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Why Teach Economics?

from Peter Radford

No I am not going to get upset about mainstream economics. Today I have a different issue to be vexed about: why do degrees in economics exist?

It makes no sense to me to teach economics in a vacuum. None at all. The economy is simply one part of a very complicated and intertwined thing called society, so why isn’t that the centerpiece, possibly with specialization at a later stage?

This isn’t new of course. People have been arguing about this for ages, but if we want to rid the world of the hyper-specialized-to-the-point-of-irrelevance oddity that economics has become we have to try to drag it back towards reality.

A reality that is not simply endless reflection on the machinery of markets either. Successive waves of formalization have reduced the study of markets to meaningless applied mathematics. I suppose it’s nice to understand all that stuff, but it doesn’t provide an understanding of actual markets.

Let me take another hack at this: 

I know that economists everywhere would be contradicting me by pointing out all the amazing work that’s been done to examine the various major ‘failures’ of markets, so the idealization I always complain about has been given a thorough critique. My point remains the same: why don’t we start teaching about markets with the real ones? You know: the ones riven through with perpetual failures. You can compare them with the utopian model if you want, but the earliest exposure anyone should have is to the markets they see around them. Not to the ideal that exists only in the imagination – vivid imagination – of economists wanting to make their life easy by eradicating reality in order to make formalization more tractable.

And do we even know what a market is?

Is it a system?

I suppose it is. That’s one way of describing what happens when a group of people engage in exchange. The characteristics of exchange can be explained as a kind of system. But there isn’t just one kind of such system. The idealized version is just one of many. In fact within the entire set of all possible exchange-systems-markets the one that is taught in school is extremely rare. Why don’t we start with the more commonly found versions?

Which gets me back to teaching economics. Why bother as a separate subject? The moment we allow ourselves to explore the full set of relationships that surround exchange – not just the act of exchange, but the prior acts of innovation, exploration, resource provision, and production, and the subsequent acts of consumption, depreciation, and disposal we will have a better way of understanding how the economic acts fit within and complements the wider and richer activities of society at large.

Not only that, but by situating the economic acts as one component of a great cycle of activity we would introduce a sense of history and dynamism so missing from the current subject. We would also be able to fit those acts within the reality of the human environment with its physical limitations and its unbounded intellectual capacity.

It is that contest between a physical limitation, a social/historical dynamic, and an intellectual discovery process that defines opportunity, constraint, and objective. Economics ignores all this and focuses narrowly on only one aspect of the entire cycle. It cannot, therefore, make commentary on discovery, on the development of needs, on the limits of production, or on any of the other essential aspects of the creation of supply and demand.

It is, in other words, a technique for examining the interplay of supply and demand. It remains mute on all the really interesting content of what makes an economy. Or, indeed, what makes a market.

So why teach it? Why not simply bury it as a method, one of many, needed to explore society?

And, no, I am not going to complain about mainstream economics.

  1. C-R D
    January 9, 2016 at 3:01 pm

    For me, a market is a complex-dynamic-social construct designed to produce information. Teaching as such would be a beginning; Of course, that would not provide the nitty-gritties of real markets but it would set the limits of modelling it. From there, we can approach the real thing with greater confidence and understanding.

  2. January 9, 2016 at 3:36 pm

    The same i think could apply to any academic degree or subject. Or even, ion general, to education—why get educated, especially since its hard to define, basically because there are so many specialties. And within those specialties, there are actually so many people with different ideas and competencies its hard to know what is being produced. (Eg one can look at the sophisticated propoganda, internet and other skills of ISIS—i would say they are highly educated in some things, and living in an ancient world in others.) It would take a human genome or los alamos project to cover the field of economics. And its hard to assemble a team that can work together of that size. People also typically prefer instead to just choose some small specialty and contribute it to the mix—–ending up with thousands of papers with vague relations to each other. Eventually people do create encyclopedias (like the one for philosophy put out by stanford. Even wikipedia is not all that bad as a start, but its jumbled.).

  3. January 9, 2016 at 7:51 pm

    Before the Enlightenment took hold of everything in the west (don’t get me wrong, I believe much that can be traced to the Enlightenment has had positive consequences) there was natural philosophy and moral philosophy. Comprehensive categories for scholars and learned persons. But even these left much unexamined. The point is that the Enlightenment produced a surge in study, learning, and eventually what we call today science. And that lead to the ‘devil” of specialization. Scholars and laypersons began to divide up the world to make it easier to study and explain. That movement is okay so long as we don’t take it too seriously. As long as we always recognize no matter what portion of the world we find more interesting to study and discuss, that it’s all interconnected, materially, morally, and culturally. Economists began to abandon that road during WWII, along with most of the other social scientists. There was simply more prestige, power, and yes money by taking the “my specialty is the most important and necessary” route. I have no idea how to end this movement, if it is even possible today to do that.

  4. anmayhew
    January 9, 2016 at 11:07 pm

    I will comment as someone who spent a lot of years teaching economics and a lot of years involved in academic administration. My own lucky background in which I began university-level study of social science (including Economics) in a year long honors course taught by the Institutional economist, Clarence Ayres. It was not a perfect course but it was very good and it led me to think that social science was all part of the same endeavor. Subsequent study of anthropology, of the work of Karl Polanyi, and of economic history did not disabuse me of that notion. Nor has lots of buffeting over several decades in academia, as both professor and administrator.

    It is interesting that boundaries among disciplines in the biological sciences have been erased and redrawn and erased and redrawn in response to new tools (think electron microscope for one example) and new discoveries (think the double helix). This same process has not occurred in the social sciences. I once spent a frustrating year of meeting with representatives from social science departments trying to get some agreement on a general social science course but found all disciplines, and not just economics, resistant to the idea.

    However, it does seem to me just possible that there may be change occurring now with the emphasis on use of statistical data to answer demographic questions and questions that arise from the efforts to devise effective policies. Something very much like this happened with the early NBER (when Wesley C. Mitchell was running it) and the growth of government agencies with their emphasis on data collection and policy during the interwar period. Perhaps a similar process will force more cross-disciplinary work in the social sciences again though there are many barriers, including the claimed superiority of economics, as well as the hard turn against genuine empiricism by one U.S. political party. But, I do find some reasons for hope.

  5. January 10, 2016 at 4:47 am

    Folks with economics degrees are used by the establishment to mislead the populace into ignorance about how they are being screwed.

    • January 10, 2016 at 5:51 pm


      Why not teach, just teach economics and allow students “due examination”

      : A free download,the entire book.**Excerpt from http://en.wikipedia.org/wiki/Frederick_Soddy
      “In four books written from 1921 to 1934, Soddy carried on a “quixotic campaign for a radical restructuring of global monetary relationships”, offering a perspective on economics rooted in physics—the laws of thermodynamics, in particular—and was “roundly dismissed as a crank”. While most of his proposals –
      “to abandon the gold standard,
      let international exchange rates float,
      and establish bureaus of economic statistics (including a consumer price index) in order to facilitate this effort” – are now conventional practice, his critique of fractional-reserve banking still “remains outside the bounds of conventional wisdom”.
      Soddy wrote that financial debts grew exponentially at compound interest…”

      ***Why not read and challenge a Noble Laureate ?

  6. Alan
    January 10, 2016 at 7:54 pm


    I think you are describing anthropology (cultural or social). The discipline of Economics ignores the 100 years-worth of empirical data and analysis that is economic anthropology. They can afford to do so and can’t afford not to ignore it. Anthropologists on the other hand have no problems expressing opinions about Economics. Sahlins:

    One would think the whole discipline [Economics] had been mortally wounded by the critical attacks of its own practitioners—let alone the likes of anthropologists—on its abstract, unrealistic, post-hoc, pseudo-scientific, fantastic, fetishistic, Platonic, chimerical, rhetorical, ideological, non-empirical, teleological, metaphorical, tautological, mythological, and otherwise louche theoretical propositions.

    Apparently not but truth be told Neoclassical Economics is really a topic of study for anthropologists (historians and philosophers); not an intellectual competitor.

    • Larry Motuz
      January 12, 2016 at 12:25 am

      Thank you for a superb reference {Marshall Sahlins}. I very much enjoyed and learned from it. “Value-in-exchange”, though a product of monetized economies, is hardly independent of either human values or politics, domestic or global. “Ceteris paribus” assumptions, conjoined with a ‘consumer’ divorced from having any needs, make economic theory little more than and ideological parable.

      • Alan
        January 12, 2016 at 6:13 pm

        If you liked the Sahlins piece, I recommend taking a look at some Chris Gregory. I believe he trained as an economist and then converted to anthropology so he’s well-placed to talk across the divide. In the 1980s he wrote one of the classics of economic anthropology, recently reissued: Gifts and Commodities.

        Also see:
        His review of Piketty’s book.
        Gregory, C. A. “Anthropology, Economics, and Political Economy.” History of Political Economy 32, no. 4 (2000).
        Gregory, C.A. “On Money Debt and Morality: Some Reflections on the Contribution of Economic Anthropology.” Social Anthropology 20, no. 4 (November 1, 2012): 380–96.  (Related lecture: On Money, Debt and Morality: Before Smith, Smith, After Smith..)

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