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Course leaders cancelled the Bubbles, Panics and Crashes module developed as counterpoint to free-market teaching
Manchester University bosses came under fire from angry economics students after they scrapped a groundbreaking course that examined the effects of the 2008 banking crash.
In an escalation of the crisis gripping university economics departments, the course leaders cancelled the Bubbles, Panics and Crashes module developed to answer protests at the dominance of orthodox free-market teaching.
Students said the U-turn undermined the credibility of senior staff who promised reforms and meant the department was actively obstructing debate over the causes of the financial crash and why economists failed to see it coming.
Next week, they will hold a day of debates to run alongside the Royal Economic Society’s annual conference, which is held over three days at Manchester University. A manifesto for reform – The Revolution in Economics – will also be published with a foreword by Andy Haldane, the Bank of England’s director of financial stability.
The row broke out last year when students claimed that mainstream economic teaching failed to address the underlying causes of the banking crash, and was in part responsible for politicians and financial watchdogs relying on free-market theories and light-touch regulation.
Undergraduates in Manchester formed the Post-Crash Economics Society and joined groups at the London School of Economics, Cambridge University and University College London to rebel against what they saw as the dominance of discredited theories that rely on mathematical formulas and not real-world examples.
In response, several university departments agreed to implement a new curriculum that would incorporate a wider range of viewpoints, including Keynesian economic thinking. Sponsored by the Institute for New Economic thinking, based in New York, the Curriculum in Open-source Resources in Economics project was set up to develop “a new approach to economics teaching for undergraduates”.
Manchester University’s economics department, which faced the brunt of student criticism, went further when it agreed to run the Bubbles, Panics and Crashes course. The decision to close it down after only one year has dismayed students.
A Manchester University spokesman said: “Our students have been leading a national debate on the way economics is taught in higher education, and the ensuing debate has been positive, useful and informative in terms of our extensive consultation with key stakeholders, including students.
“We have decided not to run the Bubbles, Panics and Crashes module next academic year, but will launch other new economics-run modules to address broader areas of the economics curriculum. These include a new module on economics for public policy led by the renowned and newly appointed professor Diane Coyle and a module on behavioural economics. Students will also now be able to take a second-year module on the financial crisis offered by Manchester Business School and two third-year modules on global capitalism by the politics department.
“Looking further ahead, economics is exploring the possibility of running a module on alternative economic theories from 2015 to 2016.”
Coyle, who runs a consultancy and is the author of The Economics of Enough: How to Run the Economy as if the Future Matters, is writing some of the Core curriculum, which she is expected to teach when she joins the university.
Joe Earle, a spokesman for the Post-Crash Economics Society and a final-year undergraduate, said the new courses and Coyle’s appointment showed that the university was responding to student and employer concerns about the lack of “real-world application” in economics education.
“However, its decision to reject Bubbles, Panics and Crashes shows that it is actively obstructing attempts to provide optional modules that teach students about alternative economic perspectives such as institutional, post-Keynesian and Austrian economics.
“This does nothing to reverse the elevation of one school of thought to be the sole object of study in economics and means that the assumptions, methodology and values of what we are taught are not in question. We are simply taught the ‘scientific’ way to do economics.”