Challenging the Orthodoxy: Race, Racism and the Reconfiguration of Economics

Books abound on what is wrong with economics (Chang 2014Keen 2011Nelson 2018Mazzucato 2018Raworth 2018Stanford 2015), and what we would have to do to change it. Given the little change we have seen in economics training and policy-effective economic thinking since the global finance crisis of 2007/08, and in light of the global environmental, inequality and health crises, it is to be seen whether these interventions can make any meaningful impact. What is good though: Half of these impactful books were written by female economists. Despite this ‘wind of change’ in an overtly male discipline, it is striking that these books still offer a glaring lacuna: the issues of race and racism (except for brief mentions in Nelson 2018 and Stanford 2015). For many people around the world, these are no mere ‘issues’, but integral to their daily struggles and experiences in White majority countries. These are part of a differentiated life– a life differentiated so much that it can be full of unrealized potentials, suffering and trauma, physical harm and violence, and premature death in the worst of cases. Therefore, while we could move on, building on these interventions and many others (e.g., Obeng-Odoom 2020Sarr 2019 or here), to discuss what would have to change in economic thinking (which includes economics training), policy and praxis to help achieve a “safe and just operating space for humanity” (Raworth 2018), the goal of this blog entry is more firmly tied to the question of how economic thinking would change if race and racism were taken seriously as structural-relational problems?

Much of economic thinking happens via economics. Therefore, my entry will often refer to economics as an institutionalized field. That said, expertise about the economy is not just rooted in economics. In fact, economists should not hold an intellectual monopoly over explaining how the economy works and should work (even though many of them, ironically, seem to appreciate that monopoly). That is why I as an economic geographer dare write this post. Pluralizing the economy, economics and economic thinking are separate but still interconnected projects. Some of the arguments that follow apply to other disciplines, too. Nevertheless, economics is singular among the social sciences in terms of its socio-demographic homogeneity (at least in countries of the Global North), prestige, student intake volumes, policy influence and partial self-isolation from other disciplines. It thus deserves particular scrutiny.

So what would an economics that takes race and racism seriously as structural-relational problems have to look like? To what kind of epistemic and institutional practices would it have to commit itself in an effort to effectively engage with these lived realities? A partial answer is already provided by economists who do study race and racism in a field called stratification economics, not to be mixed up with the so-called economics of discrimination that is largely rooted in a neoclassical economics framework. Building on some the insights of the former, and adding a few more perspectives, we can call for at least 10 ways of how to challenge the broader field of economics (i.e. variants of neoclassical and behavioural economics, but much more than that, as we saw above!) via race and racism.

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Philosophy as if the world mattered: critical development studies and the work of Tony Lawson

No reader of this blog needs reminding that positivism retains a powerful grip on development studies. Not because every theorist, researcher and department carries a card or flies a flag self-identifying as positivist, but because positivist concepts of what knowledge is and how it is assessed continue to dominate, in so far as these have captured the concept of ‘science’. As Ingrid Kvangraven’s critique establishes, one need look no further than the dominance of random control trials (RCTs) for evidence of this. While there are many specific problems one might identify with RCTs, such as the capture of policy by what can be researched using RCTs rather than by what may be more significant as structural causes of poverty, perhaps the fundamental one is the model form, which stands behind RCTs. It is this that lends authority to RCTs, as it does to many other branches of economics.

Tony Lawson is probably the best known critic of mainstream mathematical modelling and in a recent interview he reprises his argument. Lawson is a ‘critical realist’ and ‘social ontologist’ and his, and other critical realists’ argument, is deceptively simple. All knowledge claims involve assumptions about the nature of the world, what and how it might appropriately be investigated. Whether this is acknowledged or not this presupposes a theory of reality or being (an ontology) and an orientation to knowledge (an epistemology). Philosophy thus has an important role in making these assumptions explicit and in exposing them to critical scrutiny to address their plausibility, consistency etc. Such philosophy does not replace the sciences or social sciences, but rather ‘under-labours’ for or supports their endeavours and is itself subject to critique in this context.

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The Washington Counterfactual: don’t believe the Washington Consensus resurrection

By Carolina Alves, Daniela Gabor and Ingrid Harvold Kvangraven

Decades of research have documented the devastating impacts of the Washington Consensus in the developing world. Yet revisionist accounts of this story have emerged in recent years. Remarkable amongst these, a recent blog post by the Peterson Institute for International Economics –  “Washington Consensus stands the test of time better than populist policies” – draws on research that is jaw-droppingly ideological and flawed. 

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Pluralism in economics – its critiques and their lessons

By Claudius Gräbner and Birte Strunk

In a recent paper we engaged with common critiques of the concept and the movement for more pluralism in economics. We found that while the majority of the critiques are either unfounded, easy to dismiss or address strawmen, others do highlight challenges the pluralist movement should address.

In 2017, we were spending a week at the Summer Academy for Pluralist Economics, when the German economist Johannes Becker published a blog article on Makronom entitled “The Movement for Pluralist Economics risks its success” (translated from German). He argues that the movement for pluralist economics faces a decision: it could continue to be a movement of fundamental opposition against the ‘economic mainstream’, or it could start striving for ‘real change’. Economics professors, at least in Germany, Becker argued, were highly perceptive and open-minded towards alternative perspectives in economics. If the movement would focus more on constructive engagement with economics faculties rather than on fundamental critique, then there would be a greater amount of pluralist seminars and lectures.

Being surrounded by around 100 fellow pluralists who dedicated a week of their summer to study different approaches to economics, the accusation of simply being a movement of unconstructive opposition seemed alienating to us. So we drafted a response, arguing that pluralist economics is about both critique and the construction of alternative practices. Based on this response, we wrote an article evaluating the critiques posed toward pluralist economics, drawing from philosophy of science, philosophy of economics, and philosophy of interdisciplinarity. When writing the paper, which has recently been published in the Journal of Economic Methodology, we indeed found many critiques of pluralism to be unconvincing, yet we also discovered that some critiques of pluralism are not easily dismissed. They should be taken seriously by pluralists because an honest engagement with these critiques rather than the neglect of their relevance could, we believe, make the movement for pluralism in economics more convincing and successful.

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What is a Developed Country?

Any discussion of economic development – either implicitly or explicitly – contains the distinction between developed countries and developing (or under-developed) countries. While there are many theories on what promotes development and how best to achieve it, in all cases the goal is for a country to eventually become ‘developed’.

This begs the question – what is a developed country? There are at least three common definitions, which are presented below. These definitions overlap in many cases, but in others they are at odds. This piece argues that a broader definition is needed in light of recent failures of several ‘developed’ countries to cope with shocks ranging from the COVID-19 pandemic to natural disasters.

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Abolition Will Not Be Randomized

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By Anastasia Wilson and Casey Buchholz

In the wake of the current uprising in support of Black Lives Matter, there has been increasing interest in the use of mainstream empirical methods in economics — like randomized control trials (RCTs) and administrative data evaluation — to address issues of racism and violence in the institution of policing. These interests are well intentioned, but similar to prior debates, we are reminded that “there is reason for concern” about the relevance of these approaches amidst a mass movement calling for deep structural and institutional change. In just two weeks, mass protests have sprung up across the U.S. and the world calling for the defunding, disbanding, and abolition of police as well as the dismantling of white supremacy. This moment has the potential to bring about an institutional and structural shift in our politics, society, and economy. Given this, we will echo many of the concerns shared by economists about the limits of some empirical methods, the biases embedded in administrative data, and the relevancy of these approaches to the current moment calling for immediate change. Read More »

The Nature of Social Reality: Issues in Social Ontology (Review)

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Review of Lawson, T. (2019). The Nature of Social Reality: Issues in Social Ontology. London and New York: Routledge.

Ontology is the study of being. Social ontology is the study of social being or, in other words, the study of the nature and basic structure of social reality. We all do ontology all of the time, economists included, whether we like it or not. For all practices carry ontological presuppositions. Economists only have a choice between doing ontology explicitly or implicitly. Tony Lawson’s contributions stand out and are of such profound significance precisely because he explicitly grounds his analysis in an account of social ontology. It is only by redressing the ontological neglect that has for some decades characterised the discipline that a productive transformation of economics is at all feasible. 

Lawson is perhaps best known amongst heterodox economists for his critique of the mainstream emphasis on mathematical modelling. Lawson shows that the implicit ontological presupposition of an insistence of mathematical modelling is a world of isolated atoms and argues that, as the social realm is not characterised by isolated atoms, the mainstream approach will produce largely irrelevant research. However, it would be wrong to consider this critique to be his major contribution. Rather, it is but one of an increasing number of powerful (sometimes startling) results derived from Lawson’s three-decade project of developing and defending, along with other participants of the Cambridge Social Ontology Group, an account of the nature of social reality. 

The Nature of Social Reality: Issues in Social Ontology provides the latest developments that Lawson has made in the field of social ontology. Here, he sets out an account of social ontology that has come to be regularly referred to as a theory of social positioning, demonstrating its explanatory power. An exciting feature of the book is that it sets out the theory of social positioning in its most advanced form to date and then puts it to work through analysing the nature of the corporation, money and emancipatory practice. Whilst Lawson is pursuing themes in social ontology at an advanced level, he takes great pains to ensure that the analysis is everywhere accessible. The detailed and provocative accounts of the corporation and of money provide ample illustrations of the enormous potential of the social positioning framework.  Read More »

The risk of being misled by climate economy models

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This post deconstructs the following statement:

If reducing greenhouse emissions had economic benefits then we would do it anyway without new policy.

The statement above is used by economists to argue against the introduction of policies to reduce greenhouse gas emissions on the basis that the costs would outweigh the benefits of reducing climate change. It is part of a wider narrative that regulatory policy can only lead to economic costs. However, the statement is perhaps one of the most perverse conclusions from neoclassical economics. It depends on a raft of assumptions that run contrary to real-world experience. Further, as discussed below, if just one assumption is taken out, the conclusion changes.

Sadly, economists and (in particular) economic modellers, have played a key role in turning this fallacy into accepted reality. They have done this by using simple optimisation-based approaches that make strong assumptions about human behaviour. Often the modellers do not critically question or even fully understand these assumptions. Read More »