Following the financial crisis in 2007 and subsequent recession of 2007-2009, the discipline of economics began a soul-searching process of questioning its very foundations. Far from the arrogance that characterized the field during the 1990s and 2000s, economist Paul Krugman tackled the question “How Did Economists Get It So Wrong?” in late 2009 in a New York Times Magazine story.

This undertaking has included a rethinking of the undergraduate economics curriculum, led by Wendy Carlin at University College London and Diane Coyle of Enlightenment Economics. Additionally, students have begun to take important roles in the debate as well.

In April, the student-run Post-Crash Economics Society (PCES) at the University of Manchester published a report titled Economics, Education and Unlearning, which critiqued economics education in the UK and at Manchester in particular.

As the report points out, “the problems … are certainly not limited to Manchester and are in fact international in scale.” Accordingly, this is an issue that concerns and impacts economics students at Pitt. 

The report identifies many reforms that are spot-on — the undergraduate curriculum must include more of an emphasis on economic history, as well as its ethics, politics and philosophy. It should also encourage deeper understanding of the discipline’s assumptions and methodologies, and prepare students to engage in contemporary economic discussions.

But one of the central tenets of the report, which argues for “pluralism” in economics education, is flawed and has worrying implications.

A pluralistic approach is defined as “a consideration of a variety of theories before forming judgements,” which would include various theories outside of mainstream economic thought, such as Austrian, Marxist, feminist and post-Keynesian economics.

These theories all stand in stark contrast to conventional economic theory, which is defined by the report as a system in which individuals “seek to optimise their preferences” amongst external limitations — like government regulations, for instance. 

Coyle pointed out the problematic nature of the report’s definitions of conventional and pluralist economics. In particular, she pointed out the broadness of its definition of conventional — or neo-classical — economics and the narrowness of its definition of pluralism.

This is because the authors of the report fail to understand how economics, as a science, operates.

In “The Structure of Scientific Revolutions,” Thomas Kuhn, a renowned American philosopher of science, describes the march of scientific progress as the movement between different “paradigms,” which are a shared set of assumptions, methodology and empirical results within a particular scientific community. Take physics, for example — the field experienced a paradigm shift in the early 20th century, which moved it from Newtonian mechanics to quantum mechanics.

It is unclear that this characterizes the social sciences as well as the natural sciences, but the marked shifts in thought from classical economics to Keynesian thought, and then to monetarism, seem indistinguishable from paradigm shifts.

Regardless of the actual status of the discipline, operating under a shared paradigm has huge benefits, which the natural sciences have already reaped. Scientists are able to communicate effectively with each other, as paradigms have a shared technical vocabulary and they are able to solve “puzzles” using shared tools, leading to an advanced understanding of the world.

The acceptance of pluralism among economists would mean that in practice, the discipline would operate under several paradigms. This would surely retard growth in economic thought significantly, since economists who operate under different paradigms will be unable to effectively exchange ideas and critique each other.

This is reflective of the “incommensurability” of paradigms — Austrian economists operate under a wholly different set of assumptions, methodology and jargon than, say, Marxist economists.

Further, this has disastrous consequences for policy decisions. Consider a council of economic advisors, including a neoclassical economist, a feminist economist and an ecological economist. Not only would the economists spend an inordinate amount of time arguing with one another, but any disagreement would ultimately come down to fundamental differences in assumptions, which can only be overcome if one member of the group changes his or her ideological commitments — which is next to impossible.

A seemingly more sensible direction for the profession to head is towards what Coyle terms a “science of human behavior in the economic domain,” operating under a unified paradigm, whatever that paradigm may be.

At the present time, there is no doubt that economics as we now know it must change. But, abandoning a unified method in favor of a pluralistic discipline would lead to a confused policy approach — one that may leave us reading a Krugman redux in 2019.

Write to Thomas at [email protected]