Teaching Un-Normal Economics
Having observed many failed textbook projects over the years (I won’t mention names), I notice several predictable pitfalls. They include:
…The author has views of the field that are too idiosyncratic to appeal to the vast majority of instructors who teach the course.
The pressure on textbook writers is for conformity and homogeneity. Daniel B. Klein has some concerns about homogeneity and what he calls “normal economics.”
But a little experience with normal economics shows that “market failure” is a fundamental analytic category in economics, whereas “government failure” is scarcely used, and when used is more frequently used in a sense meaning failure to achieve its goals or failure relative to other (imperfect) institutional arrangements.
Built into the normal science, then, is a double-standard that is prejudicial against free markets. Other aspects of “normal” economics are prejudicial against free markets. Model building, for example, the exalted mode of discourse, tends to eclipse some of the important virtues of free markets. I would even say that model building tends to render the very idea of freedom nugatory—that is, the idea of freedom is vital because life is not like an equilibrium model.
Klein attempts to summarize the views of economists like myself, a minority that he estimates as constituting 10 percent of the economics profession.
(1) a tendency to make the distinction between voluntary and coercive action clear in formulating many basic economic categories, principles, and arguments;
(2) an appreciation that knowledge is not merely information, but also interpretation and judgment, and as such is highly particular to the individual and the moment; it is essential for humans to err, in the sense that they kick themselves for having interpreted or judged badly;
(3) a sense that economics must be relevant and serve social purposes, and that such service necessarily entails heavy engagement with non-economists, notably laypeople and policy-makers;
(4) a sensibility that economic reality is incredibly complex, inspiring the eschewal of efforts to paint a picture of the economy or how it “really” works;
(5) a sober, non-romantic view of government—since economic reality is scarcely knowable, we should be wary of those who pretend to manipulate it beneficially;
(6) a presumption in favor of liberty, not the status quo.
I find this list unsatisfying. For example, I think most of what Klein calls “normal” economists would share (3), and I am not clear what (4) means.
Here is how I would describe myself as different from normal economists:
1. I think that it is more important to tell a plausible story than to tell a mathematically representable story. For example, in my book on health care, I describe three narratives of why health insurance has become so difficult to afford: a narrative based on “premium medicine” and “insulation”; a narrative based on price gouging; and a narrative based on adverse selection in health insurance. I give some basic facts that favor the first narrative.
2. I think that the process of economic growth over time is more important than efficiency or income distribution at any given point in time.
3. I think that it is extremely important to take what Klein calls a “sober, non-romantic view of government.” In my view, if you watch the evening news, you will see two types of advertisements. The “commercials” offered by private firms, pushing their cars or pills or what have you; and the content of the program, which pushes “crises” that government must “solve.”
The question of how to teach economics, given my minority perspective, is difficult. Perhaps what I owe students is the “normal” viewpoint, with my own suppressed.
Klein himself favors teaching multiple points of view. That is not as easy as it sounds. But I do recall my favorite professor, Bernie Saffran, recommending students read Bowles and Gintis (who at the time were Marxist economists) with the same enthusiasm that he gave when recommending Milton Friedman.
In conclusion, I think it would be better for freshman economics textbooks to include various points of view than to tend toward homogenization. However, my guess is that a textbook that covers normal economics, libertarian economics, socialist economics, and other points of view would be much harder to write and to use in the classroom than the standard text.