post-autistic economics network

heterodox economics
sanity, humanity and science
pluralism in economics

59 chapters, 500+ pages Contents Click here to buy from Amazon.com for $29.95 Click here to buy from Amazon.co.uk for £17.99 Six winners of the Bank of Sweden Prize for Economics have written as follows. ". . . economics has become increasingly an arcane branch of mathematics rather than dealing with real economic problems" Milton Friedman “[Economics as taught] in America's graduate schools... bears testimony to a triumph of ideology over science.” Joseph Stiglitz "Existing economics is a theoretical [meaning mathematical] system which floats in the air and which bears little relation to what happens in the real world" Ronald Coase “We live in an uncertain and ever-changing world that is continually evolving in new and novel ways. Standard theories are of little help in this context. Attempting to understand economic, political and social change requires a fundamental recasting of the way we think” Douglass North “Page after page of professional economic journals are filled with mathematical formulas […] Year after year economic theorists continue to produce scores of mathematical models and to explore in great detail their formal properties; and the econometricians fit algebraic functions of all possible shapes to essentially the same sets of data” Wassily Leontief “Today if you ask a mainstream economist a question about almost any aspect of economic life, the response will be: suppose we model that situation and see what happens…modern mainstream economics consists of little else but examples of this process” Robert Solow Post-Autistic Economics is about changing this state of affairs. "Economics is supposed to be social science, i.e. an intellectual discipline resting upon empirically-observed facts, in which mathematics and conceptual frameworks are tools for understanding.  But in contemporary mainstream economics, the tools are often in the driver's seat, declaring evident facts impossible and reducing the subtleties of the real world to whatever clockwork economists best know how to build.  Post-Autistic economics is the attempt to escape the tyranny of these tools and build new ones that will work properly." Ian Fletcher “Modern economics is sick. Economics has increasingly become an intellectual game played for its own sake and not for its practical consequences for understanding the economic world. Economists have converted the subject into a sort of social mathematics in which analytical rigour is everything and practical relevance is nothing.” Mark Blaug Contents Introduction Click here to buy from Amazon.com for $22.76 Click here to buy from Amazon.co.uk for £13.29 Contents Here are more things seriously wrong with traditional economics that Post-Autistic Economics addresses. “. . . the close to monopoly position of neoclassical economics is not compatible with normal ideas about democracy. Economics is science in some senses, but is at the same time ideology. Limiting economics to the neoclassical paradigm means imposing a serious ideological limitation. Departments of economics become political propaganda centers . . .” Peter Söderbaum “Economics students . . . graduate from Masters and PhD programs with an effectively vacuous understanding of economics, no appreciation of the intellectual history of their discipline, and an approach to mathematics that hobbles both their critical understanding of economics and their ability to appreciate the latest advances in mathematics and other sciences. A minority of these ill-informed students themselves go on to be academic economists, and they repeat the process. Ignorance is perpetuated” Steve Keen "Undergraduate economics is a joke -- macro is okay, but micro is a joke because they teach this stuff that you know is not true. They know the general equilibrium model is not true. The model has no good stability properties, it doesn't predict anything interesting, but they teach it ... " Herbert Gintis “The human economy has passed from an “empty world” era in which human-made capital was the limiting factor in economic development to the current “full world” era in which remaining natural capital has become the limiting factor “ Robert Costanza “Most courses deal with an ‘imaginary world,’ and have no link whatsoever with concrete problems.” Emmanuelle Benicort “All of these textbooks fail to explain how prices are determined in ‘markets’’ and thus how markets work. Where do prices come from? Who determines them? How do they fluctuate? These questions are never addressed, even though it is through the price mechanism that the ‘invisible hand’ is supposed to operate.” Le Mouvement Autisme-Économie “. . . mainstream economists seek knowledge through numbers to stop the messy reality of people, processes and politics dirtying their invisible hands.” Alan Shipman “Multinationals are everywhere except in economic theories and economics departments.” Grazia Ietto-Gillies “. . . the economist must engage him or herself as a citizen with convictions regarding the public good and ways of treating it, rather than as the holder of universal truth that he or she substitutes for discussion in order to impose it on us all.” André Orléan “The Taliban, and its variety of fundamentalist thinking, has been the most controlling and oppressive regime with regard to women in contemporary times. Contemporary academic economics, and contemporary global economic policies, are gripped by other rigidities of thinking – what George Soros has dubbed ‘market fundamentalism.’ Fantasies of control are operative in both phenomena, and gender is far from irrelevant to understanding their power, and their solution.” Julie A. Nelson “There is an urgent need for a more realistic economics of the environment, with theories and analyses that can help to create environmentally sustainable economic activity.” Frank Ackerman “Modern economics is not very successful as an explanatory endeavour. This much is accepted by most serious commentators on the discipline, including many of its most prominent exponents” Tony Lawson “Because mathematics has swamped the curricula in leading universities and graduate schools, student economists are neither encouraged nor equipped to analyze real world economies and institutions.” Geoffrey M. Hodgson “. . . the concepts of uneconomic growth, accumulating illth, and unsustainable scale have to be incorporated in economic theory if it is to be capable of expressing what is happening in the world. This is what ecological economists are trying to do.” Herman E. Daly “The application of mathematics to economics has proved largely unsuccessful because it is based on a misleading analogy between economics and physics. Economics would do much better to model itself on another very successful area, namely medicine, and, like much of medicine, to adopt a qualitative causal methodology.” Donald Gillies “Economic history courses have been disappearing from classrooms across the world. Once a compulsory part of economics education, they have been relegated to the remote corners of ‘options’ and even closed down.” Ha-Joon Chang “In Smith is a forgotten lesson that the foundation of success in creating a constructive classical liberal society lies in the individuals’ adherence to a common social ethics. According to Smith, virtue serves as ‘the fine polish to the wheels of society’ while vice is ‘like the vile rust, which makes them jar and grate upon one another.’ Indeed, Smith sought to distance his thesis from that of Mandeville and the implication that individual greed could be the basis for social good. Smith’s deistic universe might not sit well with those of post-enlightenment sensibilities, but his understanding that virtue is a prerequisite for a desirable market society remains an important lesson. For Smith ethics is the hero-not self-interest or greed-for it is ethics that defend social intercourse from the Hobbesian chaos.” Charles K. Wilber “. . . conventional economics . . . remains fixated on the view that economics is the physics of society. In other words, most of the profession behaves as if there were a single universally valid view of the world that needs only to be applied.” Paul Ormerod

real-world economics review Formerly the post-autistic economics review An emailed pdf economics journal with 10,698 subscribers from over 150 countries contact subscribe for free here and receive by email each issue, beginning with the current no. 48 Back Issues issue48 issue 47 issue 46 issue 45 issue 44 issue 43 issue 42 issue 41 issue 40 issue 39 issue 38 issue 37 issue 36 issue 35 issue 34 issue 33 issue 32 issue 31 issue 30 issue 29 issue 28 issue 27 issue 26 issue 25 issue 24 issue 23 issue 22 issue 21 issue 20 issue 19 issue 18 issue 17 issue 16 issue 15 More Back Issues Topics Ecological Economics Ethics Heterodox Economics Pluralism Development ToxicTextbooks.com new Toxic Textbooks Facebook Group new The Post-Autistic Economics Movement A brief history The Strange History of Economics Policy Implications of Post-Autistic Economics Network Resources Some articles on the PAE Movement “Teaching Economics: PAE and Pluralism”, (EAEPE, July 2005) “Post-Autistic Economics” (Social Policy, summer 2005) “Post-Autistic Economics” (Soundings, April 2005) “Signifying nothing?” (The Economist, Jan 29, 2004) “Revolutionizing French Economics” (Challenge, Nov/Dec. 2003) pdf “Fired up for battle” The Guardian (UK) 9 September 2003 ”Taking On 'Rational Man'” The Chronicle of Higher Education (US) 24 Jan. 2003 ”The 2002 Nobel Prize in Economics” The Journal of Investing (US) Spring 2003 “The Storming of the Accountants” The New Statesman (UK) 21 Jan. 2002 “Post-autisten' vallen economische heilige huisjes aan” De Morgen (Bruxelles) 2 Mar. 2002 English Translation “movimiento económico postautista” IBLNEWS, 14 March 2002 “Distorted economic relations: A new movement – the post-autistic economists want to renew economics” Sueddeutsche Zeitung (Munich) 3 April 2002 Some important PAE texts The Student Petition of Autisme-Economie (June 2000) French Petition for a Debate on the Teaching of Economics (July 2000) Issue No. 1 of the post-autistic economics newsletter ( September 2000) A Contribution on the State of Economics in France and the World James K. Galbraith Autistic Economics vs. the Environment Frank Ackerman Humility in Economics André Orléan ) Real Science is Pluralist Edward Fullbrook Teaching Economics Through Controversies Gilles Raveaud Back to Reality Tony Lawson The Relevance of Controversies for Practice as Well as Teaching Sheila C Dow Opening Up Economics The Cambridge 27 Economists Have No Ears Steve Keen An International Open Letter "The Kansas City Proposal" How Did Economics Get Into Such a State? Geoffrey Hodgson Why the PAE Movement Needs Feminism Julie A. Nelson Kicking Away the Ladder: How the Economic and Intellectual Histories of Capitalism Have Been Re-Written to Justify Neo-Liberal Capitalism Ha-Joon Chang Economic History and the Rebirth of Respectable Characters Stephen T. Ziliak Some Old But Good Ideas Anne Mayhew An Alternative Framework for Economics Jason Potts and John Nightingale Is the Concept of Economic Growth Autistic? Jean Gadrey Toward a Post-Autistic Economics Education Susan Feiner Is There Anything Worth Keeping in Standard Microeconomics? Bernard Guerrien Doctrine-centered Versus Problem-centered Economics Peter Dorman Social Being as a Problem for an Ethical Economics Jamie Morgan The Petitions New Petition (May 2008) Student Essays on PAE Two World Views: Ecological Economics vs. Environmental Economics German Section French Section Portuguese Section Spanish Section Chinese, Flemish, Italian and Turkish Sections The Perestroika Movement - a sister movement to PAE in political science Miscellaneous Some more articles concerning the PAE Movement New Post-Autistic Economics Books A Brief History of the Post-Autistic Economics Movement Theories, scientific and otherwise, do not represent the world as it is but rather by highlighting certain aspects of it while leaving others in the dark. It may be the case that two theories highlight the same aspects of some corner of reality but offer different conclusions. In the last century, this type of situation preoccupied the philosophy of science. Post-Autistic Economics, however, addresses a different kind of situation: one where one theory, that illuminates a few facets of its domain rather well, wants to suppress other theories that would illuminate some of the many facets that it leaves in the dark. This theory is neoclassical economics. Because it has been so successful at sidelining other approaches, it also is called “mainstream economics”. From the 1960s onward, neoclassical economists have increasingly managed to block the employment of non-neoclassical economists in university economics departments and to deny them opportunities to publish in professional journals. They also have narrowed the economics curriculum that universities offer students. At the same time they have increasingly formalized their theory, making it progressively irrelevant to understanding economic reality. And now they are even banishing economic history and the history of economic thought from the curriculum, these being places where the student might be exposed to non-neoclassical ideas. Why has this tragedy happened? Many factors have contributed, but three especially. First, neoclassical economists have as a group deluded themselves into believing that all you need for an exact science is mathematics, and never mind about whether the symbols used refer quantitatively to the real world. What began as an indulgence became an addiction, leading to a collective fantasy of scientific achievement where in most cases none exists. To preserve their illusions, neoclassical economists have found it increasingly necessary to isolate themselves from non-believers. Second, as Joseph Stiglitz has observed, economics has suffered “a triumph of ideology over science”.^1 Instead of regarding their theory as a tool in the pursuit of knowledge, neoclassical economists have made it the required viewpoint from which, at all times and in all places, to look at all economic phenomena. This is the position of neoliberalism. Third, today’s economies, including the societies in which they are embedded, are very different from those of the 19^th century for which neoclassical economics was invented to describe. These differences become more pronounced every decade as new aspects of economic reality emerge, for example, consumer societies, corporate globalization, economic induced environmental disasters and impending ecological ones, the accelerating gap between the rich and poor, and the movement for equal-opportunity economies. Consequently neoclassical economics sheds light on an ever-smaller proportion of economic reality, leaving more and more of it in the dark for students permitted only the neoclassical viewpoint. This makes the neoclassical monopoly more outrageous and costly every year, requiring of it ever more desperate measures of defense, like eliminating economic history and history of economics from the curriculum. But eventually reality overtakes time-warp worlds like mainstream economics and the Soviet Union. The moment and place of the tipping point, however, nearly always takes people by surprise. In June 2000 .................... more _____________________________________________________________________________________________________ The Strange History of Economics These days people like to call neoclassical economics “mainstream economics” because most universities offer nothing else. The name also backhandedly stigmatizes as oddball, flaky, deviant, disreputable, perhaps un-American those economists who venture beyond the narrow confines of the neoclassical axioms. To understand the powerful attraction of those axioms one must know a little about their origins. They are not what an outsider might think. Although today neoclassical economics cavorts with neoliberalism, it began as a honest intellectual and would-be scientific endeavour. Its patron saint was neither an ideologue nor a political philosopher nor even an economist, but Sir Isaac Newton. The founding fathers of neoclassical economics hoped to achieve, and their descendents living today believe they have, for the economic universe what Newton had achieved for the physical universe. This brief article roughly traces the strange history of economics from the 1870s through to the beginning of Post-Autistic Economics movement in the summer of 2000. .................... more _____________________________________________________________________________________________________ Policy Implications of Post-Autistic Economics The neoclassical monopoly in the classroom and its prohibition on critical thinking means that it brainwashes successive generations of students into viewing economic reality exclusively through its concepts, which more often than not misrepresent or veil the world, especially today’s world. Nearly all of these neoclassical notions have a bearing on judgements about social, cultural and economic policy. Consequently, if society were to learn to think about economic matters outside the neoclassical conceptual system, it would almost certainly choose different policies. One of Post-Autistic Economics’ (PAE) projects has been to expose some of the many conceptual lunacies of today’s mainstream, both in terms of the concepts it uses and the concepts it lacks. Drawing on recent essays by PAE economists in A Guide to What’s Wrong with Economics, especially the chapters by Michael A. Bernstein, Geoffrey Hodgson, Peter Söderbaum, Hugh Stretton, Richard Wolff, Robert Costanza, Herman E. Daly, Jean Gadrey and Edward Fullbrook,^* this brief article briefly considers ten such concepts. Neoclassical economics regards competition as a state rather than as a process. It defines perfect competition as a market with a large number of firms with identical products, costs structures, production techniques and market information. But in real life competition is a process by which firms continually seek to re-establish the conditions of their own profitability. To compete in a market requires firms to seek out and exploit differences between them in production, technology, distribution, access to information and awareness of trends in consumption. These differences are the essential dimensions in which competition takes place. Once the neoclassical conception of competition becomes imbedded in the student’s mind, appreciation of real-world competition, and hence the policies that might enhance it, becomes logically impossible. Neoclassical economists love to talk about freedom of choice. But this is pure rhetoric, because they define rationality in a way that eliminates free choice from their conceptual space. By rationality they mean that an agent’s choices are in conformity with an ordering or scale of preferences. The “rational” agent chooses among the alternatives available that one which is highest on his ranking. Rational behaviour simply means behaviour in accordance with some ordering of alternatives in terms of relative desirability. In order for this approach to have any predictive power, it must be assumed that the preferences do not change over some period of time. So the basic condition of neoclassical rationality is that individuals must forego choice in favour of some past reckoning, thereafter acting as automata. This conceptual elimination of freedom of choice, in both its everyday and philosophical meanings, gives neoclassical theory the hypothetical determinacy that its Newtonian inspired metaphysics require. No indeterminacy; no choice. No determinacy; no neoclassical model. This is far from just an academic matter, because society needs an economics that is able to address questions regarding freedom of choice. No terms in neoclassical economics are more sacrosanct than rational choice and rationality. Everyone identities with these words, because everyone wants to think of themselves as rational. But few people realize that economists give these words an ultra eccentric meaning. Neoclassical economics begins with an a priori conception of markets and economies as determinate systems that by the action of individual agents alone tend toward an efficient and market-clearing equilibrium. This requires that the individual agents, like the bodies in Newton’s system, behave in a prescribed manner. Neoclassicalists have deduced the particular pattern of behaviour that would make their imagined world logically possible, then named it “rational choice” or “rationality” and then declared that that is the way real people behave. But thankfully they don’t. Everyday economic actors do many things that by the neoclassical meaning of “rational” are “irrational”. Looking to the choices of other consumers as guides to what one might buy; buying a stock because you believe other people will be buying it and so increase its value, spending your money in a spirit of spontaneity rather than stopping to calculate the consequences and alternatives up to the limits of your cognitive powers; a taste for change, that is, buying something because you did not previously prefer it; these common consumer behaviours are all prohibited under the neoclassical notions of rational choice and rationality and so outside its scope of analysis. These failings connect with another. Neoclassical economics is by its own axioms incapable of offering a coherent conceptualisation of the individual or economic agent. From where do the preferences that supposedly dictate the individual’s choice come from? Not from interpersonal relations, because if individual demands were interdependent, they would not be additive and thus the market demand function – neoclassicalism’s key analytical tool – would be undefined. And not from society, because neoclassicalism’s Newtonian atomism translates as methodological individualism, meaning that society is to be explained in terms of individuals and never the other way around. This leaves an awful lot in the dark. In the main, despite the neoclassical axioms, we all categorise and classify according to prevailing cultural norms. Likewise our tastes and preferences for this and that reflect the social conventions and institutions with which we interact. Consequently individual choice is unavoidably and inextricably bound up with historically and geographically given social worlds. An economics that has nothing to say about the formation of economic tastes and preferences is silly and irresponsible, especially in an age of consumer societies and in a world now threatened with climate-change or worse. For half a century neoclassical economics has hid its ideology behind the notion that it calls positive economics. This is the idea that it contains no value judgements because it mentions none. Of course such a notion belongs to an intellectually more naive age than today, but nonetheless it persists as an effective tool of indoctrination of undergraduates. The fact that neoclassical economics requires a highly restricted focus in order to maintain its atomist and determinist metaphysics compels it to make many extreme judgements about what is and is not economically important. There is not space even to list them. But an example is its notion of “economic man”, which is acutely ideological, as it emphasizes some roles and relationships and excludes others. By allowing only decisions based on utility maximization, it excludes other forms of ethics. As an economic agent, each individual acts in many roles, not just market ones, and is guided by his or her “ideological orientation”. That orientation may be founded on utilitarianism or not. It may for example be based on social and environmental ethics. PAE economists do not believe that economists have the right to select one ethics as the “correct” one for framing economic analysis. Furthermore the neoclassical insistence upon the utilitarian ideology legitimises a kind of “market ideology” and “consumerism” that increasingly appears dangerous to society and sidelines the debate about Sustainable Development. Like rationality, nearly everyone thinks efficiency is a good idea. Neoclassical economists adore using this word, especially when addressing the public. But the meaning of “efficiency” always depends on what you choose to count. For example, .............. more