Students are taking on old economics – and winning

Photo credit:   Alex Proimos

MAY 19, 2014 // BY: ALICE MARTIN/ New EConomics foundation 

This is getting exciting.  With student groups across 30 countries now calling for change, it’s clear the campaign to reform university economics curriculums is reaching new heights.

Just last month the Executive Director of Financial Stability at the Bank of England, Andy Haldane, publically backed the students’ argument, agreeing it is high time “to rethink some of the basic building blocks of economics.” He added to their already sizeable list of high profile supporters, including economist of the day Thomas Piketty and renowned Cambridge scholar, Ha-Joon Chang.

What are they asking for?

The student movement is objecting to the dominance of neoclassical models of economics taught by the vast majority of university economics departments across the world: models that continue to promote profit-led decision making despite international financial instability and widening inequality.

Rather than being taught to regurgitate old theories, the student movement is calling for degrees that analyse and evaluate economic systems, decisions and models in a real world context. They object to the surrendering of political, social and environmental systems to financial markets, and want to study instead an economics that fulfils its real responsibility – answering how the world’s population can live well without further draining the planet’s resources.

The broader syllabus the students are proposing would address the major events that have shaped our current economic outlook, the most obvious of which being the 2008 financial crisis.  With the impact of the crisis still sending tremors through the economic stability of nations andhouseholds alike, it is crucial that rigourous, academic research into its causes is fostered. For this the students recognise a ‘pluralist’ approach is needed. This means a range of theories and schools of thought would be studied, instead of continuing the one theory fits all approach.

65 student groups, including those based in Oxford University and LSE here in the UK, and Jadavpur University in West Bengal, India, to name just three, have signed this open letter outlining their shared demands.

Why is this important for the rest of us?

Since the financial crash economics itself has been in crisis. With politicians pulling in different directions to try and rationalise what happened, most people have been left with no option but to soldier on with their own personal financial crises. MPs have pushed through austerity as a solution to the UKs national financial woes, despite the approach being based onwholly false economic grounds. And their damaging slight of hand has worked. Why? Because with bamboozling stock market figures and complicated national debt calculations, most people feel they have to leave economics to the ‘experts’.

But what happens when it turns out the experts don’t have all the answers? Just as we saw recently with the Bank of England’s welcome exposé onhow the modern monetary system works, economics is by no means a settled science.

This is why it’s so important that those embarking on degrees in economics are taught how to challenge the models and theories that aren’t working. And the message the students are sending out is that under the current curriculum, they are not able to do so.

Universities are listening

The University of Manchester have chosen not to renew the contract of a lecturer who set up an out-of-hours class ‘Bubbles Panics and Crashes’ to broaden the undergraduate syllabus. Despite this setback for the movement, other universities are starting to listen to the students’ calls. Kingston University last week released a statement in support of their demands “for genuine reform of economics education”. With other universities expected to follow suit, the student led action has the potential to make a profound change. A ripple effect through the financial industries is perhaps too far off to get excited about, but a reformed curriculum is certainly a bold first step.

For those keen to find out more about what changes are being proposed, the UK based student group Rethinking Economics are planning a public conference in London this June.  And the International Student Initiative for Pluralism in Economics (ISIPE) website has full details of the groups, and supporters involved.