Post-crash economics: time to face reality

By Bernadette Meaden
January 21, 2014

The average British voter takes little interest in economics as a subject, being fully occupied with the economic realities of their lives.

I suspect they regard economics as being like physics: complicated, technical, and made up of certain laws that govern the way the world works and which cannot be altered or questioned. If a highly regarded economist appears on television saying that A plus B will inevitably lead to C, the average viewer may regard that as being as true as a mathematician saying two plus two equals four.

This may explain why the vast majority of the public seem to have accepted that austerity, even though it may have caused them great hardship, is the only course of action open to us.

What the average voter may not realise is that economics, far from being a science, is much more like an art, or even one could say, a religion. There are many different schools of economics, each with their own adherents. Yet for several decades, one school of economics, the neo-classical school, has dominated in public life and in education. Its beliefs have been taught and applied to the virtual exclusion of all others.

We would not consider it right if Religious Education in schools taught only about Christianity to the exclusion of other religions or beliefs, but neo-classical economics has often been taught as if it was the only economic approach worth considering.

The financial crash in 2008 caused some people to question what had been happening, including the economics students at Manchester University. They formed the Post-Crash Economics Society, calling for other economic approaches to be taught at Manchester and challenging the dominance of neo-classical economics.

They set up a petition which eloquently calls for change, saying:

In most courses “economics” is shorthand for “neoclassical economics”. There is no recognition of the fact that economics is a discipline that consists of a variety of schools of thought. Academic integrity requires that alternative economic theories be introduced to students. Economic questions cannot necessarily be answered adequately from a single theoretical standpoint.

The way economics is taught has hugely important consequences because our societies are shaped by economic events and policies. Economics graduates should be prepared to deal with the economic problems that the world faces.

The mismatch between syllabuses and real-world needs is a challenge faced by economics departments across the world. We don’t want to vilify the economics department, as they are not the cause of the problem. However, they must now live up to their world-class reputation and take a lead by reforming the syllabus.

We therefore believe that an education in economics should include more plurality and greater critical evaluation.

The whole text of the petition is well worth reading.

As a move by a group of students, this attracted significant press coverage and was welcomed by many who had long felt that the sidelining of other economic approaches ran counter to academic freedom.

The dominance of neoclassical economics, coupled with the rise of neoliberal politics, has contributed to the ever-increasing concentration of wealth in the hands of a few, and we have now reached the position where the world’s 85 richest people own as much as the poorest half of the world’s population.

That’s 85 people owning as much wealth as 3.5 billion people. Income inequality is now seen as a big threat to world stability, but the prevailing political and economic theories seem to offer very little in the way of solutions, indeed they have brought us to this point.

It is vital that alternative approaches to our economic problems are taught and debated in our universities and more widely. It would be refreshing to hear, for instance, next time the economy is debated on TV, Professor Georgina Waylen speak from the perspective of feminist economics, which places a value on much of the unpaid work that women usually do, caring for the sick and elderly as well as childcare. Feminist economics would advocate spending on social infrastructure, which would create more jobs than HS2 for instance. Or to hear Ann Pettifor, author of ‘Just Money: How Society Can Break the Despotic Power of Finance’ address the fundamental issue of what money is, and how it is created.

Perhaps then, when another eminent economist or politician appears on the television to tell us that whilst certain policies may cause great hardship they simply are an economic necessity, we would have the knowledge and the confidence to question those assertions.

The field of economics has been too narrow for too long, it needs to open up to alternative ideas, and to the voices of those who will be affected by policies. It is too important a subject to leave it to the traditional experts. Perhaps it’s time for the advocates of the free market to open themselves up to a little competition.


© Bernadette Meaden has written about political, religious and social issues for some years, and is strongly influenced by Christian Socialism, liberation theology and the Catholic Worker movement. She is an Ekklesia associate and regular contributor. You can follow her on Twitter: @BernaMeaden

Although the views expressed in this article do not necessarily represent the views of Ekklesia, the article may reflect Ekklesia's values. If you use Ekklesia's news briefings please consider making a donation to sponsor Ekklesia's work here.