Your remark that “Despite the severity of the crisis in the real world, academic neoclassical economists will continue to teach from the same textbooks in 2009 and 2010 that they used in 2008 and earlier (laziness will be as influential a factor here as ideological commitment … Many undergraduate economics students in the coming years will sit gob smacked as their lecturers recite textbook theory as if there is nothing extraordinarily different taking place in the real economy” is a good example of the evidence base of critics of economics.

Have you or Prof. Steve Keen checked and compared the tables of contents of the older, more recent and 2011 planned editions of popular macroeconomics textbooks? The university textbook market is ruthlessly competitive.

Amazon.com in general and the new to this edition tabs at academic publisher web sites are good early ports of call for reviewing textbook contents.

Many economics lecturers post their current and past lecture notes free on the web. Has Prof. Keen checked these to see what is actually said in macroeconomics class by a representative sample of macroeconomics lecturers in 2008, 2009, and 2010?

What do the blogs of prominent macroeconomists discuss these days? John Taylor is a good example?

Tenure-track and promotion minded academics are publishing left, right and centre on the great recession as evidenced by the annual meeting papers of the American Economic Association and recent issues of the journal of economic perspectives to name but a few places. Lee Ohanian’s recent paper on the great recession at home and abroad in JEP is excellent as is anything by John Taylor anywhere since 2007.

Mainstream economics is not just protective about their research methods, but they’re arrogant to other (fringe) research domains that conduct researches into economics. This is well-known such as they tend to dismiss researches from behavioural economics & econo-physics for example.

I would like to quote one of those fringe econonomist Prof. Steve Keen :

Despite the severity of the crisis in the real world, academic neoclassical economists will continue to teach from the same textbooks in 2009 and 2010 that they used in 2008 and earlier (laziness will be as influential a factor here as ideological commitment). Rebels economists will be emboldened to proclaim “I told you so” in their non-core subjects, but in the core micro, macro and finance units, it will be business as usual virtually everywhere. Many undergraduate economics students in the coming years will sit gobsmacked. as their lecturers recite textbook theory as if there is nothing extraordinarily different taking place in the real economy.

The same will happen in the academic journals. The editors of the American Economic Review and the Economic Journal are unlikely to convert to Post Keynesian or Evolutionary Economics or Econophysics any time soon—let alone to be replaced by editors who are already practitioners of non-orthodox thought. The battle against neoclassical economic orthodoxy within universities will be long and hard, even though its failure will be apparent to those in the non-academic world.

From : Neoclassical Economics: mad, bad, and dangerous to know

Also Physicist , Prof. Gene Stanley, the Director of Center for Polymer Studies, Department of Physics @ Boston University, mentioned in one of his article that he & some fellow physicists tried to submit research articles in economics in the early 1990s to major economics peer review journals but were turned down. His opinion was the establishment in economics (mainstreamers) were skeptical about the application of physics methods in economics.

From then onwards, the branch of Econophysics was born. Physicists who are working on economics problems, now have a forum and a journal to publish their work. Those research works are mainly published in the Statistical Mechanics Journals. The journal is not entirely econophysics work, but it does publish econophysics papers being submitted to it. The journal is still remain a physics journal dedicated to publishing work in particle/atomic/molecular physics researches. Other reputable science journals like Nature, Physics Review Letters and others have started accepting econophysics research articles for publications as well. This trend is growing and now physicists don’t give a toss if mainstreamers take note of their work or not, but the empirical evidence that have been shown to confirm the models from the econophysics community is gaining momentum (ie, models agree with the data). Also mainstreamers still haven’t picked up on the work of physicists in economic problems. I mean, there is hardly any mentioned of the work done by physicists in economics by mainstreamers.

Econophysicists have taken the non-mathematical ideas of Austrians (self-organised & self-emergence, etc) and start mathematising them, because they have the experience of modelling those types of complex system dynamics in the physical science but being applied to economics. There have been amazing empirical results from some of those models. Here is a quote from one of those econophysics researchers:

Soros himself this morning referred constantly to his own theory of ‘reflexivity’, by which he essentially means interacting agents, the feedback which takes place between such agents the session last night was on Keynes and Hayek. A bit strange at a conference on NEW thinking to go back to the works of someone who died in 1946 (K) and someone whose major contributions were complete by the mid-1950s (H). But we need to junk completely the macroeconomics of the past 30-40 years, so it kind of makes sense.

I think Hayek in particular was the brilliant precursor of complexity theory; he stressed the inherent limits to knowledge. Very interestingly, the Hayek man last night did refer if only briefly to complex adaptive systems and how Hayek lacked the mathematical tools to work in this area – true, but we now have them.

Now, work on mathematising Austrian ideas is starting to gain momentum from econophysics community as the following recent book shows. Chapter 14 is on Hayek.

Title : “Classical Econophysics”
Table of Content:

1. Problematizing Labour
2. Problematizing Information
3. Labour Productivity
4. From Machines to the Universal Machine
5. Information and Communication
6. Political economy: Value and Labour
7. The Probabilistic Approach to the Law of Value
8. Value in a Capitalist Economy
9. Farjoun and Machover’s Theory of Price
10. A Probabilistic Model of the Social Relations of Capitalism
11. Money and the Form of Value
12. Credit and Capital
13. Understanding Profit
14. Hayek on Information and Knowledge

There are more work on both micro & macro economics that have been published (journals & bound ones) in recent years.

Mainstream economics must wade themselves wider than the apple tree they grew up on, rather than falling not far away from the apple tree. Revolutionary science ideas in human history started by falling far away from the norm and the last 100 years we have witnessed such great achievements in science. Do we expect economics to do the same? I doubt it because; mainstreamers don’t want to read anything counter to their religion.

Jim Rose said…
Given the level of disagreement among economists, critics of neo-classical economics should be expected to misfire.

So, you think that Joseph Stiglitz criticism (in that youtube vid above, I linked to in my previous post) misfired? You think that Stiglitz (as a mainstreamer himself) was disingenuous in his criticism of the shortfall/falsity of neo-classical premises? Umm, that’s very interesting.

Do economists agree on much at all, and even on methodology?

In macroeconomics, there are the following schools of thought:
1. monetarists,
2. new classicals,
3. new monetarists,
4. New Keynesians,
5. real business cycles,
6. Keynesians,
7. Old Keynesians,
8. Post-Keynesians, and
9. Austrians.

These schools do not agree on the cause of inflation, and in the case of Joan Robinson, the cause of hyperinflation.

Many of these schools have trouble communicating with each other at all or even agreeing on how to resolve differences in opinion.

Deciding whether inflation was a monetary phenomena was a many decade long debate. The professional consensus of economists changed sides from a clear no to a straight yes.

Given the level of disagreement among economists, critics of neo-classical economics should be expected to misfire.

The prefix neo seems to be an all purpose sustained sneer these days. Neo-classical, neo-liberal and new right would round off the stereotyping.

That is a good paper. It is actually a really good idea to describe current economic thinking along the lines of the criticisms it receives – as a large number of the critiques stem from an outdated view of economic theory. It provides a sort of focal point to discuss the diverse areas of research in the discipline.

As far as I’m concerned, neoclassical means standard price theory.

This working paper by Beaulier and Subrick came out of grad student frustration of the general tone of the Austrian seminars at GMU…

Very true. However, I think even if we point this out, some critics will always just “not believe us”.

And there is the definitional issue – some of the debate here stems from the fact that I take neo-classical as modern econ, while others want to use the term to define another older set of instruments they do not like.

Personally, I think this rolls over too much onto the normative economics area – where there are value judgments that were applied that we may feel were inappropriate. While I agree with this, I’ve always been of the impression that neo-classical economics was the name for the methodological individualistic (reductionist) framework that economists work within.

As for the people you were talking with, and what troubled them about the gaps in neoclassical economics, is not a definitive way of defining what neo-classical economics is is to look at the table of contents of a few popular microeconomic textbooks?

Steve Landsberg’s table of contents is as follows:

1. Supply, Demand, and Equilibrium.
2. Prices, Costs, and the Gains from Trade.
3. The Behavior of Consumers.
4. Consumers in the Marketplace.
5. The Behavior of Firms.
6. Production and Costs.
7. Competition.
8. Welfare Economics and the Gains from Trade.
(Appendix: Normative Criteria.)
9. Knowledge and Information.
10. Monopoly.
11. Market Power, Collusion, and Oligopoly.
12. The Theory of Games.
13. External Costs and Benefits.
14. Common Property and Public Goods.
15. The Demand for Factors of Production.
16. The Market for Labor.
17. Allocating Goods Over Time.
18. Risk and Uncertainty.
19. What Is Economics?

How many critics of economics have read a table of contents of a leading economics textbook?

Hi Jim,

Very true – often it is unhappiness with the outcomes that make people uncomfortable with economics more generally. Fortunately, I do not think that is the case with the specific people I have discussed here.

@Falafulu Fisi

Hey,

Blanchard is great, although I guess I’m a mainstreamer 😉

Feel free to send me the papers, I would prefer them in my gmail address – as my work address tends to get pretty packed! The details are in the “about us” section at the top of the blog.

I am a pretty heavily indoctrinated methodological individualist – it would take quite a push to get me out of that frame 😉

Behavioural economics is not mainstream as I stated before ( I said non-mainstream).

Economic Network/Linkage analysis falls under adaptive Complex system modeling , since agents (nodes) form a network linkage (edge) with each other. The strength of each linkage in the network can increase or decrease over time (dynamic and not static), up to certain time-instant that some linkages are completely cut-off from certain nodes (agents) and new linkages are being formed with other nodes (agents) where no previous connections were established. It is more like a robot that keeps rewiring itself during its lifetime since the time it has been out of the production lines in years earlier. It can wire its old components with connections to new components that weren’t there when it was first built.

I think you should watch Joseph Stiglitz(youtube) in his talk during the Institute for New Economic Thinking (INET) conference earlier this year. There are other vids from that same INET conference which are available from their website (and also available from youtube).

You must watch them because the talks mainly honing in on the failure of mainstream & neoclassical economics, ie, the falsity of their premises.

An Agenda for Reforming Economic Theory

The Stiglitz’s lecture is a good one, but I still see him as a mainstreamer because he is still insistent that Keynesians can work but only if it is modified further.

There are numerous publications that I can send you (perhaps to your private inbox) about the criticism of neoclassical economics that once you read them, you would probably turn & become atheist against neoclassical economics.