About the Absence of Pluralism in Economics

In economics, there is no inherent truth, no unyielding theoretical construct that can explain the world. Economics is a perpetual process of evolution coined by a multitude of influences from other fields – history, psychology and political science to name a few. The aspired result is not to create the ultimate theory, but to attain a critical perspective on the plurality of theories out there. While pluralism is taken for granted in other disciplines, alternative economic theories are fighting to survive. Have you ever encountered Institutional, Ecological, Marxist, Post-Keynesian or Austrian schools of thought during your studies? A graduate in economics who is familiar only with Neoclassicism should be just as much ridiculed as a philosopher who has dealt only with Descartes.

Economists work with models and communicate through the language of mathematics. Yet the objective behind these models is to describe human behaviour. Therefore, marginalizing psychological discoveries in stem lectures and modelling human beings as rational, utility optimizing machines cannot lead to an accurate portrayal of human interaction. Instead, it would be appropriate to start questioning our rationality and abandon the simplified model of the homo oeconomicus. Granted, models can never be an exact representation of reality. However, by considering a wider range of theories and interdisciplinary discoveries, one is sure to come closer.

German universities in particular are currently in a critical position. The quality of higher education seems to have degenerated into a neoclassical orthodox theocracy, where educators advocate for normative dogmatism, conveying ideals rather than facts. Students are taught of the crime of state intervention and the immorality of deficit spending. Letting Germanys reputation as an “austeritarian” liberalist state interfere with education could lead the next generation of economists to make the same mistakes as current leaders have made.

One way to tackle this problem is through student activism. In recent years, German students have formed groups and networks, have become activists to integrate pluralist concepts into lectures to widen students’ horizons. Netzwerk Plurale Ökonomik e.V. (Network for Pluralist Economics) for instance, connects different student initiatives in 33 German cities. To achieve a more heterodox economic landscape, they organize unconventional lectures, conferences, and seminars, providing opportunities for students to discuss and engage. It is a vicious cycle: An undiversified education leads to undiversified educators. This can only change if unorthodox economists are given the opportunity to occupy chairs at university and the publication of articles diverging from the mainstream is facilitated.

The heterogeneous problems of our modern time require heterogeneous solutions, which orthodox Neoclassicism alone cannot provide. Unlimited trust in the infallibility of neoclassical models and serene acceptance of unrealistic assumptions cannot serve as a reliable foundation for constructive problem solving. Mainstream economics needs to open its doors and embrace pluralist thinking.

by Manon Schuegraf