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Economics
is now so sick that even members of its
inter-sanctum publicly admit it. For example,
six winners of the Bank of Sweden Prize for Economics, alias “Nobel Prize for
Economics”, have written as follows.
". . . economics has
become increasingly an arcane branch of mathematics rather than dealing with
real economic problems"
Milton
Friedman
“[Economics as taught] in America's graduate schools... bears
testimony to a triumph of ideology over science.”
Joseph Stiglitz
"Existing economics is a
theoretical [meaning mathematical] system which floats in the air and which
bears little relation to what happens in the real world"
Ronald
Coase
“We live in an
uncertain and ever-changing world that is continually evolving in new and
novel ways. Standard theories are of
little help in this context.
Attempting to understand economic, political and social change
requires a fundamental recasting of the way we think”
Douglass North
“Page after page of
professional economic journals are filled with mathematical formulas […] Year
after year economic theorists continue to produce scores of mathematical
models and to explore in great detail their formal properties; and the
econometricians fit algebraic functions of all possible shapes to essentially
the same sets of data”
Wassily
Leontief
“Today if you ask a mainstream
economist a question about almost any aspect of economic life, the response
will be: suppose we model that situation and see what happens…modern
mainstream economics consists of little else but examples of this process”
Robert
Solow
Post-Autistic Economics is about changing
this state of affairs.
"Economics
is supposed to be social science, i.e. an intellectual discipline resting
upon empirically-observed facts, in which mathematics and conceptual frameworks
are tools for understanding. But in contemporary mainstream economics,
the tools are often in the driver's seat, declaring evident facts impossible
and reducing the subtleties of the real world to whatever clockwork
economists best know how to build. Post-Autistic economics is the
attempt to escape the tyranny of these tools and build new ones that
will work properly."
Ian Fletcher
“Modern economics is sick. Economics
has increasingly become an intellectual game played for its own sake and not for
its practical consequences for understanding the economic world. Economists
have converted the subject into a sort of social mathematics in which
analytical rigour is everything and practical relevance is nothing.”
Mark Blaug
Contents
Introduction
Contents
Here are more things seriously
wrong with traditional economics that Post-Autistic Economics addresses.
“.
. . the close to monopoly position of neoclassical economics is not
compatible with normal ideas about democracy.
Economics is science in some senses, but is at the same time
ideology. Limiting economics to the
neoclassical paradigm means imposing a serious ideological limitation. Departments of economics become political
propaganda centers . . .”
Peter Söderbaum
“Economics students . . . graduate from Masters and PhD programs
with an effectively vacuous understanding of economics, no appreciation of
the intellectual history of their discipline, and an approach to mathematics
that hobbles both their critical understanding of economics and their ability
to appreciate the latest advances in mathematics and other sciences. A minority of these ill-informed students
themselves go on to be academic economists, and they repeat the process. Ignorance is perpetuated”
Steve Keen
"Undergraduate
economics is a joke -- macro is okay, but micro is a joke because they teach
this stuff that you know is not true. They know the general equilibrium model
is not true. The model has no good stability properties, it doesn't predict
anything interesting, but they teach it ... "
Herbert Gintis
“The
human economy has passed from an “empty world” era in which human-made
capital was the limiting factor in economic development to the current “full
world” era in which remaining natural capital has become the limiting factor
“
Robert Costanza
“Most courses deal with an ‘imaginary world,’ and have no link
whatsoever with concrete problems.”
Emmanuelle Benicort
“All of these textbooks fail to explain how prices are
determined in ‘markets’’ and thus how markets work. Where do prices come from? Who determines them? How do they fluctuate? These questions are never addressed, even
though it is through the price mechanism that the ‘invisible hand’ is
supposed to operate.”
Le Mouvement Autisme-Économie
“. . . mainstream economists seek knowledge through numbers to
stop the messy reality of people, processes and politics dirtying their
invisible hands.”
Alan Shipman
“Multinationals are everywhere except in economic theories and
economics departments.”
Grazia Ietto-Gillies
“. . . the economist must
engage him or herself as a citizen with convictions regarding the public good
and ways of treating it, rather than as the holder of universal truth that he
or she substitutes for discussion in order to impose it on us all.”
André Orléan
“The Taliban, and its variety of
fundamentalist thinking, has been the most controlling and oppressive regime
with regard to women in contemporary times.
Contemporary academic economics, and contemporary global economic
policies, are gripped by other rigidities of thinking – what George Soros has dubbed ‘market fundamentalism.’ Fantasies of control are operative in both
phenomena, and gender is far from irrelevant to understanding their power,
and their solution.”
Julie A. Nelson
“There is an urgent need for a more realistic economics of the
environment, with theories and analyses that can help to create
environmentally sustainable economic activity.”
Frank Ackerman
“Modern economics is not very
successful as an explanatory endeavour. This much is accepted by most serious
commentators on the discipline, including many of its most prominent
exponents”
Tony
Lawson
“Because mathematics has swamped the
curricula in leading universities and graduate schools, student economists are
neither encouraged nor equipped to analyze real world economies and
institutions.”
Geoffrey M. Hodgson
“. .
. the concepts of uneconomic growth, accumulating illth,
and unsustainable scale have to be incorporated in economic theory if it is
to be capable of expressing what is happening in the world. This is what
ecological economists are trying to do.”
Herman E. Daly
“The
application of mathematics to economics has proved largely unsuccessful
because it is based on a misleading analogy between economics and physics.
Economics would do much better to model itself on another very successful
area, namely medicine, and, like much of medicine, to adopt a qualitative
causal methodology.”
Donald Gillies
“Economic
history courses have been disappearing from classrooms across the world. Once
a compulsory part of economics education, they have been relegated to the
remote corners of ‘options’ and even closed down.”
Ha-Joon
Chang
“In
Smith is a forgotten lesson that the foundation of success in creating a
constructive classical liberal society lies in the individuals’ adherence to
a common social ethics. According to Smith, virtue serves as ‘the fine polish
to the wheels of society’ while vice is ‘like the vile rust, which makes them
jar and grate upon one another.’ Indeed, Smith sought to distance his thesis
from that of Mandeville and the implication that individual greed could be
the basis for social good. Smith’s deistic universe might not sit well with
those of post-enlightenment sensibilities, but his understanding that virtue
is a prerequisite for a desirable market society remains an important lesson.
For Smith ethics is the hero-not self-interest or greed-for it is ethics that
defend social intercourse from the Hobbesian
chaos.”
Charles K. Wilber
“. . . conventional
economics . . . remains fixated on the view that economics is the physics of
society. In other words, most of the
profession behaves as if there were a single universally valid view of the
world that needs only to be applied.”
Paul Ormerod
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Topics
Ecological
Economics Ethics Heterodox
Economics Pluralism Development
The Post-Autistic Economics Movement A brief
history
The Strange
History of Economics
Policy
Implications of Post-Autistic Economics
Network
Resources
Some articles on the PAE Movement
“Teaching Economics: PAE and Pluralism”, (EAEPE,
July 2005)
“Post-Autistic
Economics” (Social Policy, summer 2005)
“Post-Autistic
Economics” (Soundings, April 2005)
“Signifying nothing?” (The Economist, Jan 29, 2004)
“Revolutionizing
French Economics” (Challenge,
Nov/Dec. 2003) pdf
“Fired up for
battle” The Guardian (UK) 9 September 2003
”Taking On 'Rational Man'” The Chronicle of Higher Education (US) 24 Jan. 2003
”The 2002 Nobel
Prize in Economics” The Journal of Investing (US) Spring 2003
“The Storming of the
Accountants” The
New Statesman (UK)
21 Jan. 2002
“Post-autisten' vallen economische heilige huisjes aan” De Morgen (Bruxelles) 2
Mar. 2002
English Translation
“movimiento económico postautista” IBLNEWS, 14 March 2002
“Distorted economic
relations: A new movement – the post-autistic economists
want to renew economics”
Sueddeutsche Zeitung (Munich) 3 April 2002
Some
important PAE texts
The Student Petition of Autisme-Economie (June 2000)
French Petition for a
Debate on the Teaching of Economics (July 2000)
Issue No. 1 of the post-autistic
economics newsletter ( September
2000)
A Contribution on the State of Economics in
France and the World
James K. Galbraith
Autistic Economics vs.
the Environment
Frank
Ackerman
Humility in Economics
André Orléan )
Real Science is
Pluralist
Edward Fullbrook
Teaching Economics Through
Controversies
Gilles Raveaud
Back to Reality
Tony Lawson
The Relevance of Controversies
for Practice as Well as Teaching
Sheila C Dow
Opening Up Economics
The Cambridge 27
Economists Have No Ears
Steve Keen
An International Open Letter
"The Kansas City
Proposal"
How Did Economics Get Into
Such a State?
Geoffrey Hodgson
Why the PAE
Movement Needs Feminism
Julie A. Nelson
Kicking Away the Ladder: How the Economic and Intellectual
Histories of Capitalism Have Been Re-Written
to
Justify Neo-Liberal Capitalism
Ha-Joon
Chang
Economic History and the Rebirth of Respectable Characters
Stephen
T. Ziliak
Some Old But Good
Ideas
Anne Mayhew
An
Alternative Framework for Economics
Jason Potts and John Nightingale
Susan Feiner
Is There Anything Worth
Keeping in Standard Microeconomics?
Bernard Guerrien
Doctrine-centered Versus Problem-centered
Economics
Peter Dorman
Social Being as a
Problem for an Ethical Economics
Jamie Morgan
The Petitions
Student Essays on PAE
Two World Views: Ecological
Economics vs. Environmental Economics
German Section
French Section
Portuguese
Section
Spanish
Section
Chinese,
Flemish, Italian and Turkish Sections
The
Perestroika Movement -
a sister movement to PAE in political
science
Miscellaneous
Some more
articles concerning the PAE Movement
New Post-Autistic Economics Books
A Brief History of the Post-Autistic
Economics Movement
Theories, scientific and
otherwise, do not represent the world as it is but rather by highlighting certain
aspects of it while leaving others in the dark. It may be the case that two theories
highlight the same aspects of some corner of reality but offer different
conclusions. In the last century, this
type of situation preoccupied the philosophy of science. Post-Autistic
Economics, however, addresses a different kind of situation: one where
one theory, that illuminates a few facets of its domain rather well, wants to
suppress other theories that would illuminate some of the many facets that it
leaves in the dark. This theory is
neoclassical economics. Because it has
been so successful at sidelining other approaches, it also is called
“mainstream economics”.
From the 1960s onward,
neoclassical economists have increasingly managed to block the employment of
non-neoclassical economists in university economics departments and to deny
them opportunities to publish in professional journals. They also have narrowed the economics
curriculum that universities offer students.
At the same time they have increasingly formalized their theory,
making it progressively irrelevant to understanding economic reality. And now they are even banishing economic
history and the history of economic thought from the curriculum, these being
places where the student might be exposed to non-neoclassical ideas. Why has this tragedy happened?
Many factors have contributed,
but three especially. First,
neoclassical economists have as a group deluded themselves into believing
that all you need for an exact science is mathematics, and never mind about
whether the symbols used refer quantitatively to the real world. What began as an indulgence became an
addiction, leading to a collective fantasy of scientific achievement where in
most cases none exists. To preserve
their illusions, neoclassical economists have found it increasingly necessary
to isolate themselves from non-believers.
Second, as Joseph Stiglitz has observed, economics has suffered “a triumph
of ideology over science”.1
Instead of regarding their theory as a tool in the pursuit of
knowledge, neoclassical economists have made it the required viewpoint from
which, at all times and in all places, to look at all economic
phenomena. This is the position of neoliberalism.
Third, today’s economies,
including the societies in which they are embedded, are very different from
those of the 19th century for which neoclassical economics was
invented to describe. These
differences become more pronounced every decade as new aspects of economic
reality emerge, for example, consumer societies, corporate globalization,
economic induced environmental disasters and impending ecological ones, the
accelerating gap between the rich and poor, and the movement for
equal-opportunity economies.
Consequently neoclassical economics sheds light on an ever-smaller
proportion of economic reality, leaving more and more of it in the dark for
students permitted only the neoclassical viewpoint. This makes the neoclassical monopoly more
outrageous and costly every year, requiring of it ever more desperate
measures of defense, like eliminating economic
history and history of economics from the curriculum.
But eventually reality overtakes time-warp worlds like
mainstream economics and the Soviet Union.
The moment and place of the tipping point, however, nearly always
takes people by surprise. In June 2000
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The Strange History of Economics
These days people like to call
neoclassical economics “mainstream economics” because most universities offer
nothing else. The name also
backhandedly stigmatizes as oddball, flaky, deviant, disreputable, perhaps
un-American those economists who venture beyond the narrow confines of the
neoclassical axioms. To understand the
powerful attraction of those axioms one must know a little about their
origins. They are not what an outsider
might think. Although today neoclassical
economics cavorts with neoliberalism, it began as a
honest intellectual and would-be scientific endeavour. Its patron saint was neither an ideologue
nor a political philosopher nor even an economist, but Sir Isaac Newton. The founding fathers of neoclassical
economics hoped to achieve, and their descendents living today believe they
have, for the economic universe what Newton had achieved for the physical
universe.
This brief article roughly
traces the strange history of economics from the 1870s through to the
beginning of Post-Autistic Economics movement in the summer of 2000. .................... more
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Policy Implications of
Post-Autistic Economics
The neoclassical monopoly in the classroom and its prohibition on
critical thinking means that it brainwashes successive generations of students
into viewing economic reality exclusively through its concepts, which more
often than not misrepresent or veil the world, especially today’s world. Nearly all of these neoclassical notions
have a bearing on judgements about social, cultural and economic policy. Consequently, if society were to learn to
think about economic matters outside the neoclassical conceptual system, it
would almost certainly choose different policies. One of Post-Autistic
Economics’ (PAE)
projects has been to expose some of the many conceptual lunacies of today’s mainstream, both in terms of
the concepts it uses and the concepts it lacks. Drawing on recent essays by PAE economists in A Guide to What’s Wrong with
Economics, especially the chapters by Michael A. Bernstein, Geoffrey Hodgson, Peter Söderbaum, Hugh Stretton, Richard Wolff, Robert Costanza, Herman E. Daly,
Jean Gadrey and Edward Fullbrook,* this brief article briefly considers ten
such concepts.
Neoclassical economics regards competition as a state rather
than as a process. It defines perfect
competition as a market with a large number of firms with identical
products, costs structures, production techniques and market
information. But in real life
competition is a process by which firms continually seek to re-establish the
conditions of their own profitability.
To compete in a market requires firms to seek out and exploit
differences between them in production, technology, distribution, access to
information and awareness of trends in consumption. These differences are the essential
dimensions in which competition takes place.
Once the neoclassical conception of competition becomes imbedded in
the student’s mind, appreciation of real-world competition, and hence the policies
that might enhance it, becomes logically impossible.
Neoclassical economists love to talk about freedom of choice. But this is pure rhetoric, because they
define rationality in a way that eliminates free choice from their conceptual
space. By rationality they mean that
an agent’s choices are in conformity with an ordering or scale of
preferences. The “rational” agent
chooses among the alternatives available that one which is highest on his
ranking. Rational behaviour simply
means behaviour in accordance with some ordering of alternatives in terms of
relative desirability. In order for
this approach to have any predictive power, it must be assumed that the
preferences do not change over some period of time. So
the basic condition of neoclassical rationality is that individuals must forego
choice in favour of some past reckoning, thereafter acting as automata. This conceptual elimination of freedom of
choice, in both its everyday and philosophical meanings, gives neoclassical theory
the hypothetical determinacy that its Newtonian inspired metaphysics
require. No indeterminacy; no
choice. No determinacy; no
neoclassical model. This is far from
just an academic matter, because society needs an economics that is able to
address questions regarding freedom of choice.
No terms in neoclassical economics are more sacrosanct than rational
choice and rationality.
Everyone identities with these words, because everyone wants to think
of themselves as rational. But few
people realize that economists give these words an ultra eccentric
meaning. Neoclassical economics begins
with an a priori conception of markets and economies as determinate
systems that by the action of individual agents alone tend toward an
efficient and market-clearing equilibrium.
This requires that the individual agents, like the bodies in Newton’s
system, behave in a prescribed manner.
Neoclassicalists have deduced the particular
pattern of behaviour that would make their imagined world logically possible,
then named it “rational choice” or “rationality” and then declared that that
is the way real people behave. But
thankfully they don’t. Everyday
economic actors do many things that by the neoclassical meaning of “rational”
are “irrational”. Looking to the choices
of other consumers as guides to what one might buy; buying a stock because
you believe other people will be buying it and so increase its value,
spending your money in a spirit of spontaneity rather than stopping to
calculate the consequences and alternatives up to the limits of your
cognitive powers; a taste for change, that is, buying something because you
did not previously prefer it; these common consumer behaviours are all
prohibited under the neoclassical notions of rational choice and rationality
and so outside its scope of analysis.
These failings connect with another.
Neoclassical economics is by its own axioms incapable of offering a
coherent conceptualisation of the individual or economic agent. From where do the preferences that supposedly
dictate the individual’s choice come from?
Not from interpersonal relations, because if individual demands were
interdependent, they would not be additive and thus the market demand
function – neoclassicalism’s key analytical tool –
would be undefined. And not from
society, because neoclassicalism’s Newtonian
atomism translates as methodological individualism, meaning that society is
to be explained in terms of individuals and never the other way around.
This leaves an awful lot in the dark. In the main, despite the neoclassical
axioms, we all categorise and classify according to prevailing cultural
norms. Likewise our tastes and
preferences for this and that reflect the social conventions and institutions
with which we interact. Consequently
individual choice is unavoidably and inextricably bound up with historically
and geographically given social worlds.
An economics that has nothing
to say about the formation of economic tastes and preferences is silly and
irresponsible, especially in an age of consumer societies and in a world now
threatened with climate-change or worse.
For half a century neoclassical economics has hid its ideology behind the
notion that it calls positive economics. This is the idea that it contains no value
judgements because it mentions none.
Of course such a notion belongs to an intellectually more naive age
than today, but nonetheless it persists as an effective tool of
indoctrination of undergraduates. The
fact that neoclassical economics requires a highly restricted focus in order
to maintain its atomist and determinist metaphysics compels it to make many
extreme judgements about what is and is not economically important. There is not space even to list them. But an example is its notion of “economic man”, which is acutely
ideological, as it emphasizes some roles and relationships and excludes
others. By allowing only decisions
based on utility maximization, it excludes other forms of ethics. As an economic agent, each individual acts
in many roles, not just market ones, and is guided by his or her “ideological
orientation”. That orientation may be
founded on utilitarianism or not. It
may for example be based on social and environmental ethics. PAE economists do
not believe that economists have the right to select one ethics as the
“correct” one for framing economic analysis.
Furthermore the neoclassical insistence upon the utilitarian ideology
legitimises a kind of “market ideology” and “consumerism” that increasingly
appears dangerous to society and sidelines the debate about Sustainable
Development.
Like rationality, nearly everyone thinks efficiency is a good
idea. Neoclassical economists adore
using this word, especially when addressing the public. But the meaning of “efficiency” always
depends on what you choose to count.
For example, .............. more
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