Global warming demands a swerve in how we teach economics, says Marc Beckman.

Global student movement, Rethinking Economics, has, since 2014, spoken out against the disconnect between what is going on in economics teaching and what is happening in reality. Some in the economics profession have reacted, and as a result we have seen progress. There has been a move towards empiricism, more real-world focus, a bit more complexity and even a bit more pluralism. 

Does this positive trajectory reduce my discontent with economics education? No.

The problems needed to be addressed by economics – think of the climate crisis–  are by far outrunning the efforts of reforming economics. The case for change is stronger than ever before.

Last year, when I and a fellow student tried to convince one of our economics professors to change how the university teaches us about money and banks, he told us that we should not be overly concerned. The assumptions on money creation we were criticising will be thrown out in later courses and in a few years we would get the real picture. Asking why we can’t learn the reality of how the economy works as soon as we start our degree, the professor responded that it simply would be too complicated for us to understand.

This line of argument wasn’t new to us. It corresponds to the dominant approach in the discipline: first teach highly-stylised models with abstruse assumptions, and then, step by step, introduce cases where these assumptions do not hold. It is easy to empathise with young students who are frustrated with this hoop-jumping exercise. But students’ frustration is not what exactly matters here. What matters is that the framework of equilibrium economics imprinted into students’ minds in the first years of study shapes how they perceive economic problems in the years to come. As in other spheres of life, what we learn earliest stays with us the longest. Put differently: the default matters. Getting the default right is crucial to developing an intuition that is in line with reality. Getting it wrong increases the chances of a generation of young economists misjudging the challenges they had hoped the study of economics would help them tackle.    

“Keeping economics education on track with reality is a no-brainer.”

Keeping economics education on track with reality is a no-brainer. Nobody should think twice about whether or not a larger portion of the curriculum should be spent on enabling students to understand the challenges of the 21st century. And yet, the current situation seems to be so unsatisfactory, that students are still having to push for more realism in the classroom. Just a few weeks ago, another call for changing economics education was published, this time by the German-speaking community of the student initiative, Economists for Future, who pointed to the discrepancy between textbook economics and the real-world economics unfolding around the pandemic and the climate crisis. Public calls for change like this one shouldn’t be necessary. But as long as those at the top are not stepping up, we need them. 

Meanwhile, my question for the established economists who have most power in setting the direction of the profession is: isn’t it the absolute minimum to prepare students for an ecologically-shattered world that your generation has collectively brought about, and which you will now pass onto your children who are the least responsible for it? 

In many ways, the benefits of changing economics education will clearly only be seen in the long run, yet, for many of the problems we’re facing, we need action now. The most urgent one is the climate emergency: we need to decrease global greenhouse gas emissions by 7.6% each year between 2020 and 2030 to still reach the 1.5°C goal. We simply do not have time for generational change, for waiting until a better educated generation reaches the places of power to stop us from driving over the cliff. Those currently in power (and that includes influential economists) must turn the wheel around. For economists specifically, this includes radically increasing the pressure to adopt policies that respect the Paris Agreement. For some this might be a new terrain. But given the drastic consequences of inaction, this is not the time to hold back.

Given that the need to respond to the environmental emergency is driving us to expect economists to step out of their comfort zone, our call to change the teaching of economics shouldn’t invoke resistance. Certainly, it shouldn’t be as slow a process as it currently is. In truth we need an immediate change.

“Given the drastic consequences of inaction, this is not the time to hold back.”

Learning about the implications of the current climate change trajectory in economics courses can inspire students to take to the streets now and ramp up the policy pressure themselves. And in that way, an economics education in line with reality can have a very direct impact – one that we can’t afford to miss. 

Marc Beckman is a Masters student at the Vienna University of Economics.

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