Prior to 2008 much of the profession was triumphant in its success in achieving economic stability. The period leading up to 2008 was known as the great moderation, characterised by low inflation, strong growth and low unemployment. This period has been followed by the most significant economic event since the great depression. This event has seen increasing doubt over the old consensus and the reincarnation of Keynesian economics.
Just as the era of stagflation in the 1970s saw the decline of Keynesian economics, the current crisis has challenged many of the neoclassical assumptions taught in introductory courses. The current syllabus introduces students to the concept of supply and demand, the role of government, the benefits of trade, the contrast between perfect competition and monopolies as well as basic macroeconomics.
Critics of this approach come from all sides, with Austrian economists complaining it encourages students to view the economy as a machine while other claim it is indoctrinating students with a right wing neoclassical philosophy that relies on simplistic assumptions such as downward sloping demand curves while ignoring economic inequity, as was claimed by those students involved in the occupy Harvard movement.
It could be argued that it is not the syllabus that is the problem, but rather the context in which it is taught. Often, the ideas taught to first year economics students belong to competing ideologies and without exposure to economic history this is often lost. Recently, there has been much debate on the place of economic history in academic programs. I feel strongly that exposure to economic history is essential for a complete understanding of this subject.
Few students would really understand that Keynes, Hayek, Friedman, Pigou, Marshall and Coase were and are real people, who approached the study of economics from different viewpoints and often disagreed. It’s important for students to know that the Coase theorem was in part a response to the government centric Pigovian approach to welfare economics. Without economic history, these names are just different models to memorise for an upcoming exam final.
A student must take it upon him or herself to read broadly and expose themselves to ideas beyond the narrow scope of their set academic program. As part of my journey I have read blogs and books, listened to podcasts, and engaged with the material on a deeper philosophical level. Economics is first and foremost a social science. A history student would not limit themselves to studying only those periods of history covered in their course, equally the economics student must be prepared to read more broadly.
Finally, I feel the fact that so many different groups of economists are unhappy with the current syllabus suggests to me that the syllabus is probably about right. Yes, it’s simplistic, yes it does lead people to view the economy as a machine, but it does provide the conventional economic theory that all other theory should be judged on. What the current syllabus does needs is for these ideas to be taught within the historical context in which they were developed.
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