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In October 2010, an international student movement to free the economics curriculum from its neoclassical straightjacket was launched at the University of California at Berkeley)...

The Sorbonne, Oxford and Cambridge and now the Berkeley

In 2005, in my co-authored book, Promoting the Common Good, I highlighted the fact that students are rebelling against the way economics is being taught. Please see the following passage from the book.

…”The obviously contrived nature of neo-classical economics has begun to attract many calls for change. One of the most vocal has come from university students. This is music to my ears. It is something I would very much like to share with you.

In the spring of 2000 an interesting dichotomy between theory and reality in economics teaching appeared in France when economics students from some of the most prestigious universities, including the Sorbonne, published a petition on the internet urging fellow students to protest against the way economics was being taught. They were against the domination of rationalist theories, the marginalisation of critical and reflective thought and the use of increasingly complex mathematical models. Some argued that the drive to make economics more like physics was flawed, and that it should be wrenched back in line with its more social aspects. They called the economics they were being taught ‘autistic’– divorced from reality – and called for a post-autistic economics that would ‘rescue economics from its autistic and socially irresponsible state’. Autisme-economie, the Post- Autistic Economics (PAE) movement, was born”…

Read the whole chapter 4:

Today the students of economics at Berkeley have started their own revolution against the dismal science of mambo jumbo. This is very significant, as now many around the world have discovered the role that neo-classical economics and economists have played in the current financial and economic meltdown. Given your own interest in this subject, I have provided you with the link to the Berkeley Students’ Manifesto for New Economics below.

The next obvious step for all those who love economics as it was, a subject of wisdom, beauty and elegance, is to come together and see how we may be able to rescue it from the “Guilty” ones and take it back to the fertile field on which it was born- moral philosophy amid the broader questions of human existence and meaning.

Below you can see further on the urgency of our task:

Put your trust in Socrates, not economists
Editorial, The Observer, 16 August 2009

"THE WISDOM OF Socrates was famously summarised as his ability to know that he knew nothing. So in modern times he would probably be an economist. Few saw the credit crunch coming. Since it arrived, opinions as to the severity of its consequences, its effects on different nations and the prescriptions to remedy them have varied wildly"...

Economists are the forgotten guilty men
Academics - and their mad theories - are to blame for the financial crisis. They too deserve to be hauled into the dock
Anatole Kaletsky
From The Times
February 5, 2009

…” The answer was beautifully expressed two generations ago by John Maynard Keynes: “Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.”
What the “madmen in authority” were hearing this time was the echo of a debate that consumed academic economists in the 1960s and 1970s - a debate won by the side whose theories turned out to be wrong. This debate was about the “efficiency” of markets and the “rationality” of the investors, consumers and businesses who inhabit them.
On those two dubious adjectives “rational” and “efficient” an enormous theoretical superstructure of models, regulatory prescriptions and computer simulations was built. And without this intellectual framework, the bankers and politicians would never have built the towers of bad debt and bad policy that have come crashing down”...
…“ Equally pernicious has been the stifling of intellectual debate among academic economists, who have spent the past 20 years arguing about the properties of their imaginary mathematical models rather than the behaviour of the real economy these models were supposed to describe.
The question, not only for professional economists but for all those in politics and business who have relied on these ideas, is what will happen to economics now that its fundamental assumptions and mathematical models have been totally discredited by events.
There seem to be only two options. Either the subject has to be abandoned as an academic discipline and becomes a mere appendage of the collection and analysis of statistics. Or it must undergo an intellectual revolution.
The prevailing academic orthodoxy has to be recognised as a blind alley. Economics will have to revert to a genuine competition between diverse intellectual approaches - such as behavioural psychology, sociology, control engineering and the mathematics of chaos theory.
So economics is on the brink of a paradigm shift. We are where astronomy was when Copernicus realised that the Earth revolves around the Sun. The academic economics of the past 20 years is comparable to pre-Copernican astronomy, with its mysterious heavenly cogs, epicycles and wheels within wheels or maybe even astrology, with its faith in star signs.
The academic Establishment will resist such a shift, as it always does. But luckily economists understand incentives. They should now be given a clear choice: embrace new ideas or return their public funding and Nobel prizes, alongside the bankers' bonuses they justified and inspired”.

Now is the time for a revolution in economic thought
Anatole Kaletsky: Economic View
From The Times
February 9, 2009

…”While some economists had warned for years about global trade imbalances, escalating house prices, of excessive consumer borrowing, none of them remotely foresaw the truly unprecedented feature of the present crisis: the total breakdown of financial markets caused by the unforced blunders by investors and banks. Modern economists were inherently incapable of understanding such a problem because they assumed that investors were “rational” and markets “efficient”…
“…George Soros is no mathematician like Mandelbrot, but he has repeatedly demonstrated far better understanding of how market economies work than any professional economist by using psychological and philosophical ideas”…
“…One reason why such fruitful insights have been ignored is the convention adopted by academic economists some 30 years ago that all serious ideas must be expressed in equations, not words. By this weird standard, the intellectual giants of the subject — Adam Smith, Ricardo, Keynes, Hayek — would not now be recognised as serious economists at all”…

Who taught them greed is good?
To what extent are business schools' MBA courses responsible for the global financial crash?
Peter Walker, The Observer, Sunday 8 March 2009

…” Harvard MBAs are usually worn as a badge of pride, especially when, as with Hornby, you graduate as the top student in your year. But as the debris settles from the worldwide collapse in credit and banking confidence and the reckoning begins on who exactly led the financial system into chaos, an increasing number of fingers are being pointed at leading business schools”...
“Similar arguments have been made before, most recently when US energy giant Enron imploded amid a mountain of concealed debt, a scandal stewarded by another Harvard alumnus, Jeffrey Skilling. Too many MBA programmes, the simplified version goes, draw in young, greedy types with little business experience and indoctrinate them with half-baked management and finance theories, along with an unshakeable belief in their own talents, before sending them out to earn ill-deserved fortunes in investment banking and consulting”...
…” Unusually for a business school professor, Rao expresses serious misgivings about the fundamental ethos of such institutions: "Our top business schools are really not education institutions, they are indoctrination institutions. There are certain things which are so much dogma that you don't even want to encourage any challenge to them - the primacy and efficiency of markets, maximising shareholder value. These things are not in question."
He believes that notions developed in business schools such as agency theory, which argues that the managers' interests and those of their shareholders need to be aligned through devices such as stock options, have created a world of short-term profits in which executives gorge on bonuses”...

A Note on what Economics should be:
”The focus of economics should be on the benefit and the bounty that the economy produces, on how to let this bounty increase, and how to share the benefits justly among the people for the common good, removing the evils that hinder this process. Moreover, economic investigation should be accompanied by research into subjects such as anthropology, philosophy, politics and most importantly, theology, to give insight into our own mystery, as no economic theory or no economist can say who we are, where have we come from or where we are going to. Humankind must be respected as the centre of creation and not relegated by more short term economic interests"...


Kamran Mofid PhD (ECON)

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