October 2014 newsletter – Necessary pluralism in economics: the case for heterodoxy

In our survey of major recommendations for curriculum reform, the last, July, issue of the Newsletter featured a description of the INET-Core project led by Wendy Carlin. This time it is the turn of the Association of Heterodox Economists. The author is Jamie Morgan.*

As Alvin Birdi indicated in his July Newsletter article,1 a great deal of the dissatisfaction, dispute, controversy and heat rather than light regarding the state of economics education (and hence the issue of whether and how to change the curriculum) divides between the issues of what to teach and how to teach. As the developers of CORE are also aware, since it is stated in some of their early publications and is intrinsic to their laudable commitment to road test their materials, there is a learner to be considered in this process. With this in mind I am going to start from a broader context, specifically issues in education that then give meaning to what we teach and how. It is here that the case for pluralism and then for heterodoxy can best be appreciated. As economists we are also educators, and we were once students. Before reading on, try to remember what made a good educator when you were a student, what made for a good learning experience and then try to connect that to what has made you (at your best) both a good economist (academic or otherwise) and a good educator in your own turn.

The central issue
Now let’s consider a primary issue for the economics curriculum, what it means to be economically literate. There are a variety of relevant ways to consider this. There is the simple sense that the term is conditional on the needs and expectations of different types of students. So, one can consider a student taking one or a few economics courses as part of economics for business or marketing as economically literate in terms of a different standard than an economics undergraduate or postgraduate for whom this literacy is progressive and cumulative and for whom that standard must involve some greater degree of skills. Here the standard must also consider the needs of society and the needs of the economy.

An informed student is one who can make sense of economics discourse and particularly its relevance in politics and its representation in the media, and so is potentially better able to participate as a citizen in a democracy. An adequately trained student is one who brings relevant skills to the workplace. There is an apparent distinction here between understanding economic issues and knowing how to do certain things as an economist, but this cannot be pushed too far without conflating the idea of skills with technical proficiency in given methods. Skills are cognitive-practical proficiencies and these can be of many kinds. It is also a skill to be able to look at things from several points of view. It is a skill to be able to listen effectively to other points of view and consider their value and to respond effectively and creatively to them, based on evidence but also reasoning that assesses the basis of the evidence and the assumptions that order the evidence and argument. It is a skill to be able to think laterally and imaginatively. And it is a skill to know when and when not to use ‘tools’ and methods and to know what their limits are, and this is a small subset of the very notion of the expertise that ought to render an economist of greater value than any equation or computer and its programmes that are at her disposal. These are skills that have social value and are simultaneously valued by employers (just ask the CBI).

In terms of social value the range of skills, for example, may raise the level of informed debate regarding core issues for a country, such as Scottish independence, financial reform, policies of austerity, and membership of the European Union. These issues do not come packaged in certainties but rather can be effectively approached through reasoned exploration of issues and evidence to consider different possibilities. A good economics education can raise the standard of democratic debate, as well as energise political participation — and so help to address a primary problem of political legitimacy that all democratic states seem currently to be experiencing in terms of alienated citizenry. Concomitantly, the traditional slight offered regarding economists to which Birdi alluded (that there as many opinions as economists in the room) could in proper context become an asset. If the general context is recognized to be one of many possibilities then many opinions makes for caution and so also prudential policy both in business and politics. This is something a dogmatic certainty tends to militate against (and we are living through the consequences of the hubris of this now). Moreover, if the general context is one where there is recognition of many possibilities then every position can be considered based on its evidence and assumptions and so constructive consensus and creative synthesis as solutions become possible. This requires a strong sense that objectivity is a value before it involves methods, and it is an active process that one demonstrates rather than merely asserts. It is the genuine recognition that there are several ways to consider a problem, many different sources of evidence and different ways of ordering the facts for different purposes. It is then also a genuine commitment to the incompleteness of knowledge in an uncertain and changing world of fallible investigation. From this point of view an economist who has social value may bring confidence and intelligent articulation of ideas in the form of theory, but is one who also does not acquire a reputation for closed-mindedness. An economist in this vein is a genuine problem solver and sheds her reputation as an arcane purveyor of synthetic puzzles.

So, there are many useful skills that a student can acquire from an economics education and they are skills an educator also requires in order to provide that education. Beyond these considerations economic literacy also invokes both a sense that students will be well read in the theory of the subject and that they will be able to think constructively/effectively about an economic problem or issue and so also about real economies. One would expect these two would simply and necessarily cohere, in the sense that being well read in theory (and well practiced in some methods) would facilitate thinking constructively about an economic problem. But there is actually no reason why this should spontaneously be the case and recognizable reasons why it may cease to be so. Whatever one’s individual opinion on the state of economic theory and of its value in bringing insight regarding real economies it remains the case that the global financial crisis revealed a sense of discontent with the state of economics as a discipline, and that discontent focused precisely on problems of divergence between theory and thinking constructively and effectively about economic problems. That discontent was variously expressed within politics and the media, and by students, and also within the upper echelons of the profession. INET cannot be dismissed as simply a peripheral organization of inveterate malcontents. Consider also the sense of commitment required for students to organize locally and nationally their own economics education because they are dissatisfied with what they are getting. To be that motivated requires significant cause and particularly when one places this in terms of the current context of instrumentally oriented education and of the employment pressures faced by today’s indebted students.

Theories not theory

So, what I want you to consider here begins from our role as educators. What I want to suggest is that theory is highly relevant to helping students learn how to think constructively and effectively about economic issues. However, it is not the substance of a theory or of a group of commonly motivated theories and any associated focus on method, it is the existence of a range of relevant and substantive theories that is significant in an educational sense. One can think of this in terms of an educational ethos (giving them something to think about rather than telling them what to think) and then some principles of pedagogy:

1. A boundary should be maintained between one's own position and what is conveyed to students regarding the existence of positions. To do otherwise is to conflate the end product of one's own judgment with teaching the process of judgement. The latter should always be the goal. There is no single way to achieve this but:

2. A teaching strategy or the use of material should not become an invitation to confirm. An invitation to confirm is not an earned agreement, it may be mere channelling for concordance. This principle applies also to technical material, since one should not confuse confirming a student has grasped a proof or a technique with an understanding of its place.

3. The context in which a body of substantive theory is presented is as important as the content.

• One might first give students an economic problem, data set or range of empirical materials and ask them to devise a way to effectively investigate it and, as a corollary, synthesise its significant, perhaps simplifiable, aspects. One might then compare this to how a substantive theory approached the problem and consider the pros and cons of the theory and this can then naturally lead to issues regarding what theory is and what it is intended to achieve.

• Alternatively one might provide students with a range of substantive theories and invite them to consider them jointly as a comparative exercise — what are the motivating questions, what is being shed in pursuit of what is described, accounted for or explained… Can one ask different questions and what difference do different questions make? This can then naturally lead to further questions regarding how theory has developed historically and the degree to which that development has focused on addressing new problems and issues arising in economies, compared to how far it has shaped a policy agenda or led to curious omissions in conceptual focus that are later rectified.

4. It is as important to build space into the curriculum, as it is to build content into courses. This should not be conflated with simply timetabling in self-study based on a reading list. Genuine space is designed rather than simply bolted on as an additional period in which students are required to familiarise themselves with material. Genuine space builds in a capacity for considered responses to the material that one intended to convey, and as a corollary provides a place for creative responses to that material and for further exploration of the arising significance of that material, perhaps because of current events. It militates against any time-pressured academic feeling compelled to respond to a potentially relevant economic question based on genuine curiosity with the dispiriting reply ‘that’s not on the curriculum’. Such space should also allow for the response, ‘I don’t know but maybe we can consider the problem or find out’. The existence of space in the curriculum distributes responsibility for learning.It also reinforces a learning disposition in students because it actively demonstrates to them that their opinion matters, that their opinion can be developed, and that the study of economics can always be turned to matters of relevance to the economy.

The organic outcome of implementing these principles ought to be engaged students who are encouraged and supported in developing a range of skills, from the assimilation of information to directed critical analysis of theory and evidence and then imaginative, creative responses to that theory and evidence. Such students are disposed to be collaborative problem solvers for whom objectivity is a demonstrated value. 

Of course, setting out pedagogic principles in this way typically invites accusations of condescension. No academic would claim to be anything other than committed to being a good and then better educator and no academic would claim anything other than this required also a focus on developing student skills based on teaching strategies. What I am inviting you to consider is the logic of these principles and the commitment. If drawing attention to them can invite accusations of condescension it is because they are in some sense uncontroversial. But this also means that open-ended contextualised teaching necessarily embraces pluralism in order to achieve its goals. Economics is a social science or study of an aspect of society, and so as a matter of inquiry into the economy requires one to range across history, philosophy and policy/politics. It would be pedagogically irresponsible in a social science to not invite students to ask what theory is and what theory is for, to not also invite them to consider the way responses to matters of theory, including the different motivating questions one can ask or goals one sets, can profoundly affect inquiry and policy. In so doing one also reveals economics to always be re-describable as political economy, not least because economics concerns competing descriptions, explanations, perspectives and visions of an economy and what it is for.

This then is the case for heterodoxy. Economics is one way of cutting up the complexity of social reality. Even after social reality is carved into disciplines it must range across their subject matters in order to educate its students effectively. As such, it must necessarily embrace inter-disciplinarity. The argument for inter-disciplinarity is rooted in the plurality of issues that arise in the effective study of an economy and this extends to the history of the study of the economy and the continued relevance of exploring the economy in different ways. As such, economics in order to effectively educate its students must expose them to different ways one can explore and theorise an economy. The education of a student can be enhanced by exposing them not just to a plurality of issues but also of perspectives and schools of theory.

Of course, no single educator and no single course is equipped to or can comprehensively address all aspects of an effective economics education. Each can only play some role in developing skills and creating the economically literate. It is for this reason that the value of pluralism and of heterodoxy ought to be recognized and accommodated at the level of the overall curriculum. A place can then be made for them as the main constituent of the teaching of particular courses or modules and then also more generally as an aspect of the critical engagement and space within given courses or modules, beginning with foundation or general introduction courses. I don’t want to be overly prescriptive here regarding the substance of any particular heterodox position that might be taught. However, one can illustrate some of the value of heterodoxy within a teaching environment.

Heterodoxy – some illustrations
As readers may be aware, although CORE has been conceived as a curriculum, its developers also state that its various areas of content are not intended to be complete courses. They are offered as online resources. So, one way to illustrate the value of heterodoxy within a teaching environment might be to show one might creatively apply and develop some CORE materials along particular heterodox lines. For example, in the foundational Unit 1, students are introduced to isoquants as a way to express relations between labour, technology, switching and output as part of the story of the capitalist revolution as a sudden take-off in economic growth. Students are also given ‘pop-ups’ to deal with different aspects of key concepts that are intended to underpin a framework understanding of the dynamics of economic activity. An example of work/leisure choice begins ‘Suppose you are happy earning just £400 per week and so can convert any hourly pay increase into more free time,’ and derives a 46.3 per cent increase in the consumption of leisure.

A heterodox approach might provide a further contrasting set of pop-ups in order to illustrate the limits and realism of different ways of considering economic activity. For the context of the early industrial revolution one might introduce a short text version of a pop-up highlighting the significance from 1815 in the UK of the Corn Laws and phrase a further example that began ‘Suppose you must pay x for food subsistence, y for rent and earn just £z per week in a small mill town with only 2 employers, how would you increase your wage and what range of ways might you then respond to any increase in wage?’ One might then add further contemporary pop ups; perhaps ‘Suppose you have a mortgage to pay and childcare costs of £x and are employed on a zero point contract. What different strategies might you apply to managing your finances?’ or another that begins ‘You earn an annual salary of £x which converts into a monthly salary of £y…’

A process of contrast avoids any potential for the teaching method to become simply one of inadvertently inviting the student to confirm a concept or logic as foundational. It prevents confusion over the use of technology for teaching where the interactive nature of the medium is assumed to also be an active learning process. At the same time it invites the student to critique particular formulations of problems as theory and concepts and to consider the range of contexts in which actual economic activity occurs. Here, this may then become a further teaching point in various ways. It may allow one to consider the way each example involves a particular institutional context — which then may be developed by asking what is an institution, how does it affect our view of economic reality and in what ways would one want to investigate institutions? So, one might consider old and new institutional theory, problems of how choice is conditioned or socialised, whether one can build a theory upwards from individuals or down from existing rules or systems, what the difference might be between actual fieldwork that asks people what they do and why and game theory or experimental approaches to rules.

Similarly, one might ask whether a firm has ever or would ever construct an isoquant or engage in some facsimile of this kind of situation. One might then consider the range of ways firms might approach relative costs of factors leading again to a whole range of issues of concepts and how to investigate. The detail and sophistication of all of this will vary with the level of the students (one might not, for example, inform an early undergraduate that they were following in the footsteps of Sraffa on problems of mark up and returns, or reprising aspects of the Cambridge Capital Controversies). The key point, however, is that economics is not approached as though there were a single simple version — the common basics that then become more complex based on areas of theory and application. There is rather also a range of ways of considering the basics. Teaching here is purposive but neither overly prescriptive nor (technologically) didactic. It is pluralistic and can be explored along many lines where heterodoxy can enhance the critical appreciation of students. In this sense heterodoxy also enhances the approach to materials that motivate CORE (empirical relevance, historical significance and contemporary issues, dynamics, institutions matter… see Newsletter no. 166, July 2014, p. 12).

I’ll conclude with a practical point of reference and a comment. There are many heterodox resources one might call on in developing a more diverse curriculum and set of courses. Many of these can be found via Fred Lee’s heterodox economists information directory, the heterodox economics newsletter, or via Michael Marien’s online Global Foresight Books project.2 Relatedly, a new general introductory economics textbook is soon to be published by Palgrave. Reardon, Mardi and Cato’s Introducing a New Economics provides an explicitly plural and heterodox introductory text. It begins from economics as an approach to social provisioning rather than as a restricted concept of allocation and scarcity. It provides useful designed spaces or exercises for students to reflect on concepts and problems (sustainability, growth, inequality) in a variety of contexts and based on a range of different uses of evidence.

Finally, I want to encourage you not to think of heterodox economics as simply existing schools of thought in some historical sense. Heterodoxy includes living bodies of different theory, including new bodies of theory. The work of Tony Lawson has done much to advance our understanding of economics as an aspect of social reality, that of Geoff Hodgson has done much to advance our understanding of institutions. Post-Keynesians are producing some of the most innovative responses to problems of uncertainty and finance and this includes Steve Keen’s monetary macroeconomic modelling.3 What these and the Reardon text clearly demonstrate is the value of diverse ways of thinking and of thinking differently. These are characteristics every curriculum should embrace. To fail to do so is to risk confusing consensus with conformity. Now more than ever economics needs to agree that there are many ways to explore an economy. The discipline needs a plural consensus and this must also be inscribed in an economics education.


*Jamie Morgan works as an economist in the School of Accounting, Finance and Economics, Leeds Beckett University. He is coordinator of the Association for Heterodox Economics and with Edward Fullbrook edits Real World Economics Review http://www.paecon.net/PAEReview/ 

1. A Birdi, ‘Changing the subject’, RES Newsletter, no. 166, July 2014, pp.10-11

2. For Fred Lee’s directory see http://cas.umkc.edu/econ/economics/faculty/Lee/ For Michael Marien see, http://cadmusjournal.org/user/219 See also the World Economics Association online textbook commentary project organized by Stuart Birks, which aims to provide structured commentaries on current textbooks as teaching aids. http://www.worldeconomicsassociation.org/textbook-commentaries

3. Keen’s Minsky model can be downloaded at http://www.debtdeflation.com/blogs/minsky/ Heterodox economists also make use of many forms of innovative research methods — fuzzy sets, Qualitative Comparative Analysis, network analysis.