Mainstream economists dissing people that want to rethink economics22 October, 2016 at 20:02 | Posted in Economics | 14 Comments
There’s a lot of commenting on the blog now, after yours truly put up a post where Cambridge economist Pontus Rendahl in an interview compared heterodox economics to ‘creationism’ and ‘alternative medicine,’ and totally dissed students that want to see the economics curriculum moving in a more pluralist direction.
Sad to say, Rendahl is not the only mainstream economist having monumental problems when trying to argue with people challenging the ruling orthodoxy.
A couple of years ago Paul Krugman felt a similar urge to defend mainstream neoclassical economics against the critique from students asking for more relevance, realism and pluralism in the teaching of economics. According to Krugman, the students and people like yours truly are wrong in blaming mainstream economics for not being relevant and not being able to foresee crises. To Krugman there is nothing wrong with ‘standard theory’ and ‘economics textbooks.’ If only policy makers and economists stick to ‘standard economic analysis’ everything would be just fine.
I’ll be dipped! If there’s anything the last couple of years have shown us, it is that economists have gone astray. Krugman’s ‘standard theory’ — mainstream neoclassical economics – has contributed to causing todays’s economic crisis rather than to solving it. Reading Krugman, I guess a lot of the young economics students that today are looking for alternatives to mainstream neoclassical theory are deeply disappointed. Rightly so. But — although Krugman, especially on his blog, certainly tries to present himself as a kind of radical and anti-establishment economics guy — when it really counts, he shows what he is — a die-hard teflon-coated mainstream neoclassical economist.
Perhaps this becomes less perplexing to grasp when one considers what Krugman said in a speech (emphasis added) in 1996:
I like to think that I am more open-minded about alternative approaches to economics than most, but I am basically a maximization-and-equilibrium kind of guy. Indeed, I am quite fanatical about defending the relevance of standard economic models in many situations …
Personally, I consider myself a proud neoclassicist. By this I clearly don’t mean that I believe in perfect competition all the way. What I mean is that I prefer, when I can, to make sense of the world using models in which individuals maximize and the interaction of these individuals can be summarized by some concept of equilibrium … I have seen the propensity of those who try to do economics without those organizing devices to produce sheer nonsense when they imagine they are freeing themselves from some confining orthodoxy.
So now all young economics students that want to see a real change in economics and the way it’s taught — now you know where you have people like Rendahl and Krugman. If you really want something other than the same old mainstream neoclassical catechism, if you really don’t want to be force-fed with mainstream neoclassical theories and models, you have to look elsewhere.