A COMMENTARY ON THE BOOK
(THE CREATIVE DESTRUCTION OF NEOCLASSICAL ECONOMICS)
- Kalle Lasn: Born March 24, 1942. Is an Estonian-Canadian film maker, author, magazine editor and one of the joint founders of Adbustersi.
- Adbusters: describes itself as "a global network of artists, activists, writers, pranksters, students, educators and entrepreneurs who want to advance the new social activist movement of the information ageii.
Publisher: Seven Stories Press, NY 1001, Edition: 2012
Commentator: Brian. K. Harrisson.iii
Note from commentator: I read this important book ten years ago and now (in November 2023) seek to gain a feel for the extent to which the book has achieved its stated aims.
- THE AIM OF BOOK.
The book contains a well-directed attack on Capitalism and the system of economic thought, on which Capitalism is based, called neoclassical economics. In a political context, this system is consistent with conservative politics otherwise called Neo-liberalismiv.
‘Meme wars’ is different from typical texts that get involved in such complex matters. It uses colour, photographs, drawings, artwork, illustrations, cartoons, and clear prose to convey its messages. The book aims to encourage and motivate current and potential university students in economics, to challenge their teachers in class, if their messages do not reflect the economic truth in the real world. Hence, the book is fundamentally a ‘how-to-do’ manual, for students who seek to ensure that the economic ideas they are taught reflects the reality and truth of the real-world. A situation that does not currently apply in many Economic faculties in universities throughout the western world.
An introductory page in ‘Meme Wars’ describes that situation well. It reads: ‘Hey all you students out there. You are entering university at a critical juncture. Capitalism is in crisis and the crisis is growing ever deeper. The inability of economists to incorporate externalities into their models and to account for phenomena such as species extinction, resource depletion, and climate change – not to mention the 2008 financial meltdown that blinded them all – has turned the profession into a target for derision and ridicule. And it is not just an academic joke – today even ordinary people look down their noses at the ineptitude of economics.
And yet, as you delve into your textbooks, listen to the sensible, ordered tone of lectures and come to associate your professors with accolades that hang on their walls, you may get the sense that economics is a science: A rigorous discipline with its own immutable laws, proven theories, and a crop of Nobel Laureates. Far from it. You may be temporarily fooled by this façade, but you need only look beneath the surface to discover economics is a highly contested field…a profession whose axioms and credibility are being questioned, as never before. The prevailing neoclassical paradigm is crumbling and a new, more chaotic, and biologically and behaviourally based paradigm is struggling to emerge.
But your department, like most others around the world, is still marching in lockstep with the old guard. That’s because generations of tenured professors have marginalized dissenters and eliminated competition. Your economic department operates like a police state … not a free market of ideas in which innovation is acknowledged and rewarded. But outside your department, a vigorous heterodox thrives … there are social economists, feminist economists, interdisciplinary economists, behavioural economists, ecological economists and hundreds of intellectuals and maverick professors who are openly critical of the neoclassical regime and are fighting to overthrow it.
So, there are really two ways for you to approach your studies over the next few years. You can ignore the screaming inconsistencies and accept the status quo. You can cross your fingers and hope that the old paradigm has a generation or two left in it, enough for you to carve out a career. Or you can align yourself from the get-go with the mavericks. You can be an agitator, a provocateur, a meme warrior, an occupier, one of the students on campus who posts dissenting messages up on that the notice boards and openly challenges your professors in class. You can bet your future on a paradigm shift.’
All of us here at ‘Adbusters’ hope this book fires up your imagination and inspires you to take the riskier path. (Signed: Kalle Lasn, Summer 2012.)
- CURRICULUM FOR STUDENT MAVERICKS.
The ‘Introductory page from the book just quoted, is followed by ten chapters which the book refers to as the (REAL – WORLD CURRICULUM), for potential maverick students of Economics. Each chapter provides a briefing on a specialized area that those mavericks should learn about, during their educational journey. The contents of each chapter, is organized around, key themes, ideas, and philosophies, as sketched below, viz:
Battle for the soul of Economics (1): This chapter outlines a social and economic history of aspects of the world, from ancient to modern times, using, a selection of ‘important’ developments and events that have had ongoing effects on the world at large.
Paradigm lost (2): This essay, is about how our economic beliefs and modern ways of living have driven climate change which are killing the planet and threatening humanity.
The Logic of Freaks (3): Explains how neoclassical economics is sick and has become an intellectual game played for its own sake, and not for understanding how the real-world economies work.
Meet the Mavericks (4): The book names outstanding heterodox economists outlines their work, ideas, and research, that directly challenge the neoclassical paradigm.
Bionomics (5): Until Copernicus pointed out five hundred years ago, that the Earth was not the centre of the universe as scientists of those times had previously believed, they could not make sense of their own calculations about the movements of the Sun, Moon and Stars moving around the Earth. This chapter points out that something similar is happening today within the field of conventional economics. Such economists are only now realizing that the economy is merely a subset of the earths Bioeconomy and not the other way around, as the conventional economic paradigm has assumed.
Psychonomics (6): This chapter asks the question: Is our mental wellbeing being affected by the way, conventional economics, has driven our way of life? Sitting at the centre of conventional economics right now is the notion of a pathetic parody of a human being called the ‘Rational Utility Maximizer’ who runs around making perfectly predictable choices in perfectly predictable markets. The reality is of course different. Neither human beings nor markets react in the way that theory assumes. Neoclassical Economics has achieved its coherence as a so-called Science only by misrepresenting the reality of human nature and the predictability of markets.
Meme Warfare on Campus (7): In his seminal 1962 book ‘The Structure of Scientific Revolutions’, Thomas Kuhn, describes how scientific revolutions happen, in contrast to how conventional scientific wisdom asserts they do. Conventional scientific wisdom holds that scientists will readily accept evidenced based new-ideas, and theories when they arise, phase out the old ones, then seamlessly move on. However, Kuhn’s work has shown that this conventional scientific wisdom is simply not like that. Rather, the process is often nasty and messy, like political revolutions. The old guard, often actively move to protect their positions, the old ideas they are expert in and wedded to, irrespective of the strength of the evidence, justifying a change. The book argues that the behaviour of practicing conventional economists, has confirmed Kuhn’s viewpoints. This also suggests that Economics should not have been called a ‘Science’ as senior Neoclassical Economists did when giving evidence to public hearings, after the financial crash, of 2008.
The Early Pioneers (8): Those named in this chapter, have been questioning the validity of conventional neo-classical economic, and proposing improvements for years. Their pioneering contributions to improved economics, should be remembered by maverick students.
2017 (9): This chapter begins with the question; Ok all you crash survivors out there, how are you travelling? As ‘Meme Wars’ was published in 2012, the contents of this chapter, purport to be discussions with people in 2017, about how they have managed the effects of the financial crash of 2008. This would seem to be an unusual, but creative way of leading into a discussion about people’s future expectations, at the time of the 2008 financial crash.
Successful bio-economies of the future will (10): (a) Mimic nature at every step, (b) Involve corporations that will reinvent themselves to align with the needs of nature and (c) price of every product so it will reflect the ecological truth.
- A BRIEF HISTORICAL NOTE.
The predecessor to Neoclassical economics was Classical economics which emerged concurrently with the Industrial Revolutionv. Classical economics covered the dominant form of economic thinking from 1776, whose intellectuals included: Adam Smith, David Ricardo, Thomas Malthus, John Stuart Mill, Alfred Marshall, Arthur Cecil Pigou, and othersvi. This dominance prevailed until the economic crash of 1929 which signalled the start of the Great Depression.
The economic practitioners of the time neither predicted the 1929 crash, nor were able to provide rational advice to governments on how to mitigate the adverse effects of the ‘Great-Depression’. In 1933, the US administration of President Roosevelt therefore introduced new government policies, collectively labelled the New Deal. This included the introduction of a new system of. Economics based on the ideas of John Maynard Keynes, a British economist. The new system inter alia, formally provided roles for government intervention in the economy. This notion was anathema to the conservative economists of the dayvii and stoked the ongoing conflict between two groups of economists (Namely, the old school conservatives and the progressives)viii. This conflict continues to this day.
The new economic paradigm introduced by the New-Deal in 1933, was influential world-wide and continued to operate through the second world war, until the early 1980’s, when three developments, undermined it. First, the cold war which had begun following the end of world-war two. Second, the advent of Republican Ronald Reagan as president in the USA, and conservative Margaret Thatcher as Prime Minister in Britain. Third, a new set of international economic challenges arose.
Those developments benefited the conservative side of politics and its supporters of Neoclassical economics, in the following ways, viz:
- The western alliance used neo-classical notions with their emphasis on ‘freedom and economic freedom’ to win the ‘Cold War’ against the Communist opposition.
- Conservative Governments attacked the then prevailing (Keynesian) notion of ‘a role for government in the economy’ which politicized the existing and ongoing conflict on economic ideas.
- Beset by the newly emerged economic problems, the then conservative leaders of two countries, President Reagan in the USA, and Margaret Thatcher the Prime Minister in Britain, attacked the then progressive system of economics (which provided roles for government in the economy), that had prevailed, since the new deal of 1933. President Reagan asserted that: ‘Government was not the solution to the (newly arisen) economic problems, because Government is the problem.’
Essentially, the Keynesian economic paradigm that had replaced the then classical system of economics that prevailed in 1933, was itself replaced in the 1980’, by conservative governments with what we call the new-classical (Neoclassical) system of economics. Note however that after about a quarter of a century this system is itself, now under pressure because of the financial crash of 2008, its practitioners failed to see coming. The crash highlighted the flaws in neo-classical ideas and stimulated the ongoing conflict over economic ideas.
Enter the authors of the book into that conflict with the publishing of ‘Meme-Wars,’ in 2012.
As this commentary was written towards the end of 2023, I sought to ask the question, ‘have the authors been successful in their aims of encouraging economic students to become mavericks, during their economic education?’
This question is not easily answered, and I sought guidance from the internet.
One article was particularly informative. It was written by journalist Dylan Matthews who then worked for VOXix Media which published the article in May 2019. The headlines read:
“The Radical Plan to Change how Harvard Teaches Economics.”
“Raj Chetty a professor in the Economics faculty there, has an idea for introducing students to an economics system that will transform Economics and Society.”
Selected points from Dylan Matthews article indicated that:
- Eco 1, the famous introductory course in economics at Harvard University, is run by Professor Greg Mankiw who has taught this subject for a long time. This course is based on his textbook, ‘The Principles of Economics.’ The text is theoretical, mathematically based and is based on, the theories of Neoclassical economics. The subject has been a prerequisite for later economics subjects. The course portrays a ‘conservatives’ view of the economic world and has been subject to increasing criticism since the financial crash of 2008.
- Another Harvard Professor, Raj Chetty, graduated from Harvard with a Ph.D. in Economics. He became a professor at Stanford University for a brief time before being poached by Harvard. Professor Chetty now teaches at Harvard, the subject labelled Eco 1152,. Although the course is an introductory course, it is not based on any textbook. Rather, it requires students to read and discuss, eleven empirical research papers each year, written after 2010. Of those, at least half are required to have been released in 2017 or later. Eco 1152 focuses on economics of the real-world and seeks inter-alia, to teach students to understand the social, political, and economic outcomes the economics of the day, produces and perhaps why.
- Unlike the subject Eco 1, Eco 1152, does not cover theoretical concepts such as supply and demand curves. As noted above, it does however endeavour to ascertain the real-world effects of economics. For example, its research has shown that in the real world, under the neoclassical system, black boys experience less upward mobility, than white boys do.
- At Harvard, most classes in economics have historically required Eco 1 as a prerequisite. Eco 1152 however does not require that prerequisite. Professor Chetty is aiming to make Eco 1152 available to other economic schools. After the financial crash of 2008, practicing economists highlighted and criticized the weaknesses in Neoclassical economics. Although professor Chetty offers a new way of learning economics, he is closely associated and aligned with contemporary research. As well, his course attracts new students, previously put off by the Eco 1, emphasis of, on theory, the disregard of the real world, and the intensive use of maths, in eco courses.
- The reaction of Harvard students to the advent of Professor Chitty and his new course described in Dylan Matthews article, should excite the authors of ‘Meme Wars’:
First, first year economics students at Harvard, now have two options. One is to opt for the pre-existing theory based subject Eco 1 which was up to recently the only first year option available, or the new first year subject, Eco 1152.
Second, the sum of the enrolments in both subjects totalled 836. Of these 461 students enrolled with Eco 1, while 375 students enrolled in Eco 1152. This seems to suggest that approximately 45% of the first-year student body, opted to learn about real-world economics, instead of opting for a course in pure economic theory.
Third, it can be said with reasonable confidence that, by the year Dylan Mathews article was published, first year student support for introductory economics, with a real-world emphasis, has grown from zero previously, to 45%.
Congratulations to the authors of ‘Meme Wars’ for the publication of their fine book. They, together with their progressive cohorts, progressive academics, and others, are likely to have played a role in the changes that currently appear to have occurred in Economics education at Harvard University, as described above. Let us trust that this trend continues and grows.
However, two notes of caution:
First, although the teaching of first year economics at Harvard University appears to have changed, history has also shown (see section 3) that politics and hence power, have driven changes to the prevailing economic orthodoxy (and hence its teaching) twice over the last century. Similar new threats will no doubt, arise. A recent one is that recently, asserted by prospective Republican Presidential candidate, Donald Trump who asserted that when he gains office, his administration will clean Communists, Socialists and Lefties out of institutions in the U.S.A.
Second, the authors of Meme Wars, are to be congratulated on the books, its proposals regarding required future behaviour to save the planet. (See outline of chapter 10, in section 3 above.): Namely that: (a) Everyone should Mimic nature at every step, b. Corporations should continuously reinvent themselves to align with the needs of nature. c. The price of every product should reflect the ecological truth.
They are fine ideas, but experience has shown that: (a) People ignore nature, if adherence to natures principles does not suit them. (b) Corporations will avoid reinventing themselves if this behaviour adversely affects their profitability. (c) Governments have not introduced policies requiring that pricing of products to reflect the ecological truth. Further, Countries still support, the search for, and mining and production of, environment damaging, carbon base fuels such as coal, petroleum, and natural gas, and the mining of them. Hence, (d) The conflict over environmental and economic ideas, is likely to continue.
- END NOTES.
i For further information, see: https://en.wikipedia.org/wiki/Kalle_Lasn
ii For further information, see: https://en.wikipedia.org/wiki/Adbuster s
iii See my website: brians-satchel.com.
iv The notion of ‘neoliberalism’ is covered in in the book, ‘Never Ending Nightmare’. A commentary on that book is available on my website: brians-Satchel.com.
v The Industrial revolution is perceived to have occurred in two phases namely 1750-1880, and 1850-1914, beginning in Britain and progressively spreading throughout Europe.
vi See: The Penguin Dictionary of Economics for the significance of these important figures, G Bannock & R Baxter, 2011.
vii See: The Penguin Dictionary of Economics for sketch of Keynesian economics, G Bannock & R Baxter, 2011.
viii Although this question is not easily answered, I sought guidance from the internet.
ix Vox (from the Latin vox = voice) is an American news and opinion website owned by Vox Media. The website was founded in April 2014 by Ezra Klein, Matt Yglesias, and Melissa Bell, and is noted for its concept of explanatory journalism.