Issue 3/2012: The case for pluralism in economics

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  • Issue 3/2012: The case for pluralism in economics

I do not need to say very much about Keith Hancock’s work in economics, as the Festschrift edited by Joe Isaac and Russell Lansbury provides both a comprehensive survey of his writings and a bibliography that is complete to 2004. As someone with a joint honours degree in economics and history and a PhD supervised at the London School of Economics by the great Henry Phelps Brown, as a lifelong scholar of industrial relations and a former Deputy President of the Australian Industrial Relations Commission, Hancock embodies the multi-disciplinarity and pluralism that once characterised Australian economics but has now succumbed to the increasing formalisation and Americanisation of our profession. Unless things change, rapidly and substantially, we shall not see his like again.

Economics is unique among the social sciences in having a single monolithic mainstream, which is either unaware of or actively hostile to alternative approaches. I offer three pieces of evidence in support of this claim, one of them anecdotal (but in my opinion quite convincing) and two documentary. Here is the anecdote. In 2007 I interviewed the eminent Austrian economist Kurt Rothschild, then 93 years old and himself a long-term advocate of pluralism. ‘The present situation in economics’, he told me, ‘is unlike that in any other science. Look up “Heterodox Economics” and “Dissenting Economics” in Google. You get 49,900 hits. If you ask for ‘Heterodox Sociology’ or ‘Heterodox Psychology’ you get five or six’. He might have been embellishing the precise numbers, but the principle is very clear, and it is confirmed by the documentary evidence.

First, there is the recent volume on the post-war history of the social sciences, edited by Roger Backhouse and Philippe Fontaine. At the core of this book are six chapters on the individual disciplines, written by international authorities in their respective fields. The editors contribute the chapter on economics, which turns out to be the only social science with a single, unified mainstream. There is no such thing in psychology, political science, sociology, social anthropology or human geography, and even in economics it is a post-1945 phenomenon. My second piece of documentary evidence comes from Oxford University, where in a recent issue of the alumni magazine the head of politics, Stephen Whitefield, described his department in the following terms:
‘We are self-avowedly pluralist in our teaching and research with enough of us to operate on the zoo principle – two of everything’. I reported this statement to the readers of the Heterodox Economics Newsletter, a free electronic journal with many thousands of subscribers in many countries, and asked if there was an economics department, anywhere in the world, that could claim to operate on the same principle. Unsurprisingly, I received not a single reply.

In this lecture I shall present a case for pluralism in economics, derived from the complex and ceaselessly changing nature of the world in which we live. I use the indefinite article quite deliberately. Indeed, there would be something rather paradoxical about a claim to provide the case for pluralism. I am sure that this is only one of the many possible arguments that might be put forward, and that others would do it differently. Towards the end I shall allude briefly to the work of Gillian Hewitson and Therese Jefferson, who stress gender issues, and Tim Thornton, who emphasises questions of ontology derived from the literature on the philosophy of science. For the moment I shall just refer you to the 20 arguments for pluralism in economics that are
listed in a recent book by Rob Garnett, Erik Olsen and Martha Starr.

I shall concentrate on only two arguments. First, economic reality is very complicated, so that the questions economists ask are therefore inherently difficult, and it is unlikely that they have simple answers. Since no theory can consider all relevant factors in any particular economic context, this establishes a strong prima facie case for pluralism. Second, economic reality is fluid and subject to continuous change, so that the quest for a single, ‘general’ theory applicable to human behaviour in all societies, at all points in time, is a delusion. To illustrate the case for pluralism I shall refer to the unfortunate consequences of denying it for the future of both economic history and the history of economic thought. I shall also draw on the recent history of the global economy, the problems encountered in understanding it in terms solely of mainstream macroeconomics, and the dangerous policy implications that have been drawn from mainstream theory.

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