In a behavioural economics class recently, I was discussing the concept of pluralism. The exact question up for discussion was, “is economics right?” which – before any answer can be given – demands we understand what economics actually is. From these postgraduate students with whom I was speaking, ideas were provided hesitantly. Economics involved supply and demand and had something to do with utility maximisation. Keynes had been an economist, one student has said.
Answering the question of what economics is is an essay for another time. My response to these students, then, given the daunting task that might have faced me, was that economics was the study of value systems. It questions what society values, how it values things and – on the question of utility – what does value actually mean?
Again, these are big questions, and often superfluous ones. I argued as much; economics as a discipline is innately tied to political forces, with political economy, for example, often being the study of what to do with surplus production. Beyond anything, this is a political question. At this point, I believe there was a realisation. If politics can change, so too can economics. If attitudes can change, so too can what we value.
This is a useful, but dangerous way to think about economics. It allows economics a freedom not available to its counterparts in the natural sciences – the ability to change and adapt as necessary. But it is dangerous because, particularly when taught, it suggests that for every political/social/economic problem, there is an economic school which can solve it. This is a bastard form of pluralism, and it is what I desire to discuss.
First, however, here is a problem. In less pompous language than my own, a student asked me how we can know which economic key fits a given policy lock? In other words, what is correct economics today, and how will we know if it’s still correct tomorrow?
This desire for absolutes amongst an academic trail of ‘isms,’ is understandable, if regrettable. This is not what I wish to linger on. Rather, I will conclude my story. My view of pluralism is what one student called nihilistic economics: nothing is right, nothing is wrong, nothing is known, and everything is possible. In the face of such an open-ended philosophy, an important question was asked. What is the point?
This is a question I have thought about, so much so I have been inclined to write about it. It is a question that resonates because, in one form or another, I have seen this sentiment before. This will not be an attack on the present pluralist movement, or the institution of which the movement consists. I am, in broad strokes, an ally of that campaign, and celebrate their victories. But, in a way I fear is characteristic of a pluralist, I believe some worthwhile words may be said. After all, nothing is right, nothing is wrong.
My definition of pluralism is a personal one. A more common definition may be, “the study of various, sometimes contradictory, schools of economic theory and analysis.” By this definition, the mission of organisations such as Rethinking Economics, or the activism of groups such as the Post-Crash Economics Society cannot be criticised. Neither can the wider goals of groups such as Joe Earle’s Economy charity, who aim to reform the image of economics as a closed off subject and the economy as an amorphous creature into an image that is more representative of reality; one of real people, decision making and the values which underpin those actions. I wholeheartedly applaud this effort and will return to this in due course.
I want to first consider another anecdotal experience. Several years ago, I attended a roundtable discussion on universal basic income held by the Post-Crash Economics Society. At the time I was sceptical of UBI, and remain somewhat still, yet objectively I would not deny UBI’s place as a heterodox economic position. I voiced my scepticisms, and everyone politely listened, before others voiced their opinions (some more developed and significantly better researched than mine). This was pluralist economics in action, but I too found myself wondering what was the point? After some consideration, I think I know the cause of my dissatisfaction; it was academic.
Let us think about UBI. In terms of tackling rising inequality and automation, UBI may be a solution. It may be a necessity in a market rationing form of socialism as suggested by Peter Frase, or as a market perpetuating tool in a Keynesian economy where profit tends too zero. Friedman even proposed UBI in the form of negative income tax, and indeed a dubious argument could be made that the tax-free income allowance is a form of UBI.
These are very pluralistic takes on universal basic income. They are not particularly practical. While I accept the argument that discussing these ideas with students makes them familiar and facilitates policy formation in the future, I feel this is insufficient, and an absence of emphasis on practicality is a present weakness of a supposed pluralistic curriculum. After all, when that postgraduate student asked what the point of pluralism was, it was not out of blind faith to the neoclassical paradigm. It was because, for all the talk of Marx, Keynes and Hayek, they needed to see the big picture – to see the policy.
This is not a universal criticism. In my own field of behavioural economics, great strides have been made to bring it into the mainstream, alongside practical developments such as the creation of the UK Behavioural Insights Team (BIT) and the advent of behavioural public policy. Unfortunately, for much of the pluralist movement, pluralism consists of taking books usually reserved for the niche work of postgraduates and giving them to undergraduates without much context.
Maybe, however, this is something which must be allowed to develop as the movement does. As pluralism re-enters economics education, educators will surely have to adapt the literature to identify the point of it all. It is also, perhaps, a consequence of our higher education system, with knowledge regularly treated as a commodity, rather than an end in itself. On this latter point, the power of the pluralist movement is limited; on the former, we can do more. The consequences of not doing so are, in the short-term, defeatist: replacing consumption functions with a copy of Capital will do little other than increase library withdrawals.
We must teach pluralism not simply as an ideology in itself, but as a practical reimagining of economic progress, one that recognises as part of its programme where we are, where we have been and where we might be heading. Central to this, I believe, will be an expansion of scope, one that includes political science, philosophy and anything else which one determines to be relevant to our contemporary world.
While Keynes remarked in the long-run we are all dead, pluralism must not fear this horizon either. Part of the logic of disseminating more, ‘niche,’ economic literature not just to undergraduate students but to non-economists (by which I mean ordinary people) is because most people do not go on to discover these ideas for themselves, as few continue to postgraduate or doctoral study. I recognise this, and so I encourage the pluralist movement to continue in this endeavour.
However, it is an insufficient argument that these graduates, now knowledgeable of heterodox thought, will necessarily go onto shape policy with those ideas. Indeed, it may be this reasoning which is why an emphasis on policy in tandem with pluralism has not, in my opinion, been a priority. This argument is insufficient because of what Veblen might call a hurricane: institutional culture.
Another way of thinking about this might be to adjust what Mark Fisher called capitalist realism; while Fisher employed the term to criticise the belief in the inevitability of capitalism, we might call neoclassical realism the belief in the inevitability of the eponymous economic school. All professional economics graduate employers follow some degree of neoclassical realism, and demand an adherence to a particular economic method, rationale and standard – not a school of thought. And, for that matter, no aspiring economist would get very far if they wore their ‘allegiance,’ on their sleeve.
Again, with the exception of perhaps behavioural economics, few heterodox ideas have made a place for themselves in the mainstream. Some ideas, such as the push to get unpaid household work recognised in official statistics, or to get recognition of climate, ‘externalities,’ in growth and risk assessments, have made traction too. These are real achievements of which the pluralism movement deserves some credit. But Goldman Sachs do not want a Marxist economist, just as the civil service do not want an Austrian; both simply want good economists that can evaluate policy/strategy effectively.
The role of the pluralist movement in this reality may be, as I suggest, to engage in the policy realm as much as the academic. Equally, it may be to lobby business and government to recognise the issues the incurious analysis such as theirs produce. Ideally, the movement will do both.
This, of course, will be a long-term project, and one which may risk debasing the movement if the movement takes a stance beyond advocation of pluralism. But I believe recognising the practical employment needs of economics graduates would serve the movement well. Again, I return to the question: what is the point? For a student of economics, what is the point of pluralism if it is not going to be used in job procurement? And for pluralism, surely this is partly the goal: to get real economists thinking differently.
By my definition of pluralism, I of course disagree with this utility maximising sentiment. Pluralism should be about adaption, enabling our economists to understand trends and build models in a way that better reflects the real world. Was this not the original failing of neoclassicalism? But as long as pluralism is taught as a lock-and-key approach; as long as something like UBI is explored an academic curiosity rather than a real world policy decision with all the problems that go along with it; as long as pluralism is a call to eat forbidden fruit, rather than to grow some of our own, the same question we ask of neoclassicalism can be asked of us: what is the point?
Today’s and Tomorrow’s Work
Reading the Econocracy, it is clearly a rallying cry by enthusiastic and academic minds calling for movement in the face of intransigence. This is a cry worthy of praise, and praise too should be given to those that continue to advance the movement today. Particularly, I might add, in its efforts to democratise economics. In these times of tremendous global uncertainty, direction should not be left to a select few. Furthermore, in advancing this agenda, problems of institutional dogma may subside as the wider population questions and re-evaluates, say, the role of the state, of finance, or of higher education. These goals, primarily to expand the economics discipline inside and out, should remain the core aims of the movement, and in far too many areas, from feminism to environmentalism, the subject remains unchanged. In other words, we still have work to do.
But hand-in-hand with knowledge must come purpose. Marx’s writing is as much a history of the Victorian worker as it is political economy; Hayek’s as much a love letter to classical liberalism as it is economic theory. Context matters, and pluralism should embrace a campaign of why economics is taught as much as what economics is taught and how. These things are surely not the same. Without the why – without the point – many efforts may be wasted.