a Nuisance

It did not take much time, however, before criticism towards the new movement started to appear. Robert Solow, Nobel prize winner in 1987, said, in Le Monde, that the reservations the post-autistic had about the completely unrealistic assumptions of the dominant neoclassical theory – such as rational and perfectly informed individuals, or perfect competition – were quite understandable, but that the proponents of Neoclassicism were fully aware of these weak points. Moreover, Solow added that modern neoclassical research also deals with imperfect markets, restrictions of competition, asymmetrical information, and other such subjects. And in any case, in the end, both orthodox and heterodox methods had the same goal: to develop reliable instruments that could be used in political economy. Yet, even if one agrees with Solow, there remains a problem: economists are still hoping for an exact understanding of economic processes, and most of them also believe that a paradigm borrowed from natural science and based on the concepts of equilibrium and quantification is sufficient to explain the workings of the economy, meaning that economic laws are almost the same as natural laws, and thus can be discovered and analysed.

By contrast, in his answer to Solow, John K. Galbraith, the phoenix of the leftist Keynesians in the United States, insists that “that the core arrangement of theoretical propositions in economics also remains among the questions worthy of debate”. In the same vein, the post-autistic economist Geoffrey M. Hodgson argues in his latest book that economic science has “forgotten history”, and he calls for the inclusion of historical and cultural conditions when dealing with economic activity: “Alongside philosophy, there is a need to re-establish the value and importance of the history of ideas and study of economic history”. What is crucial in ensuring the future of economic theory is not the refining of mathematical instruments, but the change in theoretical methods: because an economy is a cultural phenomenon which evolves with time and therefore has history, economics should be studied using a social science approach: economic science is a culture theory.

In order to operate such a change, post-autistic economists propose many different starting points, without favouring any particular school of thought. In this way, the “New Institutional Economics”, a research program developed mainly in the United States in the 1960s and 70s, and which focuses on property rights, transaction costs and contract theory analyses, already offers important insights. “Evolutionary Economics”, which follow the tradition of Joseph A. Schumpeter, in addition focuses on the origin of innovations and how they spread in an economy.

This debate around the history of economic thought goes to show the way in which economic theories are determined, and how they can evolve. At the same time, old theories can provide new stimuli. In that way, the German Historical-Ethical School of Economics of the 19^th century focused heavily on social policy. The Freiburg economist Walter Eucken, intellectual leader of the German, socially-minded brand of capitalism, also called for a theory that would not ignore reality, for a theory that could provide the “modern industrialised economy with a functioning, yet humane, order”. Post-autistic Hodgson believes that social science can benefit from “rediscovering a Lost Continent of problems and ideas”. This implies the “rehabilitation of historicism and institutionalism”.