Monoculture breeds impractical economic logic

Amarjit Bhullar
Professor, University of Northern British Columbia, Canada

The continuous increase in the disparities has given a rise to economic discontent throughout the world and India is no exception. An Oxfam report calls for ‘a fundamental change in the way we manage our economies so that they work for all people and not just a fortunate few’. But the ‘fortunate few’ have not only been able to circumvent economic policies to their advantage but are also the beneficiaries of what is happening within the discipline of economics.

The course of development of economics, in the last four decades, is coxswained in a way that, largely, the theories that favour the ‘fortunate few’ get endorsement the economic discourses. The systematic promotion of these theories ensures their domination in economic teaching modules to marginalise and make dormant any alternative economic thought to the extent possible. Budding economists are taught to swim with the current to avoid the fear of, ‘being exiled’.

Historically economics, as a subject, is an affiliate of the social sciences faculty closely associated with sociology, psychology, anthropology, ethics etc. Different schools of thought and competing theories and policies emerged from those schools. The diverse schools of thought dominated in different time periods, but nothing was called ‘mainstream economic theory’ as forcefully as one hears today in the economic discourses. Economists have tried to describe economic activities and the economy with mechanical precision with the help of mathematical and econometric models leaving aside the interconnections between power, class, and the economy.

So, it was a tremendous effort to accept liberalism as the definitive version of economic thought. Most of the economic journals published the papers that adhered to a homogenised form of thinking. The mainstream media discussions also demeaned alternative ideas and thoughts.

Neoliberalism with the institutional support it got, failed to appreciate that it is a part of the pluralistic evolutionary economic thought not an end itself. Noted critic and a long-time trade unions’ economist Jim Stanford writes, ‘If the entire history of Homo sapiens up to now is assumed to 24-hour day, then neoliberalism so far existed only for 17 seconds.

But neoliberal economic theories are so strongly embedded in the university curriculums and the economics students largely have the access to monocultured thought. Milton Friedman’s statement that ‘there is no such thing as different schools of economics; there is only good economics and bad economics’ depicts the tactical approach of labelling all other schools as schools of bad economics.

Consequently, the students of economics learn abundantly the typecast models and impractical theories. As a result, many of them carry profound doubts over whether economic theories embody real science, or whether economists explain the economic order in a moral, socially responsible manner.

In the last decade, students’ voice is heard in every nook and corner of the world to reform economics curriculum and end the supremacy of a thought.

The disagreement of students to the supremacy of neoclassical economics in the curriculum is not new. In the year 2000, French students organised themselves under the name ‘Post-Autistic Economics’. It disapproved the teaching of economics for lack of practicality, excessive reliance on mathematical techniques, and the dominance of the neoclassical approach. However, with the growth and stable conditions in Western economies and the unprecedented growth in some of the emerging economies, neoclassical economics proclaimed its victory over the conduct of economic policy. But the unpredicted recession of 2008 killed that euphoria. Mainstream economic theorists and the economists of World Bank and IMF had not warned of a recession.

After that the disenchantment with the neoliberal economics re-emerged. The ‘Occupy Wall Street’ movement started and gained momentum, but it was contained in a short span of time. But the most important event was the students’ dissent. Students of Harvard University boycotted the lecture by Gregory Mankiw, a noted economist and former Chairman of the Council of Economic Advisers with President George W. Bush, and joined the ‘Occupy Wall Street’ movement alleging that the course module was biased in favour of conservative economics and policies. There were tens of other dissenting organisations that emerged.

The most important result from social perspective is the rise of income inequalities. The World Inequality Report clearly brings out the glaring income and wealth disparities across the world and how  it has increased since the adoption of liberal policies.

In 2016, 22 per cent of global income was received by the top one percent. The bottom 50 per cent received only 10 per cent of the global income. Who is reaping the fruits of growth? The global GDP has increased from $11 trillion in 1980 to $80 in 2016 but the top one per cent has garnered about 27 per cent of the global GDP growth. The World Inequality Report further provides a vast set of data to prove that skewness in income distribution is on the increase and will continue if ‘business as usual’ scenario prevails. The economics discipline is under severe pressure to discipline itself and it remains to be seen whether a nascent students’ movement in the West will bring it about.