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from post-autistic economics newsletter : issue no. 8, September, 2001

How Did Economics Get Into Such a State?
Geoffrey M. Hodgson   (University of Hertfordshire, UK)

I much applaud the recent initiatives of the movement for a post-autistic economics in
France and the petition for reform from economics graduate students at the University
of Cambridge. They are two great rays of hope in an otherwise largely disturbing
intellectual scene. It is to be hoped that these initiatives can help to reverse the
narrowing and over-formalisation of economics that proceeded apace in the second
half of the twentieth century.

In 1903, Alfred Marshall established one of the first economics degrees in Britain at the
University of Cambridge. It had a much broader curriculum than is typical in the year 2001.
If he were still alive, would Marshall get a job at the University of Cambridge or any other
leading Department of Economics in the world today? Probably not. First, there is very
little mathematics in Marshall’s writings and he saw mathematics as no more than an
auxiliary tool.

In his letters, Marshall explained that he had ‘little respect for pure theory’. He declared:
‘Much of “pure theory” seems to me to be elegant toying’. Along very similar lines,
Marshall wrote to Francis Edgeworth in 1902: ‘In my view ‘Theory’ is essential. … But
I conceive no more calamitous notion than that abstract, or general, or ‘theoretical’
economics was economics “proper.”’ (The Correspondence of Alfred Marshall, ed. John
K. Whitaker, Cambridge University Press, 1996, vol. 2, pp. 256, 280, 393).

Sentiments like these would not help Marshall get a job in a top economics department
today. Concerning pluralism and tolerance in economics, much has changed for the worst
in the last 100 years. Economics today is much less concerned with the history of
economics, the history of ideas, the study of real and relevant social institutions, and the
detailed practicalities of policy formulation and implementation.

How has economics got in its present state? The ideological polarisation of the Cold War
period cannot on its own explain why economics took a wrong turning. To some extent it
may explain why Western economics was increasingly dominated by pro-market ideology
from 1948 to 1991. But it cannot explain the degree of narrowing and impoverishment of
the standard economics curriculum in the last 50 years.

Several economists have suggested that the growing mathematicisation of economics has
been the key impetus behind the narrowing of economics since 1950. Formalisation feeds
on itself. It creates a peacock’s tail process of positive reinforcement, in which all that
matters is that which can be put in mathematics: all else is marginalised or rejected. The
curriculum is thus narrowed. In time, the selection criteria of enticing and innovative
formalisation come to dominate the leading journals and the professorial appointment
processes. In ratchet steps, the economics profession as a whole becomes progressively
dominated by the formalists. And so it goes on, in a narrowing, accelerating, inescapable

The positive feedbacks involved with formalisation do much to explain why economics got
into the state that it is. But I do not think that this is the whole story. Formalisation does
not provide a complete explanation of the travails of the social sciences, especially when
we glance outside economics.

Look at sociology. It is in deep trouble. Its central theoretical project of relating agency to
social structure is in virtual chaos. Its discourse is frequently confounded by fashionable but
deliberately obscure intellectual bandwagons that never should have been taken seriously.
In addition, having abandoned former theoretical presuppositions, many sociologists are now
embracing a version of utility maximising ‘economic man’ and proclaiming this as the ‘new
sociology’, whereas it has little to differentiate itself from Gary Becker-type neoclassical
economics. Sociology is in such a mess that it no longer has any apparent ability to define
its own identity.

I do not ignore the fact that some good work is being done within sociology and elsewhere.
But ironically, much of the best work in sociology in the last 20 years has addressed topics
and phenomena that used to be under the purview of the economist.

In the case of sociology, in contrast to economics, formalisation has not played a significant
role in causing its recent distress. Considering the social sciences as a whole, something
more than formalisation has been at work. I am now of the opinion that something even more
awesome and worrying is at work in modern academia. There are global forces in operation
that threaten the intellectual integrity of all the academic disciplines. The two leading social
sciences have been an early casualty.

My tentative explanation of these global developments would rely on a theme that is
central to the third part of my book Economics and Utopia (Routledge, 1999): the scenario
of growing complexity, knowledge intensity and specialisation under capitalism. In the
competitive process, capitalism creates ever-more products, technologies and wants.
Although deskilling exists in some sectors, modern capitalism also relies on an increasing
variety of skilled specialists. The global workforce divides between the skilled professionals
and the unskilled underclass. Under specific institutional conditions, the level of required
skill among the skilled population is pulled upwards by the expanding frontiers of science
and technology, and by the rising managerial burdens of growing social and organisational

Clearly, this scenario has several consequences for modern universities. First, the growing
corporate demands for highly skilled labour have brought the needs and concerns of the
corporate world into the centre of the academic arena. The knowledge economy has
expanded the hold of commercialisation inside the bastions of knowledge. While a good
dose of real worldliness in stuffy ivory towers can often do a power of good, it can also
corrupt and undermine. The risk is that the universities will loose their aura of detached
enquiry. The commercialisation of learning and enquiry can threaten the ancient
institutional function of universities as centres of relatively detached enquiry.

In the social sciences, a recent effect of this commercialisation has been the relative decline
of student recruitment into economics and sociology in favour of the business schools.
Economics has reacted in an attempt to maintain its position and prestige, by reaching for
its feathered head-dress of formalisation. This accelerated a process of mathematicisation
that has its own independent institutional logic, as described above. Meanwhile, sociology
as a whole has imploded in an orgy of self-doubt. Some have escaped the sociology
departments to pursue (sometimes excellent) case studies of business organisations in
business schools. But the theoretical core of sociology has become an abandoned battlefield.

This is only part of the story. The accelerating process of specialisation and the growing
volume of knowledge – as described in my Economics and Utopia – have just as serious
effects on academic life. The number of scientific journals and other publications has
exploded. At the same time, science itself is subdividing endlessly into a growing number
of subdisciplines. As a consequence, it is increasingly difficult to keep up-to-date in any
subdiscipline, let alone in a whole subject. The crucial result is that wide-ranging critical
reflection and interdisciplinary conversation are increasingly impaired. It is ever more difficult
to take a more general view, and make an impact across the disciplines. Generalists of the
orientation of Marx, Mill, Marshall, Durkheim, Pareto, Weber or Schumpeter would find it
difficult to obtain a foothold in the modern university. Today, as the grand view is more
difficult to obtain, the big questions fall out of favour. The disciplines narrow down on
relatively minute technicalities. Sadly, the grand vista is lost.

I believe that the causes of the ills of economics are not confined to economics alone.
Accordingly, its restoration to health will be all the more difficult. The modern university may
require a Humboldtian reform similar to that which made the nineteenth century German
universities the envy of the world. A key feature of this academic revolution was that
philosophy replaced religion at the apex of all enquiry. The pursuit of truth remained the
purpose of the university, and all students were required to understand the philosophical
problems of truth and explanation. The faculty of philosophy received full equality of status
with the other faculties. We now take it for granted that every scientist should have some
training in mathematics and statistics. But today an induction in philosophy is the
exception rather than the rule.

Philosophy should take a similarly general and prestigious position, in both the natural and
the social sciences. Philosophy is a skill that is transferable to multiple fields of inquiry.
Hence it can enable communication between disciplines. It encourages a critical frame of
mind and can help locate the big questions. Scientific development is facilitated by a common
philosophical awareness of problems of truth, meaning, testing, modelling, explanation,
prediction, unification and progress

In addition, I would suggest that every student scientist should have some training in the
history of at least his or her own subject. There should be a widespread awareness of
historical precedents for successful or failed innovation in science. The contemporary
development of science can be guided and inspired by knowledge of its own history.

In sum, just as the requirement of mathematics is now virtually universal, so too should
be some philosophy, and relevant parts of the history of ideas. All three should be part of
the compulsory core curriculum of every science. I do not know how this second
Humboldtian revolution can come about. Perhaps, at least in Paris and in Cambridge, it
has already begun.

Prof. Hodgson's latest book, How Economics Forgot History: The Problem of Historical Specificity in Social Science,
has just been published by Routledge. For details go to:


Geoffrey Hodgson (2001) “How Did Economics Get into Such a State”, post-autistic economics newsletter : issue no. 8, July, article 2.