PostAutistic Economics Network
Home Page
PAE
Review

www.paecon.net
from postautistic economics newsletter :
issue no. 7, July, 2001
Economists
Have No Ears
Steve Keen (University of Western Sydney, Australia)
Thomas
Kuhn once famously described textbooks as the vehicle by which students learn
how to do 'normal science' in an academic discipline. Economic textbooks
clearly fulfil
this function, but the pity is that what passes for 'normal' in economics
barely deserves
the appellation 'science'.
Most introductory economics textbooks present a sanitised, uncritical
rendition of
conventional economic theory, and the courses in which these textbooks are
used do
little to counter this mendacious presentation. Students might learn, for
example, that
'externalities' reduce the efficiency of the market mechanism. However, they
will not learn
that the 'proof' that markets are efficient is itself flawed.
Since this textbook rendition of economics is also profoundly boring, the
majority of those
exposed to introductory course in economics do no more than this, and instead
go on to
careers in accountancy, finance or management  in which, nonetheless, many
continue to
harbour the simplistic notions they were taught many years earlier.
The minority which continues on to further academic training is taught the
complicated
techniques of economic analysis, with little to no discussion of whether
these techniques
are actually intellectually valid. The enormous critical literature is simply
left out of
advanced courses, while glaring logical shortcomings are glossed over with
specious
assumptions. However, most students accept these assumptions because their
training
leaves them both insufficiently literate and insufficiently numerate.
Most modernday economics students are insufficiently literate because
economic
education eschews the study of the history of economic thought. Even a
passing
acquaintance with this literature exposes the reader to critical perspectives
on
conventional economic theory  but students today receive no such exposure.
They are insufficiently numerate because the material which establishes the
intellectual
weaknesses of economics is complex. Understanding this literature in its raw
form
requires an appreciation of some quite difficult areas of
mathematicsconcepts which
require up to two years of undergraduate mathematical training to understand.
Curiously, though economists like to intimidate other social scientists with
the
mathematical rigour of their discipline, most economists do not have this
level of
mathematical education. Though economics students do attend numerous courses
on
mathematics, these are normally given by other economists. The argument for
this
approach  the partially sighted leading the partially sighted  is that
generalist mathematics
courses don't teach the concepts needed to understand mathematical economics
(or the
economic version of statistics, known as econometrics). As any student of
econometrics
knows, this is quite often true. However, it has the side effect that
economics has
persevered with mathematical methods which professional mathematicians have
long ago
transcended. This dated version of mathematics shields students from new
developments
in mathematics that, incidentally, undermine much of neoclassical economic
theory.
One example of this is the way economists have reacted to 'chaos theory'.
Most
economists think that chaos theory has had little or no impactwhich is
generally true in
economics, but not at all true in most other sciences. This is partially
because, to
understand chaos theory, you have to understand an area of mathematics known
as
'ordinary differential equations'. Yet this topic is taught in very few
courses on
mathematical
economics  and where it is taught, it is not covered in sufficient depth.
Students may learn some of the basic techniques for handling linear
difference or
differential equations, but chaos and complexity only begin to manifest
themselves in
nonlinear difference and differential equations'. A student in a
conventional 'quantitative
methods in economics' subject will thus acquire the prejudices that 'dynamics
is
uninteresting', which is largely true of the behaviour of linear dynamical
systems, but not
at all true of nonlinear systems. This prejudice then isolates the student
from much of
what is new and interesting in mathematical theory and practice, let alone
from what
scientists in other sciences are doing.
Economics students therefore 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 which hobbles both their
critical
understanding of economics, and their ability to appreciate the latest
advances in
mathematics and other sciences.
A minority of these illinformed students themselves go on to be academic
economists,
and then repeat the process. Ignorance is perpetuated.
The attempt to conduct a critical dialogue within the profession of academic
economics
has therefore failed, not because economics has no flaws, but because 
figuratively
speaking  conventional economists have no ears. So then, 'No More Mr Nice
Guy'.
If economists can't be trusted to follow the Queensberry Rules of
intellectual debate,
then we critics have to step out of the boxing ring and into the streets.
Hence my book
'Debunking Economics', which describes the many formal academic critiques of
neoclassical economics in a manner which  I hope  is accessible to a the
interested
noneconomist and nonmathematical readership. But it should also prove very
useful to
those who have come to regard conventional economic theory as autistic, since
it clearly
and simply explains the source of this endemic autism.
s.keen@uws.edu.au
SUGGESTED CITATION:
Steve Keen (2001) “Economists Have No Ears”,
postautistic economics newsletter : issue no. 7, July, article
4. http://www.btinternet.com/~pae_news/review/issue7.htm
