Reforming Economics Education

There is a good deal of discussion these days about what is wrong with how economics is taught at the University level. For some examples, see Lars Syll’s blog , The Institute for New Economic Thinking, and this recent article in VOX about controversies surrounding Greg Mankiw’s Principles of Economics course and text and alternatives to it at Harvard. I’ve now completed the rather painful process of converting my Principles of Economics (Micro and Macro) to an online format, so the issue of what gets covered , what does not get covered, and how it is covered in introductory economics courses has recently occupied a good deal of my attention.

Quite unfortunately,  my University has chosen to employ Learning House as its primary vehicle for online courses. I hope to have a bit more  (OK quite a bit actually) in a month or so to say about how online education, and especially the Learning House approach,  is yet one more example of the corporatization of higher ed and of what Habermas  termed  technicization  of society in general.  I’ve realized however that getting into brass tacks about what is wrong from an ontological, epistemological and common sense perspective of reducing a course to a set of bulleted action verbs centered on Bloom’s taxonomy  (especially, in a framework that seems particularly non-reflective) will take a bit of work. Suffice it to say, that this is pretty much the opposite of what I think will constitute meaningful and productive reform in economics education.

Instead, I want to focus on what I think can be useful, and what can be problematic at the introductory level in economics education. My goal is not to lay out a comprehensive program of reform, but instead to suggest what could be some productive directions. I’d like to make the case today that at the introductory level,there is a need for three courses for students who are majoring in economics or who need a strong foundation in economics. I will leave the larger issue of how we should structure the curriculum in the economics major for another occasion.

There are at least two complex, and closely related issues:

  1. What constitutes the difference between Heterodox vs. Orthodox economics;
  2.  How much space should be given to specifically heterodox approaches (e.g. the contributions of theorists such as Marx and Veblen).

Course One: In the past at least, students could take a course at a lower level that Principles of Micro and Macro economics, that has often been called “Economics for the Social Sciences”. I teach this course myself, though I had to label it “Foundations of Political Economy” after my University’s General Ed Committee found the other title too confusing.

What do I put in this course? It’s a very general overview of some economic history, which due to the constraints of one semester is probably overly focused on the economic history of Western Europe and the U.S., history of economic thought (for which I still use and highly recommend Robert Heilbroner’s classic The Worldly Philosophers) , and some general, non-rigorous discussion of institutional detail, the role of prices, and fiscal and monetary policy. Few economics majors, or business majors who need to take Principles courses, in most Universities will take this course. When it is taught  as those who do will generally be students who are seeking an “easier”  general education course in economics. And if you are going to take only one course in economics, I think it should actually be this one. However, I would require this course, and count this course, as credit towards an economics minor or major.

It is in the teaching of Principles where I think we face the much stronger challenges. Though my own approach to economics is distinctly heterodox, I disagree strongly with those who view “mainstream” economics as necessarily leading one down the primrose path to opposing minimum wages and unions. I still think there is important and even good content in these courses.  Even when one is using a relatively conservative leaning text such as Mankiw’s, there is still a lot of choice about what we emphasize and how we emphasize it.

For example, in Micro, there is a lot of space, even in the mainstream, for teaching about imperfect competition and emphasizing Alfred Marshall’s “burn the maths” approach to mathematical formalism in economics. What I think we need in our micro texts are at least an entire chapter (not an excerpt) devoted to Behavioral Economics, some extended discussion of the limitations of mainstream environmental economics (even though it can make a good case for extensive environmental regulation) and attention to Ecological Economics, and a lot more on poverty, discrimination and Normative ideas underlying economics. Though it would take a lot more space to explain, I think it is possible, in at least a common sense way, to draw a distinction between positive and normative analysis.

Ironically, it may be in Macro economics where the stronger challenges lie. There is a need to spend more time on the history of business cycles. Students will often get a cursory introduction to the severity of the Great Depression, but little (if any) understanding of The Great Depression of 1873  or of 1893. There’s the opportunity to teach heterodox interpretations of Keynes and to contrast that with the Classical,New Classical and Austrian models. Instead, we spend a lot of time (or at least I do) getting our students though the basic mechanics of formal analysis using graphs which depict functional relationships of macroeconomic variables. But the primary “synthesis” version of the Aggregate Demand and Aggregate Supply diagram we develop hopelessly confuses short and long run analysis with the introduction of vertical long run Aggregate Supply curves. The “Keynesian” aspects of Macro are reduced to a few words about “sticky nominal wages and prices”. In contrast, it would be better to refocus on a variable elasticity aggregate supply curve and the problems of debt-deflationary cycles. And it is in the introduction to the monetary theory parts of the course where what we are teaching our students-the basic money multiplier model based on bank balance sheets where banks use checkable deposits as their primary source of funds-fails to present to our students the basic reality of how banks create money by creating credit.

My goal above, has not been to present a rigorous or comprehensive version of what I would and would not keep in Principles courses, but rather to lay out a direction that I think could preserve the better and more useful aspects of mainstream economics, including the introduction to logical rigor it can provide, while opening the courses up to a broader perspective. It’s worth noting, that in taking this approach there are notable constraints beyond simply needing to please a tenure committee. There is of course the time constraint on what we can cover in a Semester. There’s the constraint of State Guidelines for Micro and Macro and even oddly written General Education Guidelines, which do not always necesarily mesh. There is a pedagogical challenge of introducing students to content and modeling simultaneously, and also of presenting students at the same time with contrasting ideas in a subject matter.

Having said that, I think that the three course foundation with a flexible, and somewhat less formal approach to the teaching of principles for economics majors and others requiring a strong foundation in economics would be a good start. I hope to have some time in the near future to address where we need to go with the economics curriculum overall, and then proceed to why the rise of the kind of approach being pushed by large corporate entities such as Learning House will be destructive not just for economics education, but for higher education as a whole.



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