What has Economic Pluralism Got to Do With Understanding Complexity?

By Teresa Linzner, Research and Communications Officer, Promoting Economic Pluralism

17th December 2018

Please note, the views and opinions expressed in this blog are those of the authors and do not necessarily reflect the views of CECAN.

To understand the complex systems we inhabit, surely, we must recognise a plurality of perspectives. After all everyone gets a different view. However mainstream economists, the dominant social scientists, only accept one perspective on how economies work drowning out others. Unless this is challenged, new understandings of complex systems will remain marginalised in policy and practice. Outside the mainstream, though, there are many around the world who understand the importance of plural perspectives in economics. Join us in working with them to raise their legitimacy and profile.

When we picture a complex system, it is tempting to see it laid out before us from above. However only a god like figure gets this view. We mere mortals clearly are deep in the system with a partial and obscured view. Furthermore, each of us sees the world through spectacles carved over the centuries by our culture, history, gender, class, race and more.

We cannot hope for understanding unless we listen to the range of views and perspectives near and far from us to build shared understandings of the world we live in. And it is only then that we can build collective action to address the huge challenges we face in the 21st century.

However the dominant social science, to which those in power pay most regard, continues to merely give status to one perspective on how the complex systems of our economy work. This is in spite of the revelations of the extraordinary inadequacy of economic models at the time of the Crash in 2007/8.

After that many expected a revolution similar to those in the 1930s and 70s with new ideas flowing in. A team of economists[1] recently undertook a systematic analysis of citations pre and post crisis in economic journals to examine whether this has happened. They concluded it hadn’t.

The Institute for New Economic Thinking (INET) has put this down to the iron grip of top journals who enforce a mono-culture. These journals determine career prospects and academics have to stick to mainstream dogma to publish in them. This they have dubbed a ‘crisis of conformity’.

Unsurprisingly the same is true of most economics teaching. After all, broadly the same people are doing the teaching as do the research. With the pervasive use of standard text books, there is even less space for diversity and innovation. This is in spite of the growing campaign of the student movement lead by Rethinking Economics, which was born out of students’ disillusion with economic teaching post the Crash.

So more than ten years after the Crash, students are still taught the same theories as gospel that underpinned the group think which prevented the mainstream from “seeing it coming”. They leave university with the understanding that a single simple model explains almost everything: individual agents maximising utility leading – with marginal adjustments to address market failure – to optimal equilibria… No wonder such powerful certainty can drown out attempts to evaluate policy based on a recognition of complex systems.

Is this resistance to change surprising though? Standard economics itself suggests that monopolists will resist competition. Mainstream economists are trained in only one form of economics and they control access to research and teaching in top university departments. For them the status quo is comfortable and change only has downsides.

Of course there were many outside the mainstream that did ‘see it coming’ such as Steve Keen and Ann Pettifor. In spite of that, they remain side-lined as do many others who do not conform. And this we see as the opportunity.

This group of heretics is growing, experimenting and innovating as it draws in new young researchers, many inspired by the students’ movement for curriculum reform and high-profile non-mainstream economists. No crisis of conformity here.

There is also a rich and varied set of economic schools to draw on dating back to the 1930s and beyond, when there was more space for innovation. This includes thinking on institutions, uncertainty and even complexity that was subsequently discarded by mainstream economics. Furthermore, academics in other disciplines have turned their attention increasingly to socio-economic issues and have brought new insights.

However these academics are fragmented across disciplines and departments without a common identity or much traction with policy makers. They sit in international political economy, geography, psychology, sociology and anthropology departments as well interdisciplinary centres. The mainstream economics departments don’t even recognise them as ‘real’ economists and police the use of the ‘economics’ term.

We intend to work with these innovators and other stakeholders to build a common identity and, most importantly, an increased profile outside academia to be able to influence policy and practice.

As a first step, we are doing this by creating an accreditation system for masters courses that take a pluralist approach to economic teaching, i.e. recognise more than one way of thinking about the economy and encourage critical reflection.

The point of this is not to determine what economics is ‘right’ or which courses are ‘best’. It is to build a shared sense between those inside and outside of academia of what economic teaching looks like that fosters creativity and critical thinking to address real world issues. How much of and where this type of teaching is already happening can be seen in the list of courses here. It is happening in the same high-ranking universities where the economic departments themselves defend the status quo.

What can you do to support change in these urgent times? For a start, you could register your public support for this initiative here. It is crucial that we demonstrate a diverse and wide-ranging support for this initiative.

Beyond that you can get involved in actually co-creating this scheme – it is too important to be left to us economists. This doesn’t mean that you necessarily have to get involved in the detail or devote huge amounts of time to it. We will ensure people can give their views on the principles and broad approach as easily as possible. Please sign-up here to be involved.

We look forward to building this new institution together to support the essential task of organising economies fit for the 21st century based on a proper understanding of complexity.