For the past five years, economists Wendy Carlin and Sam Bowles got professors from around the world to ask thousands of first-year economics students one basic question on their first day of class. What is the most pressing problem economists should be addressing?
Among responses such as globalization, digitalization, and unemployment, two concerns dwarf the rest in the most recent data: inequality and climate change.
But there is a growing sense that the standard economics curriculum, especially as taught in introductory courses, is not adequately preparing students to address these issues.
Frustration began to mount following the financial crisis of 2008 in response to a curriculum deemed oversimplified and blind to history, power, and notions of fairness. As concerns about income distribution and the environment have intensified since, and in response to students’ demands, a small but growing number of economists are now pushing ethical questions to the surface in introductory economics.
“There’s really an inflection point in economics education right now,” says Megan Way, professor of economics at Babson College in Wellesley, Massachusetts. “There’s a recognition of how modern economics has not incorporated nearly enough of the reality of climate change and sustainability or issues of inequality, diversity, and inclusion. ... There are certain assumptions underlying our models and our principles, and some of those models are really wrong and really problematic.”
For starters, how can economics truly embrace sustainability when the basic models taught to college freshmen assume more is always better? Or: However natural the quest for efficiency, is society ignoring those who are losing more than winning in the process?
Such questions are more than academic, because the impact of economic theory ripples outward. About 40% of the 20 million undergraduate students in the United States take a course in economics each year. A few will study the subject in depth. Some begin careers in influential fields like business, finance, or politics. For many, “Econ 101” is it. That responsibility isn’t lost on economists.
The most essential thing professors say they can do is be more careful not to treat economics as a values-free zone.
“A lot of what’s called efficiency in economics actually has implicit in it a moral theory,” says Jason Furman, one of two economists leading Harvard University’s intro course. “People in economics pretend that, ‘Oh, growth doesn’t have any moral implication, or social surplus doesn’t have any moral implication.’ But they do. And so, rather than implicitly smuggling it in, I would rather be explicit about what it is.”
Beyond efficiency
Introductory economics is by far the hardest course to teach, says James Campbell, and not just because he has more than 600 students in his class at the University of California, Berkeley.
Part of what keeps Professor Campbell up at night is deciding how much time to spend on the technical details of basic models like supply and demand, profit maximization, and GDP growth – which students need in order to do well in higher level courses – and how much energy he can devote to complicating the narrative and helping students make ethical judgments.
On their own, the assumptions in economics seem to paint a world inhabited entirely by homo economicus. People – far-sighted, rational decisionmakers – aim only to maximize self-interest. Ecosystems in nature are totally separate from the workings of the economy. And social interaction takes the form of a market exchange in which perfect competition leads to the most efficient outcome.
Economists are the first to warn that these are just handy simplifications that higher-level work complicates. But there is some evidence these views shape students’ worldview and behavior, making people less generous and less concerned with fairness, says Professor Campbell.
“In lots of the standard texts … efficiency is the measure of how good an outcome is. What we try to do is unpack all of the implicit ethical statements that are underneath that to say, ‘Well, what kind of world are you advocating for if you advocate for an efficient world in the sense that Econ means it?’”
Thought-provoking discussion questions accompany problem sets in each unit. For the final exam, students write two essays – no regurgitating supply and demand curves – on ethically oriented prompts like, “What’s the right way to measure well-being in an economy?” and “Should policymakers care more about economic growth or reducing inequality?”
Wandering into ethical terrain can be scary for an economist, says Professor Campbell. “I think there’s this perception among some economists that it’s too overwhelming to try and have these unanswerable questions.”
But he says being honest with students and trusting them to handle the nuance goes a long way.
“Look, it’s a mess, and it’s hard, and we don’t have the answers,” he tells them. “But you are going to want to be able to participate in those conversations.”
Students tend to appreciate the extra effort.
“Getting caught up in this oversimplified economic universe of modeling can have unintended negative consequences when we forget that the real world is not as simple as our models,” says Emma Berman, a UC Berkeley sophomore who says she wishes more professors would take ethical implications into account.
New textbook
Wendy Carlin of University College London and Samuel Bowles of the Santa Fe Institute didn’t ask students about society’s most pressing issues for nothing – they were on a mission. As part of CORE, a group of economists from far and wide united by the conviction that Econ 101 needed an ambitious overhaul, they set out to write a new textbook.
“The Economy” has since been adopted in 379 universities in over 60 countries, from University College London to Colorado State University.
The free, online text introduces a new framework for studying economics. In it, people are motivated by values such as fairness and reciprocity in addition to self-interest, the economy operates as part of a natural world whose sustainability is in question, and inequality is one of the opening topics.
“It’s a godsend for people who are trying to enrich Econ 1,” says Professor Campbell, who uses the book alongside a more traditional text.
As the profession diversifies, economists hope new voices will continue to push the envelope toward a more nuanced and inclusive teaching of basic economics.
“The core principles haven’t changed,” says Derek D’Angelo, president of the National Association of Economic Educators. “But how we’re applying them and how we’re looking at them [is]. ... Is what we’re teaching inclusive? Is it a story or a topic that every student sees themselves as being a part of?”
“Society isn’t just numbers”
The growing focus on ethical questions coincides with other changes in economics in recent years. For example, the recent award of the economics Nobel Prize to three researchers, including David Card of UC Berkeley, reflects an increasing emphasis on analyzing real-world data – which has sometimes challenged long-held theories like the idea that a higher minimum wage necessarily diminishes employment.
“The ice is breaking, definitely,” says economist Gerald Friedman.
At the University of Massachusetts, Amherst, Professor Friedman teaches from an introductory textbook he began writing over two decades ago after years of lecturing from texts that too often ignored the importance of social norms and values.
“We need to take that approach of seeing behind the numbers and seeing the true effect it has on society,” says one of his students, Christian Figueroa. “Because society isn’t just numbers.”
Professor Friedman “states his opinions, he provides the arguments for it, but then he also provides arguments for the side he opposes,” Mr. Figueroa adds. “That gives you a balance to think for yourself.”
Harvard economist Stephen Marglin remembers a time, not long ago, when such thinking wasn’t so welcome. When he taught an intro course between 2003 and 2010 critiquing the standard approach, it was popular with students. But “my department didn’t care much for it,” says Professor Marglin, smiling as he remembers how only one other professor voted in favor of the course counting toward the economics major.
“I think now the center of gravity of the profession has shifted,” he says.
In his teaching at Harvard, Professor Furman says he dedicates more time to ethics than previous iterations of the intro class did, in part because urgency has grown.
“We’re not trying to teach them what values to have,” he says, “but trying to teach them to think more carefully about their values and how to combine them with economics.”
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