In a recent article in the Financial Times, Samuel Bowles applauded critics of economics education and praised calls for greater pluralism (diversity of viewpoints) within the discipline. He then went on to explain how the newly published CORE textbook, which is being promoted as an alternative economics text for undergraduates, provides the answer to this problem. But don’t be deceived: the battle for pluralism in economics has barely begun.

Rethinking Economics welcomes CORE’s incorporation of a variety of thinkers in their curriculum, as well as their efforts to make economics more real and engaging for economics students. However, it is vital to recognise the distinction between what CORE labels as pluralism, and how Rethinking Economics defines it.

In the article Bowles refers to ‘pluralism by integration’. This is the use of a variety of schools of thought in the development of a modified economic model, and is the only one to be taught to students in the CORE curriculum. The origins of the various ideas and assumptions employed in the CORE textbook are not always acknowledged, and alternative interpretations are rarely mentioned, so students are presented with what appears to be a singular version of economic truth. This doesn’t facilitate critical engagement or challenge, and is therefore vulnerable to creating the kind of ‘groupthink’ that the IMF has recognised contributed to the 2008 financial crisis.

Rethinking Economics, on the other hand, believes that students should have the chance to learn about multiple paradigms and models, and use their own critical faculties to decide which aspects of these are useful in analysing the real world. It is up to students to decide what school of thought they prefer, in a similar fashion to how one decides their own political and social leanings.

This is what Samuel Bowles calls ‘pluralism by juxtaposition’, but it can also be described as methodological pluralism. This is the approach represented by the new reader published by Rethinking Economics: an introduction to nine different schools of economics, in nine separate chapters, ready for students to absorb, critique and use. This encourages students to think critically about what they’re learning — a vital skill for employment after university.

Rethinking Economics does not advocate teaching just one paradigm to students, even if that one paradigm is made up of a variety of complementing views. This approach risks creating a new economic dogma which will ultimately limit students learning and the economics discipline itself

Recent media coverage has given the impression that the answer to university economics university education has arrived in the form of CORE. This was reinforced by a recent Bloomberg interview which gave the impression that Wendy Carlin, lead editor of the CORE textbook, represented the student movement Rethinking Economics. This is highly misleading, and it is important that it is challenged.

Wendy Carlin, lead editor of the CORE textbook, is implied by Bloomberg’s caption to represent the student movement Rethinking Economics

Rethinking Economics recognises that CORE is a step in the right direction. The teaching of insights from diverse pluralist thinkers from Marx to Hayek, and the incorporation of other social sciences, is something that the student movement welcomes.

But real critical pluralism that reflects the true diversity of real-world perspectives is still a long way off. There is plenty more rethinking yet to be done.

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“This is the bit with the economicky words in it”, Chancellor Philip Hammond announced in his Budget speech last November.

It’s hard to imagine Stephen Hawking or Brian Cox saying, “this is the bit with the sciency words in it”. But the economics profession has a similar responsibility to scientists. As experts, they have a responsibility to convey complex information in an accessible and engaging way to the public, in order for the public to engage with democracy. Social and political issues are often framed in relation to their effect on the economy, and this can decide elections, referenda and policymaking.

While scientists have spokespeople who convey their messages in a palatable way, economists do not. Where are the economics pin-ups?

Economists aren’t famed for their social skills. Research has shown that they don’t communicate particularly well. A recent study of Twitter found that they were the least likely out of any profession to engage in general conversation. Economists aren’t storytellers like scientists are; they speak in cold, hard, technical terms most of the time, and unsurprisingly this can be disengaging for the public.

In a recent poll by Rethinking Economics, it was found that 60% of UK adults cannot define GDP, while 70% do not know what quantitative easing is. A recent OECD survey found that only 38% of the UK public understand inflation.

Andy Haldane, Chief Economist at the Bank of England, has argued that the public are less likely to trust a discipline and its spokespeople if they don’t understand the subject. This is reflected in a recent poll, which showed that while 82% of the public trust doctors, and 71% trust scientists, only 25% trust economists. Only 4% of the UK population feel that the information they hear in the news about the economy is “completely reliable and trustworthy”.

The economics campaigns website Economy found that only 12% of the public feel confident in the way that economics is spoken about in the media and by politicians. Meanwhile, economists were the group of ‘experts’ with the single biggest drop in trust in the Brexit referendum, with only 14% of Leave voters stating that they trust economists. Yet at the same time, it is clear that people want to understand economics. Four out of five people acknowledge that economics is relevant to their everyday lives.

This ‘twin deficit’ of a lack of understanding and trust within economics has huge ramifications for policymaking and democracy. If the public don’t trust or understand the economics that is being communicated, they cannot critically engage with the policies that affect their everyday lives.

What is the solution to bridge this gap between the public and experts? The answer must be for the experts to communicate in a better way. For this to happen, the economists of the future – economics students – must be taught this as part of their university curriculum.

The charity Rethinking Economics produces materials for universities to use if they want to change their economics curriculum. With their sister group Economy, who campaign for understandable economics, they are both calling for economics departments to include communications skills as part of their syllabuses, from presenting to public speaking.

This alone isn’t enough to make economics fit for purpose, but it is vital if we are to start rebuilding trust in the profession.

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Ten years ago this week, customers of the bank Northern Rock queued up in their hundreds at branches across the country, demanding to cash out their deposits. Only two months earlier, the bank had released rosy forecasts, including a plan to increase shareholder dividends by 30%. But by March 2008 the bank had been nationalised, and the Financial Crisis was cutting ever deeper into our economy.

Economists were left firmly on the back foot. The Queen asked why nobody saw the crisis coming, and she was told, “that financial crises were a bit like earthquakes and flu pandemics in being rare and difficult to predict.” But should economists view economic crises in this way, as semi-Biblical disasters emerging from somewhere completely outside the economic realm? Surely, it is possible to skill up our economists to predict and prevent disasters, and to create economic systems that can withstand economic, social and ecological realities without risk of collapse.  If we want a more stable economy, the economists of the future need to be taught an economics that is fit for purpose.

Nearly all economists start life as economics students: in lecture theatres and seminar rooms they learn their trade. Our organisation, Rethinking Economics, examines and critiques what economics students are taught. Our study of 177 undergraduate economics modules in seven prominent universities showed some stark conclusions.

Across the country, students are being taught a narrow version of economics where real-world economic issues barely feature. Primarily, students are required to ‘operate a model’ (show the calculations needed to reach an often predetermined right answer) or to ‘describe’ rather than evaluate a theory or policy. On average, a fifth of core macro and micro modules were assessed by multiple choice exams, with one university using these for 53% of core assessment. Overall, 78% of economics assessments required no critical or independent thinking at all, and a mere 5% of exam marks required any knowledge of the real world.

Shockingly, this trend persisted throughout undergraduate courses, with little or no progression onto a broader curriculum or a more analytical style in later years. More complex economic phenomena that relate to financial crises continued to be classed as ‘external shocks’, beyond the mandate of economists to consider.

Given this background, it is hardly surprising that economists see economic crises as being as unpredictable as earthquakes. Economics students that are not equipped with the tools to understand real economic systems will inevitably struggle to understand and work with real-world economic events when they graduate. In the years following the collapse of Northern Rock, society learned the consequences of the economics curriculum’s limitations.

From this analysis, it might seem that economics has little to offer to prevent another crisis. In fact, there is much that economics students could be taught that would skill them up for real-world economic management.

Broadening the curriculum would bring huge benefits. Courses could cover Minsky’s ‘Financial Instability Hypothesis’, which explores the impact of risky borrowing behaviour on the wider financial system. This could help future economists to spot and resolve vulnerabilities to help avoid crashes. Inclusion of New-Keynesian thinking, which builds in the idea that market failures are possible, could give future economists a fuller understanding of the interventions available to keep an economy functioning. Austrian economics contributes valuable insights relating to business cycles, inflation, and government intervention. Feminist economics draws our growing care economy into analysis. Ecological economics provides insight into the economic pressures that may arise as global resource availability shrinks.

Economics graduates who study these and other perspectives, as well as the modelling that comprise the current curriculum, would be better placed to help manage the real economy in all its glorious complexity. When economics students are taught a broader range of perspectives and techniques, they will be better able to foresee challenges and financial risks, predict collective as well as individual human behaviour, and address the ecological, social and economic challenges of our time.

Universities have a huge opportunity to contribute to a decent, stable and secure economic future for us all. We are relying on them to train up the next generation of economists, who will inform our voters, advise our governments, and sculpt our economic environment. Those economists must be ready to prevent another Northern Rock, and to create a better economic future in the real world.

The post 10 years on, could today’s economics graduates predict and prevent another Northern Rock? appeared first on New thinking for the British economy.