"The story of stuff" -- a great resource for economics teachers and students

While reading George Monbiot's column (published in today's Guardian), I followed his footnote to this great site that I hadn't seen before: The Story of Stuff Project. I watched their first 20 minute video of the same name -- thought provoking stuff! Perfect to show to my introductory economic class next term just after they've read the chapter on 'resource maintenance' and are doing the one on consumption and consumerism (in Microeconomics in Context, by Goodwin, Nelson, Ackerman, & Weisskopf).

There's a series of other videos, all with annotated transcripts freely available, where sources and more background information is given. A great resource!

RH

Stiglitz on growing inequality and its consequences

A great talk by Joseph Stiglitz (@Google) about his new book The Price of Inequality. He points out the useless nature of marginal productivity theory in determining the huge rewards enjoyed by some, how there is no correspondence between 'contribution to society' and the large fortunes at the top, which, he contends, also have a good deal to do with plundering those lower down on the food chain. (OK, he phrases it more diplomatically, calling it 'rent seeking'.)

Stiglitz@Google, 2012

Compared to the wealth of information like this that is available to today's undergraduate economics students, I feel like I was living in the stone age when I was a student in the 1970s. I hope their instructors are helping them to find such gems. Perhaps it's one of the best contributions we can make to their education.

RH

Debunking the propaganda about public investments

I read with interest Mariana Mazzucato's fine piece in today's Guardian. The title -- "Public money spent on 'digging ditches' won't stimulate the economy" -- initially put me off (after all, Keynes showed that was not true), but the subtitle -- "State spending to boost growth needs to go beyond mere investment – it must transform the economy" -- gets at the real subject of the article. (Nicholas Stern makes a similar argument regarding public investments in dealing with climate change, in particular in part 2 of this interview.)

Being lazy and also preparing for the start of classes this week, I wasn't going to write anything about Mazzucato's article, and my laziness paid off as Yanis Varoufakis wrote a much better piece about it than I would ever be able to, and it prompted me to add a link to his excellent blog in the list of blogs on this page.

By the way, I wrote earlier about Varoufakis's remarkable book Foundations of Economics: A Beginner's Companion. Check it out!

RH

Chris Hedges interviewed by Bill Moyers

A new book by Chris Hedges and journalist/graphic artist Joe Sacco, Days of Destruction, Days of Revolt, prompted this interview of Hedges by Bill Moyers. (The video appears at the bottom of the page in the link.)

Hedges is remarkably articulate and is very good at giving a clear glimpse into the ugly, violent and destructive underbelly of the system. I'll have to find some way to get students to see parts of this.

RH

A Finnish translation of The Economics Anti-Textbook?!

Recently, a colleague from Finland wrote to us that he was trying to interest publishers in Finland in a translation of The Economics Anti-Textbook. To get someone interested in doing that, some information about the book's use in universities would be useful. The publishers provide us nothing along these lines and I have searched the web as best I can and found half a dozen (quite varied) courses that have used it in one way or another, but I'm sure there are many more I don't know about.

If you have used it yourself, as an instructor or a student, or if you know someone who has, we would very much appreciate getting a note with some details. (Our gmail.com address is on the main blog page.)

Chinese edition of The Economics Anti-Textbook

Such is the language barrier, that only now did we discover that the Chinese edition of The Economics Anti-Textbook has been in print for a year. The Chinese title is 你最应该知道的 主流经济学  教科书的荒谬  which Google Translate awkwardly renders as 'You should be aware... of the absurdity of mainstream economics textbooks'. The cover (below, lifted from Amazon.cn) has a picture of a book whose interior appears to have been mostly shredded, which is not bad.

I'm curious to find out whether everything has been translated or whether any passages have been omitted in the interests of political correctness. As far as I could tell, the translation rights were sold with no restrictions concerning censorship.

RH

The art of economics

A series of essays (called Uneconomics) is appearing on the website Open Democracy. I found Judith Marquand's piece, "Economics as a public art" interesting. Although she doesn't mention it, John Maynard Keynes' father, John Neville Keynes (an economist at Cambridge) wrote a book in 1891 on the methodology of economics in which he argued that economics could also be considered an art, "having for its object the determination of practical rules of action".

But to arrive at 'practical rules of action' to deal with some of the major problems facing the world (which Marquand writes about), economists have to have a much wider vision than the narrow one reflected in standard maximizing models. The best economists have always thought like that, but it takes a wide range of skills to do so and that is not the training young economists are getting. As usual, JM Keynes best described the necessary skills in a famous passage from his obituary of Alfred Marshall:

the  master-economist  must  possess  a  rare  combination  of  gifts.  He  must  reach  a  high  standard  in  several different  directions  and  must  combine  talents  not  often  found together.  He  must  be  mathematician,  historian,  statesman, philosopher-in  some  degree.  He  must  understand  symbols and  speak  in  words.  He  must  contemplate  the  particular  in terms  of the  general,  and touch  abstract  and concrete  in the same flight  of  thought.  He  must  study  the  present  in  the  light  of the  past  for the  purposes  of the  future.  No  part  of man's  nature or his  institutions  must  lie  entirely  outside  his  regard.  He  must be  purposeful  and  disinterested  in  a  simultaneous  mood;  as aloof  and incorruptible  as an artist,  yet sometimes  as near the earth as  a  politician. (p.322)

The part of Marquand's essay that is most relevant to the subject of this blog (and our Anti-Textbook) comes near the end where she writes:

The teaching of economics needs to be changed from top to bottom. Students need to have a grounding in economic history, set in its social and political context. They need to learn some social psychology, drawing on insights from neuro-science and anthropology. They need training in social science research methods focussing heavily on areas which are often neglected in the training of economists – all the ethnographic methods. They need to think critically about selecting indicators; about the design of questionnaires; about the crucial importance of the assumptions when building models. They need to study the operation of current economic organisation set in its political context. And they need some understanding of the rich heritage of economic thought.

 RH

 

An example to us all

A comment yesterday below the second half of our interview with Naked Capitalism stood out for me. It was written by Gabe Langton about Professor Douglas Orr of City College of San Francisco and I hope no one will mind if it quote it in full.

I entered San Francisco City College just before the birth of my son in fall 2008, and was fortunate enough to take a microeconomics class taught by Douglas Orr, who spent the first two class sessions warning students to critically challenge the models that we’d be learning. He gave an analogy:  

“If you want to learn about an airplane, the cheapest way to do it is with a model airplane. Maybe you go out and get a build-n-paint F-16 from your local hobby shop. It’s a great way to get details about the appearance and dimensions of a real jet fighter. Or maybe you go out and get a little balsa-wood glider, which is a great way to get an intuition for basic aerodynamics. But every kid understands implicitly that F-16s are not built by snapping plastic chunks out of molded frames and gluing them together, just as every kid understands that you don’t go to the airport and get strapped onto a giant balsa wood trojan glidar and hurl [yourself] off a bridge. 

"As you learn about mainstream economics you will be continuously urged by your textbook to apply the models you are learning to the real world, and you will be faced with constant reminders of the predictive power of these models. But the reason I’m standing here talking to you is to remind you, just as constantly, that every single morning, in offices from Wall Street to the IMF, economists are strapping entire populations to wooden planes and launching them off bridges, throwing up their hands in helpless befuddlement at the inevitable grisly results, cashing their checks, and heading out for the golf course by 2pm.” 

I often visited him during office hours to turn in late work due to my son getting sick, or my hours at work overlapping with class time, and as far as I could tell he put in almost every second of his free time writing, consolidating, and refining instructional problems and examples in order to provide alternatives and context to the misleading shit in the text. It appeared to take monumental effort to do this while keeping it digestible enough that us community-college simpletons could still internalize the core concepts of economics. That he did it, year in and year out, and is still pulling it off, is amazing. Hopefully these texts and others like them will enable more of those economics professors like him, who are genuinely concerned with cultivating genuinely critical economic reasoning in future economists, to effectively revitalize the discipline.

Professor Douglas V. Orr, City College of San Francisco

Professor Orr's cautionary story about the dangers of taking a model too literally is a brilliant way to start a course. I envy his students!

RH

Tony and I interviewed on Naked Capitalism

Philip Pilkington, who writes for Naked Capitalism, did an interview with Tony Myatt and I recently and the transcript has been posted in two parts, the first part yesterday and the second part today. 

Phil Pilkington

There were some interesting comments posted about it. One that struck me as important was that by "Hugh", who wrote yesterday (2:55pm) and also writes today (12:17 pm), saying

Well if the idea is that we need an economics that actually describes the real world, why aren’t these guys working on the economics of kleptocracy? That is the real world. Instead we get this happy talk that there are a lot of exciting things going on in economics. But this simply isn’t true. Most of the “new” stuff is happening at the margins and strongly resisted by the profession.  ....

I do not want to come across as too harsh but what Hill and Myatt are doing reminds me of a critique of Scholasticism by Scholastically trained critics. There is the same attention to evey nook and cranny with the concomitant loss of the big picture. And the big picture here is wealth inequality, kleptocracy, and class war. These are not peripheral issues, they are the issues.

I fully agree with his view of the real issues, to which I'd add ecological destruction and the loss of millions of lives from things like needless pollution and from the consequences of needless inequality, mass death that we discuss in The Economics Anti-Textbook. 

Something that didn't end up being raised in the interview was that we set for ourselves a rather limited objective with the Anti-Textbook. The book is aimed at the undergraduate student and has the goal of providing that student with the first steps out of the maze into which they are invited by their textbooks. It is not an 'alternative textbook', but only volume 1 of a deprogramming manual for survivors of the typical undergraduate microeconomics course.

In the recent talk by Stephen Marglin that I've posted earlier on this blog, he says (around the 5 minute mark) that students do have to learn mainstream economics to be able to critique it properly and because it is "the language of power". Then, he says, there are critiques of it. "There is a critique within economics. It's a limited critique, but it is a critique. Indeed, if taken seriously, rather than being treated as sort of fine print, it would be a devastating critique of mainstream economics..." 

We agree and part of our objective in the book is to provide that 'devastating critique' that we hope works doesn't take the student too far from familiar territory, therefore making those steps away from 'textbook economics' the easiest to take. In places, we go beyond that too, dealing at least in a preliminary way with some of the other critiques that Marglin talks about.

"Hugh" might be right, though, about the "loss of the big picture" which I think could have been set out in a clearer and more forthright way.

RH 

Slow motion train wreck, part 23: fish stock destruction

We note in The Economics Anti-Textbook how the textbooks downplay the failure to deal with the plundering of the oceans.  This report from the great Center for Public Integrity on the slaughter of jack mackerel in the south Pacific sketches out the consequences of "decades of unchecked global fishing pushed by geopolitical rivalry, greed, corruption, mismanagement and public indifference".

RH

Self interest, from hypothesis to factoid: Elizabeth Warren as 'elitist hypocrite'

In an entry today in Paul Krugman's blog, he tries to understand the apparently senseless accusations by Massachusetts Senator Scott Brown's flunkies that Elizabeth Warren is an 'elitist hypocrite' and concludes that the flunkies don't know what 'hypocrite' means. While it's certainly possible that it's just being used as a term of abuse with no connection to its real meaning, I think another interpretation is possible

The right-wing hacks could be slaves of some defunct economist that they read back in their college days, whose text assumed that everyone pursues their 'self-interest'. But if carefully examined, the examples of self-interest in the textbooks implicitly assume a special form of narrow self-interest: the default case is that Person A gets utility from the goods and services that A alone consumes. No one explicitly cares about what anyone else consumes. In the core model in the textbook, this narrowly self-interested behaviour leads to 'efficiency' and a Pareto optimum where no one can be made better off without making someone else worse off. (A moment's thought can convince anyone that this says absolutely nothing about the desirability of this particular state of affairs, but never mind...)

It seems to be all too easy to slip from examining an unrealistic hypothetical situation that explores what would happen if people were actually like this, to assuming that all rational people actually do behave in this way. Back to Brown's flunkies' claims of hypocrisy against Elizabeth Warren.

'And if Elizabeth Warren is not a hypocrite then she' must be a Commie!!'

If we suppose for a moment that they aren't just hypocritical bullshitters (quite likely, given the pervasiveness of bullshit in our culture) and that they actually believe that Elizabeth Warren is narrowly self-interested, then she can't be advocating policies that would raise her own taxes out of conviction that these would be a good thing. No, she must be pretending to support those policies achieve even greater gains for herself, namely winning a Senate seat and then (who knows?) maybe she could get a $700,000 advance on her memoirs like Senator Brown has received.

RH

Jim Stanford reviews The Economics Anti-Textbook

Jim Stanford, an economist with the Canadian Auto Workers and the author of the excellent introductory primer, Economics For Everyone, recently reviewed The Economics Anti-Textbook for the Canadian journal Labour/Le Travail (Issue 68, Fall 2011). If you're interested in reading the review and don't have access to that journal, a copy of the review appears here, at least for now.

Here is the last part of his review:

My only significant critique of this book probably derives inherently from its basic structure as a topic-by-topic critique of simplistic neoclassical pedagogy. The extremes of neoclassical thought, especially in its stereotypical textbook incarnations, provide an easy target for piece-by-piece disassembly and refutation. The specific critiques catalogued so helpfully by Hill and Myatt are not, for the most part, new. Yet the edifice of Walrasian thought still dominates academic economics and (more importantly) real-world economic discourse and policy-making. In addition to highlighting the logical failures of specific neoclassical assumptions, models, and conclusions, there is also a way in which neoclassical analysis--rooted in a model of optimizing behaviour by atomistic agents who engage in equal, efficient exchange--fundamentally misportrays the essence of economic activity in real-world capitalism.  

We therefore need to do more than just snipe around the edges of the neoclassical edifice--with critiques that ultimately accept the Walrasian portrait of the economy as a place where people exchange things through markets. (My former professor John Eatwell describes this class of criticisms as "imperfectionist" in nature, in the sense that if it were not for some flaw or imperfection in the market mechanism--be it imperfect information, limited rationality, "sticky prices," or whatever--then the assumed mutually beneficial equilibrium would finally come to pass.) That's where we need a textbook that presents a comprehensive and holistic alternative depiction of how the economy actually works. I can imagine one that would start by describing the reality of work, production, accumulation, and innovation under capitalism, highlighting the asymmetry and inequality between different stakeholders (in terms of power and agency, not just income and wealth), describing the core mechanism of production for profit that defines capitalism, explaining the history and institutional reality of money (which neoclassical microeconomic models still have not successfully incorporated), and exploring the dynamics of all these processes for growth, development, cycles, and distribution. This would not constitute an anti-textbook in the sense of refuting specific assumptions and predictions of the Walrasian system. It would, instead, erect a competing intellectual edifice.  

There are places in this book, despite the incrementalist mission they set at the outset, where Hill and Myatt do verge on a more fundamentalist critique of neoclassical economics (moving beyond just challenging the formulations of its simplistic textbook variants). For example, in numerous locations in the book they discuss the role of power in shaping both production and exchange. That is not an imperfection or a market failure, it is a completely different dimension along which to understand human economic interactions. Their discussion of government and political-economy similarly reveals a more fundamental divergence from the core structures of neoclassical analysis. In this way, Hill and Myatt's catalogue of the many specific failures of neoclassical microeconomics should hopefully whet the appetite of critical thinking students to pursue completely different, heterodox explanations of how the economy actually works. While many references are provided to examples of this sort of work, Hill and Myatt could be more explicit, in my view, in connecting the dots and guiding the reader to those comprehensive alternative models.  

Nevertheless, for students and others who possess a gut-level faith in the potential of economics to make the world a better place, but are constrained by stultifying introductory neoclassical curriculum, this anti-textbook will be invaluable in enhancing their capacity and their confidence to challenge orthodoxy--and ultimately to look beyond it. 

RH