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Stock trader clutching his head in front of a screen showing a stock market crash.
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Economics Schooling After the Crash

Source: Simon Belcher/Alamy

Real-World Economics

Why Student Economists Are Staging a Revolution

Why you should care

Because today’s econ students will be tomorrow’s policymakers, and they’re planning to shake things up.

There was a time when economics was considered a branch of philosophy. Alfred Marshall, speaking in 1890, said the role of the economist was to analyze how people “live and move and think in the ordinary business of life.”

But in recent decades, the field has transformed almost beyond recognition. It’s become a highly quantitative, analytic discipline that’s been singularly bad at delivering accurate forecasts, which most would agree is the chief task of economists. Most famously, the economic powers that be utterly failed to foresee the global fiscal crisis of 2008, with devastating results.

In response, student economists in universities around the world are demanding that their field return to its roots and, like most young radicals, they refuse to take no for an answer.

Many students start their programs with the valid expectation that economic classes will address the topics [they] read about in the Wall Street Journal.

The International Student Initiative for Pluralist Economics (ISIPE) brings together 65 student associations from 30 countries. In a recent open letter, it outlined its belief that “the teaching of economics is in crisis,” citing “the dramatic narrowing of the curriculum that has taken place over the last couple of decades.”

ISIPE’s argument is that academic economics focuses excessively on abstract neoclassical theories and technical mathematical modeling, which doesn’t equip students to deal with real-world challenges.

Book cover of Thomas Piketty's

Capital in the Twenty-First Century by Thomas Piketty, Harvard University Press, 2014.

“Many students start their programs with the valid expectation that economic classes will address the topics [they] read about in the Wall Street Journal. They want to help find solutions to the economic challenges our world faces,” says Thomas Vass, founder of the New York branch of Rethinking Economics, a member group of ISIPE.

Originally from Denmark, Vass, 32, is a graduate student at the New School for Social Research in New York. With a bi-disciplinary background in economics and philosophy, he uses a critical philosophical approach to challenge economic assumptions. After years of feeling isolated due to his unorthodox approach, Vass attended a Rethinking Economics conference at the London School of Economics last year. Excited by the opportunity to meet other people with similar views, he brought the movement to New York, where the new branch will hold a conference in September.

Critics of ISIPE argue that mainstream economics is mainstream for a reason — because it works. They question the intellectual rigor of the proposed alternatives and argue that existing models can be and have been applied to explain the financial crisis.

But Vass is eager to emphasize that the movement does not promote a particular school of thought or agenda, nor does it advocate the wholesale rejection of neoclassical theories or mathematical modeling. “We are not seeking to reignite the battles between different schools of thought that were fought in the past,” he explains.

We are not seeking to reignite the battles between different schools of thought that were fought in the past.

Instead, they invite everyone to “reconsider all schools of thought” with an eye toward better understanding the global financial market. The open letter embraces the classical, post-Keynesian, institutional, ecological, feminist, Marxist and Austrian traditions. They also support a more interdisciplinary approach that allows students to engage with other social sciences and the humanities.

Practical suggestions for achieving these changes include hiring a greater diversity of instructors and researchers, developing new texts and teaching materials to support more pluralist studies, and creating formal collaborations between academic departments. The groups have already organized extracurricular workshops, reading groups, guest lectures and conferences to present alternative viewpoints.

Thomas Vass holding up a whiteboard with text on it.

Source: Privatni album

Thomas Vass is rethinking economics.

The initiative is growing rapidly. Having started in Europe, membership in the U.S. remains limited, but Vass believes there is a lot of potential for expansion. Their inaugural conference in September aims to bring together students, academics and activists from across North America to discuss why the movement exists, what needs to change and how it can be achieved. Confirmed speakers include Michael Sandel of Harvard, Richard Wolff of Amherst and Dean Baker, a co-founder of the Center for Economic and Policy Research.

Long-term, Rethinking Economics and ISIPE have some pretty lofty goals. They believe that changing teaching and discussion will gradually “renew the discipline and ultimately create a space in which solutions to society’s problems can be generated.”

Vass emphasizes that because of the career trajectories of economics students — who typically enter government, banking and think tanks — “it is natural that a change in how economics is discussed will also change policy.”

Arguments for more relevant approaches aren’t entirely new, but they haven’t enjoyed much popular support in the past. In 1999, Joseph Stiglitz was fired from the World Bank for criticizing its one-size-fits-all free market development model. Thomas Piketty, the celebrity economist du jour, completed his doctorate at 22 and was immediately offered an academic position at MIT, but stayed just three years. In his book Capital in the Twenty-First Century, he admits he was flattered by the job offer, but felt he “knew nothing at all about the world’s economic problems.”

Back then (this was in 1995), Greenspan was in, regulation was out, and the U.S. was experiencing its longest-ever period of peacetime economic expansion. Piketty was an outlier. But today, in the aftermath of the global financial crisis, people are far more wary of the economic establishment and receptive to alternative viewpoints. That’s evident from the stunning success of Piketty’s book and the enthusiasm of students who are following in the footsteps of Stiglitz, Piketty and other dissenters.

These student protesters may not be marching, striking or taking on the police, but their objectives are no less radical. And while this particular revolution may not be televised, we suggest you pay attention all the same.

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