Neoclassical economics fighting back from “the Ropes”?
In 2003 the the heterodox economics faculty at Notre Dame University were removed from the Economics Department. Now I gather their new home, The Department of Economics and Policy Studies, will be eliminated as well.Â The story can be found in The Chronicle of Higher Education
An interesting analysis appeared today in the Chronicle titled ” Neoclassical Economists on the Ropes (Except at Notre Dame)
September 22, 2009, 01:48 PM ET
Neoclassical Economists on the Ropes (Except at Notre Dame)
By Teresa Ghilarducci
That squeaking sound you hear on your college campus is coming from economists nervously shifting in their chairs.
As the recession wallops jobs, eagle eyes and sharp tongues are pointing to economists asking where they were when the economy collapsed. (After all we would haul up the Center for Disease Control after an outbreak of TB.)
A serious European paper, “The Systematic Failure of Academic Economists” came out at the beginning of the year; The Nation started a good discussion in May; and preeminent economist Paul Samuelson indicted neoclassical economics by summer. The business press chimed in: Mainstream Financial Times rudely asked (rude if you are an economist):Â “What is the point of economists?”
Just two weeks ago, Nobel prize winner Paul Krugman, prominently criticized our profession arguing that mathematical models and abstract formulations got the better of the neoclassical economists who should have, but didn’t, warn the world of very risky unregulated leverage. Why? perhaps 1) they just didn’t pay attention, 2) they didn’t know enough, 3) they were compromised by consulting deals by a financial industry that wanted praises, not rebukes.
What is the solution? Economists need to be broader, more self-critical, deeply knowledgeable about economic institutions. This is why it’s dumbfounding that the University of Notre Dame created an economics department filled — by intent! — of only neoclassical economists and banned their Ph.D. economists who are policy-oriented and non-orthodox from the department.
I since left — happily, to head to the New School for Social Research — but I started my career on the Notre Dame faculty attracted by it’s mission to address problems facing humanity and thrived where neoclassical economists interacted with historians, policy economists, Keynesians, Marxists, philosophers, and other faculty deeply committed to the same goal.
Notre Dame students, faculty, and scholars everywhere question ND’s move. Orthodoxy and intolerance in the economics profession helped plunge the world into the deepest recession since the 1930s: It doesn’t take a rocket scientist — or even an economist — to recognize narrowness has a cost.
Here is a modest recommendation for this aspiring top-tier university: Put all the economists it hired for the economics department in an economics department and let ideas interact. After all that is what universities do and what economic thinking and economic regulation needs.
Ellen Russell is a senior economist at the Canadian Centre for Policy Alternatives