The fact that South Africa has among the worst inequality in the world suggests that a shift in the economics syllabus should happen here, says the writer. Photo: Masixole Feni
15 April 2016
Joseph Schumpeter considered capitalism stable in the long run. I don’t. Schumpeter was vehemently opposed to Franklin D Roosevelt’s regulation and interference in the “free market”. I consider FDR to be the greatest American president. And yet Joseph Schumpeter is one of my all time favourite academic economists.
Although I disagree with much of his political and some of his economic writing, Schumpeter may be the greatest teacher of economics of the last hundred years.
His friend, and one of his favourite students, was the great Marxist economist, Paul Sweezy, who said of his supervisor “Schumpeter had that rarest of all qualities in a teacher, he never showed the slightest inclination to judge students or colleagues by the extent to which they agreed with him. … He didn’t care what we thought as long as we did think.”
How far have we come from the days when, in 1947, the Socialist Club of Boston asked the Department of Economics at Harvard University to stage a debate on the comparative virtues of capitalism and socialism? Wassily Leontief was the moderator, Schumpeter represented capitalism and asked his Sweezy to make the case for socialism. According to Schumpeter’s biographer Thomas McCraw, “they had a great debate and “everyone went home happy”.
What happened subsequently is much more in line with the path typical of Economics departments from the second half of the twenty century. McCraw points out that Sweezy “was not promoted at Harvard, almost surely because of his politics” and ended up being venerated by the American Sociological Association in the form of the Paul Sweezy Marxist sociology Book Award.
How is it that the memory of a great economist must keep alive by sociologists, and not by his own discipline? And why, as Ihsaan Bassier has rightly asked, are heterodox economics not given a more prominent place on the undergraduate syllabus?
I used to think that the answer involved metaphoric smoke-filled rooms of orthodox economists maintaining their dominance, but I am now not sure that is entirely fair. Why, almost one month since Bassier’s article in GroundUp, has there been so little response to the substance of his case? This question is asked by Grieve Chelwa, a post-doctoral Fellow at Harvard University, who did his honours, masters, and PhD in in economics at UCT, writing in Africasacountry.com.
To illustrate Grieve’s point, his own article, while shared widely, has, as far as I can tell, also not received much comment. The comments that have been made have tended to criticise the status quo, rather than tackle the much more difficult, and much more constructive, task of suggesting a syllabus change.
Possibly the reason for this relative silence on what a future syllabus should look like, is that this is the hard part. Even basic ideas that I have, I share here with trepidation, because this is a subject that I care about, and because despite being a PhD candidate, I am not confident that my ideas are not wrong.
The problem of a syllabus that does not properly explain the biggest problems we currently face in the world is a challenge for most economics departments around the world. Inequality of income and wealth, high unemployment, the instability of the financial system, and its growth disproportionate to the size of the real economy, are global problems. That said, the fact that South Africa has amongst the worst inequality in the world, and one of the highest unemployment rates among middle-income countries, suggests that it is all the more urgent that a shift in the syllabus should happen here.
Any discipline spends the foundational years introducing students to the models of the field of study. Do we discard the dominance of the orthodox models in first year, and introduce, from day one, many of the heterodox economists who have given us models which better analyse key problems in economics, and risk a “soup” of models? Or do we hold our noses at the possible inapplicability of many of the orthodox models, and teach them as the “language” in first year, reminding students that we will be introducing heterodox models in year two and three which may be more applicable?
Or do we start with the economic problem, say inequality or stability or unemployment, focusing on the problem and then introducing the models relevant to these problems as responses?
This last method seems to been the foundation of the CORE Economic Curriculum Development, the open source teaching system funded by George Soros, and driven by Professor Wendy Carlin, Professor of Economics at University College London, and visiting Professor at Oxford. It was introduced as a pilot project at University College London, Sciences Po in Paris and the University of Sydney, and at many other universities around the world, in 2015.
I cannot comment on the undergraduate curriculum at UCT, aside from the History of Economic Thought course, of which I teach a small part. Speaking generally, I am not a fan of the models which dominate currently, but this itself is not necessarily the problem. The challenge is not to throw out one set of dogma to replace it with another, but rather to answer the difficult question of how and when to introduce heterodox models to the students, and how to allow those students who want to explore one or more heterodox model, to do so.
Part of the challenge is that the seductive appeal of mainstream economic models is not just that they serve the interests of business and open up a well paid career for the students who graduate in them, but also that they have internally coherent rigour. Heterodox models might also have their own internal rigour, but lack a coherency with each other, so that often, when students wrestle with the problems of the real world, it is the heterodox models that make more sense, even if, when read all together they may lack the internal rigour of the pie-in-the-sky mainstream models. After all, as British economist John Maynard Keynes wrote, it is better to “see the truth obscurely and imperfectly rather than to maintain error, reached indeed with clearness and consistancy and by easy logic, but on hypothesis inappropriate to the facts”
Following Keynes’s logic, Bassier rightly questions the relevance of mainstream economics to some of the greatest challenges in South Africa, and I would add, the world.The call to change economics curricula is a global one. Students in Manchester revolted against an orthodoxy that did not address the economic problems of the real world in 2013. Since then there has been dissatisfaction in other parts of the globe.
While I understand Bassier’s frustration at the “attempts to push mathematical concepts”, of models which may not capture the essence the economic problems of South Africa, I would suggest that the problem is less the use of maths in itself and more that it is usually taught in service of a single theoretical paradigm, the relevance of which is often questionable.
Bassier has done us a favour by laying down the challenge. My hope is that the debate on this subject moves onto the constructive question of what an improved economics undergraduate curriculum should look like, rather than the much easier one of just focusing on how it is wrong.
Bordiss holds a Masters of Commerce in Economics from Rhodes University, and is currently a Candidate for the Ph.D programme at the School of Economic and Business Sciences at the University of the Witwatersrand. He teaches a portion of the History of Economic Thought at the University of Cape Town. Views expressed are not necessarily those of GroundUp.