"a triumph of ideology over science", as Joseph Stiglitz observed.

The tragedy of economics

The discipline is retreating to fantasy, argues Edward Fullbrook.

Theories, scientific and otherwise, do not represent the world as it is but rather by highlighting certain aspects of it while leaving others in the dark. It may be the case that two theories highlight the same aspects of some corner of reality but offer different conclusions. In the last century, this type of situation preoccupied the philosophy of science. Our new book, A Guide to What's Wrong with Economics, however, addresses a different kind of situation: one where one theory, that illuminates a few facets of its domain rather well, wants to suppress other theories that would illuminate some of the many facets that it leaves in the dark. This theory is neoclassical economics. Because it has been so successful at sidelining other approaches, it also is called "mainstream economics".

From the 1960s onward, neoclassical economists have increasingly managed to block the employment of non-neoclassical economists in university economics departments and to deny them opportunities to publish in professional journals. They also have narrowed the economics curriculum that universities offer students. At the same time they have increasingly formalized their theory, making it progressively irrelevant to understanding economic reality. And now they are even banishing economic history and the history of economic thought from the curriculum, these being places where the student might be exposed to non-neoclassical ideas. Why has this tragedy happened?

Many factors have contributed; I will mention only three. First, neoclassical economists have as a group deluded themselves into believing that all you need for an exact science is mathematics, and never mind about whether the symbols used refer quantitatively to the real world. What began as an indulgence became an addiction, leading to a collective fantasy of scientific achievement where in most cases none exists. To preserve their illusions, neoclassical economists have found it increasingly necessary to isolate themselves from non-believers.

Second, as Joseph Stiglitz has observed, economics has suffered "a triumph of ideology over science". Instead of regarding their theory as a tool in the pursuit of knowledge, neoclassical economists have made it the required viewpoint from which, at all times and in all places, to look at all economic phenomena. This is the position of neoliberalism.

Third, today's economies, including the societies in which they are embedded, are very different from those of the 19th century for which neoclassical economics was invented to describe. These differences become more pronounced every decade as new aspects of economic reality emerge, for example, consumer societies, corporate globalization, economic induced environmental disasters and impending ecological ones, the accelerating gap between the rich and poor, and the movement for equal-opportunity economies. Consequently neoclassical economics sheds light on an ever-smaller proportion of economic reality, leaving more and more of it in the dark for students permitted only the neoclassical viewpoint. This makes the neoclassical monopoly more outrageous and costly every year, requiring of it ever more desperate measures of defense, like eliminating economic history and history of economics from the curriculum.

But eventually reality overtakes time-warp worlds like mainstream economics and the Soviet Union. The moment and place of the tipping point, however, nearly always takes people by surprise. In June 2000, a few economics students in Paris circulated a petition calling for the reform of their economics curriculum. One doubts that any of those students in their wildest dreams anticipated the effect their initiative would have. Their petition was short, modest and restrained. Its first part, "We wish to escape from imaginary worlds", summarizes what they were protesting against.

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