The Mancunion

Britain's biggest student newspaper

Time for a revolution in the way we teach economics?

Economics syllabus attacked for “failing to provide students with the tools and the information they need to assess economics in the real world”

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“The world has changed, the syllabus hasn’t” is the rallying cry of the University of Manchester Post-Crash Economics society. Despite barely being around for a year they have already received national media attention and support from leading economists such as Ha-Joon Chang. Their petition calling for a change to the way economics is taught has collected over 300 signatures.

“Courses should teach students to think independently and critically but the vast majority of economics modules assign no marks for these skills.” Post-Crash Economics told The Mancunion. With nine economics modules where 90% of the marks are awarded for multiple-choice questions, questions should be raised about whether studying economics is nothing more than a box ticking exercise.

They point to the Manchester Matrix and Student Charter, which lay out what students can expect that, where learning to think independently and critically is mentioned in the first line. Failing to teach a plurality of economic theories seems to go against that.

“Economics questions are also almost always considered only from a single viewpoint; as a field economics contains a plurality of different schools of thought yet we see none of this in our syllabus.”

The Post-Crash Economics society takes issue not with just what is taught but also with the way it is taught. They take aim at economics tutorials where students passively take notes rather than challenging the theory before them.

“We should not be going to tutorials to copy down answers to mathematical exercises off a board but to question the assumptions and shortcomings of a model and discuss how well they match up with the real world.”

Options are limited for students studying straight economics who have no opportunity to take on a dissertation and with the pressure to get a well-paid job in the city, many will shy away from more critical modules. For a subject with its thought so closely related to politics there’s rarely an opportunity to critique economic theories with controversial political implications.

Essay writing is not taken seriously with many courses giving full marks for just handing the essay in, and others handing out high marks with ease. With a greater focus on the mathematics and often just a single theory, students rarely have the chance to challenge the relevance of a theory.

There are of course exceptions Dr Sakir Yilmaz uses data to critique neoclassical theories and Nick Weaver teaches a broad array of theories in his development course. Both courses still feature multiple-choice tests taking up a large percentage of the marks.

The Post-Crash Economics society is not going to wait around for the economics department to change the syllabus. They place an emphasis on self-education, holding regular book groups, putting on an extra module with lecturer Dr Yilmaz covering bubbles, panics and crashes and holding a regular lecture series called “What you won’t learn in an economics degree”.

Cambridge Development Economist Ha-Joon Chang was their first guest lecturer and gave a talk on the potential gains from a pluralistic education in economics opposed to the standard focus on neoclassical economics.

Before the lecture, he sat down for an interview with The Mancunion. He told us what he thought was the biggest problem with undergraduate economics education.

“They teach only one approach, neoclassical economics. Being taught just one approach, [students] are being led to believe this is the only way to do economics, and it is the only scientific way to do economics.

“Even if you are dealing with problems which this approach is good with. You are going to ignore issues that this approach is not interested in. For example, we learn a lot about market exchange but we learn very little about production.

“When you think about it we spend most of our waking life working, yet we don’t study it, we don’t talk about it.”

Chang argues that mainstream economic theory has been actively harmful.

”Mainstream neoclassical economics has been particularly harmful in the free market approach that has been dominant in the last few decades.

“This is not the first financial crisis, as soon as they started liberalising markets and opening up borders to foreign capital flows, we have had crisis after crisis over the world.

“Even in its most benign form neoclassical economics is biased in favour of the status quo. Neoclassical economists are structurally disinclined to ask questions about the underlying structure.”

One difficulty with accommodating a more critical, pluralistic economics education is that you risk sacrificing the depth of understanding in mainstream theories.

Manchester Economics post-grad Martin Kelly shares this concern. “Educating all our undergrads in a pluralistic environment would be brilliant in allowing them to replicate debates that currently exist in journals.

However this emphasis on pluralism would come at a detriment to the much broader subsections of economics that are largely uncontroversial, where the subject sees many of its greatest – and most applicable – developments.”

Chang is all too aware of the problem, but suggested that it is not as big of an issue as you might think.

“You have to make some trade-offs, students have a limited amount of time and attention. If you broaden things, you’ll have to make other things shallower. But these days students are taught the same theory two or three times over. The level of mathematical sophistication might change, but the same macro theory is taught every year.

“If you cut that out, there will be a room for a more diverse intellectual diet.”

Economics education may not seem like the most pressing issue, but it is important to understand that the way economics is taught affects our every day life. Civil servants, politicians and financiers are all educated in economics and it shapes the way they address major socio-political problems.

Ha-Joon Chang points to the way mainstream neoclassical economics has shaped our response to the financial crisis.

“Every theory has underlying moral and political judgements, therefore they look at the world in a very different way.”

“The idea that what is rational for individuals is rational for the whole society has led to an austerity policy, which was not necessary like it was in Greece and Italy.

“The small c conservative bias in neoclassical economics has restricted the scope of reform. We have become somewhat immersed in this way of thinking that refrains from structural changes.”

Chang was sceptical of the prospects of economics teaching changing any time soon.

“If something goes wrong, political leaders get voted out, business executives lost their jobs, but professors have tenure. It is hard for academics to change their ways because for academics there ideas are there identity. It is extremely difficult for them to say I got everything over the last twenty years.”

One worry with the Post-Crash Economics Society is that their criticism of neoclassical economics is politically motivated. At university level economics is one of the only courses available where a student is likely to leave more right wing than they started. Is the Post-Crash Economics Society is seen as just a push to make economics teaching more left wing?

“There definitely is that danger, as seen from the Guardian headline ‘Economics students rebel at orthodox free market syllabus’ however this is a complete misrepresentation. The Post-Crash Economics Society is politically neutral; our argument is simply that economics education is failing to provide students with the tools and the information they need to assess economics in the real world.

“We don’t want all modules teaching mainstream economics to be scrapped and replaced with classes on Marx, we are just asking for pluralism, context and critical evaluation which is essential for economics students of any political persuasion. “

One defence given by the economics department at the University of Manchester is that it is important to teach the mainstream theory to improve student’s employment prospects.

“Like most other university courses around the world, economics teaching at Manchester focuses on mainstream approaches, reflecting the current state of the discipline.

“It is also important for students’ career prospects that they have an effective grounding in mainstream economics.”

The economics department also points to the fact that many students are able to talk modules outside their discipline.

“Many students at Manchester study economics in an inter-disciplinary context alongside other social sciences, especially Philosophy, Politics and Sociology. Such students gain knowledge of different kinds of approaches to examining social phenomena.”

Post-Crash are not satisfied with this response. They want to see economics education transformed throughout every course and not just when they take the odd politics module.

“We want to see much greater plurality on the economics syllabus but not just in optional modules – we think that all economics undergraduates should leave university with a well-rounded understanding of economics.

“As well as models and theories being taught in their socio-political context, we would like to see time and space in every module being dedicated to critical analysis of the theory.”

Despite their strong criticisms towards the economics department, the society is pragmatic and willing to cooperate in order to bring in a more pluralistic education.

“We have been trying to work with the economics department as much as possible, we feel that we can resolve the issue much more quickly and come out with a result much more to everyone’s satisfaction if we do work together. The department have obviously defended their syllabus but have so far been prepared to listen to and work with us.”

One cause of the push towards a monoculture within economics education has been the Research Excellence Framework, which decides how university funding is distributed. In an op-ed published in the Guardian, Post-Crash Economics founders Zach Ward-Perkins and Joe Earle argue that a lack of heterodox representation has caused non-mainstream views to become marginalised.

“Every four years a panel of leading academics grade economics journals from 4 stars to 0 depending on their academic quality. The problem is that there are no recognisably non-mainstream economists on this panel and the grading is done behind closed doors with only institutional results published. Because of this the highest graded journals are all neoclassical and universities must hire academics who subscribe to this school of thought.”

Neoclassical economics can accommodate a wide variety of views from Supply-side Economics to Berkeley economists Emmanuel Saez and Thomas Piketty’s call to raise the income tax on the very richest to 90%. Yet, when we push heterodox ideas to the outskirts, we limit our ability to understand the world when the data doesn’t fit the theory.

While neoclassical economists struggled to see the crisis coming heterodox and struggled in the aftermath, heterodox economists were able to offer a variety of explanations. Austrians pointed to a miscalculation of interest rates  leading to bad investments, while Post-Keynesians were pointing to Hyman Minsky’s Financial Instability Hypothesis.

We should not discount neoclassical economics, indeed the private sectors reliance on its models suggest they are still useful in day-to-day life.  One example would be Eugene Fama’s Efficient Market Hypothesis, which casts doubt on the ability of stock-pickers to manage your money and has saved people a lot of money. Another would be Alvin Roth whose pioneering work in game theory led to a system of kidney donor matching which has saved countless lives.

Yet it is important for theories to come into contact with different schools of thought, which hold different assumptions. They make us question why we first thought what we thought and encourage us to understand our own position to a much greater level of depth. When engaging with a Marxist, Austrian or Post-Keynesian economist, a neoclassical economist will have to know their theory inside out to respond persuasively.

It is a real shame that at Manchester economics students will rarely get the opportunity to engage with dissenting opinions. But, with the growing momentum of the Post-Crash Economics society for future economics students that will hopefully change.