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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

Great article. When will peopel understand that these economists and other and other so-called experts are just using "facts" and "scientific methods" as part of teh global power structure to keep down the working class. The only fact I need is the sight of a srtarving child in africa.

Anonymous

Great article. When will peopel understand that these economists and other and other so-called experts are just using "facts" and "scientific methods" as part of teh global power structure to keep down the working class. The only fact I need is the sight of a srtarving child in africa.

Anonymous

Summary of article:

"If economics doesn't confirm my (left- or right-wing) beliefs, it's wrong."

Wow, that's an agenda for scientific progress....

Anonymous

Summary of article:

"If economics doesn't confirm my (left- or right-wing) beliefs, it's wrong."

Wow, that's an agenda for scientific progress....

Mr. Econotarian

Yes, and global warming deniers and creationists are also oppressed.

"The fact that CEOs earn millions while their workers struggle by on minimum wages "

Actually most workers do not make minimum wage. The proportion of US workers earning the minimum wage in 2004 was only 2.7%.

Moreover, about half of all workers earning the minimum were under age 25, and about one-fourth were age 16-19.

"A number of the recent Nobel prizes in economics have been awarded for research that is beginning to pry open the mainstream model. "

Not sure what is meant by this - in 2007, Leonid Hurwicz, Eric Maskin, and Roger Myerson won for for having laid the foundations of mechanism design theory, the study of designing rules of a game or system to achieve a specific outcome, even though each agent may be self-interested.

In 2006 Edmund Phelps won for analysis of intertemporal tradeoffs in macroeconomic policy, and in 2005 Thomas Schelling and Robert Aumann won for analyzing conflict and cooperation through game-theory analysis.

While behavioral economics (such as done by Gary Becker, Nobel Laureate 1992) and game theory do have new developments, your "average economist" doesn't think they are odd, whereas "Footprint Theory" is generally considered silly and irrelevant.

"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. "

This is BS, these kinds of analyses are done all the time by economists. For example, look at David Card's work on whether there is an effect on wages due to immigrants (his findings: "evidence that immigrants have harmed the opportunities of less educated natives is scant.")

Go to EconPapers and read yourself...

"Distribution and labour market incentives in the welfare state – Danish experiences"
"Main features of the labour policy in Portugal "
"The wage costs of motherhood: which mothers are better off and why "
"Attracting and Retaining Teachers in High-Need Schools: Do Financial Incentives Make Financial Sense?"
"Do unemployment benefits increase unemployment? New evidence on an old question"

Mr. Econotarian

Yes, and global warming deniers and creationists are also oppressed.

"The fact that CEOs earn millions while their workers struggle by on minimum wages "

Actually most workers do not make minimum wage. The proportion of US workers earning the minimum wage in 2004 was only 2.7%.

Moreover, about half of all workers earning the minimum were under age 25, and about one-fourth were age 16-19.

"A number of the recent Nobel prizes in economics have been awarded for research that is beginning to pry open the mainstream model. "

Not sure what is meant by this - in 2007, Leonid Hurwicz, Eric Maskin, and Roger Myerson won for for having laid the foundations of mechanism design theory, the study of designing rules of a game or system to achieve a specific outcome, even though each agent may be self-interested.

In 2006 Edmund Phelps won for analysis of intertemporal tradeoffs in macroeconomic policy, and in 2005 Thomas Schelling and Robert Aumann won for analyzing conflict and cooperation through game-theory analysis.

While behavioral economics (such as done by Gary Becker, Nobel Laureate 1992) and game theory do have new developments, your "average economist" doesn't think they are odd, whereas "Footprint Theory" is generally considered silly and irrelevant.

"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. "

This is BS, these kinds of analyses are done all the time by economists. For example, look at David Card's work on whether there is an effect on wages due to immigrants (his findings: "evidence that immigrants have harmed the opportunities of less educated natives is scant.")

Go to EconPapers and read yourself...

"Distribution and labour market incentives in the welfare state – Danish experiences"
"Main features of the labour policy in Portugal "
"The wage costs of motherhood: which mothers are better off and why "
"Attracting and Retaining Teachers in High-Need Schools: Do Financial Incentives Make Financial Sense?"
"Do unemployment benefits increase unemployment? New evidence on an old question"

Anonymous

There are fine heterodox econ depts. at Notre Dame and UMass. These alternative economists who see conspiracies to deny them fame and cash prizes are just as egomaniacal as every other academic who thinks they're the most brilliant person alive and everybody else should be deeply interested in their work.

Anonymous

There are fine heterodox econ depts. at Notre Dame and UMass. These alternative economists who see conspiracies to deny them fame and cash prizes are just as egomaniacal as every other academic who thinks they're the most brilliant person alive and everybody else should be deeply interested in their work.

Nicolas

Very nice article. Would have been better if it had not only been focused on the US but I know it is asking much...

To the anonymous person who says there are fine heterodox dpts at Notre Dame and UMass - I agree on the latter but you probably ignore that the heterodox dpt at ND has been deprived for some years of any access to postgraduate teaching. Only focusing on UG means no access to intellectual reproduction. A parallel (mainstream, though poorly rated) econ dpt for PG has been set up there. It is a worrying worldwide trend - to restrict heterodox economists (Marxists, Post-Keynesians, Feminists, etc.) to undergrad teaching and supervision.

To those who blame the article for not articulating a critique of neoclassical economic theory: you are missing the point. This article is about mainstream economists' reluctance to ENGAGE with criticism that comes out of their own toolkit. This peculiarity makes mainstream economics an incredibly poor discipline from an intellectual perspective, with a remarkable ability to look at topics without paying any attention to what other social scientists have written about them before. If you want a critique of neoclassical theory, there is an abundant literature on this - Bruno Amable, Ben Fine and many others have written interesting things.

Nicolas

Very nice article. Would have been better if it had not only been focused on the US but I know it is asking much...

To the anonymous person who says there are fine heterodox dpts at Notre Dame and UMass - I agree on the latter but you probably ignore that the heterodox dpt at ND has been deprived for some years of any access to postgraduate teaching. Only focusing on UG means no access to intellectual reproduction. A parallel (mainstream, though poorly rated) econ dpt for PG has been set up there. It is a worrying worldwide trend - to restrict heterodox economists (Marxists, Post-Keynesians, Feminists, etc.) to undergrad teaching and supervision.

To those who blame the article for not articulating a critique of neoclassical economic theory: you are missing the point. This article is about mainstream economists' reluctance to ENGAGE with criticism that comes out of their own toolkit. This peculiarity makes mainstream economics an incredibly poor discipline from an intellectual perspective, with a remarkable ability to look at topics without paying any attention to what other social scientists have written about them before. If you want a critique of neoclassical theory, there is an abundant literature on this - Bruno Amable, Ben Fine and many others have written interesting things.

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