Governments: Fostering Crises and Stifling Entrepeneurs? An Evening With Matthew McCaffrey

On the Monday of December 5th we were joined by Matthew McCaffery for a low down and discussion of the famous and influential ‘Austrian’ school of economics. A school that builds up it’s analysis of the economy from the ground up, highlighting the importance of entrepeneurship, and the motivations and actions of individuals in the shaping of the economy. Although of course, to give a brief summary risks misrepresenting it, so for more details of what this school is about, and for an idea of how it analyses the world, you’d do well to look at a few of Matthew’s publications: http://www.manchester.ac.uk/research/matthew.mccaffrey/publications . The Austrian school struck us as having pretty watertight and often quite radical arguments. Matthew had strong responses for all our criticisms, one response that stood out especially was the response to the central argument of Mariana Mazzucato’s book the Entrepeneurial State, put forward by someone in the back rows. For many of us in the room the book is very much a knock out argument that reaffirms an idea that state intervention has been the most important force in our economic progress. Let’s just say that Matthew’s response ‘sent us back to the drawing board’ slightly. As we were very happy to see at PCES, the school had some interesting analysis on the role of debt, finance and money in the economy. Things that we can reasonably say are not heavily featured in mainstream economics. Some of us came in with preconceived ideas about the content of the talk, assuming it might be perhaps slightly right wing and even slightly inhumane. This was not the case, a strong...

What Would We Like to See on the Curriculum?

A recent post by blogger Tony Yates presents an opportunity for us to give a brief clarification of what we would like to see on the economics curriculum, and to debunk some common myths that seem to circulate among mainstream economists about campaigns like ours. This will only be a whistle-stop tour of the kind of stuff we’d like to see taught; over time, we hope to develop a more comprehensive outline of a post-crash curriculum. Anti-Maths? Critics of economics are often thought to be anti-maths (with the underlying implication that they are simply not clever enough to understand maths or economics). However, although we believe mathematics on its own does not lend a theory credibility – and that contemporary economic models seem to have sacrificed too much relevance in the name of mathematical tractability – we are not at all anti-mathematics. In fact, a lot of the mathematics taught on undergraduate and even graduate economics courses is quite dated and simplistic (eg linear equations; stochastic, normally distributed shocks). This is the kind of stuff natural scientists abandoned when they realised how complex and unpredictable the world can be (see Phillip Mirowski on this). This is why we would strongly endorse a link up with our mathematics department to teach ordinary differential equations – as well as models which utilise them, such as Richard Goodwin’s model of class struggle – to economics students so that they may gain a better understanding of dynamic systems, rather than simply using comparative statics with unique equilibrium solutions. Economics students could also be taught basic programming packages such as MATLAB – mathematics and engineering students currently are – so...