Economists seem to find it difficult to accept different schools of economic thought. But pluralism in economic thinking is the solution to the complexity of the real world that surrounds us.
Are economists willing to shift gears? This question was asked by Paul Anand of the Open University (United Kingdom) in the morning session on the second day of the Economics for a Better World conference in Paris. For the past ten years behavioural economists have given their best shot at calculating models by accepting bounded rationality as the starting point. Instead of assuming that economic agents gravitate uniformly to a singular optimum point, as if led by an invisible hand, the model inquiries were guided by a more realistic assumption of economic agents seeking satisfactory solutions to their economic problems.
Are these same economists now ready to ‘shift gears’ and replace the welfarist’s approach by a more comprehensive approach to economics that puts human wellbeing centre stage? And are they also willing to kill some of their own darlings – for example the notion of individual utility maximization and the endogenous summation of stable preferences technique? That remains yet to be seen. They should, as Allister McGregor (IDS Sussex University) and I argued in the same session, if they do not wish their profession to develop blind spots for heterogeneity, the minority case, emergent properties and dynamic change.
Of course this will increase the complexity of economics tremendously. But the point is not to lose this complexity in economic analysis. The fact of the matter is, there was scope for discussion on pluralism of thought in economics at this conference. Economists do not wish to see their profession being reduced to a set of technical skills, whilst letting slip other ways of thinking – as Jonathan Leape (London School of Economics) argued in a follow-up session.
Most of us agreed on one thing: the challenge to shift gears starts with the economics curriculum. Students walking out of the economics classroom because they refuse to listen to an old-school economics lecturer teaching them models they cannot apply in the real world – as happened at Delft University in the Netherlands the other month – is a really sad thing. Economics lecturers should appreciate more that there is something valuable to learn from different schools of economic thought, without having to be afraid of losing the robustness of their discipline.