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sanity, humanity and science
post-autistic economics newsletter
Issue no.
4; 29 January 2000
subscribers in 58 countries
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In this issue:
- James Galbraith
replies to Robert Solow
- The Franco-American
neoclassical alliance
- Two curricula: Chicago vs. PAE
- Advice from student organizers
- What's in the name?
A
contribution on the state of economics
in France and the world
James K.
Galbraith (University of Texas at Austin)
(This is an
excerpt. The full text is available in
the media archives section of www.paecon.net )
Professor Robert Solow, a distinguished and notably non-autistic
economist, has recently
entered the debate in the pages of Le Monde on the questions of economic teaching raised
originally, and now placed before the world community, by the French
students. Permit me
to underline the important points that Professor Solow
acknowledges, while at the same
offering a few points of difference where, in my view, the French students
have made a
stronger case than Professor Solow is willing to
concede. . . . .
First, it is
worth asking -- since neither Professor Solow nor I
have been in French classrooms
lately -- just how strongly supported are the claims put forward in the
students' petition.
Are they [the students’ claims of an autistic curriculum]
contradicted by any opposing body
of students . . . ? To my knowledge,
they have not been.
So, are they contradicted by the professors, whose work they so deeply
indict? First, it is
worth noting that while the students are united, the French professors are
divided. Some
support the students. Others do not.
The latter group admits to this fact, in its
counter-appeal lately published in Le Monde . . .
.
The responding professors . . . raise two issues, the first being the role of
mathematics in
economic instruction, and the second being an allegation that the students
have launched
“une attaque partisane” against the central theories of modern
scientific economics.
Professor Solow himself has rightly dismissed the
first issue . . . The students have
not
raised an objection to the use of mathematics in economics, and it is beside
the point to
rebut their complaint on this ground.
It is therefore the second issue – the question of whether the French
students may have
improperly objected to the core propositions and methods of a scientific
economics, that is
pertinent, and here Professor Solow expresses his
reservations about the movement. And
it is this issue that is, indeed, the interesting one, the issue that tends
also to preoccupy
professional economists who concern themselves in a serious way with
methodological
questions.
To begin with, Professor Solow points out, rightly
and importantly, that applied economics
properly consists of a series of particular models, drawn from a variety of
intellectual and
scientific traditions, which help to structure thinking about empirical
issues.
Thus, for example: Does the distribution of changes in asset prices or
exchange rates follow
a normal curve, or one with fatter tails and hence a higher risk of
catastrophic deviations?
Is the market for low wage labor characterized by monopsony power (so that increasing
minimum wages may raise rather than reduce employment)? Can free international
capital
movements be justified when information is not equally available to all sides
of the resulting
transactions? Does economic inequality
tend to fall, or rise, with economic growth? Does
unemployment rise when inequality falls, and vice versa (the conventional
position), or do
more equal societies have fuller employment, as a rule, than less equal
societies (my
position)? These are issues all of
which can be, and are, contestable using tools that
ought to be part of the research training of economists everywhere.
Professor Solow notes that the French students do
not make clear that they understand
just how much of the terrain of so-called “neoclassical”
economics is under such contest
these days. But how could they make
such a thing clear, if it is not part of their training?
And that brings us to the question, what on earth are the professors
teaching? Nowhere in
the counter-appeal is there the simple acknowledgment that these and similar
issues are,
in fact, among the most hotly and openly contested questions in economics
today. Indeed,
the professors do not acknowledge that any issues are contested! Instead,
they resort to a
characterization of their discipline that is completely at odds with the
pragmatic and
practical approach described by Professor Solow. . . .
In other words, the
counter-appeal professors appear oblivious to the high controversy on
most important issues of theory, fact and policy into which even neoclassical
economics
has descended in recent years. They seem unaware of the heterogeneity of
models and
methods breaking out everywhere in economic research. Truly, if this is a
correct
perception, then in Professor Solow’s words,
“ils ne font pas correctement leur
travail.”1
But what about the question of alternative theoretical approaches? Is there anything
missing even from the hotly contested domains of modern mainstream
economics? I
believe there is, and would point to three large areas that have nearly
disappeared from
the teaching of economics even where that activity is otherwise competently
carried out,
at very considerable intellectual and social cost.
The first is the history of economics itself.
The intellectual roots of our subject – going
back in Anglo-American tradition to Smith, Ricardo, Malthus,
Marx, Mill, Veblen (not
Swedish as Le Monde
has erroneously reported in passing, but American), Keynes and
Galbraith père,
not to mention such great French figures as Quesnay,
Say, Walras... is
sorely neglected, and so is the study of the historical relationship between
economics and
other disciplines, notably physics and the theory of evolution, as well as
the modern
philosophy of science (a vastly more interesting topic than the crude
description of method
in the French professors’ statement would make it appear). As a matter of intellectual
formation, a great deal of potential creativity is lost when students do not
have the origins of
their own subject available to them as an object of study.
Second, there is a tradition of macroeconomic and monetary economics that has
largely been
submerged by the neoclassical emphasis on market transactions between firms
and households. . . .
Third, I would argue from my experience as a teacher of research methods that
the French
students are correct in emphasizing the need for instruction in differing
institutional contexts,
political, national and international structures, policy histories, and also
methods for collecting
economic data and for evaluating the quality of information contained in
economic data sets. . . .
A scientific economics, as Professor Solow states
with my emphatic agreement, must be a
diverse, pragmatic, applied enterprise with an open discussion of
controversial questions. I
go beyond Professor Solow mainly in emphasizing
that the core arrangement of theoretical
propositions in economics also remains among the questions worthy of debate
and therefore
of inclusion in the curriculum of economics, since a theoretical framework
cannot be debated
unless it is first properly taught.
The pretense that a single axiomatic
framework can be, or
has been, built up for all time from first principles and verified by
observation -- the stated
contention of the counter-appeal -- merely reveals how far removed from
the reality of our
profession that statement is.
It also constitutes the best
evidence that the French students are correct in their appeal
for fundamental reform.
1 One might
add that the remainder of the counter-appeal includes an effort to besmirch
the motives of the
professors and students involved in the protest. This section, with its
reference to “conspiracy theory,”
unsupported by evidence, does not inspire confidence in the scientific
disposition of those who signed
the counter-appeal.
The Franco-American Neoclassical
Alliance
Joseph Halevi (University of Sidney)
Solow's and Blanchard's appearances in the two most
intellectually oriented papers
(Le Monde 12 December 2000 and Liberation 13
October) of France is not a random
event. It is the result of the difficulty in which the French neoclassicists find themselves
since the students' movement began in June. At the beginning of Fall a
counter-manifesto
appeared in Le Monde. Its impact has been
insignificant and, if anything, it strengthened
the students' position in the eyes of public opinion. The counter-manifesto
ignored all the
remarks made by the students in their original manifesto and just
harkened back on the
scientificity of economics. The paucity of
their arguments was striking.
Hence the
French establishment has resorted to the Americans, initially via Blanchard,
who,
surprise surprise, writes with Fitoussi
on the French economy. Blanchard is French
but he has
been with MIT for more than a decade and is now the chairperson of the
economics
department. Blanchard was as poor and as dogmatic as the counter-manifesto.
He
claimed that modern mathematical economics has solved the Smith-Walras puzzle of
how markets
hang together. In this way he highlighted his complete ignorance of Smithian
and
classical economics which is a cost of production theory of price and value
and not a
supply
and demand story. Furthermore, he maintained that present neoclassical theory
is
useful to
understand, among other things, the Asian crisis. A very bold statement
indeed!
Even neoclassically born and bred economists like Joseph Stiglitz would reject such an
absurd
assertion.
Finally,
Blanchard took a typical comprador posture stating that the research done in
the
USA is
the best you can possibly get. Indeed this is exactly what the directors of
the
neoclassical
centers in France, such as in Toulouse (home of Laffont), Marseille, Paris 1,
think.
They want their own centers to be just MIT/Stanford
cells located on French soil.
And, not
insignificantly, they want to use their American connections and France's
establishment
inferiority-complex vis a vis
the USA, to gain absolute power in matters
concerning
certification of doctoral programs, research funds, appointments and
promotions.
These are issues that in France are decided at the national level. This
is
why the
power of these centers is real only if it is mirrorred in the national institutions.
On the
whole the Blanchard piece was even more disastrous than the counter-manifesto
Finally, Solow has been brought to the rescue. Behind his
pragmatic stance there lay a
very
imperialistic attitude, blaming the French for being bad teachers. But MIT
itself
nurtured
the very individuals who stalinistically
endeavoured to enshrine the
monopoly
of neoclassicism in France's economics: Laffont and
Tirole just to
mention
two of them.
These
episodes show that the students perception that Le Monde
was setting up a straw
or false
debate is correct. But the problem does not pertain only to Le Monde. It is the
coordinated
reaction of the establishment that the students are facing. Fitoussi, with his
links to MIT
and homme de pouvoir in
France, is fully part of the establishment. In his
capacity
as the head of the Committee entrusted with writing the report he is not
without
heavy
vested interests. The students are surely aware of this fact.
Two
Curricula: Chicago vs. PAE
Robert Solow's suggestion in Le
Monde, that there is not really so much
difference
between what the French students are asking for and what North American
economics
departments offer, appears wildly erroneous and misleading when the core
curriculum
proposed by the French PAE students is juxtaposed to the core
economics curriculum
of the University of Chicago, the acknowledged gold standard of American
economics
curricula.
Below you will find first Chicago's core curriculum (as downloaded from the
web) and
then the core curriculum put forward by the students in
France. In fact the difference
between the two curricula is even greater than appears. They
have been constructed on
the basis of radically different epistemological and pedagogical
principles. Whereas the
traditional approach lets the theory-generated tool kit
determine what aspects of
economic reality are admitted for consideration, the post-autistic
approach, in line with
the natural sciences, reverses the order of determination. Gilles Raveaud, one of the
authors of the French PAE core, sums up the new
approach as follows. "Our view is:
courses can no longer focus on TOOLS (maximizing under constraint, finding
local and
general extrema), but on PROBLEMS (incomes,
poverty, unemployment, monetary
policy, international trade, European Union, developing countries,
immigration, new
economy, ecology, etc.). The
tools would then be used only to the limit of their
relevance for analysing such
problems, and not for their own sake."
E.F.
________________________________________________________________________________
University of
Chicago Core Curriculum
Program of Study
The Bachelor of Arts program in economics is intended to
equip students with the basic tools
required to understand the operation of a modern economy: the origin and role
of prices and
markets, the allocation of goods and services, and the factors that enter
into the determination of
income, employment, and the price level.
Program Requirements
The Bachelor of Arts concentration in economics . . . must
include the core curriculum, which
consists of price theory (Economics 200, 201) and macroeconomics (Economics
202 and 203).
One course in economic history (Economics 221, 222, 223, 225, 229, or 254)
and two courses in
econometrics are also required; the latter requirement is normally met by
Statistics 220 and
Economics 210. . . . . Students concentrating in economics must also
take three mathematics
courses beyond the general education requirement.
Thus Chicago's core
curriculum is divided into 10 parts, of which three are pure
mathematics, two are econometrics and statistics, four are analytical
"tools", and
one is economic history. These are listed as follows.
1.
pure mathematics
2. pure mathematics
3. pure mathematics
4. The
Elements of Economic Analysis I. This course develops
the economic theory of consumer choice. This theory characterizes optimal
choices for consumers given their incomes, their preferences, and the
relative prices of different goods. The course develops tools for analyzing
how these optimal choices change when relative prices and consumer incomes
change. Finally, the course presents several measures of consumer welfare.
Students learn how to evaluate the impact of taxes and subsidies using these
measures. If time permits, the course examines the determination of market
prices and quantities, given primitive assumptions concerning the supply of
goods.
5. The Elements of Economic Analysis
II. This course is continuation of Econ 200. The first part
discusses markets with one or a few suppliers. The second part focuses on
demand and supply for factors of production and the distribution of income in
the economy. The course also includes some elementary general equilibrium
theory and welfare economics.
6. The Elements of
Economic Analysis III. As an introduction to macroeconomic theory and
policy, this course covers the determination of aggregate demand
(consumption, investment, and the demand for money), aggregate supply, and
the interaction between aggregate demand and supply. The course also
discusses activist and monetarist views of fiscal and monetary policy.
7. The Elements of Economic Analysis
IV. This is a course in money and banking, monetary theories, the
determinants of the supply and demand for money, the operation of the banking
system, monetary policies, financial markets, and portfolio choice.
8. Econometrics A. Econometrics A covers the single
and multiple linear regression model, the associated distribution theory, and
testing procedures; corrections for heteroskedasticity,
autocorrelation, and simultaneous equations; and other extensions as time
permits. Students also apply the techniques to a variety of data sets using
PCs. Students are encouraged to meet this requirement by the end of the third
year.
9. Statistical Methods and Their Applications. This course is an introduction to
statistical techniques and methods of data analysis, including the use of
computers. Examples are drawn from the biological, physical, and social
sciences. Students are required to apply the techniques discussed to data
drawn from actual research. Topics include data description, graphical
techniques, exploratory data analyses, random variation and sampling, one-
and two-sample problems, the analysis of variance, linear regression, and
analysis of discrete data. One or more sections of Stat 220 use examples
drawn from economics and business and a selection of texts and topics that
are more appropriate for concentrators in economics.
10.
economic history
_______________________________________________________________________________________
French PAE Students'
Proposed Core
Curriculum
Proposals for a common core in the curriculum of economics
Three groupings without a predetermined hierarchy
First Group:
« Descriptive economics : history of economic and social phenomena
, actors and institutions »
1. History
of economic and social phenomena (including the history of economic and social policies).
2. Actors, organizations,
institutions.
-The State (public
administrations, public law, public finance)
-Firms (accounting methods for private firms, commercial law, financial analysis…).
*The financial and the banking
system (The banks and the
Central Bank, money and
finance).
*Trade Unions (collective bargaining,
labor law).
*Associations (diversity, the
social economy).
*International economic institutions (international
economic relations,
the international monetary and financial system,
public law, international law…).
3. Descriptive economics (active population, structure of the productive system, household's
budgets),
national
accounting systems, economic geography (studying the areas of economic integration,
problems
of development..).
Second Group : « Theories and issues »
1.
History of economic theories (The Classics, Marx and Marxism, Marginalism, Keynes and
Keynesianism, the Austrians, the Neoclassicalists, the Institutionalists).
2. Political and moral philosophy (thinking about the concepts of justice, equality,
distribution,
efficiency,…). An important part of this course will have to be assigned to the examination
of
case studies (such
as « can
health care be left to the free interplay of market
forces ?,
« up to what point should
borders be opened ? », should genes be treated
as commodities ?
Third Group : « Applied economics and quantitative
methods »
The
quantitative and formal
techniques available to the
economists (statistics econometrics, matrix
algebra…) are justified
only as long as they can be applied
to concrete situations. It
is necessary
therefore to study those quantitative techniques (operation
research, forecasting
models, simulation
models..) in relation to questions of current relevance
corresponding to political
and social issues. This
kind of work can be undertaken
only in small groups. Here is a non-exhaustive
list of the possible themes.
-Taxation (should the petrol tax
be lowered ? should the income
tax system be reformed ?).
-Administered
prices and the pricing of public utilities’ services (Electricite
de France,
the national railways
-SNCF, prices, the prices of pharmaceuticals,…)
-Pollution (the market for the rights to pollute, ecotax,…).
-The
regulation of financial flows (Tobin Tax, prudential regulation).
-The
social minima (the unemployment
trap, disincentives..)
-Economic
forecasting (contribution and
limits of modelling).
-Competition
(regulation of monopolies,
anti trust policies,…).
-Insurance
(information asymmetries, social insurances such as social security).
-Auctions.
In the same vein we include
in this group the topic economic and social policies. This
inclusion will
allow the study of the IS-LM and Mundell
Fleming models etc as tools
addressing specific
questions
(such as the coordination
of budgetary policies in the Euro zone , exchange rate policies…).
Options (such as Law, sociology,
psychology, history, microeconomics, game theory) can also
be
pursued during the course of studies in order to facilitate interdisciplinary openness.
( trans. Joseph Halevi )
Advice
from Student Organizers
Olivier Vaury,
France
When you
want to launch a movement like ours, you immediately become aware of three
obstacles:
- the students may not be
at all interested: they merely want to pass
their degrees, no matter what they learn,
- the teachers may be satisfied
with the current situation, and,
- last but not least, the
journalists may not be at all interested.
I would
like to focus on the third obstacle, and to emphasize the fact that it is not
that big.
And this is
the reason why: nowadays, people who want to change something in the
society
they live in are not very numerous. This makes it easy to be heard :
less
competition!
Moreover, journalists are happy to get some "ready-made"
material: do not
hesitate
to provide them with your articles, and other relevant documents, so that
they
can
simply "copy and paste". Moreover, some of them are really
interested in the reform
of the
economics faculties, and may not be convinced by mainstream's purported
"scientificity". You can go and meet them with
petitions, with representatives of the
teachers,
and show them articles by well-known economists (Leontief,
Galbraith,
Simon...).
If you come from a major University, they will be impressed and inclined to
take your
protest into account.
Gilles Raveaud,
France
Our
experience is that the very most important point is to focus on
TEACHING. Since
there are
obviously teaching problems (i.e. lots of maths without much relevance), the
majority
of teachers will agree with you on that point, even if they may disagree on
other
points.
This is even more true now with what is going on in France,
because many
teachers
fear students' reaction. You just have to prove to them that
their misgivings are
justified,
and not let them continue "teaching as usual" as if nothing is
happening. It is
also a
good argument for the press : journalists have absolutely no idea of what is
going
on in
universities. They are amazed when you tell them what you spend your days at.
So focusing on teaching problems is indeed an excellent starting point: most
of the
people
will listen to you, understand what you say, and probably agree with you.
Larger
consequences
(theoretical, or even political in a broad sense) will come afterwards.
But it is
very important to keep away from such aspects in the beginning, as students
are
always suspected (in France at least) of being politically biased. And never
forget
that many
social movements have involved students in the past : so when you say that,
as
students, you are not pleased with what is going on, lots of people will
indeed pay
attention.
We can tell you. It is really easier than it seems...
Jorge Fabra,
Spain (Economics
Student Association, Madrid)
The French
student mobilisation has spread to Spain. Here too it has led
to public
debate
concerning the future
of economics. But whereas in France the debate has
tended to
become focused on the excessive use of mathematics, in Spain we are
focusing
it on the absence of pluralism in the study of economics. But we see
both
problems
as interrelated. Both escapeism
into formalism and the exclusion of all
analysis
that is not broadly neoclassical lead to the same terrifying outcome:
economists
unable to
deal with, maybe even unaware of, the real economics problems of today
and
tomorrow. Inequalities
throughout the world are growing extremely fast;
economies
are ruining environments and the biosphere; the nature of economic
transactions is
changing, etc, etc.. The study of economics should prepare students to
be able
to analyse the problems of their time,
not the time of their great-grandparents.
Recently
two articles supporting the post-autistic economics movement appeared in
El Pais,
Spain's leading newspaper. Since then other student organizations have
been
contacting us. Some teachers have expressed their
support. Here in Madrid, students
from four universities are holding a meeting to coordinate initiatives and to
share ideas
for expanding the public debate. Conferences and assemblies are a
good way to
introduce the debate into economic departments. And we have set up a
web site,
www.aee.es.org , to inform through
texts and articles.
What's in the name?
Luigi Pasinetti has convinced me that it would be good idea to
include in the newsletter the
following extracts from my emails to him regarding the meaning of
"post-autistic economics".
(E.F.)
1. The English word
"autism" and its adjectival form
"autistic" come from the Latin "autismus".
In "post-autistic economics" "autistic" is intended
in its original and general meaning, rather
than in any specialist or technical sense, as in "infantile
autism". Thus:
The American Heritage
Dictionary
AUTISM: 1. Abnormal subjectivity,
acceptance of fantasy rather than reality.
-autistic, adj.
Merriam - Webster's
Collegiate Dictionary
AUTISM: 1.
absorption in self-centered subjective mental
activity (as daydreams,
fantasies,
delusions, and hallucinations) usually accompanied by withdrawal from
reality.
-autistic, adj.
2. "post" is
prepositional, and as such is value-neutral (e.g., post hoc). It simply
means
"after" and in English carries no connotations, either positive or
negative. Because of this
neutrality,
the compounds in which it is found may carry positive, negative or
neutral
connotations regarding the component that follows "post".
For examples, with post-modernism
the connotation is negative, with "post-war" acutely
negative, with post-Keynesian acutely
positive, and with post-millennial neutral.
3.
The
charge is not that neoclassical economics (marginalism
and atomistic agents) is
autistic, but rather the insistence of the economics' establishment that
economic reality
should in the main be viewed only to the extent that it is observable through
this conceptual
lens. Any economic theory, including post-keynesianism
could be turned to autistic ends.
This is why pluralism figures so large in the French student
and teacher petitions. The call
for pluralism is not a rhetorical device or a ploy to substitute one
conceptual tyranny for
another, but rather a sincere call for economists to, like natural
scientists do with the natural
world, fit their concepts to the multifarious, multidimensional and
sometimes structurally
changing realities of the economic realm. No one, in
short, is arguing economics should
give up all neoclassical analysis, but rather that economics' window to
reality should bigger
than this, much much bigger.
4. I think the term
"post-autistic" (it began with "autisme-economie"
in France) is proving
extremely useful. Firstly, it is neutral vis a vis the various heterodoxies. It is always difficult
and often impossible to get diverse dissenters to rally together under a
common banner,
and yet this seems to have happened spontaneously
with "post-autistic economics".
Secondly, it captures the rhetorical high-ground for our side, in the same
way that
"mainstream" does for theirs. Thirdly, it seems to convey
a meaning that corresponds with
peoples' general impressions of contemporary economics, so much so, that to a
certain
degree the name proves to be self-explanatory. In terms of
building public awareness, this is
a valuable feature. Finally, the name is catchy and memorable,
perhaps because it is so ugly.
___________________________________________________________________________
EDITOR: Edward Fullbrook
CORRESPONDENTS:
Argentina: Iserino; Australia: Joseph Halevi, Richard Sanders: Brazil: Wagner Leal Arienti;
France: Gilles Raveaud, Olivier Vaury;
J. Walter Plinge; Germany; Helge Peukert; Japan:
Susumu Takenaga;
India: Nitasha Kaul;
Spain: Jorge Fabra; United States: Benjamin
Balak, Daniel Lien, Paul Surlis:
At large: Paddy Quick
________________________________________________________________________________________
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