Friday, 11 April 2014

Rethinking Economics Italia - Manifesto

Modern economics is a discipline that confronts a stark contrast between its willingness to reform and the static reality it faces, endlessly stuck on its own problems.

 Supporters of quantitative methods and supporters of qualitative methods often disagree about the role either plays in modern economics. While the former put forth a realist view of the world, the latter cry for normative reforms: students need to be taught how things should be rather than how they just are. Herein lies the figure of the social scientist, whose lack of interdisciplinarity today inevitably leads to a debate that is nothing short of hollow.

We need to stop thinking of the economist as someone who is able to tell us how things are going to change, how any economic policy affects our lives, and start turning future economists into social scientists who know how to face social, ethical, and anthropological problems alike. It is they who are going to carry on the normative approach, in a better, independent way.

Social scientists of tomorrow must base their work on their own beliefs, yet must overcome their creeds and to refute them, if needed. Their job is not to find the truth as much as disprove it. It is their own intellectual honesty and open-mindness which makes them a reliable scientist.

For this very purpose, we need to challenge the concept of the economics faculty as an institution whose sole job is to prepare its pupils to manipulate the inner workings of financial capitalism.

But even here universities fall short, and there are two words that tell us why: mainstream economics. In almost every university swathes of students are taught but mainstream economics – post-Keynesian and neoclassical. The rationale underlying this choice is that these are the only theories used by policymakers. A vicious cycle is thus created: alternative economic theories are put aside because they lack empirical evidence, and they lack empirical evidence because no policymaker wants to use them.

Therefore, we need to provide students, if possible from the very start of their academic careers, with the chance to have a taste of the different lines of economic thought, and to provide them with teachings that go pari passu with the evolution of the economic thought itself. To study different ways of thinking does not mean making things hard for the pupils as much as it means broadening their horizons.

We also need to overcome the hegemony of quantitative thinking. Quantitative tools, lacking variables that economic processes themselves cannot take into account, inevitably lead many a theory to fail. However, it needs to be said that challenging this hegemony does not mean reducing the use of quantitative tools; rather, it means aiming at discovering mathematical and statistical models that can take into account social and political parameters.

As of now, in fact, theoretical teachings and practical matters are completely out of kilter with each other. Economics, like any other social science, is created by people for other people. Hence, it withholds human virtues as much as its vices. Wrongdoings are commonplace and just because a law – be it economic, social, or political – works, it does not mean that it is right. Along similar lines, just because an economic theory has worked in the past, does not mean that it will fulfill any future needs.

Future social scientists, therefore, need to be prepared to work on the subtle difference between equity and equality and it is crystal-clear that modern economics cannot provide them with the necessary tools to face such a gigantic task. Rather than trying various (and not very successful) one-size-fits-all measures, universities should focus on offering specific trainings that encourage their students’ inclinations. This way, students can choose whether to follow a business-oriented career by applying to a business school, or to to continue towards a more academic path, in brand-new schools for social sciences.

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