Friday, November 4, 2011

This is why we are Anti-Mankiw

Students at Harvard University on Tuesday, November 1st walked out of Professor N. Gregory Mankiw's Ec 10, "Principles of Economics" course, for two main reasons.

First, to declare their solidarity with the Occupy Wall Street Movement, and indeed, occupy movements currently happening all across the world.

Second, to protest the specific role played by Mankiw's course in perpetuating inequalities of wealth and power, which have plagued American (and world) capitalism for decades, if not centuries.

As the Harvard students put it in their open letter to Professor Mankiw, they are concerned with the political bias inherent in Mankiw's text, as well as how it "affects students, the University, and our greater society."

But what does it really mean to say that Mankiw, his class, and his textbook are responsible for such things?

The students state in the letter how Mankiw rarely includes a discussion of primary sources and often slants toward the classical model of political economy, expounded most famously by Adam Smith. This bias stands to the detriment of other important schools of economic thought such as Keynesianism. But the problem with his course goes a bit deeper than that. While Mankiw might argue that his New Keynesian approach to macroeconomics combines the best of both Keynesian analyses of the short run and classical views of the long run, the fact is that both Adam Smith and John Maynard Keynes understood that the economic laws of the market are not immutable "principles" of society -- a point which, unfortunately, leaves Mankiw less in the camp of either of these great thinkers, and more in the realm of political ideologues and pundits.

That is to say, the self-interested agent who "faces tradeoffs" and "responds to economic incentives", as Mankiw's "10 principles of economics" assert, describes but a very small part of our daily lives. Whether you're with your friends, or at home with your family, values of cooperation, love, friendship define your day-to-day interactions. Even political power is an important concept, not given even a single mention in Mankiw's entire text! The idea that those who are wealthy might institute political power over the economic system is an idea that, indeed, goes back to Adam Smith himself. Choosing not to discuss such an economically-relevant and important topic demonstrates a severe lack of intellectual and moral integrity on the part of Mankiw and his textbook. In other words, the whole market-centric approach of Mankiw's course is fundamentally at odds with how the world works in reality.

So given that Mankiw’s course, textbook, blog, and ideology are at odds with the actual workings of social and economic life, and even help to perpetuate our societal and economic problems through producing this image of the individual as completely oriented toward market values and ideas, it’s probably time to expand the economic conversation towards more pluralism and away from hegemonic, ideologue set-in-stone “principles”. Indeed, this is why this blog is Anti Mankiw.

14 comments:

  1. It sounds more like you're opposed to the entire academic field of economics than Mankiw in particular.

    Most economists lean to the left, according to surveys I've seen, yet Mankiw's textbook has been the most popular introductory text for the last ten years or so. I find it hard to believe that this would be the case if it had a rightward bias.

    And a relatively bias-free text is completely plausible in this conetxt-- because all the accusations you make are equally applicable to most academic economists. Mankiw just does a good job of channeling those views into his textbook.

    For example, economists aren't supposed to talk about interpersonal interactions and politics. Those subjects are for sociologists and political scientists. (Granted, there are some economists who look at these subjects, but those aren't topics for an intro text. Plus, you'd probably just accuse Mankiw of more bias if he included them.)

    Economists aren't supposed to worship the views of Adam Smith and John Keynes. That would be religion, not science.

    It's also odd to accuse Mankiw of de-emphasizing Keynes. Greg Mankiw is one of the most influential Keynesians alive today. He might be THE most influential Keynesian alive today. He's not a person I would expect to de-emphasize Keynes. (And, lo and behold, if you look through the second half of the textbook, which focuses more on macroeconomics, Keynesianism appears constantly.)

    Mankiw (and other economists, too) don't say that their principles are immutable-- but they're pretty reliable. At least, according to empirical data. (But if you prefer old books by Smith and Keynes, I guess you'll disagree.)

    That's why I'm pro-Mankiw, and pro-economics.

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  2. With all due respect Will, the notion that if you're against Mankiw's mainstream New Keynesian (which is not even really Keynesian) economics, you are against economics as a field of research is disingenuous to say the least. There is a range of approaches in economics that don't fall into the inconsistencies and mistakes of the mainstream.

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  3. For a brief description of heterodox economics go here http://nakedkeynesianism.blogspot.com/2011/05/meaning-of-heterodox-economics-and-why.html

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  4. Will,

    Your comments are great and insightful. You bring up some important insights. Though we are not on the same page on a few key points. Speaking for myself and not necessarily my fellow collaborators, I believe that you are arguing past us, not with us, if you say that Mankiw is "NOT full of rightwing bias." The post does not implicate Mankiw at all for rightwing bias. Rather, we are indeed "anti-economics" in the sense that we are opposed to the mainstream views of market society and homo economicus. That's not a "rightwing bias" or "leftwing bias" critique, it's a general point about Mankiw's approach to economic problems.

    and as Matias points out, there are many ways of doing economics in a way that eschews the market model as front-and-center to all concerns and social problems (distribution, etc.). *That* is why we are anti Mankiw.

    Finally, again, you are arguing past us by saying that we criticize Mankiw for deemphasizing Keynes. If you read our response to the Harvard students carefully, we believe there is a stronger point to make than simply being for or against some worldly philosopher -- namely, that the mainstream view of economics is one in which economic laws are seen as universal, when in fact, neoclassical economics has a very particular history, one which is simply NOT accounted for ANYWHERE in Mankiw's text. A little contingency can go a long way towards showing how economic values are not politically neutral and are certainly not ahistorical.

    Thanks again for your comments! (both you and Matias!!)

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  5. Thanks for the respectful replies.

    Alright, so, if I'm reading you correctly, you want more time spent on heterodox economics in introductory courses.

    How far do you want to take this, and how consistent are you prepared to be? Should introductory biology courses include discussions of creationism? Should climatology courses spend time discussing the views of climate change deniers? Do the heterodox views you have in mind have a better standing in the academic community than creationism or denialism? (I honestly don't know.) Where would you draw the line on what to include or exclude?

    And what good would this discussion do for economics (or biology or climatology) students? If you think more discussion of heterodox views would be good for students, why do so many econ professors (apparently) disagree?

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  6. Hi Will,

    Great questions! We've thought hard about these same ideas and still agree that there is no perfect reply.

    1. How far do we want to take this, i.e., exposure to other aspects of the discipline. It's a great question -- you can't include everything. We believe that there are some fundamental themes which define the weaknesses of Mankiw's approach. Absence of political discussions and how they relate to economic policy; the ahistorical treatment of many subjects in the text (such as the market economy or labor markets); and behavioral economics' influence on modern economics. Also the logical inconsistency of some of his discussions (such as welfare economics), which we believe allows him to skip over some politically subjective ideas (I can elaborate on this last point if you'd like). These areas are essentially used as "organizing principles" of the critique.

    2. What good would this do. We believe that the way Mankiw's principles of economics is taught leaves no room for critically thinking about the economy's contingency. How markets are contingent upon states and political power; how classical neoclassical economics is not universal in the sense that it arose out of very specific historical circumstances. Mankiw's text has the effect of narrowing students' views about possible answers to economic questions so we want to broaden them.

    Finally, I wouldn't say that most econ professors disagree with heterodox economics. How many heterodox courses have you taken? How many heterodox courses have most economists taken? We believe that wider exposure to these ideas will help them gain traction.

    Thanks for your time

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  7. WIll, you ask: "How far do you want to take this, and how consistent are you prepared to be? Should introductory biology courses include discussions of creationism? Should climatology courses spend time discussing the views of climate change deniers?" Your questions presume that the critique here is that there is an insufficient theoretical account of the facts. That may be one critique, but it is not the primary one that I see in this post. The problem rather is the manner in which the subject matter is even framed in the first instance. Mankiw's ten principles are not a simple matter of pure positive science. At best, they may be true for some people under some socio-economic conditions in some historical periods. It is a disservice to honest inquiry to pretend otherwise; it also has ideological effects. If you manage to portray contingent truths as universal ones, you've already stacked the deck. And really the matter is worse than that. If you claim "people respond to incentives" without defining "incentives," then you can slide back and forth between a tautological claim (and thus indisputable!) and a substantive claim that fails to capture so much of what drives activity that would (by any scientific light) be called "economic." But that slipperiness is part of what makes the pretense that this is all nothing but pure positive science so dangerous. That's what I think is important about your comparisons to biology, etc. And no, this is not unique to Mankiw. It is a problem throughout the profession. (Disclaimer: I know Dan. He can correct me if I've misread what I he meant to say here. All errors are, of course, solely my own)

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  8. Hey everyone,

    Let me forewarn y'all this could be long as I have a lot of thoughts on this topic.

    Will May said:

    "It sounds more like you're opposed to the entire academic field of economics than Mankiw in particular."

    This is mostly true, and its due to the fact that most of the field still treats our system as if we are on a gold standard. They forget (or ignore) that in 1971 Nixon changed things 180 degrees when he closed the gold window.
    Things like IGBCs, loanable funds markets and crowding out are considered "settled" issue by most academic economistsand they are patently false.


    "For example, economists aren't supposed to talk about interpersonal interactions and politics"

    Oh really why is that? One cannot do economics free of politics. Politics is about power and so is economics. People with money buy policies, frame debates. Everyone knows that and accepts it to some degree. But when power (money) gets way out of whack like today people start to notice, and when the economics profession simply says "nothing to see here just move along" they are playing politics. Capitalism is sold as the best way to make everyones life better, but it clearly is not doing that now.And its not because the rich are paying too much in taxes


    " Greg Mankiw is one of the most influential Keynesians alive today. He might be THE most influential Keynesian alive today."

    First off, just cuz you call yourself a Keynesian doesnt make you one. Mankiw is much more of a modern monetarist (as is Krugman) than a keynesian. When all aggregate demand management is being run via the Central Bank, this is clearly not what Keynes had in mind. This is supply side policy being cloaked in demand side language.



    " you want more time spent on heterodox economics in introductory courses.
    How far do you want to take this? Should introductory biology courses include discussions of creationism? Should climatology courses spend time discussing the views of climate change deniers?"

    What makes you think the heterodox views in Biology or Climatology even warrant such an elevation. The entire argument of the deniers in both those fields boils down to "Nuh uh, no its not". They have no testable hypotheses in creationism and all the things the climate deniers throw out there like sun cycles are ALREADY IN THE MODELS.

    Some heterodox economic models take into account that we are no longer on a gold standrad and distinguish between currency users and currency issuers. Without these distinctions one might think the US is in the same danger as Greece ( we're not). Without understanding these facts one cannot explain Japan and it high debt/deficits and low inflation and bond yields.
    They also look at private debt levels which are ignored by orthodox models.
    Most orhtodox models do not accurately represent the banking system, in fact most will tell you they dont get banking very well. How can one understand the machinations of a modern economy and not understand the operations of banks

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  9. The students' full statement is here: http://hpronline.org/harvard/an-open-letter-to-greg-mankiw/

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  10. Mankiw does tilt to the right in his textbook - for example, he overstates the case against governmental regulation of monopolies.

    Overall, though Mankiw tries to be relatively balanced, for example he spends multiple chapters on market failures (Externalities, public goods, monopolies, etc.) - things that a lot of right-wing economists pretend don't even exist.

    The purpose of a survey course, like principles of micro/macroeconomics is to cover the basic concepts used in the field, to expose you to the main ideas in the discipline, and to preview the material students will see at the intermediate level. I'd say that it does an exellent job of all 3.

    His first third of the book covers the same material you'd expect to see in a high-school econ course. The middle third focuses on microeconomics and especially industrial organization. The last third, on macro, is based primarily on Keynsian ideas.

    You can argue that there are a lot of topics not covered - that's going to be true in any econ book. Power and rent seeking could be added to the micro side. There's no discussion of law and economics. Behavioral economics gets part of a chapter to share with political economy. There's not much time at all spent on other alternate macro theories. But before you'd cover things like heterodox economics, you'd be more likely to cover RBC, or the use of matching theory to explain business cycles.

    Mankiw's book provides good tools for thinking about business problems and a solid introduction to much of the field of economics. It provides access to the language of economics that students need to understand competing theories.

    You don't teach from academic journals in a principles class, which is the very first exposure many students have to a subject. I wouldn't teach an introductory physics class or a history class using journal articles either. Maybe it's OK to do such things at Harvard, but that's certainly not going to fly at a lower-income community college.

    Saying "we want them to teach heterodox economics" is going to be interpreted by a large group of people as "we want them to teach about the Austrian school", since they're far and away the most well-known and popular heterodox school in the US today.

    Last thought - I really can't take seriously any argumnet that includes the claim that Krugman isn't a Keynsian.

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  11. One of these days I'll learn how to spell Keynesian. Sorry bout that.

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  12. People would appreciate an honest open debate on various economic models and especially an attempt to refute this one - An Intro. to a Resource-Based Economy [ TEDx - Peter Joseph ]
    http://www.youtube.com/watch?v=4mkRFCtl2MI

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  13. A good heterodox text is"Economics-The Anti Text Book-A Critical Thinker's Guide to Microeconomics", by Rod Hills and Tony Myatt, 2010, Zed Books, London

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  14. Seriously, how can you be anti-somebody? You have your own opinions on economics and they're different from a corpus of mainstream economics which is nearer, perhaps, to Mankiw's position. That's all you can really say without resorting to ad hominem emotional appeal, and it's not that much per se. Or is the crux of your economic thinking to systematically oppose to Mankiw's statements? What a poor system of thought you have built in that case!

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