A Renaissance in Economics

Students all over the world are demanding a new curriculum.


The American President Ronald Reagan once quipped, “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’” I get the same shivers when someone introduces themselves as an economist.

For, in its current form, the economics curriculum at Oxford and other Anglo-Saxon universities is far too detached from reality. Demand curves, utility maximization equations and abstract mathematical models serve only to distort the worldview of undergraduate students.

Why does this matter? It is simple. Oxford in particular has a firm grip on the British establishment. These bright young things will soon be entering the top echelons of corporate, finance and government circles. And as soon as they step into those offices, the same tired way of thinking about economics will perpetuate.

Economics is a social science. It is not a natural one, like psychics. Rather, economics is about people and their behavior. Some dismal scientists like to think otherwise. The heavy emphasis placed on mathematics, particularly at the postgraduate level, helps to lend a thin veneer of natural scientific legitimacy to the subject.

But it is the mark of an immature, insecure science when its practitioners speak in a convoluted, esoteric language known to only a chosen few. It wasn’t always like this. The English economist John Maynard Keynes, a gifted statistician, didn’t feel the need to write equation after equation in his famous work The General Theory. That didn’t stop him getting his point across. Nor should it stop economists today.

Of course, there is no perfect way for a student to learn economics. Several “schools” of economic thought still rival each other for dominance in departments across the world. Interpretations of historical events, whether it’s the Great Depression or the recent global financial crisis, can lead to fiery debates. Indeed, these divisions have given rise to a joke about economics exams: the questions remain the same each year, but the “correct” answers always change depending on which “school” is in vogue.

Students should therefore read widely and decide which theory, in their opinion, best fits our chaotic world. Well, at least that is the ideal scenario. The reality is somewhat different. In class students are usually given just one textbook, with one standard interpretation of how the world works. There are no debates, no contest of ideas and certainly no room for free thinking.

To pass exams, then, students often have to learn mathematical models that bear no relation to reality given the amount of unrealistic assumptions attached to the analysis. As a result, graduates leave the college gates with a bastardized version of economics, one that sticky-tapes bits of neoclassical, monetarist and rational expectations theory together in an incoherent fashion.

Oxford University has a proud history. Look at the origins of Politics, Philosophy and Economics (PPE), for instance, a course that schooled generations of leading politicians. The course traces its origins back to 1920, a time when economics was studied closely alongside its two brothers, politics and philosophy. Now, however, PPE students study the subject in complete isolation. There is little, if any, overlap with its erstwhile siblings. This is a dangerous situation.

What is to be done? An interdisciplinary approach is required from the start. Four key points stand out. First, introduce far more historical analysis to the undergraduate curriculum. Offer historical examples through which students can better understand and anchor a given theory. Secondly, acknowledge in lectures the fierce debates that are tearing the subject apart. This won’t scare students. Rather, it will entice their interest and make economics sound like the exciting subject it actually is: a battlefield where ideas and policies fight it out.

Thirdly, offer more criticism to the mathematical models studied in class. Students aren’t idiots. By highlighting flaws, you are allowing them to think critically while learning. The fourth point relates to language. Economists need to learn how to communicate their message effectively to a wider audience – for mathematical models can only show so much. Economists must learn to talk in simple, plain English.

All these changes need to happen soon. The dismal scientists like to talk about supply and demand. Well, how does the following sound? Economics departments are supplying us with a poor, naïve brand of economics. Let us demand a better one.

Simon Mee is a freelance financial journalist currently undertaking a DPhil in Economic History at University College, Oxford. In 2011, Simon won the Nico Colchester Fellowship at the Financial Times.

Nail to professor’s door

Before economics can progress ... poster