2 posts categorized "Books"

10/02/2015

Irene van Staveren shows the value of introducing alternative economic thinking to students

Irene bookI am currently teaching with my own new textbook Economics after the Crisis. I make use of blended learning techniques such as quizzes, flipping the classroom with YouTube videos with my slide shows and voice-over, and visual one-page summaries of each chapter on Facebook page of the book. This all frees up lots of time for classroom discussions. In this blog I would like to share a few of these discussions with you.

Student A, from the UK, asks why Margaret Thatcher was so much in favour of markets but did not want the government to regulate markets to ensure fair competition. Others seemed equally puzzled: if markets have a tendency to lead to oligopolies, they move away from the ideal of full competition, and hence, they need the state to ensure that it does not happen. Of course, they are right. Not bad for students of an introductory course. It is, of course, the same issue that Joan Robinson addressed when analysing real-world markets. My answer, though, is not Post-Keynesian but social economic. The tendency of markets to allow, or even support, winners over losers to accumulate market shares, through mergers and acquisitions, lobbying, and explicit or implicit price agreements, is enabled by a dominant social norm among economists as well as policy makers that markets are good and the states are bad, when it comes to efficiency and wellbeing and growth. This leads the discussion towards the dominant policy paradigm of neoliberalism in the world since Thatcher and Reagan.

EC Matrix CH 01[1]The students had to write a mini-essay about the dominant policy debate in their countries. Here is what student B, from Mexico, answered. The indigenous people aligned in the Zapatista movement regard nature and earth as a mother. Hence, the farmers are in a caring relationship with the land and for this reason resist production for commercial firms and the market beyond their own community. Only by producing for their own community they can maintain this relationship with the mother. They therefore also resist the state, which offers to provide social security. The Zapatista farmers understand that by accepting this, they are drawn into the national and international market economy, which will undermine their caring relationship with mother earth.

I found this a nice example of how local communities resist not just neoliberalism but even the state in a neoliberal policy environment—their distrust is most likely justified.

Student C, from Indonesia, offered a very different example, but also from a social economics perspective. He argued for keeping the fuel subsidy for the poor, whereas neoliberal policy makers want to abolish the fuel subsidy. His argument is that fuel is a key commodity for the poor and the subsidy helps them to purchase this (for example, fuel for cooking and transport). Here, it is the inequality and poverty argument that was used from social economics, to support a redistributive policy. Even when it may not be friendly to mother earth...

My students' feedback teaches me that even though it is not easy to teach four economic theories at the introductory level, they quickly see the relevance of it for their own economic context. If only to be able to see alternatives to dominant policies, rightly or wrongly.

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IreneIrene van Staveren is professor of Pluralist Development Economics at the Institute of Social Studies of Erasmus University Rotterdam, the Netherlands. She was awarded the 2014 Lifetime Achievement Thomas Divine award by the Association of Social Economics.

03/18/2015

Economics After the Crisis, by Irene van Staveren

Irene bookA year after the fall of Lehman Brothers, The Economist's headline proclaimed the end of modern economics. What has happened since? Well... almost nothing.

Mainstream and near-mainstream economic textbooks still sell like before. And INET has supported some initiatives that eliminate the rough sides of neoclassical thought and neoliberal policy advice. Very laudable initiatives, with, for example, Wendy Carlin's work on developing a new undergraduate curriculum CORE. But students of economics are not satisfied with these minor changes, so many years after the start of the financial crisis. Their Rethink Economics petition demands more fundamental changes to textbooks.

As a supporter of every single petition, pamphlet, op-ed, and plea for pluralism in economics before and after the crisis, I decided three years ago that I should practice what I preach. The result is Economics after the Crisis, a pluralist introductory textbook published by Routledge in January 2015. It offers a tool to understand the basics of economics from four theoretical perspectives either for use in the classroom or for self-study alongside a standard course book. The theories are presented in every chapter, micro and macro. And from interdisciplinary and close to real-world experiences to mathematically in an idealized world of perfect markets and agents following the single ethical guide of utility maximization. The book presents social economics, institutional economics, post Keynesian economics, and neoclassical economics and thereby shows that almost no economic concept or tool is theory-neutral. If only this message gets across, the book will have accomplished already more than I could hope for.

The window of opportunity to reform economic teaching is almost shut. Banks pass stress tests in Europe and the US while still being too big to fail. Nobel Prizes are awarded to economists who show no effort at all in rethinking economics. And economic policies ignore the danger of continuously increasing private and public debt, while shifting the consequences of such myopia on disadvantaged groups and whole populations.

If it is not now, we may have to wait for the next crisis to change economic thinking and teaching. I truly hope that the combined efforts of critical economists, activist students, and courageous teachers will help to make the change. We cannot afford to standby any longer.

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IreneIrene van Staveren is professor of Pluralist Development Economics at the Institute of Social Studies of Erasmus University Rotterdam, the Netherlands. She was awarded the 2014 Lifetime Achievement Thomas Divine award by the Association of Social Economics.