Economic Indoctrination
- Gilles Raveaud
- | 30 Nov 2007
- | 46 comments
Journal of the mental environment
Art: William Brayley
You might not have heard of N. Gregory Mankiw. The Harvard economics professor and former adviser to George W. Bush is one of the most gifted economists of our generation. He is also one of the most effective and talented propagandists of our times. His target: young economics students. His field of operation: the world’s universities. His weapon: the best selling textbook in the world. It includes 36 chapters and 800 pages of nice colors, graphs, cool stories and interesting asides. Don’t worry if you or your kids don’t speak English, Mankiw’s text surely exists in your language.
Gregory Mankiw is one of the most effective and talented propagandists of our times. His target: young economics students.But what is most worrisome is that Mankiw’s text presents economics as a unified discipline, entirely committed to the neoliberal agenda. Mankiw believes that markets are the solution to everything – and he would like students to think likewise. According to Mankiw, if a problem persists, it can only be for one of two reasons: the market is imperfect, or it is inexistent. No other explanation for persisting economic or social problems is permitted.
Unemployment is an example of the market being imperfect. For Mankiw, if unemployment exists, it is only because of human inventions such as unemployment benefits, trade unions and minimum wages. Without them, there cannot be unemployment. Mankiw presents this view as being consensual among economists. In fact, quite a few of them admit that the labor market is a very special “market” indeed, where the price – the wage – is not set the same way as the price of other “goods,” say, tomatoes. As Alan Krueger has put it, “it is a gross oversimplification to say that ‘wages are set by the competitive forces of supply and demand,’ or that there is a unique, market-determined wage.”
Gregory Mankiw is one of the most effective and talented propagandists of our times. His target: young economics students.
This specificity in the way in which wages are set is one of the reasons why 600 economists (including stars like Kenneth Arrow, Robert Solow and Joseph Stiglitz) have recently argued in favor of an increase of the US minimum wage. But when students and workers at Harvard asked for a “living wage,” Mankiw opposed it. As he told Harvard Magazine in 2001, raising, even modestly, the minimum wage for janitors at Harvard would “compromise the university’s commitment to the creation and dissemination of knowledge.” No kidding. Of course, Mankiw does not discuss the possibility that the salary of tenured professors might be above its “equilibrium” value; not to mention the very existence of tenure, which goes against the principles of a perfectly competitive labor market – for academics.
Pollution is an example of the inexistent market. Mankiw admits that in some cases, markets do not ensure that the environment is clean and the result is excessive pollution (what economists call a “negative externality”). But what is the solution to pollution? According to Mankiw, it is to define property rights to pollute. Public authorities issue “pollution permits” to polluting companies (who then cannot pollute more than the amount covered by the permits they hold). Companies buy and sell these permits on the market, depending on how much they will pollute in a year. The fewer the permits, the higher their price and the higher the incentives for firms to reduce their pollution. This system is not stupid. Indeed, there are instances where such permit systems might work to solve simple pollution problems. But the problem is that, to the amazement of his students, Mankiw never mentions self-restraint, and downplays government regulation as a way to regulate production and diminish consumption or waste. Nor does he bring up the imperative to use renewable sources of energy. In fact, Mankiw even insists in his textbook that we are not running out of resources (because if that were the case, the price of oil would be much higher than it is now). Climate change is a critical issue, caused by ever-growing economic activity – but it doesn’t even merit an index entry.
Incredibly, in Mankiw’s chapter on growth, the only two factors of production are capital and labor. Workers and firms do not use land nor electricity, gas or coal. They produce with their hands and their brains, and work on machines that run day and night on … well on what, exactly? Nobody knows. But what is sure is that it’s not energy. As natural resources and energy are absent in Mankiw’s model, they cannot become a problem – for economists, that is.
Some of the students I had at Harvard have described Mankiw’s course to me during private conversations as “massive conservative propaganda.” One of them told me that he thought that Mankiw manages to “indoctrinate a whole generation.” In 2003, a protest against a similar course then proposed by professor Marty Feldstein, an ex-adviser to President Reagan, led to the creation of an alternative intro economics course, taught by radical economist Steve Marglin. But while Mankiw’s course gives the required credits to students, Marglin’s does not. As a result, Mankiw has around 800 students, and Marglin 100. Not to mention the more than 100,000 students around the globe who learn from Mankiw’s textbook.
According to Mankiw, since markets are a good way to organize economic activity, supply and demand is just about all you need to know in economics. Whatever you desire, you can pay for in the market: tomatoes, health care, housing, a car. That’s demand. On the other side of the market, firms compete to supply the consumers with the latest cool clothes, or mobile phone or housing. That’s supply. When supply is higher than demand, the price falls (holiday trips to a country at war). When demand is higher than supply, the price rises (a war in the Ivory Coast reduces the supply of cocoa). And supply and demand apply to absolutely every single issue you can think of, including organ scarcity. But Mankiw’s text is all about trivial choices, such as how many slices of pizza you are willing to give up to buy yourself an extra can of Coke. This method is extremely effective in hiding the magnitude of what is at stake. The reactions of the students would not be the same if the textbook addressed how much health care people have to give up to be able to buy basic food. Also, the very notion of “need” is absent from Mankiw’s text. One may wonder how students would feel if we discussed the fact that a millionaire’s desire for a yacht will always be met because it is backed by money, while a poor family’s need for a roof wouldn’t. But such discussions are avoided.
By repeating his trivial examples, Mankiw accustoms the students to the idea of individual choices and preferences. The words “poor” and “rich” are rarely used. But, more surprisingly, there is also no mention of the power of corporations to shape tastes. This is because Mankiw’s world is a world of small firms operating on perfectly competitive markets. “Corporate America” is not part of the picture. No MacDonald’s, no Nike, no Microsoft.
Also, Mankiw downplays inequality, even if the growing gap between rich and poor in the US over the last decade has commanded the attention of more and more American economists, even within the mainstream. But Mankiw is not one of them. True, he admits that there is more disparity in the US than in Europe (even if he forgets to mention that this was not the case in the 60s). But he goes on to remark that there is less disparity in the US than in Brazil and China. So we can all relax.
Mankiw knows that the vast majority of his students are not going to become economics majors. He is not interested in training economists – his textbook is too simplistic to prepare a student for advanced study in economics. As he explicitly tells his teaching fellows, Mankiw’s interest is in shaping the minds of thousands of citizens and future leaders around the world. Mankiw’s world is one where “there is no such thing as a society.” Rather, the world is made up of isolated individuals. But it is a world where fairness prevails: everybody gets what they deserve. It is also a world where, thanks to the magic effect of markets, private enterprise and property rights, standards of living rise constantly. It’s a beautiful world … if only it existed.
While Mankiw’s text is easy for professors to use, it oversimplifies economic theory and leaves out the ways in which markets can degrade human well-being, undermine societies, and threaten the planet. Each year, tens of thousands of students go out into the world, with Mankiw’s biases as a roadmap to the future. But we know that the neoliberal agenda is more and more disputed outside universities. And within universities, alternative textbooks are flourishing. One can thus hope that these new textbooks, with their greater relevance to real world problems – and their better acknowledgment of the diversity and complexity of economic thought – will soon out-compete Mankiw’s bible. As a believer in competition, Professor Mankiw could only consider this to be fair game.
Recent Issues
Culture Jammers Network
We are a global network of culture jammers and creatives who are working to change the way information flows and meaning is produced in our society.
Current Issue
User login
Web Feeds
Note: If the links don’t work, please copy the feed URLs and paste into your news readers such as Google Reader.
Comments
inexistent is not a word... is this intentional?
I think that this is very okwerd.. and I don't know what half or the words in here mean! Thanks
Although I understand the main problem raised here by Mr Raveaud. I cannot help to think that the author is making an ideological mountain out of a heap of incidental issues. Does it really matter what Mankiw teaches? Are students at university level taking a course in economics not already aware that for every JM Keynes lies a Ricardo in the shadow?
Alternatives would include more economics classes to allow students to reconsider points raised in this textbook, especially classes that discuss points raised in the article and in other branches of the field, including development economics.
Also, given many problems taking place today, including peak oil, global warming, water and food shortage, a possible global credit crunch due to mounting debts in several industrialised countries, and so on, we will have to be more critical of neoliberal economics.
To the haters: I think the key point of the article is that there is a difference between simplification of a model by presenting straight lines instead of curves, shaving off subtleties, etc, and presenting that model as a universal truth. There are real problems, for instance, with the property rights model for public goods and presenting the model without presenting critiques is neither good science, nor good education. We're trying to develop critical thinking skills in students, not just stuff them full of facts. Everything-is-roses examples fail to stimulate anything but rote memorization, an educational model discredited, oh, a hundred years ago. And as for the consensus view, the consensus view on is that government intervention is necessary in the case of market failure which is pretty much the norm. Maybe not consensus in Chicago-school circles, perhaps, but consensus in the part of the academic community that actually gets taken seriously everywhere in the world except the US.
George Mankiw has posted a reaction to Gilles Raveaud's critique of his textbook on his blog:
http://gregmankiw.blogspot.com/2007/11/antimankiw.html#links
Mankiw writes: When I teach introductory economics either in the classroom or in my textbook, I view myself as an ambassador for the economics profession. I try to represent the economic mainstream, not my personal political views. Some students may view the economic mainstream as right of center. That assessment is probably correct, at least as judged by the universe of college professors. But the job of an introductory course is to present, as honestly as possible, the consensus of the profession. If the typical economist is more market-friendly than the typical literature professor, then that point of view will likely be reflected in the leading textbooks.
I was most surprised to read that the author of this critique was once a member of the army of teaching fellows I oversee in ec 10. I wish he had come to talk with me about his views while he was involved in the course. I have long been intrigued by the post-autistic economics movement. A conversation on the topic would have been edifying for both of us. Notice how he doesn't deal with the substance of the critique. He deflects it by suggesting Raveaud should have come and had a chat with him the subtext Mankiw would have shown Raveaud the errors in his thinking. Also, its funny that someone who likes to portray economics as a scientific discipline focuses on trying to present the consensus of the profession. A profession's consensus is often wrong - think of how geologists initially resisted the idea that continents were slowly moving.
Wow, what an amazing tirade! It seems as though the author has a huge personal issue with Mankiw himself not just his textbook. To those of you that pride yourselves in objective intellectual thought, I encourage you to read Mankiw's books for yourself and not rely on this unbelievably off-kilter commentary. While you do, think critically and keep in mind that Mankiw is simply trying to educate the masses with elementary models and show that even seemingly complex concepts can be evaluated with simple logic.
I just took a course at the University of Chicago arguably the world's best school for economics employing this very textbook, while being taught by an unabashedly Chicagoschool econ Professor. In other words, I've been exposed to the indoctrination described in this article. As a democrat with a small d, I don't really understand the basis of the criticism in this article. The author's problem with the textbook as I understand it are two fold: 1) the models are too simple to describe the complexity of the world. 2) The textbook is biased toward a freemarket ideology.
Well of course the economic models are overly simplistic. This is a textbook without almost any mathematics aimed at an introeconomic course. Economists are not oblivious to the complexities of realworld interaction in micro and macroeconomic policies see Bounded Rationality Behavioral Economics among others, but the models presented by Mankiw necessarily assume ideal conditions as parameters for making predictions. More complex interactions and there are many of them do exist and Mankiw spends 4 chapters examining precisely why perfectly competitive markets almost never exist asymmetrical information, product differentiation, etc. What's important however is that the explanations of supply and demand, as they're offered in the textbook, provide a clear, concise introduction to the basis of economics as practiced by advanced western nations.
Additionally, I found the textbook to be relatively free of most political biases. Mankiw admits at the outset his own work with the Bush administration, along with his own frustrations at implementing efficient public policies that minimized deadweight loss for consumer and producer's alike. I don't really understand why this reviewer is so quick to dismiss Mankiw's textbook on political grounds. Ten principles just ten make up the bulk of the book's argument and none of them are open to debate; they are truisms of sort. People face tradeoffs Government can improve market functions Markets usually but not always allocate resources efficiently People think at the margin etc.
As somebody who aligns themselves on the center-left of the political spectrum, I get especially frustrated by the paucity of political insight and understanding exhibited by articles such as this. It seems there are far more important subjects for debate than the relatively benign explanations in an econ 101 textbook aimed at college freshman. More complex economics and I can assure everyone that it does exist understands the level of complexity present in real world situations in the same way physicists comprehend that vacuums and frictionless space do not exist in nature. Models , however, don't need realistic assumptions to be valid. All they need is predictive power. As long as their is validity in their predictions, they are useful and will continue to serve their purpose in economics, sociology, physics, indeed any field of study dependent on some sort of idealization of realworld conditions. Any objections to this will need to be sustained by insight and logic, rather than the shrill, ignorance present here.
For people wanting a real introduction to economics, consider reading Robin Hahnel's The ABC's of Political Economy: A Modern Approach http://www.amazon.com/ABCsPoliticalEconomyModernApproach/dp/0745318576
Doesn't capital in Mankiw's book include land, natural resources and electricity?
Surely we must slap that yellow sticker on kascapital....
Good to see, but I can't imagine that it's news to anyone. As a former econ student, I got plenty of indoctrination. Keynes was the farthest Left ha! that was taught.
Dr. Raveaud is surely correct that most of Dr. Mankiw's introductory text on economics is overly simplistic. It is an introductory text, after all. But Dr. Raveaud is simply wrong about other things. Mankiw does discuss Pigouvian taxes and is a strong proponent of them, in fact to correct externalities; he does propose government regulation to control problems of the commons which include environmental issues; he textbook does present models in which perfect competition does not exist; and all of his models assume that political rights are more or less equal. Additionally, it would be impossible for Dr. Mankiw to correct the simplicity of much introductory economic theory with greater nuance without first teaching the simpler models. Economics is not unique in this regard; all sciences start with the simplest models and assumptions first, then make the picture more complex as one's education extends. Lastly, it is laughable on its face that Dr. Raveaud would complain about propaganda in a publication such as Adbusters, which seems unabashedly dedicated to the same.
Our economics course uses this text and I've often found myself wondering that the hell is happening to the world... I'm glad someone cleared it up for me. I will be writing to my prof directly.
This commentary is the kind of thinking that leads to politically controlled decision making, which has a very poor track record.
The counterarguments against this article, particularly by Lewis and Scott are superbly nearsighted. The article addresses the philosophy of economics, not its methodology. You can tout all you want saying the text is for an introductory economics class and circlejerk over econometrics and integrals, but there is little doubt that mainstream economics represents mainstream America a laissezfaire economic philosophy. This does not change as you go higher into economic courses. The higher courses address methodology aka descriptive economics using higherlevel math, not introduce other schools of thought or address the underlying philosophical issues. Raveaud is correct in saying these are ignored, because mainstream economics is God. This is an article about indoctrination, not simplification. His impetus is against outdated economic postulations and seemingly closed models that pervade academia. And the reason these models work is because the continuing imperialism of capitalist culture and its philosophy of economics the conservative, freemarket ideology continue to pervade in the spread of capitalism. It doesn't matter whether this is good or ad, because ultimately this is a critique of positivism and positive economics, who cares not about how things should be, but only how things are. Economists don't care about other disciplines and academic subjects hence why they it is called autistic and why economists aren't very well liked in academia. The ultimate problem with this sort of economics is exactly what the author points out: environmental degradation, lack of ethics, and its deceiving claim of being valueless social science BSc in economics? Come on. Almost all economic associations do not have a code of ethics in contrast to most certainly every other discipline in the academic world. Economists do not take into account anything other than utility, profit, and supply/demand into their models. Environmental damage? Human rights? Alienation? Those are things that simply do not matter because efficiency and the market is ultimately an economist's greatest concerns. Obviously this is hugely myopic because it is predicated on a narrow view on what efficient is highest profit margins. But ultimately it goes beyond positive economics because the prescription made by these economists although Mankiw is certainly excluded, in running the state, is one of their own ideal utopia. It is an utopia of corporatism and market capitalism, where the state only serves to protect against monopolizes and enforce contracts. Forget about government services, security, environmental regulations, social benefits, and so on. So despite what some of these comments cry, Raveaud makes a clear and correct statement: mainstream economics is prescriptive and normative, not just descriptive. Because how one sees the market will ultimately shape how one acts in the market. Economics is a social science, and despite the denials, economists are social beings like all humans. To further their individual reductionist worldviews only serves the purpose of them flaunting further the success of neoclassical economics. It's circular, a selffulfilling prophecy. Neoclassical economics works because people follow it. Or people follow neoclassical economics because it works. It's tautological, and economists will need to wake up when they see capitalism imploding because of its undesired consequences due to market failure. Of course, that is not to say some schools in the behavioural economics are any better. Austrian economics would be a bigger disaster than Ron Paul.
If you want some really good honest Canadian input as to economic policy, Read: Eric W. Kierans from 'The Lost Massey Lectures published in 2007 by House of Anansi Press, is on the shelves now. Also of course Naomi Klein's 'The Shock Doctrine'. I am a 64 year old Canadian who believes that both these books should be required reading for enlightened high school students but mostly introductory economics university courses. My hope is with the younger generation. Our relationship submissive to American
economic and foreign policy leaves one with the question, What will Canada do when our resources are depleted? The younger people are going to have to create and control their own paradigm for the future because the old one has taken us to the cliff.
Then why alternative text books are not arriving in Third world markets.
Damn, humanity is fucked.
This essay is a typical thoughtless leftist critique. The essayist prefers a world in which there is no scarcity, there are no trade-offs, in which incentives aren't real or don't matter, in which prices can be mandated without creating surpluses or shortages. Etc. etc.
The core components of Mankiw's text are testably, empirically true. Wishing they weren't won't change that reality. Steve
Mankiw is a clown for sure but this is a most puerile article. This guy is a Phd? He's barely armed with any verbs beyond to be. The fact that he taught one of Mankiw's sections is a bigger indictment of the Harvard professor than anything in this essay.
Mankiw's text is an introduction to the economics, and its goal is to show students how to analyze problems from an economic framework. I did not use Mankiw's book when I took introductory economics, but it too was filled with simple two good models of supply and demand. It's not because Mankiw's world is a world of small firms operating on perfectly competitive markets, but rather those are the assumptions of standard models and theories. To blame Mankiw for the simplified assumptions of an introductory course in economics is outrageous. If you got your PhD in economics, you know how difficult the mathematics involved is, so in order to teach an introductory course, simplifying models is pretty much necessary. Criticizing Mankiw for using a production function with only two goods? Come on! If you really want people to take Post-Autistic Economics seriously, bashing a professor who uses simple models in his introductory course is not a good way of doing so.
Amazon reviews, albeit flawed, seem favorable. Some alternative references, links, would be nice. Thx
Opus, thanks for a great comment.
suspend disbelief for a moment. Suppose the Kyoto Protocol is a good thing and that adhering to it would bring net benefits for Canada and the world. Even if you buy all that, the problem remains of how to best implement it. This is a quote taken from my microeconomics book. Although this quote is taken out of context it still remains that Mankiw's name, along with others, is on the front of my book. In effect I find myself targeted by some conservative propaganda. Although my text book is in fact teaching me, I find it still ever increasingly important to question everything I read. I just hope, as I look around my class of 600 economic devotees, that they are doing the same.
It is important in any field that the traditional models are continually questioned and challenged otherwise how would we grow?
To assume that the pure economic models championed by the likes of Mankiw are sacrosanct is a narrow and blinkered viewpoint. If you agree that we are growing in knowledge and experience at an exponential rate it would be ridiculous to presume that Mankiw's teachings, which are based on an outdated model, are still relevant to today's society.
It is often the old dogs that continue to propagate their ideals with such vigour once they have been proved wrong what is their life's work worth? A difficult scenario for such an ego. That their students are so ready to continue spreading such rubbish only highlights how dumbed down our society has become, we are no longer encouraged to think for ourselves, and those who are the least capable of original or questioning thought are often the ones that follow the teacher with such zeal.
These people reduce humanity to formula, numbers and charts and present the outrageous concept that all people are standard, homogenised robots.
I can't believe the push back on this article. Then again I shouldn't be surprised. Economics produces more touchy egos than any other discipline as well as a haughty overblown attitude toward criticism. To the uniformed about the crisis in neoclassical economics I suggest our contrary blog posters start with Steve Keens book Debunking Economics Pluto Press, 2001 or any of Edward Fullbrooks Editor books capturing the best of the Post Autistic Economics movement. Start with Whats Wrong With Economics Anthem Press 2004. Keen has an excellent web site at http://www.debunkingeconomics.com/
For our neoclassical advocates who want to go head to head on the math, try Joe McCauleys book Dynamics of Markets: Econophysics and Finance. McCauley makes it quiet clear that the whole body of neoclassical nonsense is riddled with flaws or as he puts it mathematical ideology.
This is a fairly weak criticism of the text book, especially noting the inherent far left bias present in the article, rather than a strictly green approach. The far left has a weak track record for economic policy, the author should know this. Governmentally run programs are, for the majority of cases, pork or complete failures. Welfare, public education, and bridges that go nowhere. If the government can't do it, then only the individuals with incentives to prosper and make profit can.
Social activism is about creating awareness to change behavior, not necessarily getting the government to hold our hands through. aside from that, this is an introductory economics book. Graduate level courses will typically tackle more complicated issues, not undergraduate courses devoid of any complex mathematics multi variable calculus and series, and matrix methods to name a few or analysis techniques.
This article is deeply, deeply stupid. It confuses the simplification of an introductory economics textbook, with its requisite noncalculus ideas. Paul Krugman's introductory textbook is similar in scope and presentation, even though he is at the opposite end of the political spectrum. I wish I could say there is a single point on which the author is especially wrong, but he appears to have missed every base indiscriminately, even epically. Mankiw is also a huge advocate of using carbon taxes to control global warming. It's true that Mankiw doesn't mention every concern that could plague a reasonable person's conscience in his introductory textbook, such as the economic treatment of tenure, but it is deeply childish to consider this an example of bias. It's fools like this author that make me cringe as a student of economics, a liberal one at that.
The bottom line is that classical liberal economics explains the world while no other models do. Sorry. We like to be able to explain everything we see in the world as opposed to imposing our values on the world, then making up models to catch up.