One of the most common rebuttals by mainstream economists is that critics have ‘straw-manned‘ them, accusing them of supporting policies such as wanton deregulation and environmental neglect, when they don’t. Sometimes, this is a valid complaint. Reading some heterodox books would have you thinking every economist is Milton Friedman (and even he supported some regulations, particularly in the banking industry).
The problem, though, is that this objection has become little more than a stock reply and is rarely accompanied by much substance. Similar stock replies include assertions that economics is value free, just a tool for analysis, with no ideological implications, as well as accusations of ignorance. These kind of dismissive replies lead the heterodox economists to accuse the mainstream economists of arrogance and blindness, say they are beyond help, and give up trying to communicate with them.
In fact, heterodox economics could do itself a favour by acknowledging that much of mainstream economics isn’t the kind of dogmatic stuff you find on the internet. Many economists are centre left in their views, and in most universities a fair amount of time is given to environmental considerations, limitations of models are acknowledged, assumptions are laughed at and so forth. Many policy conclusions economics comes to are also favourable: regulate oligopolies, tax carbon emissions redistribute wealth and income. In fact, the problems economics suffers from are fairly subtle, which is perhaps why its proponents don’t see them in the same way an outsider might.
For example, a major problem is the way it is taught. You are told the area you are studying and the name of the model. You are then presented with a list of assumptions, followed by a diagram. It misses out two points that are crucial in a science:
a) Which problem was the model built to solve, and did it solve it? Why has it survived the test of time? What are/were competing theories?
b) How do you derive the diagram from the assumptions? What exact impact does each assumption have on the analysis?
This ‘here’s how the economy works, learn it’ method tends to instil students with the feeling that they have been gifted with the knowledge of how the economy works. This is why you see so many people deride the public for being ignorant of ‘economics’, when in fact what they mean is neoclassical theory.
Wider context is also incredibly important. Though economics presents the economy as some sort of neutral, ubiquitous entity, it is in fact an emergent property of complex political and social institutions, human psychology, historical context – much of which was characterised by war and empire, areas rarely mentioned by economics – and of course, is contained in and limited by the environment and natural resources. The characterisation of the economy as an emergent property rather than an entity in its own right would be far more accurate and could potentially make economics a lot more interesting.
The point is that correcting these failures doesn’t mean sweeping absolutely everything away, as most of the qualitative material taught in economics does not need to be changed. However, reforming economics does mean ditching the diagrams and many of the assumptions required to derive them. It means putting capitalism in its historical context: how it came about, its flaws, why its rivals failed, rather than taking it as a given. More attention must also be paid to the history of thought: how and why different thinkers came up with their theories, which ones have been discredited and which ones have survived the test of time. Finally, extensive discussion of the failure of economics to explain the recent crisis would be a major positive step.
The problem with the mainstream vs heterodox debate is that there isn’t a debate. According to mainstream economists, heterodox economists are ignorant cranks who straw man their theories. According to heterodox economists, mainstream economists are arrogant and so deep into an ideological hole that they cannot be saved. Perhaps heterodox economists are at risk of overstating their case and alienating the people they are trying to engage – they should be more ready acknowledge the strengths of mainstream economics before they attack its shortcomings.