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post-autistic
economics |
Arena
By Gilles Raveaudraveaud@idhe.ens-cachan.fr We, a group of French
economic students, launched a protest against the current teaching of
economics. This protest was three-fold : - economics as it is taught
is completely detached from the “world out there”. What is presented to
students is not an analysis of economic phenomena, like unemployment or
growth, but theoretical worlds which have no link, even tiny or indirect,
with any concrete phenomena. This is what we called “imaginary worlds”, i.e.
worlds which can be internally or logically coherent, but which are detached
from real phenomena, in their premises as well as in their conclusions. - economic teaching, especially
in France, makes an excessive use of maths. Most theories can be explained
with little or no maths. In particular, maths do not help and actually
frequently prevents the students from grasping what is at stake in the
theories presented. As a consequence, students spend most of their time
resolving ready-made exercises, instead of reading classic authors and
current articles. Besides, such exercises are basically always the same, and
do not have any “mathematical” interest. They are mainly a tool to select
students, by separating those who play the game and those who don’t - because they can’t or because they don’t want to.
As we have been labelled as “anti-maths”, students, I have to make clear
that, of course, we do not oppose the use of maths in teaching nor research.
What we say is that maths are to be used only when necessary. In particular,
they never should have become an end in themselves, as is unfortunately the
case in many universities nowadays. - economic teaching is
monolithic. It does not present the variety of past and present theories. It
focuses on the dominant one, which is called “neo-classical”, or mainstream,
economics. Its basic assumptions is that human beings and organisations,
including the state, can be reduced to isolated, a-cultural and a-historical
self-interested rational calculators. Such an analysis basically reduces
everything to mental calculus, love and crime included. For instance, it
cannot explain daily routines and cooperation which are necessary to the
correct functioning of firms, or the fact that most people pay their taxes,
even when they have no interest to do it. Besides, it excludes from its scope
of analysis all “institutions” that make an economy work: money, the state,
firms, trade unions, the law, etc. Such a theory then excludes
from its analysis what makes most of current economies, without mentioning
power relationships or inequalities. Mainstream economics is simply the
presentation of a perfectly competitive world between “atomistic” isolated
super-minds, with great calculus powers. An “autistic world”, indeed.
Why ? Is it an effect of an ideological bias? 1. Are mainstream economics neo-liberal? The reasons for this state
of affair are various[1].
In particular, ideology plays a dominant role in all this. But I have not
enough space to extend on this respect. In short, I will make the following
hypothesis (I am an economist, after all...) : economists do not create
ideologies, they simply reinforce and give greater strength to the dominant one(s).
In France, typically, many economists were Marxists in the 60s ; most of
them were Keynesian in the 60s and 70s ; and now the majority is
Neo-classical. What’s more, the same person may have belonged to each of this
groups, as we had the opportunity to learn... In order to support this
view, I give two examples which show that the link between mainstream
economics and neo-liberal ideology is not so simple. First of all, mainstream
economics does not give the reasons why
people act the way the actually do. In particular, in such a theory,
agents have all the information they need for their calculus: they know all
the prices of all present and future goods, at all dates - please take a few seconds to imagine what this
implies... Hence, given their (for ever stable) “preferences”, they have no real choice to make: they are to be
permanently at their optimal combination of present and future goods.
Everything is settled, for ever and ever, and they will never be asked to
really choose[2].
Mainstream economics is then not a theory of individual choice, as is
unfortunately widely believed. Furthermore, it is not a
theory of free exchange: in fact, as the co-ordination of a great number of
individual agents leads to nothing but chaos and instability, one needs a central auctioneer which receives all
the bids and offers made by all agents for each good. It is this central
auctioneer who, having all the necessary information, states what the
equilibrium prices are, i.e. those for which supply equals demand for each
good on the market. It is only then, when such prices are known, that “free”
exchanges take place. This central auctioneer plays a crucial role in the
very foundations in mainstream economics, even if its indelicate presence is
erased from textbooks. So mainstream economics is, if anything, a theory of centralised exchange, not
of decentralised exchange between free individuals[3].
In mainstream economics,
people have no choices to make, and all their exchanges depend on a central
organisation. One would acknowledge that the link between the dominant
economic theory and the dominant political one, neo-liberalism, is not so
simple! 2. Why the “autism” of economics cannot be
challenged So, if economics is not
ideology, then what do economists do ? Well, what “real” economists
pretend to do, and what is taught in universities, is science. The debates we had with many of them during the last
months stress the importance that academic economists, mostly mainstream but
also some of the “heterodox”, attach to this notion. They always fear that
what they write will not be considered as being “scientific”. More precisely,
they make a double move of separation and attraction. The move of separation
is the one from other social sciences with which they have a common origin:
philosophy; psychology; sociology; law; etc. As such curriculum are not
considered by economists as really
scientific, they wish to actively separate themselves from them. This is one
of the reasons for the hypotheses made by mainstream economics on the a-social
and a-historical egotistic rational calculator. The second move is one of
attraction, towards science, and its paradigmatic example, physics.
Mainstream economists are really fascinated by classical physics - or at least their perception of it. The structure
of mainstream economics is indeed directly derived from that of classical
physics: elementary particles which have all exactly the same size
(individuals, which are significantly called “agents” by economists, who are
powerless on one another) interact (exchange on the market) in such a way
that the situation is stable (we are at an “equilibrium”). This interpretation
explains the surprising characteristics of the theory presented above: in
order to have the nice mathematical results they are looking for, economists
have had to make a whole bunch of silly hypotheses. This was the only way for
them to “demonstrate” that free exchange could lead to an optimum (even if
they failed to do so, as we saw above: their theory needs the presence of a central agent who organises the market). I do not have room to go
further, but this point is absolutely crucial: economists are always
frustrated not to be taken seriously as scientists. Not social scientists,
scientists. They would do anything for it, including the creation of
completely imaginary worlds who, like science, are internally coherent, but
who, unlike science, do not explain anything of real phenomena. And,
unfortunately, this preoccupation is also present in too many heterodox
economists. One must understand that for all this people, the critic of being
unrealistic, or to do ideological work is completely misguided. What they are
aiming at is the construction of a scientific general theory, full of maths.
This is what they are on Earth for. Thus, nothing or not much is to be
expected from academic economists, as I had to learn personally. 3. Why the “autism” of academic economics will
continue to be challenged The conclusion is straightforward.
If nothing is to be expected from academic and Nobel Prize winners, then all
for the bad. The battle will not take place in the field of science, where
the rules are imposed by the enemy, who has all the arms. But, as we know,
this is not where battles that matter take place. Such battles are political,
ideological, they involve “real” people, workers, households, trade
unionists, etc. And all this people are very demanding of economic analysis
of current events. They want to know what is globalisation; if it is really
happening; what are its foreseeable consequences. They want to know all that
can be known about the Euro: where it comes from, why so many sacrifices had
to be made in order to make it possible. They want to know why unemployment
has risen so steeply and if it will decrease, and when. They want to know if
life in America is really so sweet, and why they have growth, while we don’t,
except the Irish. That’s also what we
wanted to know when we innocently entered economic classes... So mainstream and some
heterodox economists are devoting their time to built a science. Well, let’s
allow them to continue to do so, even if, in France at least, they’re doing
it on public money. But let us not think that this is where what is at stake
will be won. Ideas matter, no doubt. This journal is a proof of their
importance. But they do not have to take the form that mainstream economists
impose on them at the moment, with very special mathematical models, to
exist. What critical economists have to do is to put their hands in the dirty
engine of the economy, and to explain how it functions and how it could
function “better”, depending on the political choices people make. Starting
from there, they could well in the end create new theories, more convincing
than the old ones. But one is not to start from theories: as great thinkers
as Marx, Keynes and Schumpeter have told us, all lasting theories start from
a deep understanding of current problems. There is indeed a social
responsibility of critical economists: it is to help people think about what
they’re living, and help them to live it better, by looking for what can be
done, if a majority of (then well informed) people want to do it. This is an
absolutely different perspective than the one which proposes to build a
science. But it is the only one which is worth it. _____________________ 1. For further material, please visit our Website www.autisme-economie.org (English
version), and/or Edward Fullbrook’s international and superlative Website: www.peacon.net. In particular, the texts by
James. K. Galbraith, (“How the Economists Got it Wrong”, The American Prospect, Vol. 11, Issue 7, February 14, 2000) and
M. Blaug, a most distinguished historian of economic ideas (“Disturbing
Currents in Modern Economics, Challenge,
May-June 1998) give excellent insights on the reasons for the current
situation. 2
As explained brilliantly by Tony Lawson in his book, Economic and Reality, London, Routledge, 1997. See also the
Website of his “realist workshop”, http://www.econ.cam.ac.uk/seminars/realist/ 3 I
apologise for being too technical. A clearer explanation is given by our text
“Those ‘wonderful’ US textbooks”, which can be found on our website, and
which was published in issue n°7 of the Pöst-Autistic
Economic Newsletter, July 10th, 2001. It is available online
on Edward Fullbrook’s Website. |
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[1] For further material, please visit
our Website www.autisme-economie.org
(English version), and/or Edward Fullbrook’s international and grandiose
Website: www.peacon.net. In particular,
the texts by James. K. Galbraith, (“How the Economists Got it Wrong”, The American Prospect, Vol. 11, Issue 7,
February 14, 2000) and M. Blaug, a most distinguished historian of economic
ideas (“Disturbing Currents in Modern Economics, Challenge, May-June 1998) give excellent insights on the reasons
for the current situation.
[2] As explained brilliantly by Tony
Lawson in his book, Economic and Reality,
London, Routledge, 1997. See also the Website of his “realist workshop”, http://www.econ.cam.ac.uk/seminars/realist/
[3] I apologise for being too
technical. A clearer explanation is given by our text “Those ‘wonderful’ US
textbooks”, which can be found on our website, and which was published in issue
n°7 of the Pöst-Autistic Economic
Newsletter, July 10th, 2001. It is available online on Edward
Fullbrook’s Website.