Econocracy

I have yet to read "The Econocracy: The Perils of Leaving Economics to the Experts" by Joe Earle, Cahal Moran and Zach Ward-Perkins but I have been reading this review of the book by Aditya Chakrabortty and it has caused me to reflect further on my own experience of studying economics.

Like Earle, Moran and Ward-Perkins, I studied for an undergraduate economics degree at the University of Manchester. To me, in 1965, the course structure seemed fragmented: I had assumed that I would study mostly economics (although I had no idea what that involved and had chosen it for rebellious reasons).  I was puzzled by the requirement to study social anthropology (what did witchcraft among the Azande have to do with anything?) and politics, although I enjoyed both and found them much easier than my choice of option, accounting.

The course had in fact provided a very broad base of social science study, although the links between the different parts of the programme were not emphasised and it was not until I started my doctoral studies many years later that the links dawned on me. It was also many years before I realised that I had been taught by very distinguished scholars in politics (W.J.M.Mackenzie) and social anthropology (Max Gluckman).

But what about the economics courses? I remember that the main textbook was the first edition of An Introduction to Positive Economics by Richard Lipsey. I remember breathing in the smell of my brand new copy. I also remember reading the first chapter time after time in the hope that eventually I would understand it... We also used Samuelson's Economics (a book which gets its own Wikipedia entry) which I found much easier to understand. Or perhaps the diagrams were prettier. I remember that our classes were taught by two young men called David, Colman and Metcalf, who both went on to have very distinguished academic careers, although I didn't understand what they talked about.

My main problem with economics was the models. They required so many assumptions that I couldn't see how the abstractions helped with understanding the complexity of real life problems. I could - eventually - grasp the idea behind the trade-off between guns and butter but how exactly did this explain how decisions about national resources were actually made? What did the Phillips curve actually mean? This puzzlement extended into aspects of accounting: I shed tears over double entry bookkeeping for the whole of the first term until the penny dropped and I managed to produce a balance sheet that balanced.. but what exactly was the point? I hit this problem again when I began my PhD work and found that the corporate governance literature was largely predicated on principal-agent theory, the assumptions of which, to me, led to a very narrow analysis of my area of interest, board behaviour.* 

According to the book review, the Manchester students had a similar problem with abstract models and prompted by this review I look forward to reading their account. But Chakrabortty, as he makes clear, was closely involved with the students and the developments subsequent to their challenge to the Manchester curriculum and I'd like to hear other views - I'd particularly like to know how the Manchester lecturers dealt with the challenge.  Chakrabortty also states: "The authors analysed 174 economics modules for seven Russell Group universities, making this the most comprehensive curriculum review I know of." One could, of course, argue that Russell Group graduates are more likely to have significant future influence as economists than graduates from other universities but my former colleagues were certainly teaching heterodox economics long before the financial crisis which precipitated the story behind this book.

I like the idea of students challenging the curriculum, not because it's too challenging for them (not unusual among my accounting students over the years) but because it doesn't address real world problems. More power to their elbows!

*the late Sumantra Ghoshal, Professor of Strategic and International Management at the London business School, argued persuasively that the teaching of agency theory in business schools had very negative consequences on actual behaviour. The theory has been broadened more recently with scholars developing behavioural agency theory models.

Ghoshal, S (2005)  Bad Management Theories Are Destroying Good Management Practices Academy of Management Learning & Education, Vol. 4, No. 1, 75–91.