Economics Students Demand No Orthodoxy But Alternative Theory
|November 11, 2013||Posted by Staff under Uncategorized|
This 2013 excerpt of The Guardian, Oct 24, is by Phillip Inman.
Few mainstream economists predicted the global financial crash of 2008 and academics have been accused of acting as cheerleaders for the often labyrinthine financial models behind the crisis. Now a growing band of university students are plotting a quiet revolution against orthodox “free” [confusing liberty and license] market teaching, arguing that alternative ways of thinking have been pushed to the margins.
Economics undergraduates at the University of Manchester have formed the Post-Crash Economics Society, which they hope will be copied by universities across the country. The organisers criticise university courses for doing little to explain why economists failed to warn about the global financial crisis and for having too heavy a focus on training students for City jobs.
Next month the society plans to publish a manifesto proposing sweeping reforms to the University of Manchester’s curriculum, with the hope that other institutions will follow suit.
The teaching of economics was increasingly confined to arcane mathematical models, he said. Students are not even prepared for the commercial world. Few know what is going on in China and how it influences the global economic situation. Even worse, some American students have never heard of Keynes.
In June a network of young economics students, thinkers and writers set up Rethinking Economics, a campaign group to challenge what they say is the predominant narrative in the subject.
In the decade before the 2008 crash, many economists dismissed warnings that property and stock markets were overvalued. They argued that markets were correctly pricing shares, property and exotic derivatives in line with economic models of behaviour. It was only when the US sub-prime mortgage market unravelled that banks realised a collective failure to spot the bubble had wrecked their finances.
In his 2010 documentary Inside Job, Charles Ferguson highlighted how US academics had produced hundreds of reports in support of the types of high-risk trading and debt-fuelled consumption that triggered the crash.
Adam Posen, head of the Washington-based thinktank the Peterson Institute, said universities ignore empirical evidence that contradicts mainstream theories in favour of “overly technical nonsense”.
A Manchester University spokeman said that, as at other university courses around the world, economics teaching at Manchester “focuses on mainstream approaches, reflecting the current state of the discipline”. He added: “It is also important for students’ career prospects that they have an effective grounding in the core elements of the subject.