The human element in the new economics: a 60-year refresh for economic thinking and teaching

Economics, over the last 60 years, has set itself directly at odds with the basic ethical concerns of all major philosophical and religious teachings. In this respect economics is an inferior guide. From the point of view of society as a whole, purely selfish behavior will often fail to promote social well-being. Economists are finally beginning to recognize this reality. Even the economic actors themselves – whether they are business people, individuals acting in their family or community roles, or governments – may lack the information needed to make what 20th century economics assumed as the rational decisions that would lead to social optima.

Economic theory, and the textbooks through which the theory is summarized and passed on, need to catch up to these realizations. A good start would be to broaden the debate on goals. In the 21st century it is increasingly evident that ecological problems and constraints are coming into serious conflict with the goal of maximizing GDP, for any country, and especially for the world as a whole. A more appropriate goal for our time could be stated as: To maintain and increase human well-being, without further harm to the ecosystem. (The final clause of that goal statement could be rephrased as …without increasing consumption of the high-end goods now typical in rich countries.) This may be followed with a further proposition: An important goal of the discipline of economics should be to help people understand how to move their economy toward its goals.

If or when such a shift in goals occurs it will dramatically alter a good deal of what is taught in economic textbooks. Among other things, if the well-being that we would aim to support cannot be defined concretely and quantitatively enough to lend itself to the use of the calculus, can or should we be talking about maximizing well-being? Or is a subtler approach required – one that does not posit objectives that can be weighted into a single maximand, but that is prepared to use judgment to deal with tradeoffs? Other questions raised by the adoption of more complex goals include: What kind of economic growth can promote present well-being while preserving productive resources for the future? Can we imagine changes in values and in the economic culture? How are the answers to these questions different for rich vs. poor countries?

These difficult questions are not discussed, but are glossed over by an implicit assumption discernible in 20th century economics texts.

This means that economists are not off the hook. Their values, and the goals that arise from them, are inevitably relevant, not only for the advice they give to heads of state, but also for many smaller tasks – and, importantly, for how they teach economics in schools and institutions of higher education.

A deep refresh for economic thought … opens up important new possibilities in several areas of content as well as methods.

Economists, like other people, are not simple calculating machines. Students entering the field bring to it their life experience and their personal qualities such as judgment, caring, hope, imagination, and intelligence (of many kinds). A good educational experience will build on these qualities – it will provide more and deeper knowledge and experience, ways of critically analyzing information, and ways of researching new information, both alone and working with others. These goals for education are quite well known.

While schools of education are concerned with the goals of education, economists have accepted very narrow goals – “learn what you are taught,” but not “think about the meaning and the application of what you learn”.

Another, more specific goal that has not received sufficient attention within economics is that of training judgment. This quality is, in fact, as essential for neoclassical economics, with its strong emphasis on techniques of analysis, as it is for a less formal approach. There is nothing inherent in any technique per se that assures that it will be used in the right place. The correctness of the conclusions, however they are drawn, will depend upon judgment.

Humility is another valuable quality, too seldom found in economists. No individual can be expert in all the fields that are relevant to the important subjects for economics in the 21st century – fields such as ecology, systems theory, sociology, psychology, history, nutrition, anthropology, philosophy, political theory, etc. Each economist should have studied enough outside of economics so as to be able to talk comfortably with people from other disciplines, and to know where to look for insights that economics lacks. This means that economists have to talk in terms that non-economists can understand – i.e. not jargon.

Humility tells us that we don’t know all the answers: imagination is required to find solutions that are not obvious. Imagination is the quality that may be hardest of all to teach, but at least economists could learn to recognize and value it.

The list of the qualities that would, ideally, be promoted in people who are learning to be economists includes judgment, humility and imagination, as well as good communication skills – the ability to learn from others, and the ability to communicate with people with different educational and cultural backgrounds. Because humanity now confronts so many difficult problems, economists also need to be attuned to recognizing and defining problems. And along with humility they need to have hope and optimism that they can find solutions.

Finally there is the quality … of wishing to contribute to making the world a better place. Many students come to economics because they have this wish, but those who are most concerned with it are the ones who, in recent decades, have been turned off and dropped out of the field, disgusted with the lack of overt values of caring and community. Nobody should insist on what “better” means to each person who studies economics – only that they should, ideally, be open-minded to the possibility that their notions of better and worse states of the world might change in the course of their education. Unlike imagination, the quality of caring is relatively easy to teach – by example; for it is intrinsic in people to pick up on and internalize what matters to influential people around us. Thus it is all the more important that those who teach economics investigate within themselves what mattes to them, and how they think the economy, and economic theory and teaching, could contribute to a better world.

(Neva Goodwin, p.103, 117)

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