In the summer of 2009, the leading opinion magazine The Economist argued that limitations in economics education also contributed to the onset of the crisis. Irene van Staveren, professor of pluralist development economics, is therefore calling for more pluralism in economics education. What do other economists think about that?
In economics education, too little attention is given to alternative approaches, stated Van Staveren in an interview with EM. There is too much emphasis on the mainstream, neoclassical concepts and models, that focus on efficient markets and human-beings as rational actors looking for utility maximisation (the homo economicus).
As a result, economists forget valuable ideas from approaches such as institutional, Marxist or social economics. “If economists had paid more attention to this in their teaching and policymakers had remembered and put it to use, regulation of the financial sector would have been different, banks’ risk models would have been different and we would not have had to experience the crisis to this extent.”
It is, therefore, high time that we also embrace social and institutional economists, thinks Van Staveren. Not instead of neoclassical theory, but alongside to it. “It is not about telling students what is right and wrong, but you have to offer them a wider spectrum. That can only enrich education.”
‘Economics has actually become increasingly diverse'
Professor of economics, Robert Dur: “It is true that in economics education we don’t work through school, after school, after school. That’s not how economic practice has worked over the last twenty or thirty years. It’s more of a big crowd of economists that is interested in understanding various economic processes, and that crowd also shops in other disciplines. Previously, you did indeed have several schools, including the institutional economics with prominent figures such as Thorstein Veblen. I have the impression that many of the valuable aspects of these theories have been incorporated into the mainstream economics.
“I don’t think that the mainstream economics can be understood with just one school, and I certainly wouldn’t call it neoclassical. That image of homo economicus is so far removed from current economic practice in research and education. Currently, papers with titles like Who behaves irrationally and when? are appearing in the best journals.
“Is economics education one-sided? I don’t think so. It has actually become increasingly diverse in recent years. Increasingly more attention is being paid to behavioural economics as well as insights from psychology and sociology.
“Over the last ten, fifteen years, economics has become much more empirical. You also see a clear shift towards the field: there is much more research going on in collaboration with companies and other organizations, at the expense of theory development. I think that the process comes in waves: in the past, many complained that there was too much emphasis on theory, that economists were sitting in their ivory towers and were inwardly focused. Now you hear that economics is too empirical and that we need to concentrate more on theory development. I expect that, over the next ten or twenty years, more attention will once again be given to theory.”
‘Pluralism is part and parcel of an academic study programme'
Assistant professor Brigitte Hoogendoorn, Economics and IBEB programme coordinator and programme director of the honours class: “Irene van Staveren’s plea for more pluralism is justified. Multiple perspectives should be covered as part of an academic study programme, and pluralism is essential for that. I do think, however, that the economics curriculum is more diverse than Van Staveren suggests.
“History of economic thought, ethics, behavioural economics; these aspects are dealt with at several points in the curriculum. Behavioural economics is becoming increasingly important, and the outside world – the business community representatives in the advisory boards of our master’s programmes – specifically calls for greater attention to be paid to ethics. I think those are developments in the right direction. It is certainly not the case that we only put forward neoliberalism and the homo economicus. That is often said about economists, but no economist believes it.
“The question is whether students are wanting to see more pluralism. It forms part of an academic study programme, but it’s also good for students when someone tells them how it is. When I’m teaching, I often notice that it is difficult to talk in a nuanced way about topics. Students then quickly get the impression that a teacher hasn’t mastered the material.
“Irene van Staveren recently gave a guest lecture for our honours students. That is the perfect place to introduce these types of issues and to experiment. These students want and can do more, and were really listening and paying attention. I think it would also have an added value as an elective or as a major. It’s hard to say whether pluralism should become even more embedded in the regular curriculum. Whenever you want to make room for something extra, it always comes at the expense of something else.”