A majority of the stuff we learn in econ classes are the neoclassical stuff, which is fascinating and stimulating with rich insights on the markets and economy. However, as we start with (unrealistic) assumptions and build on the theory and prove them in a slick way by using equations and analysis, we are never told about its actual applicability in the real world. This is kind of frustrating but still learning the theory itself is stimulating! A relevant question is: how can realism be brought to the standard stuff we learn in econ so that it has some life? Can learning heterodox economics fulfill this purpose?
We were discussing these kind of issues with Professor Rob Garnett, an economics professor at Texas Christian University (TCU), who is visiting Dickinson College to share his knowledge on the important issue of heterodox economics and how it relates to academic freedom and philosophy of economics. We had an open, frank discussion with Prof. Garnett and Prof. McPhail about these issues yesterday evening. The whole discussion centered on how to bring realism in the study of economics and why there is a need to open up the enclosed box of economics, which is so far dominated with insights from just one school of thought--neoclassical economics, which is more stimulating theoretically but lacks practicability. He argued that there is a need to bring pluralistic views on the study of economics so that stuff we learn are real and that we are exposed to contending school of thoughts. This is kind of interesting to me because I am interested in policy-oriented research in economics, which has to be as close to reality as possible. And, all of the stuff I believe in are not explained by one particular school of thought.
We know that most of the stuff we learn in econ courses in school are not realistic and even then we force ourselves (or are forced) to learn them. Is there is way to break this up so that more realistic stuff is learnt along with the standard stuff? If we know that there is no perfect information, then why do we still learn complex models whose basic assumption is that there is perfect information? Same with the assumption of rationality. It is stimulating to learn the models despite shaky assumptions! However, what good would it do if it is not real? I have been struggling to find an answer to these questions. That being said, now I enjoy learning the models more than ever. It the end, I always ask: what’s its relevance to the world I live in? Sometimes, the very subject I love and care so much leaves me utterly disappointed for not being able to find an answer to a simple question!!
Here is Prof. Garnett’s paper on the future of heterodox economics. He combines Sen’s and McCloskey’s ideas and relates it with the need for heterodox economists to practice pluralism (after all, they all are going after the unrealistic assumptions of the mainstream economics!).
… paper proposes a philosophical framework for an egalitarian pluralist economics, combining Deirdre McCloskey’s vision of science as a pluralistic conversation (McCloskey 1998 and 2001) with Amartya Sen’s capability-centered view of human development (Sen 1999). From a Sen/McCloskey standpoint, the principal goal and tool of economic inquiry is intellectual freedom, defined in a dual Smithian sense: negative freedom from the tyranny of a prescribed Method for economic knowledge production, and positive freedom to live a choice worthy intellectual life.This freedom-centered, capabilities-minded view of academic discourse as a “civilized conversation among equals” (McCloskey 2001, 107) opens the door to a liberal rethinking of science in which the paradigmist and pluralist impulses of contemporary heterodoxy can be productively reformulated and rejoined. Such an approach is one that all economists, especially heterodox economists, can and should embrace.
I just had a good lunch and more discussion about these issues with Prof. Garnett. I will be having another dinner discussion with him in the evening.