Different questions, different answers: seeking an alternative economics

“I was working in the desert myself alongside workers from all over the Middle East and India and Pakistan in searing brutal heat and they were paid minimally. And as an engineer you think: well, things could be done much better. So I thought that economics would have an answer as to why there was inequality and poverty and all that, answers to them. It seemed to me that that’s what I should study. When I got to graduate school I realised that economics doesn’t even have the question let alone the answer. That was a big shock.”

This quote from an interview with New School Professor Anwar Shaikh about his decision to study economics and his early experiences brings to the fore some of the concerns of today’s heterodox economists. I can certainly sympathise. My own experiences in studying economics at school and of beginning to read around the subject in books and newspaper commentary generated enthusiasm for a particular approach to the subject, which gives a primacy to the importance of economic policymaking designed to improve the workings of the economy and society and the well-being of its members. I was attracted by left-Keynesian ideas, what I now recognise as post-Keynesianism, which argued for a government commitment to full employment, secured by judicious macroeconomic management, with any resulting tendency towards rising inflation to be mitigated by incomes policies involving negotiated consensus between the state, employers and workers. Of course, such policies reflected the post-war consensus in many advanced economies, which by what was then the mid-1990s had long been abandoned by the Thatcher governments in favour of a focus on controlling inflation as the main target of macroeconomic policy, while the liberal economy in the form of deregulation and privatisation became the focus of microeconomic policy, ostensibly to improve economic performance and raise living standards.

When I arrived at university, I was hoping for some exposure to debates over economic issues, and opportunities to challenge my teachers and fellow students. I was disappointed. There was no presentation of contested theories and policies. We were taught economics as if it was largely received doctrine. I attempted, in all my essays, to bring in a leftist and Keynesian angle on things, which often involved arguments in favour of state economic intervention. Sometimes this was accepted, other times it seemed to lose me marks if it departed from a particular teacher’s own views.

What I wanted from economics was in part political, and compared with what I was mostly being taught at the time, radical. I wanted an economics that furthered political and social goals. I was interested in politics, from a policy perspective. Britain in 1997 had just elected a Labour government for the first time in 18 years, and after my relatively subversive reading, some of its new ministers were making the kind of policy announcements that chimed with my newly forming opinions. Of course, this was Tony Blair’s ‘New’ Labour which was less radical economically than the party had been in previous decades, but it still looked better than the alternative. Noises about social justice, the reduction of inequality and poverty, and rising living standards for all definitely appealed.

On my first visit to the university library as a new student I started to look up books and articles by the more radical Keynesian authors I had been drawn to. Of course, they were not on the reading list for my course, but I found them much more stimulating and relevant to the kind of world I saw around me and the way I wanted it to be. One such was the definitely heterodox and left-leaning Cambridge Journal of Economics (CJE), to which I now subscribe. As I have since discovered, much modern heterodox economics has its origins in the Cambridge University of the 1950s, 60s and 70s. These days, its Faculty of Economics (tellingly renamed from the Faculty of Economics and Politics) is pretty mainstream, and the academic descendants of the original more radical thinkers have mostly migrated to other departments, in Cambridge and elsewhere. From what I gather, this trend was evident even in the 1990s when I was a student (not in Cambridge I should add).

To give a taster of the kind of economics that continues to inspire me, here are the Submission Guidelines for the CJE:

“The Cambridge Journal of Economics, founded in the traditions of Marx, Keynes, Kalecki, Joan Robinson and Kaldor, welcomes contributions from heterodox economics as well as other social science disciplines. Within this orientation the journal provides a focus for theoretical, applied, interdisciplinary, history of thought and methodological work, with strong emphasis on realistic analysis, the development of critical perspectives, the provision and use of empirical evidence, and the construction of policy. The Editors welcome submissions in this spirit on economic and social issues including, but not only, unemployment, inflation, the organisation of production, the distribution of the social product, class conflict, economic underdevelopment, globalisation and international economic integration, changing forms and boundaries of markets and planning, and uneven development and instability in the world economy.”

The kinds of articles which the CJE accepts for publication can therefore be quite different from those found in more mainstream journals. They ask different questions, provide different answers, and concern different topics in economics. The journal itself is published on behalf of the Cambridge Political Economy Society, alongside two other journals in the same spirit. Note that they consider economics as political economy, rather than the somewhat narrow set of techniques and approaches that dominate much of the mainstream. The CJE is receptive to articles from other social sciences apart from pure economics. Interdisciplinarity is welcomed, as is work on the history of thought and methodology, areas which are too often neglected by the dominant mainstream.

The topics for submission that the CJE editors encourage are ‘economic and social’, and are very much those concerned with, critical of, and seeking reforms to, the flaws in capitalism. They are thus more often than not associated with leftist thinking and thinkers, though these need not be socialist per se. Personally my views are more associated with social democracy, the mixed economy and a reformed capitalism. I am open to the possibility of political, social and economic evolution beyond the current system, but not in the form that socialism has actually taken in the last 100 years, with its attempts to eliminate markets and its frequent authoritarianism and repression.

Given the different approaches of the heterodox and mainstream camps in economics, one can perhaps appreciate that there is often insufficient communication between them. In fact, heterodoxy itself is not even a particularly coherent and unified body of thought. There are many schools within it, from Marxist and post-Keynesian to institutionalist and feminist. There is certainly overlap and cross-fertilisation between these schools, which is surely a positive. There is also plenty of criticism of the mainstream, which has gathered pace since the financial crisis of 2008 and seen the emergence of student-led movements such as Rethinking Economics which aims to reform university curricula in a pluralist direction. Given subsequent crises, and the failure of the mainstream, in the eyes of many heterodox economists, to adequately explain or even predict them, one might think that there is renewed scope for heterodoxy to gain in influence. But neither truth nor wisdom are necessarily associated with the gaining and holding of power and influence, from the academe to the state. An alternative economics or political economy able to take on the establishment needs more than the ability to critique ill-founded ideas. It needs the ability to persuade those in power that its constructive contributions are useful in understanding and positively affecting society and the economy. I will therefore end with a quote from Ha-Joon Chang, himself a heterodox economist at Cambridge University, and a writer of popular as well as academic books, who has argued that

“Economics is a political argument. It is not – and can never be – a science; there are no objective truths in economics that can be established independently of political, and frequently moral, judgements. Therefore, when faced with an economic argument, you must ask the age-old question ‘Cui bono?’ (Who benefits?).”

References

Ha-Joon Chang (2014), Economics: The User’s Guide, London: Pelican Books.

A Mearman, S. Berger and D. Guizzo (2019) (eds), ‘Anwar Shaikh’, Ch.13 in What is Heterodox Economics? Conversations with Leading Economists, Abingdon: Routledge, p.207-231.

Advertisement

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.