In the past two decades, contemporary economic policy has repeatedly failed to protect us from crises. From the financial crash to the pandemic to the high cost-of-living, continual policy failures have pushed people into poverty and left many with little agency over their own lives.
Yet these policy failures shouldn’t be seen as accidents. They are predictable outcomes of an economic discipline that conceives markets as the natural, best, and often the only, way of organising production.
Take, for example, how mainstream economics often conflates value with price, and demand with innate needs or wants, rather than the ability to pay. In theory, businesses following their self-interest of maximising profit will allocate resources to those that value them most. Yet in reality, how much you value something—be it a warm home, nutritious food, or a good education—is often at odds with how much you can afford.
This conflation has often led economists to make dangerous value-driven statements. They present market outcomes as desirable and naturally efficient phenomena, that reveal socially ideal allocations. Yet these market outcomes have delivered soaring inequality, financial instability, and inaction in the face of climate change.
Even when economists are aware of these outcomes and attempt to create more holistic models, they may still be tied to a methodological framework that is intellectually uncurious. To “think like an economist” requires formal mathematical models where functions representing utility or profit are maximised subject to constraints. This fosters an approach where multi-criteria trade-offs and qualitative judgements about fairness, wellbeing, or environmental sustainability, have to be crudely quantified or simply ignored.
This all-consuming need for quantification has solidified a discipline that places heavy emphasis on statistical inference to evaluate economic policy, ie econometrics. Yet, while developments in econometrics have certainly been useful, it has encouraged economics to focuses on piecemeal reform and isolated experimentation, even at the expense of ethical practice. Economists coming out of today’s degrees are taught how to assess the world as is, not to imagine how it could be radically different.
Fortunately, vibrant student movements like Rethinking Economics have long called for economics to change as a discipline. They advocate for economic pluralism, where students would be encouraged to learn alternative schools of thought. For example, feminist economics places emphasis on the unpaid production that takes place within the household—the food we cook, the rooms we clean, the care we provide—work often shouldered by women. Or ecological economics, which challenges the imperative of endless economic growth, placing it in direct conflict with planetary boundaries.
Despite decades of student advocacy, economics curriculums have been slow to change. If the standard market model were an accurate description of reality, supply would have reacted to this demand. So why hasn't it? The dynamics of the discipline itself defies standard economic models.
The blind spot here is that economics is shaped by powerful forces which can ignore underlying student demands: from governments to employers to the economics profession to universities themselves economics rigidity is imposed rather than the result of some equilibrium. Economics is shaped from the top-down from the Nobel Prize to dominant journals, a select and narrow vision for what constitutes economics is rewarded. Furthermore, many economics graduates enter into the financial sector where there is little need to craft solutions to economic problems, instead gambling on economic failure may actually be rewarded.
The government also plays a direct role in defining what sort of economics research is funded and therefore what university faculties get to study and teach. In the UK, one of the largest funders of economics research is the Economic and Social Research Council (ESRC) which has a statutory duty to “to have regard to the desirability of contributing (whether directly or indirectly) to economic growth, or an economic benefit, in the UK”. The executive chair of the ESRC, has stated recently this translates into a “high bar against funding applied projects that advocate for degrowth, steady-state economics and similar agendas.” This implies a funding landscape that it is turning actively hostile to alternative economic paradigms—a stance some have deemed unscientific.
This approach to economics will lead us to making the same mistakes, again and again. If the status quo isn’t working, it is time to reform it and try something new. Fortunately, history shows us that change can often come from outside state-directed channels, especially when this currently seems to be a source of hostility. Guilds and professional bodies have long been established to protect the interests of their members and uphold standards. Perhaps now is the time for one in economics.
This is why, alongside Students Organising for Sustainability, the New Economics Foundation is creating the Association for Quality Economics (AQE)—for an economics that meets the moment.
AQE will be student-led and aims to equip students with the skills they need by accrediting degrees with pluralist future-fit curriculums. Newly trained economists must be equipped to think outside of the box and be well-versed in a range of possible solutions to economic problems. When economics degrees won't regulate themselves to provide this, we will.