In the spring of 2000, Bernard Guerrien, an economist at the Sorbonne, told a conference of students and colleagues that economics as they had been taught was a sham.The ruling pedagogy instructed students in ideology rather than science, treating abstract models at the exclusion of the real phenomena to be modeled. Far from being taken aback, elite students in the audience approached him afterwards. This meeting would initiate a movement to overthrow economics as it was practiced.
In June they published a petition on the Internet, listing their grievances:
“We, the economics students of the universities of France, declare ourselves to be generally dissatisfied with the teaching that we receive. This is so for the following reasons: 1.We wish to escape from imaginary worlds!”
The petition went on to complain of an “uncontrolled” use of mathematics and a lack of pluralism in approaches, but the focus of all the complaints was the same. The disconnection of their discipline from reality and obsession with theoretical games were summed up in the epithetical adjective they applied to it: economics was “Autistic.”
The French term that translates to “autistic” is less immediately connected with the continuum of neurological conditions such as Asperger’s syndrome. Instead, it harkens to the older meaning, given in this definition from the American Heritage Dictionary: “Abnormal subjectivity, acceptance of fantasy rather than reality.” To non-economists, this accusation may sound strange. Though it may be the most dismal of the social sciences, economics is also perceived as the most rigorous and practical; It is the oldest, has the clearest doctrine, including actual “theorems,” and dominates the others both in academia and in popular culture. It stands at the forefront of domestic politics, its practitioners are our generation’s most respected talking heads, and books and columns applying economic thinking to everyday life fill our bestseller lists and newspapers. A lay reader would not be unreasonable in thinking any disconnect between French economics and reality is a strictly French problem.
But in fact, economists all over the globe have long decried the slide from realism. To quote British economist Ely Devons, “If economists wished to study the horse, they wouldn’t go and look at horses. They’d sit in their studies and say to themselves, ‘What would I do if I were a horse?’ The problem has never been one of irrelevance—there are plenty of economic “horses” to study—but one of academic methodology, and this problem is deep and widespread. In fact, the prevalence of economics in political and popular discourse makes any autism all the more dangerous. In the extreme but common case, theoretical economists work in their offices, scribbling and running regressions, writing papers that play with variations on different mathematical equations. So, an economist’s theoretical work on industrial production likely involves tinkering with functions that convert variables labeled “labor”, “inputs,” and “capital” into “output.” His research will not involve trips to the factory. The vicious cycle of economic education helps keep this method alive by training them for exactly this kind of work. Meanwhile, the field economist, whose theories’ structures arise from observation, is an endangered species. France is not an exceptional case of autism but a representative one.
The reaction to the student petition was instantaneous. Hundreds of signatures had already been gathered from students at Paris’s most distinguished institutions when on June 21, Le Monde published a long article on the students who called themselves “autismé-economie,” including sympathetic professors. The snowballing media attention and petition signatories prompted the Minister of Education to appoint a special commission headed by Jean-Paul Fitoussi, President of the French Observatory of Economic Situations (OFCE), to investigate the students’ claims. This fact seems to point towards an airing of grievances leading to an internal solution, but at the same time, a counter-petition and counter-articles were emerging in the French press.
Prominent economists, like American Robert Solow, criticized the French students in Le Monde, accusing them of attacking theoretical economics out of a disdain for theory or even a phobia of mathematics. The students, the argument runs, either misunderstood the relationship between theory and practice, or the math involved was too hard for them. At its worst, these are ad hominem arguments, but the existence of even a spurious international outcry against a movement for local reform suggests that the students had touched something deeper than teaching or realism. The touchy issue was not autism per se. Though they may have disputed the fact of theory’s misuse, Solow and others acknowledged that its place is to generate hypotheses, not conclusions; what they defended unequivocally was the theory itself. This theory, this particular “imaginary world,” originated not in France but in America, and it continues to dominate the perspective of economists across the globe. This is the world of neoclassical economics.
If you are a non-economist, chances are, what you know as economics is neoclassical. This is the world as populated by homo economicus: the “economic man” who roams the world “rationally” “maximizing” his “utility,” generally through consuming goods. He acts, independently and using perfect information, to calculate and achieves maximum happiness as defined by his preferences, which must have other nice properties in order to be “rational.” Given his impressive detachment from social context and his ability to perform dauntingly complex utility calculations in his head, making use of a semi-infinite data, it would not be out of the question to diagnose homo economicus with autism, the medical condition. Taking such people, one can create a world of perfectly free and competitive markets, and, according to the Welfare Theorems of Economics, the whole world will be efficient, in the sense that no one can be made better off without making someone worse off. This is the imaginary world the post-autistics deride.
It is, of course, a world that never has and never will exist. In this respect, it is less like economists performing thought experiments about horses than about unicorns. But if the “autistic” critique were merely this, it would be weak. As Solow pointed out, the unreality of theory is well understood by even the most conservative neoclassical economist. The catch-all defense is that economics is still a social science, and, therefore, even theories that emerge from “imaginary worlds” must be empirically tested and, if they are unexplanatory, discarded. To return to the horse metaphor, if the theories about horses arrived at by economists toiling in their offices later prove false, well, then it’s back to the drawing board.
There are, however, two problems with this defense, the first of which is economics’ rather poor track record in proving theories false or true. In the social sciences, one expects any good theory to go wrong from time to time, but certain areas of economics have been downright pathological. Take, for example, the field of development economics. It is difficult to find two economists who can agree on why East Asian countries have succeeded or why Africa continues to fail, much less prescribe any kind of economic solution. Moreover, given that “wrongness” or “rightness” is couched in terms of an economically significant truth, we might find it disturbing that in research by two economists, Professor Deirdre McCloskey at the University of Illinois and Stephen Ziliak at Roosevelt University, it was found that more than 80% of papers published in the American Economic Review (AER), one of the most respected economic journals, failed to distinguish between “statistical” and “economic” significance. To give an example of what this means, if we found enough cases where an election preceded an economic growth spurt, we’d have a statistically significant correlation. But to have a fact of economic significance, we need an idea of the mechanism by which one effects the other. Eliding this difference essentially conflates a mathematical fact with a cause without telling us how it works. This is where someone imagining how a horse would function would benefit from a little biology.
There is a second, more alarming, dimension to the neoclassical method-driven approach.We may be concerned that what is excluded is left out systematically. Ecological economists would criticize a production function that overlooks environmental cost. Marxists would criticize treating man’s labor as just another input. And those who favor social networks, bureaucracies and collective action institutions would criticize the privileged place granted to markets. It is not without reason that neoclassical economics is intimately tied to the rise of blind advocacy of free markets and limited regulation. The perfect performance of markets is assumed to be the basic structure of reality, regardless of the number or quality of exceptions. Such an approach has furthered, for example, macroeconomic understanding of stable market economies’ long-run performance, but stable market economies are not the global norm. A neoclassical analysis of states with very different institutions, very different “markets,” runs the risk of explaining the particulars of a situation only as “market failures”: failures to be the kinds of markets amenable to neoclassical study. In this respect, a better metaphor than the study of horses might be the story of blind men arguing about an elephant, one touching the leg and declaring it to be akin to a tree. Too often the “market failure” approach is simply evidence of an analytic failure to understand economies on their own terms; an equivalent of the blind man declaring the horse to be a “tree failure.” So economists defer critiques of markets into problems of missing markets; they deflect critiques of “rationality” to a bounded rationality. A simple schematic of the logic is easy to follow: Rational markets behave with perfect efficiency, so if a market appears to be behaving imperfectly (for instance, an inefficient level of unemployment), it must be because some other market is missing (perhaps a market for information, or for insurance) or people’s natural “rationality” is being bounded, obstructed by some third factor. The solution to problems is inevitably more markets, not fewer, and removing restrictions and regulation, not creating them. In the hands of non-economist policy-makers, this slipperiness and reflexive defense of markets make it easy to find vaguely “economic” defenses of laissez-faire policy. The ideological ties to neoliberalism go a long way toward explaining not only the magnitude of the reaction to the students direct attack on neoclassical economics in France, but also the subsequent sympathetic movements that followed their lead.
In France, the Fitoussi report came out but was little read. It advocated some, but not all, of the changes the students had demanded. In Britain, by September 2000, Professor Edward Fullbrook had established the Post Autistic Economics Newsletter. Now called the Post Autistic Economics Review, it has over 8,000 subscribers and features articles by professors and students on a broad range of topics. In the Spring of 2001, 27 Ph.D. students at Cambridge, known as the Cambridge 27, published their own manifesto called “Opening Up Economics.” They were followed by similar agitation at Oxford, at an international conference in Missouri (the Kansas City Proposal), at universities in Belgium, Spain, Italy, and, in 2003, at Harvard University in the United States. There, Harvard students have for decades been subjected to the same micro-economics course, taught by the same professor, teaching the same material. The course’s title, Social Analysis: Principles of Microeconomics, is emblematic of how economics
dominates the other social sciences; it is the totality of “Social Analysis.” The students found a professor who agreed to teach an alternate course, featuring more approaches, more history, and more critical thinking, but have so far been ignored.
The story is not merely one of widespread but ineffective agitation. In 2004, following the lead of the Fitoussi report, changes were made in the French universities. At the Sorbonne, programs in economics and mathematics have given way to a greater interdisciplinarity, and student leaders of Autismé-Economie celebrate their victory. Other organizations, preceding but sympathetic with the post-autistic movement, such as the 30-odd groups aggregated under the name International Confederation of Associations for Pluralism in Economics (ICAPE) have expanded worldwide, and now have 5,000 American members. Not only this, but radical critiques of economic pedagogy by prominent economists have become more commonplace.The Post Autistic Economics website (www.paecon.net) now features quotes by six Nobel Prize winning economists. Joseph Stiglitz said in 2002, “[Economics as taught] in America’s graduate schools… bears testimony to the triumph of ideology over science.”
Another Nobel Prize winning economist, Ronald Coase, noted in a speech several years ago the basic refusal of economists to change their ideological attachment to methods, while at the same time urging such a change. He referred to the idea of “paradigm shift” that as long as people are satisfied with the way things are done, there will be no receptivity to change. “Now the fact is that [economists] are satisfied.” Coase said. “To go to a meeting of the American Economic Association is to see thousands of self-satisfied economists.” Yet, as his own speech attests, not all economists are, especially student economists. Whatever shift may occur in paradigms, it will be borne out by people, and this alone may be the greatest strength of the movement. To quote a slogan that emerged in Spain a year before the French petition: “La economía es de gente, no de curvas”—“Economics is about people, not about curves.”