Macroeconomics is cool?

“It is often said that the purpose of introductory economics classes is to “teach students to think like economists”. What is usually meant by this claim, however, is to teach students to think like neoclassical economists… (This book) rests on two assumptions: that there is a generic neoclassical macro principles textbook and that there is enough common ground among heterodox economic paradigms to construct a common heterodox alternative. The first assumption is uncontroversial… the second requires more attention… Perhaps the most important idea that the book can impart is the idea that learning involves competing theories and active choices about how to think about things. A good education gives you many sets of glasses and a disciplined mind to choose among them.” – Cohn, Reintroducing Macroeconomics, A Critical Approach.

Well he doesn’t quite escape from economic jargon (as evident from above mouthwash gargling), but this guy’s book (published ’07) is pure gold. We have long needed a balanced, thorough, and intellectually rigorous approach to evaluating the way modern economics is taught. Cohn runs through standard macro to bring out the tacit assumptions and attitudes which underpin its worldview. He examines everything from the order material is introduced in textbooks, to the examples used and the jokes shared in economics class. And thus shows how the paradigm of neoclassical economics has taken its place as an unquestioned science in the minds of most who study it. 

Everyone but diehard neoclassisists believes there are flaws with some of its methodology. Common objections include those toward:

– The assumptions of perfect information and perfect competition, which underpin neoclassical economics and are almost never experienced in reality.

– overreliance on static as opposed to dynamic formats of analysis

– the reliance on models based on extreme abstraction

– narrow definition of economic output, which does not take into account the depletion of environmental capital amongst other things. 

– application of Pareto efficiency so as to create forced choice between efficiency and equality

– not taking broader measures of human welfare or happiness into economic analysis. 

And objections have come from every quarter. From anarchists and marxists who believe our entire economic system is fundamentally flawed, to the recent highly popular behaviourist analyses which challenge the paradigm that people are highly calculated machines always choosing the most “economically rational” outcome. Feminist, environmental, humanist perspectives… even mainstream classical keynsianism which is at odds with much of the neoclassical stuff. But what has been lacking until now is a synthesis of all these critiques (here termed “heterodox economics”) into a textbook to complement any ordinary macro textbook.

And here’s the beauty of Cohn’s book – it does not seek to replace, but to complement and to challenge. Through its restrained logic and return to first principles, it gives credence to many views which – partly due to the way they present themselves – are often dismissed by neoclassical economists as irrelevant, fundamentalist, or mathematically wrong. And invites synthesis and discussion. He is not trying to prove one paradigm or worldview over another, but to look at both, to examine the very glasses through which we examine economics (whatever our personal views). 

It is nothing revolutionary, just thoughtful common sense, eloquently put. I could go on, and show how he goes through the standard macro topics, in particular the very insightful box on Robinson Crusoe. (A standard example used in intro textbooks… which with a bit of rereading gives a completley different perspective!) 

But alas I have to revise. That’s why I picked this book off the library shelf in the first place. I have a macroeconomics exam on Wednesday, and was looking for textbooks to help me study. And how badly did I choose – this one won’t have helped me at all! If anything it will make it even harder to get a good grade.

RC and his pal MF

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