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Thought Control In Economics

A high level of conformity in academic institutions makes it difficult for economists to tackle the world's most pressing problems.

Thought Control In Economics

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Ecological economist Bill Rees started teaching at the University of British Columbia's School of Planning three decades ago. When he gave a presentation showing how British Columbia's Lower Mainland had already exceeded its ability to support its population and suggested that humanity as a whole might also be approaching its global carrying capacity, he wasn't expecting the reaction waiting for him.

One of UBC and Canada's best-known economists told him, in the most collegial way, history had proved Rees wrong and that carrying capacity was irrelevant.

Bill Rees
Bill Rees

"He told me economists had all but abolished the concept of limits to growth and that if I persisted in this line of research my academic career at UBC would be ‘nasty, brutish and short,'" Rees recounts to me as we sit in a campus coffee shop. "Ironically, that was the stimulus that led me to come up with the ecological footprint concept."

Rees has garnered rock star status for his role in inventing the Ecological Footprint Analysis – a measure of human demand on the Earth's ecosystems and natural resources. His theory has become instrumental in helping people rethink their impact on the Earth and his lectures are in such demand that he has little time for a personal life. But Rees has no intention of slowing down while humanity remains on a collision course with nature.

"Until society realizes that the flawed, growth-oriented neoclassical lens it has been using to guide economic decisions distorts reality and is leading to an ecological disaster, I am not very optimistic about humanity's long-term prospects," he confides.

But after three decades of questioning whether the world can continue to support our consumption habits, Rees has had trouble convincing his colleagues in economics that their economic model needs an overhaul.

"Over the years, a number of students made their way over from the economics department to take my graduate course in ecological economics," he says. "Then they stopped coming. I didn't think about it much but a couple of years back I bumped into a former student who told me, ‘You know, the economics department will not allow credit for your course. They don't consider it real economics.'"

What Rees tells me fits with what I've learned through informal discussions with students from different universities. When I explain to them that my research involves investigating what is taught in introductory economics courses, there is a very common reaction that starts with a grimace or a groan.

"I had to take first-year micro- and macroeconomics for my degree in International Development," explains University of Calgary student Alexis Crabtree. "Even though I took them with one of the most popular profs at the university, a guy who always won undergraduate teaching awards, I hated them. I found them so far removed from real life, and it seemed like the only thing economics was good for was to argue against my political views. For me, there were other considerations beyond shifting supply and demand curves, like social justice, but there was absolutely no discussion in class about those kinds of issues."

The news these days is full of stories that show how the global economy is becoming more vulnerable to environmental change caused by humans. The fear of climate change has led to subsidies for biofuels, which has resulted in grain shortages, soaring prices, hunger and riots. The price of gas suggests peak oil is upon us, promising many years of difficult and expensive transition for our gluttonous and polluting economies. And although people like Rees have invented new tools for understanding what happens when the economy presses against ecological limits, it seems that on university campuses only the mainstream, limits-denying school of economic thought has the official stamp of approval. The big issues of our era – and the theories that might help explain them – are not being discussed in economics lectures.

Robert Nelson
Robert Nelson

I decided to check in with some leading dissident economists to find out why mainstream economics had such a monopoly on our economic thinking.

Robert Nelson has all the accreditations expected of a mainstream economist and as a libertarian, he's no bleeding heart liberal. But in a career-limiting move, he became intrigued by the parallels between religious and economic beliefs, writing a couple of books on the theme. Since those books were published, he's no longer welcome at the party. As he puts it, there's an "orthodoxy of what's permissible" – step beyond that boundary and your colleagues stop inviting you to seminars and cut you off from publishing in the profession's leading journals. "From the point of view of most economists," he acknowledges, "I don't do economics."

John Davies
John Davies

John Davies is a well-regarded historian of recent economic thought who teaches at universities in Wisconsin and Amsterdam. He agrees that economists who stray from the mainstream fold are being cut out of university positions, conference slots and the leading journals. One way the mainstream does this is by insisting that only "formal" economics has merit: economics based on highly abstract mathematical models. "If your work doesn't have a formal character, then you're excluded," he explains, "but I think most heterodox economists would argue that this is really a way of disciplining views that are unacceptable or critical of standard approaches."

Despite her interest in feminist economics, Julie Nelson's publication record is so impressive that she qualified for tenure at one of the top 30 US university economics departments. But she's disheartened by the state of mainstream theory.

Julie Nelson
Julie Nelson

"We feminist economists have been assiduously ignored," she says of her neoclassical peers. "Really no one has tried to engage in any serious way with the feminist critique in terms of, ‘We need to re-examine our assumptions.' Very little of that is going on."

These accounts are symptoms of a pervasive system of thought control in economics. But no one knows more about how unwelcome ideas are kept from being expressed in economics departments and tainting the minds of curious students than Fred Lee, a professor at the University of Missouri-Kansas City. He has documented over a hundred cases where economists who wouldn't drink the neoclassical Kool-Aid got pushed aside – a problem that began over a century ago when the working classes started to teach themselves Marxist theory.

Fred Lee
Fred Lee

"The leading economists of the day feared that if workers understood Marxist theory, the working class would realize how badly they were being exploited," he says. "Fearing this might lead to revolutionary fervor, economists sought to recast economic theory to neutralize the Marxist critique. They limited their neoclassical theory to looking at innocuous issues such as how prices change. They also sought to prove that everyone gets paid exactly in accordance with their net contribution to society, implying that workers aren't exploited and that is no basis for workers to claim a fairer share of the pie."

Listening to Lee was making me realize that there is a time-honored tradition in economics of avoiding questions about who gets the wealth, who benefits and who loses with different economic policies. But there have been times when it was possible to explore other schools of thought.

Mainstream control over economics was further consolidated during the hysteria of McCarthyism in the 1950s. By the 1960s US universities had been thoroughly cleansed of dissident economists. But this ultimately undermined the discipline's credibility. With the civil rights movement highlighting injustice in America, protests against the Vietnam War spreading across campuses, independence movements gaining strength in Africa and growing signs of an environmental crisis, the mainstream economics taught in lecture halls seemed stale and irrelevant to the commotion outside the classroom windows. Students took matters into their own hands and organized unofficial study groups in alternative theories of economics. In 1970, Lee himself discovered the vast literature written by heretical economists.

Eventually, universities ended up infected with economists who were openly critical of mainstream economics – those same self-taught students who had studied outside the accepted canon and had gone on to get graduate degrees and teaching positions. "For a brief time, many departments were tolerating a couple of dissident economists on staff," Lee reminisces, "but with the surge of neoliberalism in the 1980s, those who asked the bigger questions were once again being ostracized, demoted and expelled from universities. In the last decade, the mainstream professional associations have convinced state funding bodies in the UK, elsewhere in Europe, Australia and New Zealand that other schools of economic thought should not qualify for research funds."

I ask Lee if economists get the teaching positions and the research money because, as they argue, they've got the better theory – in effect, the better mousetrap – while the economists with other perspectives have theories that don't work?

"The mainstream economists don't have the better mousetrap," insists Lee. "Much neoclassical theory has zero value in explaining any socially relevant economic problems – in many ways, like creationist theory, it fails to offer more than superficial explanations for most of what we observe in the world."

Perhaps Lee has seen too many witch-hunts against economists who stray from the neoclassical song sheet and now sees the dark shadow of suppression everywhere. After all, there might be less sinister explanations as to why only variations on the same old simplistic theory can be taught, and taught so uncritically. David Colander, who is rare among economists for being accepted in both alternative and mainstream camps, suggests that much of the perpetuation of mainstream economics is simply the result of intellectual laziness.

quot;It's easier to teach what you've always taught, a model that's been passed down from father to son again and again," says Colander. "Economists have nice jobs, they're at the center of society, they get to travel around the world, they have prestige, and why would you open up a can of worms if you could avoid it?"

I go back to Lee and ask him if there are other factors, beyond trying to defend the status quo, that would explain why professors discourage deeper questioning from students. Why are they not willing to introduce competing economic theories so students can make up their own minds?

"The fact that CEOs earn millions while their workers struggle by on minimum wages is either not examined in classrooms or is shown by the mainstream model to be completely consistent with properly working markets and to be leading to the best of all possible worlds," says Lee. "This of course makes most of the students who are concerned by such issues switch to other disciplines because they find economics pointless for what they want to know and do. So generally only the unquestioning students go on to get a PhD and become professors with views just like the professors that taught them."

At first, these conversations leave me disheartened. Here we are, in full planetary emergency, a time when we need new young graduates with a realistic understanding of what is wrong with the world, with skills that will help humanity chart a new course. And what do economics departments aspire to churn out? Individuals trained to not recognize symptoms of impending collapse, trained to ignore appalling inequality, trained to celebrate profligate waste, trained to be closed-minded and unwilling to engage with different disciplines.

But there are signs that suggest that the era of thought control in economics is coming to an end. Complex systems theory tells us that just when a system seems most entrenched and stable, accumulating tensions eventually lead to rapid change, reorganizing the system. The tensions pulling at the mainstream discipline are growing. A number of the recent Nobel prizes in economics have been awarded for research that is beginning to pry open the mainstream model. Dissident economists are getting organized, holding conferences, winning prizes, publishing journals and attracting a new wave of students. Once again, mainstream courses are losing credibility with students as the toy economic models they play with in class grow more and more divorced from the alarming view outside the classroom window. Professors in other faculties are challenging economists for misunderstanding and misapplying knowledge borrowed from psychology, biology and physics. A growing body of research into happiness, much of it by economists, shows that following many of the policies promoted by mainstream economists is a pretty good recipe for minimizing happiness in this corner of the universe. A cadre of rebellious young economists, with their freshly-minted PhDs in hand, are unwilling to spend the next three decades of their lives within the approved confines of the neoclassical economics playpen.

Noted economist John Kenneth Galbraith once observed that ideas are eventually undermined by "the massive onslaught of circumstances with which they cannot contend." The system of thought control in economics is no longer able to delay humanity's awakening to the onslaught of news showing that we are breaching our planet's limits. And with limits acknowledged, we will be able to abandon the misguided pursuit of growth that demands no-holds barred exploitation of people and the planet. We can draw on ideas long pushed to the margins to build a better world – a world with less strife, more laughter and more modest footprints.

58 comments on the article “Thought Control In Economics”

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Anonymous

Fabulous article - really illuminates many aspects of the business of economics associated with post secondary education.
I think a follow up article should critique our education systems in general... We all know post secondary institutions are riddled by bureaucracy. However, these places of supposed higher learning are the only ones with power enough to certify anyone who could ever be in a position of power.
I'm totally disenchanted with academia so to speak. These over paid tenor professors who are teaching to the agenda's of these massive business who are aligned with corporations and government, are doing nothing but shackleing us to our archaic beliefs.

Anonymous

Fabulous article - really illuminates many aspects of the business of economics associated with post secondary education.
I think a follow up article should critique our education systems in general... We all know post secondary institutions are riddled by bureaucracy. However, these places of supposed higher learning are the only ones with power enough to certify anyone who could ever be in a position of power.
I'm totally disenchanted with academia so to speak. These over paid tenor professors who are teaching to the agenda's of these massive business who are aligned with corporations and government, are doing nothing but shackleing us to our archaic beliefs.

Anonymous

A great topic! One critical person missing in this article is Henry George and his findings near 1898(!) about the faults of the established economists and economics departments.

At his birthplace in Philly there are free classes giving the historical backround of the development of economics.

There are several other chapters in major cities as well.

Anonymous

A great topic! One critical person missing in this article is Henry George and his findings near 1898(!) about the faults of the established economists and economics departments.

At his birthplace in Philly there are free classes giving the historical backround of the development of economics.

There are several other chapters in major cities as well.

Anonymous

Being born in a third world country and spending all of my childhood watchin great american moives had led me to believe that American educational system was flawless. This article came as a great shock to me.

Anonymous

Being born in a third world country and spending all of my childhood watchin great american moives had led me to believe that American educational system was flawless. This article came as a great shock to me.

Banana.Logic

I believe that this is an excellent example of how we are so unwilling to throw off the shackles of the cartesian model of science/life. We create so many machines that this view has stayed in our minds as what works best. We want stability and organization, when life around us is chaotic and confusing. If we are not constantly reworking our ideas to fit what is happening, then we end up where we are, with a model of life which is only suited to best serve a select few people. Although those select few are always renewing their ideas to suit themselves, the worker is left behind in the machine, as just another part to be manipulated and made to create technology which only the rich can afford to own and maintain, all we get is the cheap outdated version which is thrown down to us with disdain. We are condemning ourselves, though, by believing that we can/should attain what they have through hard work and perseverance, when we should be working together to create a community and not a machine of production and consumption.

Banana.Logic

I believe that this is an excellent example of how we are so unwilling to throw off the shackles of the cartesian model of science/life. We create so many machines that this view has stayed in our minds as what works best. We want stability and organization, when life around us is chaotic and confusing. If we are not constantly reworking our ideas to fit what is happening, then we end up where we are, with a model of life which is only suited to best serve a select few people. Although those select few are always renewing their ideas to suit themselves, the worker is left behind in the machine, as just another part to be manipulated and made to create technology which only the rich can afford to own and maintain, all we get is the cheap outdated version which is thrown down to us with disdain. We are condemning ourselves, though, by believing that we can/should attain what they have through hard work and perseverance, when we should be working together to create a community and not a machine of production and consumption.

Venture Boy

Academic orthodoxies do tend to perpetuate themselves in all subjects and views. The old Cambridge economics department was for many years exclusively dominated by Marxist economics way outside the 'mainstream'. Is there something more than this?

A quick googling of some of the subjects here suggests that ecological economics is ecology plus a rhetorical argument about how much damage is being done. Borrowing an economic/accounting framework to look at flows and stocks over time is fine. Doesn't make it economics.

Feminist economics does seem to ask some interesting questions on the structure of employment etc that can and are studied within the standard frameworks, fuss a bit about terminology, and then settle downs to political proscriptions about feminist lifestyles. But basically it amounts to a game of 'woundnt it be nice if..."

Critiquing formal economics as unrepresentative of the real world makes no more sense that telling a physicist that modeling the world in an abstract way is unrealistic. The question is whether translation of world-to-model-to-world answers questions or provides insights that you find useful.

Economists have played around a lot with fixed and scarce resources, optimisation of resource use over time, impact of property rights on behaviour, common resource use etc. If there is a good alternative economic research programme fine - get on with it and show me some interesting insights into the world.

There are quite a lot of alternative models within the mainstream of economics, many of which can be used to model issues such a unionisation, executive pay, government behaviour etc using game theory, agency theory, public choice etc. Bring me a paper predicting disparities in pay based on whatever factors you can find - great. There is a whole body of literature around financial economics looking at management failures around M&A between companies, a lot of interest in irrational behaviour in financial markets etc where there is both sufficient data and value to do detailed analysis.

Work in welfare economics, despite Arrow and others hopes have shown that concepts of "general welfare" are nebulous and often incoherent or ethically limited.

Economics has made productive tie-ups with psychology, law, evolutionary biology etc. Where there is a subject based on careful analysis and rigorous argument there is usually common ground.

But critiquing Economics 101 for being basic misses the point. And pushing out political programmes or asking for a "new kind of economics" (read, "new kinds of people") is just not economics.

Economic insights drive policies such as enlisting the local population in conserving elephants in Africa by seeking to ensure they are valuable to them, rather than trouble, and have had some successes where old-style conservation colonialism had failed.

What this really amounts to is a whinge that academics are not getting behind a basically political programme, or even actively disagree with some of the programmes assumptions or tactics.

Quel domage.

Venture Boy

Academic orthodoxies do tend to perpetuate themselves in all subjects and views. The old Cambridge economics department was for many years exclusively dominated by Marxist economics way outside the 'mainstream'. Is there something more than this?

A quick googling of some of the subjects here suggests that ecological economics is ecology plus a rhetorical argument about how much damage is being done. Borrowing an economic/accounting framework to look at flows and stocks over time is fine. Doesn't make it economics.

Feminist economics does seem to ask some interesting questions on the structure of employment etc that can and are studied within the standard frameworks, fuss a bit about terminology, and then settle downs to political proscriptions about feminist lifestyles. But basically it amounts to a game of 'woundnt it be nice if..."

Critiquing formal economics as unrepresentative of the real world makes no more sense that telling a physicist that modeling the world in an abstract way is unrealistic. The question is whether translation of world-to-model-to-world answers questions or provides insights that you find useful.

Economists have played around a lot with fixed and scarce resources, optimisation of resource use over time, impact of property rights on behaviour, common resource use etc. If there is a good alternative economic research programme fine - get on with it and show me some interesting insights into the world.

There are quite a lot of alternative models within the mainstream of economics, many of which can be used to model issues such a unionisation, executive pay, government behaviour etc using game theory, agency theory, public choice etc. Bring me a paper predicting disparities in pay based on whatever factors you can find - great. There is a whole body of literature around financial economics looking at management failures around M&A between companies, a lot of interest in irrational behaviour in financial markets etc where there is both sufficient data and value to do detailed analysis.

Work in welfare economics, despite Arrow and others hopes have shown that concepts of "general welfare" are nebulous and often incoherent or ethically limited.

Economics has made productive tie-ups with psychology, law, evolutionary biology etc. Where there is a subject based on careful analysis and rigorous argument there is usually common ground.

But critiquing Economics 101 for being basic misses the point. And pushing out political programmes or asking for a "new kind of economics" (read, "new kinds of people") is just not economics.

Economic insights drive policies such as enlisting the local population in conserving elephants in Africa by seeking to ensure they are valuable to them, rather than trouble, and have had some successes where old-style conservation colonialism had failed.

What this really amounts to is a whinge that academics are not getting behind a basically political programme, or even actively disagree with some of the programmes assumptions or tactics.

Quel domage.

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