r/TrueReddit • u/Maxwellsdemon17 • 5d ago
Business + Economics Economics teaching has become the Aeroflot of ideas. The discipline is failing students by ignoring the biggest social, political and ecological challenges facing the world today
https://www.ft.com/content/9aabb4a9-d896-4b4c-a40a-1c4477a47a2993
u/TheShipEliza 5d ago
hi. econn grad here. contemporary academic econ does some good work. there are teachers/scholars who are using the discipline to explain what is going on. but a HUGE part of the academy is dedicated, more or less, to magical thinking about capitalism. and their sole devotion is effectively creating a secular framework for a kind of recursive prosperity gospel where, if you have the money you understand the system and the system works. and if you don't have the money it is because you don't understand the system and cannot make it work.
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u/orangejake 5d ago
A very nice article from nearly a decade ago about how economists (in a literal sense) have replaced astrologers in political decision making. It is not too clear they do a better job.
https://aeon.co/essays/how-economists-rode-maths-to-become-our-era-s-astrologers
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u/TheShipEliza 5d ago
Whats the old joke, 3 economists go target shooting. One misses left, the other misses right, the third says “I hit it!”
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u/snooze_sensei 5d ago
I've had this argument with a Co worker of mine who writes curriculum for Economics.
He argues that Economics is a science and has scientific laws that are universal. I argue that Economics is a social construct, and that the laws of economics are simply the agreed upon rules of the game. At best a social science.
He says I'm crazy.
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u/Ell2509 5d ago
I did triple major, with Econ being one. You're partly right.
Econ is also more than that. Imagine it as a whole body of modular, complementary areas. Each of those modules will have its own appropriate application, beyond merely describing the system.
That said, the way it is understood and used in common perception is precisely what you say.
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u/beyondoutsidethebox 4d ago
Economics is reliant on people, therefore, it cannot be reduced to a system of immutable laws. A large group of people can be predictable to a degree, up to a point. But people are illogical.
Would trying to apply current economic theory to Ian Banks' "Culture" series work? Probably not. Or perhaps consider the economics of a barter only society.
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u/LucyRiversinker 5d ago
The many laws of economics often start with ceteris paribus as an axiom. Good luck applying ceteris paribus in the real world. Economics provides a useful array of tools to think about the word, but humanity is not entirely homo oeconomicus. The assumption of rational thinking is inherently flawed.
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u/Lostinthestarscape 4d ago
My first economics prof opened the class by saying "we are teaching you the foundations, they are filled with assumptions that have been proven incorrect so please just understand that it is more of learning the language - the "real" economics classes start in 4th year and run through postgraduate studies and you are going to either be modeling past data mathematically or trying to find best fit complexity models"
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u/snooze_sensei 4d ago
Ultimately though the math simply quantifies how the ruleset that humans designed works, not how anything about natural law works beyond basic mathematics. Supply and demand for example, yes basic math says if you have 10 of something and people want 15 of them, then 5 go without. That's mathematics and irrefutable, right? But everything after that is purely the result of the rules humans have devised about how to respond to that inequality.
It's just like saying that the math which describes the outcome of dice rolls in D&D reflect natural law. That's only true if you're a d&d character. But the ruleset which says when you have to roll the dice and what the results should be when you get a certain dice roll are purely human constricts.
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u/Lostinthestarscape 4d ago
My implicit meaning with "past data" specifically is that these models don't translate to universal rules so I think we are in agreement.
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u/plummbob 4d ago
Supply and demand for example, yes basic math says if you have 10 of something and people want 15 of them, then 5 go without. That's mathematics and irrefutable, right? But everything after that is purely the result of the rules humans have devised about how to respond to that inequality
There is alot more to supply and demand than that
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u/jenpalex 4d ago edited 4d ago
Ask him what reliable, repeatable findings this discipline are?
The fundamental problem of economics as a scientific discipline is complexity.
Science works stunningly well on simple subjects of enquiry. Every hydrogen atom behaves the same and keeps on behaving the same.
Using the simple mathematics of physics to predict behaviour is unlikely to work and it doesn’t. But since the 1950s it has been applied to economics with increasing rigour. It is impossible to gain credit within the discipline unless you can invert a 9 times 9 matrix in you head.
But all biological individuals must be different, otherwise evolution doesn’t work.
Humans are even more complex. They have different cultures and change constantly as they learn from experience.
The mathematics of Complexity is relatively undeveloped and, as far as I know,has yet to lead to any better predictions.
The depth of the problem is ironically illustrated by this comment on r/Economics :
“ [–]Arenavil 1 point 1 month ago Ha-Joon Chang has been writing this same garbage op ed for 20 years. Amazing that the financial times fell for it again”
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u/Brinabavd 4d ago
"Simple mathematics of physics" peak Reddit sophistry lmao
https://en.wikipedia.org/wiki/Double_auction
Is an example where theory and observed behavior line up well, for example.
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u/jenpalex 4d ago edited 4d ago
- That’s a start from a sub-field. Hardly Newtonian Mechanics, General Relativity or Quantum Mechanics.
Keep going!
Oh by the way has it been tested over a range of cultures? Over what time period has it held up?
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u/TheShipEliza 5d ago
i lean toward agreeing with your friend, especially when you get into the more mathematical parts of the discipline . but you are also not entirely wrong. In my experience, by and large the scientific parts have been minimized in the academy, in business schools, in favor of something more akin to alchemy for capitalism. basically that it is good, the suffering it creates is good, and economics says so.
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u/Big_Wave9732 5d ago
At the end of the day, old world Chicago School economics still takes the view that "economic profit" should be $0 and that "accounting profits" (i.e. what we think of as a business making money) is wasteful. That struck me as a complete denial of reality.
Also the Chicago school's views on free trade generally scoff at the idea that outsourcing and chasing efficiencies can have negative impacts on national security. I don't know that the free trade idea of peace through interlocking national economies is a viable one now.
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u/Far_Piano4176 4d ago
it could have been a viable one, had the world's hegemon made different decisions. We could argue about to what extent those decisions were "locked in" by decisions like the marshall plan, or ideologies like anticommunism, but it's clear that things could have been different and more stable if the US was a less shit global superpower, and/or had more political control over global capital flows. That's not to say whether american economic hegemony is good in itself, merely that the US did a bad job of maintaining the system.
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u/plummbob 4d ago
. I argue that Economics is a social construct, and that the laws of economics are simply the agreed upon rules of the game.
What's the profit maximizing output in a duopoly where firms compete on output, have substitute products and symmetric costs?
Answering that doesn't seem like a "social construct," it's just a bit of calculus and algebra.
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u/snooze_sensei 4d ago
Irrelevant. The concept of firms in a duopoly competing on output presume certain rules of the economic "game" which are purely human constructs.
Yes you can describe that with math. But that does not make it a scientific law, only a description of the process created by humans.
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u/plummbob 4d ago
But that does not make it a scientific law, only a description of the process created by humans.
That's the wrong takeaway. Let's imagine you wanted to impose a tax in this market. How the tax affects output, prices, welfare, etc come right out of the math.
Being weird and hand wavy "well look that isnt like a scientific law" doesn't mean the policy outcome will be what you want.
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u/snooze_sensei 4d ago
You're failing to understand the distinction.
Yes. The math describes the effect of a man-made policy on a man-made system..
I can just as easily say "2+2 = 4 that's a fact so therefore capitalism is superior" .. The leaps of logic from the mathematical side of Economics to the Policy side are insane.
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u/klone_free 1d ago
Im taking an econ 101 course and it seems like while they bring up opportunity cost, its rarely about poisoning ourselves, the planet, and the social systems pursuit of growth and profit push or keep in place.
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u/TheShipEliza 1d ago
Oh yeah later on those become “externalities” and dont get baked in to the serious calculations which of course they should.
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u/Dull_Conversation669 5d ago
We need to push for an economics education that is more pluralist, ethically aware, historically grounded and relevant to the real world.
I dunno, sounds a lot like propaganda dressed up as academic rigor.
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u/Helicase21 5d ago
A lot of this depends on subfield. Obviously 101 level macro isn't going to do a good job but I've had great experiences in agricultural and natural resource econ, even in the context of a not particularly progressive department.
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u/notapoliticalalt 5d ago
The mantra “all models are wrong, some are useful“ should apply. However, much is the problem with a lot of economics is that many people are not very honest about this fact. Economics certainly has a lot of useful insights, but it’s also not sufficient to make a lot of important decisions. Furthermore, a lot of people who don’t really know much about economics will essentially invoke it, as though ECON 101 can actually explain everything, or enough so, such that they don’t need to elaborate.
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u/plummbob 4d ago
as though ECON 101 can actually explain everything, or enough so, such that they don’t need to elaborate.
Econ 101 is just a algebraic distillation of the fancier calculus dynamics later on. For most problems, it's fine. It's not like the nature of a, say, monopoly is different in econ 101 at it would be in graduate level io
It's not like yiu get to some advanced micro class and learn that budgets don't matter or that choices aren't made on the margin.
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u/Big_Wave9732 5d ago
University level economics is still dominated by the Chicago school (Milton Friedman etc).
There are some economists that have acknowledged the deficiencies that OP is describing. Check out Behavioral Economics.
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u/plummbob 4d ago
Behavior economics is like in every undergrad program. There are no real "schools" of thought in economics.
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u/Maxwellsdemon17 5d ago
"Rethinking Economics, a group of activists that emerged from the post-crash student rebellion, recently took stock of the state of economics taught at UK universities in its curriculum health check. The findings are sobering. “The climate crisis and socio-ecological issues are broadly absent from economic curricula,” it found. Seventy-five per cent of universities “do not teach any ecological economics”. The report shows how the mainstream’s best-ranked universities often perform the worst in preparing students for the real world. We are training future economists to fail again."
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u/HWHAProb 4d ago edited 4d ago
I graduated with an econ degree.
My "environmental economics" course professor proposed that communities hurt by pollution should simply negotiate with corporate polluters to come to an optimal allowed level of pollution.
When asked about how a community subject to pollution is likely poor and can't collectively afford to negotiate with a large corporate polluter, or the possibility that the numerous costs of the pollution may be impossible to evaluate, the professor simply said "well that's not what we are modeling here"
Completely unserious lack of engagement with reality.
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u/plummbob 4d ago
, the professor simply said "well that's not what we are modeling here"
Ie, adding a million other terms into a model isn't useful
I remember learning cournot competition, and it's just easier to assume no fixed and constant marginal costs. You can add some weird cost function, but then all you're doing is adding 2 extra pages of algebra and no better insight into the basic mechanics of the model.
Trying to then be like "well how come there are only 2 firms, why are fixed costs x?" is beside the point. That's left up to the reader to do that annoying extra work that tells you nothing
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u/HWHAProb 4d ago edited 4d ago
To be clear, the problem with how this was taught wasn't an incorrect understanding of an "everyone benefits from trade/negotiation" model. The basics of that model were covered in the 200 level stuff, and yeah, it quickly becomes too complex with additional variables.
The problem was that, rather than start from real world observation of and then modeling that, we were shoehorning existing simple economics frameworks into complex situations with countless variables and exogenous considerations and then claiming there was some insight to be had.
But in a class called "environmental economics," most of what we were taught had not been modeled from existing environmental considerations. Bit of an oversight
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u/plummbob 4d ago
we were shoehorning an existing simple economics framework into a very complex situation with countless variables and exogenous considerations and then claiming there was some insight to be had.
Everything is full of countless variables and exogenous consideration. Yiu can't just start from some observation for that reason.
The key thing you're being taught is how to use the models that exist and then apply them where they work. Choosing the right model is part of the skill.
we didn't learn almost anything that has been modeled from existing environmental considerations
Maybe your class sucked, I dunno, but there are good textbooks out there for this topic, from a general overview to things mire micro oriented or more policy oriented or whatever you want. It's a massive topic
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u/HWHAProb 4d ago edited 4d ago
Sure, maybe I shouldn't extrapolate from my experience too heavily, but dear lord it was rough.
Market failures and exogenous variables were covered early on, which was fine, but later materials were frankly awful
In 2017, at a 400 level, being asked to unironically apply tragedy of the commons to public goods without any engagement with the work of Elinor Ostrom is embarrassing.
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u/plummbob 4d ago
I dunno, as somebody who just go out of being stuck in traffic during rush hour, I'm not sure how much use ostrom's work is in dealing with externalities.
And from what I can gather, if you're looking at, say, how to price carbon or minimize traffic congestion or whatever, work like ostrom's just isn't that helpful
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u/Great_Hamster 5d ago
It doesn't define "the orthodoxy."
How can you engage with an article that won't define its terms?
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u/xena_lawless 5d ago
People need to understand that in the US, landlords/parasites literally re-wrote the entire field of economics around the turn of the 20th century in order to hide their parasitism, and even the phenomenon of parasitism.
https://evonomics.com/josh-ryan-collins-land-economic-theory/
Whereas China solved their parasite problem to a much greater extent a long time ago, which made them much more attractive for capital investment.
So they're now set up to dominate the coming decades and centuries as a result.
Chinese IQs are about 10% higher on average than the US, and they don't have to dumb down their populations as significantly in order to maintain the status quo.
Mainstream "economists'" role in this cursed society is similar to that of medieval priests, hiding and justifying an abusive, extractive social order with nonsense dogma.
https://truthout.org/articles/economic-theorists-the-high-priests-of-capitalism/
https://www.imf.org/en/Publications/fandd/issues/2024/03/Symposium-Rethinking-Economics-Angus-Deaton
I recommend everyone read The Conquest of Bread by Peter Kropotkin, Progress and Poverty by Henry George, Killing the Host by Michael Hudson, or Imperialism: The Highest Stage of Capitalism by Lenin to help see through all the neoliberal/kleptocratic dogma people are brainwashed with.
Unfortunately, deception and misdirection are only some of the pieces of how our ruling parasite/kleptocrat class are able to get away with crimes against humanity, but they're important to see through nonetheless.
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u/orangejake 5d ago
I put this elsewhere in the thread, but you can also make a quite literal comparison between economists and astrologers ~ a century ago.
https://aeon.co/essays/how-economists-rode-maths-to-become-our-era-s-astrologers
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u/Velociraptortillas 5d ago
"All of Liberal economics has been a series of largely futile attempts to refute Marx."
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u/publicdefecation 1d ago
We've already witnessed an entire half century where billions of people lived under communist rule from eastern europe all the way to the edges of east and southeast asia.
Where can we find an example of a successful Marxist society?
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u/plummbob 4d ago
There are undergrad classes and whole books on any of those topics.
I mean, you gotta learn to be able to model the problems you want to address. Students have to learn to be able to do economics, not just talk policy all the time
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