Teaching Economics Through Controversies

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from  post-autistic economics newsletter : issue no. 5, March, 2001

Gilles Raveaud  (co-founder of Autisme-Économie)

In this article, we present the reasons for our discontent as students of economics in France (1.) and find that they have a broad cause : the (desperate) quest of economists for scientificity (2.). Our proposal is to turn the teaching of economics in a completely different direction, where teaching of controversies would be given priority (3.). We then explain why teaching through controversies is preferable to current methods (4.), and, well, how to do it (5.).  Finally, we offer a very tentative insight into the theory of knowledge, by pointing out affinities between the classical works of Max Weber and those of Tony Lawson. We then suggest that this more general framework of comparisons (in a well defined sense) may prove a useful guide, not only for teaching, but for research as well.

1. Reasons for our discontent

I will briefly review here the reasons for our discontent, as expressed in our petition (full text on our website: www.autisme-economie.org) :

- First, we criticized the construction of “imaginary worlds” by economists. That is, worlds which do not have any link with any plausible mechanism in reality. Such worlds (the famous “models”) are just developed for their own sake, because of their tractability. We no longer want to be taught such fairy tales, the aim of which is not to explain « reality », but just to show the ability of the writer to construct a « nice model ». It may be fun for the authors, but we do not want to be part of the game.

- Second, we highlighted the excessive use of maths in the curriculum. Here, the situation is well known and does not require further explanation. Let me just emphasize the fact that in France, the fascination with maths is particularly developed, and the level required of students extremely high in most cases.

- Third, we stressed the fact that most « explanations » given in lectures are derived from neo-classical economics. Marxism and Keynesianism, just to name a few alternate views, which were living schools of thought in France not so long ago seem to have completely disappeared[1][1]. Nowadays, virtually no student has the opportunity to study Marx as part of the common curriculum. Furthermore, the explanations given are not thought of and presented as possible explanations of complex phenomena (say, unemployment, or international trade), competing with different approaches. They are supposed to be the only possible economic analysis of such phenomena, in the following sense: even if people do not actually behave according to these views, it is because other elements (social, traditions, imperfections, etc.) blur the picture. But the proper economic part of their activity is as defined.

As one can see, the situation is disastrous[2][2]. As so many writers have already given possible reasons for such a situation in economics, we will simply focus on one aspect of the problem: the quest for scientificity for economists. There are two reasons for selecting this problem: first, these are the terms which have been used by teachers reacting to the first teachers’ petition, which supported our views. Second, we consider it as the central source of our problems, even if this view is only a conjecture and is subject to revision.

2. The underlying causes: seeking for scientificity

A few weeks after launching our petition in May 2000, we were supported by a petition from teachers, signed by approximately 140 teachers, with some very famous people among them (Aglietta, Orléan, Boyer, etc.). This text from the teachers stressed the lack of pluralism in economics and rejected the overall domination of neo-classical economics on courses.

Later on, another text, signed by only a dozen economists, but nearly all of them important in the Establishment, reacted against both the students’ and teachers’ petitions. Their purpose was, as they put it, to « preserve the scientificity of economics ». This had to be done in the most traditional of ways, following the known recipe.  The following principles were insisted upon in this tract:

- First, the “precise identification and definition of concepts and behaviours which characterize economic activity (consumption, production, investment, etc.) and the formulation of basic hypotheses concerning such behaviours.”

- Second, “the formulation of theories expressed as formalised relationships between the concepts previously defined ”

- Third, “the verification of such theories through experience. This can only take place through confrontation with history, as quantified by statistics and econometrics.

They then denied that there was any illegitimate domination by neo-classical economics : any views are valid, as long as they respect this canvas.

One can note that their reaction did not engage with our criticism: where we talked about teaching, they talked about science. They did not answer any of our points : imaginary worlds, the excess of maths and lack of pluralism. Instead, they gave us a mythical description of science, where everyone is simply doing their best with their limited means (isn’t that rational ?). In short, leaving the classrooms, the debate was now entering the field of methodology.

So much the better, as this suddenly gave coherence to our protest. We had focused on specific points which, through related, did not lead to any necessary coherence. Now, with the help of the « counter-appeal », we had more than coherence: we had a common cause. Let’s take this case seriously[3][3].

In the construction of a « science » so naively understood, one has few options. The phenomena studied, even analysed as « stylised facts », are so complex that you have to choose among them if you want to produce a « result ». From claiming to be global, the analysis in fact turns partial. Then, if your purpose is to construct logical relationships between « objects » (to be defined), you can hardly do without maths. But then again, as you progress, things will get just so complicated - leading either to many solutions or none at all - that you’ll have to spend your time simplifying your hypotheses.

Besides, for reasons which cannot be explained here, the dominant view in neoclassical economics is that everything starts with the individual, you then have to define your « individuals » as narrowly as possible. Actually, you will not deal with « individuals », nor even economic « agents » any more : you simply declare them to be their (unobservable) preference curve, and that’s it. You then have a solid basis on which to ground your calculations. Does this lead to any analytical success? We know that it hardly does.  Even the logical basis of such a simple phenomenon as the « law of supply and demand » cannot be established[4][4].

The logical consequence is that the whole approach should be re-thought. But as the « scientificity » of economics is to preserved, this is not an option. You have to follow this road, produce results, refine your hypotheses, in order to « make science progress ». You are not going to give up the possibility of constructing a science, are you?

Following the magi’s’ scientific recipe has three consequences:

- First, models are not supposed to be realistic: their aim is not to give insights into real phenomena, but to participate in the global and fascinating construction of a science. One can no longer criticise models on the grounds of irrelevance.  From the point of view of this major achievement, which is the construction of a general economic science, universally valid, these models are, on the contrary, perfectly relevant. But, yes, in a sense, they are « imaginary ».

- Second, science understood this way has to be mathematical. There is no precise reason for that, apart from the fact that any science is mathematical, isn’t it ? You would not call sociology a science, would you ? As economists, theoreticians deal with quantitative data (inflation rates, balance sheets, etc.), so there is no reason for them not to use them. More fundamentally, their purpose is to construct a general and logical theory, on the model of classical physics[5][5] – so they need maths. And, as they need maths for research, maths needs to be taught[6][6]. So there cannot be an excess in the use of maths. The only possible difficulty is not enough maths, or inadequate maths. But not too much.

- Third, as their aim is, I hope you’ve understood it by now, the construction of a « science », the idea of competing theories is nonsense. Well, of course, you can debate specific problems, propose different tools, but this game is required to take place on the same field. You cannot play against someone situated on a different pitch, can you? We need common rules, a common language. So you have to learn this language first of all: after that, you will be absolutely free to make any use of it, honest.

The points we highlighted are not here by random. Even more, as we hope to have shown it, they are not a problem for those who subscribe to  the line of « scientificity ». They are, on the contrary, perfectly coherent. That is, our critics can no longer concern themselves only with teaching: they have to encompass theory as well, and methodology.

3. Looking for controversies

Let’s turn back to the image of science insisted upon by those economists : aren’t there any conflicts of power, any competing views on the good in economics? Aren’t there completely opposed conceptions of what a society and an economy is among economists? Does everybody agree on the way to produce scientific analyses of economic problems? To put it frankly, the conception of science those economists have is really naïve: many works, written by sociologists studying natural sciences, have shown how knowledge is constructed through the conflict of theories[7][7]. Moreover, they’ve shown how the permanence of such debates is intrinsic to science, and is, one could say, its engine. No science is a calm and eternally defined pitch.  On the contrary, its lines are constantly evolving, and sometimes scientists do not even agree on the shape of the ball !

Would economics be an exception? Fortunately not. One knows how economics has been the scene of terrific fights over the years since its very origin, whenever one locates that beginning. Moreover, the point of such battles was often over the very foundations of the discipline (the forms of the lines of the pitch), not only its methodology (the rules of the game) and objects (shape of the ball, if any). Such controversies do exist in economics, they are numerous and persistent.

What does « controversy » mean? A strict definition of it could be the following : A formulates a theory, that B criticises, A replies, and so on. Examples of such controversies are for example, the « Vining-Koopmans » controversy on the place and role of maths and theory in economics. The controversy started with Koopmans qualifying Burns and Mitchell Business Cycles of « measurement without theory », because it was not based on neo-classical grounds. In his reply, Vining pointed out that Koopmans’ judgement relied on a stringent definition of economics, according to which only his approach (neo-classical theory) was valid, although he had no firm results which showed the productivity of such an approach. The controversy concerned the definition of acceptable theory and the reasons why neo-classical economics should be preferred[8][8].

As one can see, this controversy has never been settled : there is no « scientific answer » to the problems raised above, even if the majority of economists support one view rather than the other at a certain time. This is what economics is really about : conflicting views about problems and the way to deal with them ; competing claims on which policy to support. This is just so obvious that one is surprised to have to recall this. Newspapers are filled with economists contradicting one another on the policies to be followed, because their theories differ. Everyone knows that there is no such thing as an economic science, at least not in the sense understood above, but the students are required to believe there is. Only economics students are supposed to believe that there is a knowledge about economic facts which is coherent, precise, and which leads to clear policy recommendations.

4. Teaching through controversies

Controversies, even understood in the restricted sense given above, are numerous in economics (see the classical debates on value ; the question of the nature and measurement of capital ; Keynes and Hicks on the IS-LM model ; Romer and Solow on growth theory ; etc.) But one can understand controversies in a broader sense : that is, the competing views on recurring problems in economics. Theories of consumption are an excellent example of this: starting with the Keynesian « consumption function », one can trace back the attempts by Brown, Modigliani and Duesenberry to « save » the Keynesian function. One can then turn to Friedman’s radical criticism, with his « permanent income hypothesis », and its revision through the life-cycle model.

All these models are not to be presented as trials and errors on the road to an ever better theory : on the contrary, they are to be presented as what they are, that is, conflicting views on an economic problem of central importance. In particular, such theories, and the differences between them, simply cannot be understood if one is not aware of their consequences in terms of economic policy. Teaching these models should be quite different than at present; each theory should be presented on an equal footing, given its chances in the competition of science. In particular, one should focus not only on the « model » itself (if any), but also on three crucial aspects of the problems surrounding the use of the model: the context of the debate ; the role and place of empirical data ; the consequences for economic policy.

As one can see, teaching is much more demanding in this context, as it is supposed to encompass all the dimensions of the problem under consideration. In fact, what we are suggesting here may already exist, in some shape or other, but, even if it is the case, it is done through various courses, which are not linked to one another. Statistics are taught for their own sake, with no or little reference to economic theory ; the history of thought very often overlooks the mathematical contents of theories ; and economic theory is presented as being autonomous from everything else. The complete absence of economics textbooks constructed in the way we propose is a clear indication of this disastrous « division of labour » among researchers and teachers.

As a result of the present state of teaching, the student does not acquire any knowledge of the economy he lives in, nor of the competing theories that set out to explain it. With what we propose here, it could be hoped that both lacks would be filled : controversies make theories lively and real ; and their empirical content gives us knowledge of « facts », as we show below.

5. Consequences The very first consequence of our proposal is the eradication of « micro – macro » lessons. We no longer want the teaching of economics to focus on tools, as if they could be separated from their meaning – the theories and views of the world that use them. We saw above that such « technical teaching » of economics was perfectly consistent with the idea of an « economic science », made up of various techniques, accepted by all, that could be used on any and every subject. But as we equally saw, such a view is completely misleading, even if one insists on considering economics as a science. The proper condition of science is precisely its contingency, the uncertainty of its results, and the fallibility of its knowledge. In the case of economics, such uncertainty and fallibility are extreme, as everyone knows.

Teaching should focus on controversies, past and present. The idea of neutral tools would quite simply disappear. « Micro » and « macro » lessons would be replaced by a single and large course on « economic theories », presenting them in the way described above, in historical (and not logical) order. There would then be the time to present Classical and Marxian approaches seriously, spending time on reading texts, and not simply solving silly ready-made exercises. In practice, this implies that neo-classical theory should not be taught in the first year, and perhaps even not in the second year. Besides, we propose a broad course on political philosophy, explaining the ethical and political backgrounds and the consequences of the theories proposed.

A canvas would therefore be laid down for a stimulating debate inside economic departments : theories would be presented as being in permanent confrontation with one another, the course on economic theories following their historical development and reasons for success and decline. As we stressed above, the purpose of such a course would be to present both the historical context of the theories and their precise analytical content[9][9]. This would be completed by the political philosophy course, which would show the permanence of questions such as the role of the State in economic matters; the fairness of the market; the definition of money; etc. and the varying answers given to such questions through history.

Statistics and econometrics would then be taught in close relationship with such lessons. Even if these subjects are necessarily autonomous in the sense that they need to present their own techniques, tutorials (at least) should be entirely devoted to the examination of problems linked with what is presented in the two courses defined above (how does one measure the « natural rate of unemployment »? How did it evolve in the UK or the US or Gambia? What is « purchasing power parity » and how to measure it? How can one measure the value of the Keynesian multiplier nowadays in a particular country? What is the value of the rate of profit ; is it declining? etc.). In particular, it is important that students should work on real data, with its imperfections, and not, once again, on artificial sources[10][10].

A common and simple consequence of all this is that we would get rid of all ready-made exercises. Well, one or two may be tolerated, as they are useful aids to understanding  a theory precisely. But the aim of teaching should no longer be the mastering of such tools. They should remain what they should never have ceased to be, that is, analytical tools with limited relevance. The object and purpose of economics and its teaching is the world outside: what do we know about it? How do we know it? Do we all agree on this knowledge, and if not, why? What do our theories have to say about it? And above all, to be honest: how to make it a better place to live in?

Conclusion : science is not technique

This way, we hope to achieve the following aims:

- making economics interesting, and even exciting again, by showing how lively a subject it is;

- presenting a more honest figure of science, with its controversies and provisional results;

- making students learn about their economic environment, as most controversies are to be filled, or re-read with contemporary data, as the examples of the Phillips curve, the « natural rate of unemployment » or the theory of international specialisation suggest;

- giving students the competencies they need on the labour market. What will be expected from them is their ability to produce a synthesis of complex phenomena which have empirical and theoretical components. It is not by resolving ready-made exercises that they will acquire such competencies. On the contrary, being trained in the practice and manipulation of theories on real problems, they should acquire a general ability to produce critical surveys and original points of views which is highly valued.

finally, for the small minority of students who still intend to become economists, we simply cannot imagine a better way to be trained for research than to acquire a “mental map” of the positions and theories in conflict, along with the mastering of tools that can help to choose among them. Once again, this is not done in economics in universities now. We want this situation to change, and do not understand why this should not be possible.

Footnotes
[1][1] The change was quite brutal : a few years ago, the author of these lines had the chance to read texts from authors like Kaldor, Robinson, Marx, Marshall, etc. in first year, but he no longer has the opportunity to teach them to his students.

[1][1] And to be honest, our protest is fairly incomplete: one could mention for instance the way statistics and econometrics, useful tools as they may be, are taught in France nowadays. That is, students spend hours demonstrating the convergence proprieties of estimators, but we never run real data in tutorials. Or the political consequences of the models proposed, etc.

[1][1] What follows may be read as an oversimplified and caricatured synthesis of some aspects of Lawson’s (1997) Economics and Reality, Routledge. We present some of his arguments more seriously in the final section.

[1][1] See various books by B. Guerrien (in French only, unfortunately), and on related topics, Alan Kirman, (1989), "The Intrinsic Limits of Modern Economic Theory: The Emperor has No Clothes", The Economic Journal, 99, 395, 126-139.

[1][1] See Mirowski, (1989), More Heat than Light, Cambridge University Press.

[1][1] And if all the students are not pleased, never mind. As a French teacher put it, « it does not take 15000 people to build a science »

[1][1] See the programme of science studies, and in particular works by Bloor and Latour (even if their views are themselves quite different).

[1][1] For a full story, see the original texts in The Review of Economics and Statistics, vol. 29, published in 1947. Mirowski, in (1990?), “The Measurement without theory controversy : defeating rival research programs by accusing them of naive empiricism”, Economies et Sociétés n°11, pp. 65-87. puts the story in the broader perspective of the conflict between the NBER and the Cowles Commission.

[1][1] One could imagine a course done by two teachers, one a specialist of the history of thought, and the other a micro- or macroeconomist. It could even vary with the subject, some lessons (on the Phillips curve, say) being done by a statistician and a macroeconomist, others (e.g. : theories of value) by an historian of thought and a microeconomist, etc. In France, when we suggest this, everybody laughs : « What ? You want to make different people work together ? What a joke ! ». Unfortunately, this does not make us laugh. Let’s hope that the situation is somewhat better in other countries. In fact, it is hard to understand why it is not already the case, as this is just common sense.

SUGGESTED CITATION:

Gilles Raveaud, (2001) “Teaching Economics Through Controversies”, post-autistic economics newsletter : issue no. 5, March, article 6.  http://www.btinternet.com/~pae_news/review/issue6.htm

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