Advancing Pluralism in Teaching Economics

International Perspectives on a Textbook Science

Samuel Decker, Wolfram Elsner, Svenja Flechtner

• Publisher: Routledge
• Year: 2018
• Print ISBN: 9780367586904
• eBook ISBN: 9781351711487
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

The complex economic problems of the 21st century require a pluralist, real-world oriented and innovative discipline of economics that is capable of addressing and teaching these issues to students. This volume is a state-of-the-art compilation of diverse, innovative and international perspectives on the rationales for and pathways towards pluralist economics teaching. It fosters constructive controversy aiming to incite authors and commentators to engage in fruitful debates.

This volume addresses a number of key questions: Why is it important for a social science to engage in pluralistic teaching? What issues does pluralist teaching face in different national contexts? Which traditions and practices in economic teaching make pluralist teaching difficult? What makes economics as a canonical textbook science particular and how could the rigid textbook system be innovated in a meaningful way? What can we learn from school education and other social science disciplines? Through examining these issues the editors have created a pluralist but cohesive book on teaching economics in the contemporary classroom drawing from ideas and examples from around the world.

Advancing Pluralism in Teaching Economics offers a valuable insight into the methodology and application of pluralist economics teaching. It will be a great resource for those teaching economics at various levels, as well as researchers.

Part I

Why pluralism is important for (teaching) a serious social science

Foundations

1 Pluralist economics

Is it scientific?

Sheila Dow

1. Introduction

The purpose of this chapter is to address any nagging doubt that supporting pluralism in economics makes it unscientific. By science I mean a systematic procedure for establishing reliable knowledge, involving evidence-based enquiry and critical thinking.¹ Can pluralism deliver reliable knowledge? What I will argue is that it is inevitable that different ideas will co-exist in economics, not just about theory, but also as to what constitutes reliable knowledge, i.e. different theories of understanding: different approaches understand the evidence of experience differently, apply different types of logic to it and put different emphases on the purpose of the exercise being prediction or explanation. If this is the case, then the search for reliable knowledge inevitably entails plurality. Support for such a plurality – pluralism – arises from two main sources. One is that it is helpful to have a variety ofanalyses to illuminate different aspects of a complex, evolving reality, making economics at a disciplinary level more reliable. The other is the need for economists to be able to recognise the limitations of their chosen approach relative to alternatives, and to explain and defend that approach in debate, making economics within each approach more reliable. As a corollary, restriction of economics to one approach is a less reliable basis for knowledge of the economy.

There is a long tradition of economists aspiring to science on a par with the physical sciences, an aspiration apparently met by the inclusion of economics in the Nobel prize system. Nobel prizes for the physical sciences are awarded for breakthrough discoveries which open up new possibilities for enquiry or change the way scientists think about their subject. But the context is one of disciplines which are viewed as having a shared understanding of the range of possibilities at any point in time and a shared understanding of their subject. Even when there is revolutionary change, either a new paradigm replaces the old one, or the old one is absorbed into a new synthetic paradigm. Thomas Kuhn’s (1970[1962]) theory of revolutions in the physical sciences involved one dominant paradigm succeeding another.

Kuhn (1970[1962]) argued that each paradigm has its own view as to what constitutes reliable knowledge, i.e. what constitutes science. Later Kuhn (1999) explained the flash of insight he experienced as a graduate student which set him off on this path. He had been taught that Aristotle had been wrongheaded on astronomical subjects. But Kuhn tried to read Aristotle himself from the author’s perspective and discovered new realms of meaning which revealed Aristotle’s wisdom in his own context. Kuhn used this insight to explain why each succeeding dominant paradigm is incommensurate with the previous one, i.e. there is insufficient common ground by which to compare them directly.

Applying Kuhn’s ideas to economics has always been controversial, not least because of differences in interpretation. For example Blaug (1992, chap. 2) sees Kuhn’s absence of over-riding criteria for good science as unacceptably relativistic, undermining the methodological monism which Blaug supports. On the other hand Fullbrook (2001) argues that this relativism is in fact anti-pluralistic in protecting the mainstream from challenge from alternative paradigms. Indeed economics does not seem to fit Kuhn’s pattern of a succession of dominant paradigms, but rather the persistence of a dominant paradigm even in the face of the type of anomaly which was supposed to spark a revolution. Mainstream economics rather has adapted (within its own framework) in order to be persuasive that it is addressing anomalies as they arise. This strategy has been successful in large part because of the rhetorical success of presenting itself as the most scientific approach (see McCloskey 1983). Thus for example Romer (2015, 89) defines science in terms of consensus on ‘true’ theoretical and empirical statements, while he defines insistence on differences within economics as (unscientific) politics.

But we can in fact use Kuhn’s insight to understand the co-existence of incommensurate paradigms in economics. Kuhn was always reluctant to discuss the social sciences, considering them immature (implying that consolidation into a single dominant paradigm would only come with maturity). But now even the prospect of unified physical sciences has been questioned. Thus Cartwright (1999, 1) characterises both physics and economics as a ‘patchwork’. There is good reason then to expect the co-existence of incommensurate paradigms as the norm rather than a transitional state. In what follows, we explore why this is so and consider different approaches to understanding reliable knowledge; this forms the basis for a pluralist position on economics. We then consider what this pluralism entails for generating and using reliable knowledge, i.e. for economic research, for economic policy making and for teaching economics. In the process we distinguish between methodological pluralism (arguing for the co-existence of several approaches), pluralist methodology (arguing for the use of a range of different methods) and theoretical pluralism (arguing for a range of theories, whether or not within a single approach or employing a single method).

2. Establishing reliable knowledge: different paradigms

The thinking in economic methodology which dominated up to the 1970s borrowed from the philosophy of science the idea of drawing a distinction between science and non-science. Central to this philosophy was the notion of empirical testing, such that only those theories which were testable were to be regarded as scientific, everything else being unscientific. Further, testing would identify the best theories. Popper (1959) argued that simply confirming theories with evidence did not produce reliable knowledge – only showing that a proposition was falsified allowed any definitive conclusions. Blaug (1992) was influential in promoting this approach within economics. Theories would be derived by means of applying deductivist (classical) logic to assumptions which were taken to be true. They would then be tested against the evidence, seeking to identify any falsification, and those theories which performed best would be the ones regarded as most reliable. This is a monist methodological approach: there is conventional agreement about the best methodology.

But while this approach served the purpose of developing and presenting economics as a science on a par with the physical sciences,² the philosophy of science was moving on from logical positivism. Caldwell (1982) details how the logistical problems with empirical testing made logical positivism unworkable. In particular, according to the Duhem-Quine problem, if evidence contradicts a conclusion based on theory, it is impossible to pin down exactly what accounts for the failure and thus what needs to be changed, ranging from particular datasets to the precise mathematical formulation of theory. Further, it was shown to be impossible to rid economic methodology of (untestable) metaphysical content (Boland 1997, 80–82).

Nevertheless mainstream economics continued to espouse some form of logical positivism and the corresponding general approach to methodology. Its merits are taken for granted and only given explicit expression, if at all, in introductory textbooks. Mankiw and Taylor’s (2006) textbook is unusual now in making their methodological approach explicit. They offer a clear statement of logical positivism in a way which used to be more commonly found in the introductions to textbooks. They give their purpose as teaching students to ‘think like an economist’ (Mankiw and Taylor 2006, 19–21). They explicitly classify economics as a science on a par with the physical sciences in that they employ ‘the scientific method’ of developing theories on the basis of simplifying assumptions and testing them. There are of course debates within econometrics as to different methods of empirical testing, and the sources of evidence have widened in recent years to include survey evidence and the results of experiments. But the methodological approach still stands, based on a logical positivist philosophy of science, distinguishing between science and non-science.

Science according to Mankiw and Taylor is ‘dispassionate’, echoing the prevalent mainstream view that the economic researcher engages in positive science, but only then do policy makers derive normative conclusions by applying their separate value systems. Further science, according to this view, is cumulative, becoming more robust the more theory is developed and the more datasets are used for testing. It is now widely understood that mainstream economics actually defines the subject of economics according to this methodology, i.e. according to logical positivist principles of what constitutes reliable knowledge. As Becker (1976, 5) put it: ‘what distinguishes economics as a discipline from other disciplines in the social sciences is not the subject matter but its approach’. This has allowed a form of imperialism whereby economics extends into the traditional subject matter of other disciplines by applying the mainstream economic method. Lazear (2000) puts it as follows:

Economics is not only a social science, it is a genuine science. Like the physical sciences, economics uses a methodology that produces refutable implications and tests these implications using solid statistical techniques. In particular, economics stresses three factors that distinguish it from other social sciences. Economists use the construct of rational individuals who engage in maximising behavior. Economic models adhere strictly to the importance of equilibrium as part of any theory. Finally, a focus on efficiency leads economists to ask questions that other social sciences ignore. These ingredients have allowed economics to invade intellectual territory that was previously deemed to be outside the discipline’s realm.

Lazear (2000)

Because mainstream economics is presented as a technical, positivist exercise, it has increasingly protected itself from popular challenge. This was something which Adam Smith associated with the physical sciences rather than the social sciences. He noted that the physical sciences were protected from public challenge:

Natural philosophers, in their independency upon the public opinion, approach nearly to mathematicians, and, in their judgments concerning the merit of their own discoveries and observations, enjoy some degree of the same security and tranquillity.

Smith (1976[1759], III.2.20)

But moral philosophy (from which political economy was emerging) was different:

A system of natural philosophy may appear very plausible, and be for a long time very generally received in the world, and yet have no foundation in nature, nor any sort of resemblance to the truth … But it is otherwise with systems of moral philosophy and an author who pretends to account for the origin of our moral sentiments, cannot deceive us so grossly, nor depart so very far from all resemblance to the truth.

Smith (1976[1759], VII.ii.4.14)

As mainstream economics became synonymous with the deductive mathematical method, in an effort to become more ‘scientific’, the scope for departing from resemblance to the truth increased. Indeed, as Earle et al. (2016) argue, the combination of the increasing power of economics in political argument with its presentation as a specialist technical discipline has created what they call an econocracy: something which discourages public engagement. But the evident failings of mainstream economics to predict the recent crisis or to prevent much of its social impact have encouraged more forceful challenges within public discourse. This has encouraged other approaches to reliable knowledge in economics.

It has been a persistent theme in critiques of mainstream methodology to challenge the validity of the assumptions on which the deductivist structure is built (the assumptions of rational, fully-informed choice by atomistic agents). But this has become a major research programme within New Keynesian economics which has gained widespread attention. Departures from these assumptions are explored: behavioural biases, cognitive limitations, asymmetric information and other-regarding behaviour. However this approach has simply refined the assumptions, certainly in the direction of greater realism, but still with rational economic man as the benchmark. Agents are still depicted as constrained optimisers, but facing more complex constraints. Logical positivism and the empirical testing of deductivist theory still prevail. What Colander (2000) has identified as a general pluralist development within mainstream economics is in fact theoretical pluralism, not methodological pluralism.

There have been more fundamental critiques which conclude that even modified rational optimising assumptions are far from being self-evident and are in fact false. All assumptions by definition involve some departure from reality, but the argument is that rational economic man is not a simplification of real individuals but rather a fiction. By implication any conclusions derived deductively from such assumptions are unreliable. A logical positivist would argue that the proof was in the empirical testing. In fact Popper was happy to accept that economics made assumptions which had not been empirically supported, such that falsification was limited to the propositions deduced from them. But even this has invited further critique. First, the normal practice is to seek confirmation from the data, which is less reliable than seeking falsification. Second, it is long established that any test is applied to a complex structure of assumptions and formulations which make it impossible to identify what has been falsified if the evidence contradicts the hypothesis (the ‘Duhem-Quine’ problem discussed above).

But third, there has been a critique of the whole notion of ‘facts’ independent of theory at one level or, at another level, what Searle (1995) calls the ‘deep background’ of the researcher at another level. This social and individual background influences, at a subconscious level and from an early age, how we observe and interpret the real world. Different approaches to reliable knowledge in economics thus start from different understandings of the subject matter (different ontologies). Thus for example the state of unemployment is regarded variously within different communities in economics as damaging dignity, reducing income, encouraging dependency on the state, or as voluntary leisure, depending on how the commentator understands the world. A further example is money which is variously regarded as a technical input into exchange, a subjective perception of liquidity, and as a social relation. Boland (1997, chap. 5) criticises the mainstream ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of contributors
• List of referees
• Economics and its teaching at a critical juncture Introduction
• Part I: Why pluralism is important for (teaching) a serious social scienceFoundations
• Part II: International perspectives on pluralist teaching
• Part III: Economics textbooks Failures and new pathways
• Part IV: The prospects of pluralism in economics
• Index