Episode 02: Why economists need multiple perspectives with John T Harvey

00:00:05: Those things, so when one thing changes

00:00:06: another change.

00:00:07: The growth national product is not allowed in the health of our children... ...the quality their education will enjoy at their

00:00:14: place.".

00:00:20: The explanation's being given as a support for this system that already exists.

00:00:26: So here why it's important to learn other schools' thoughts.

00:00:30: If you only learned one view and all ways to support them You come out.

00:00:34: thinking well makes lots sense Until you hear that somebody has challenged and found out, oh.

00:00:42: Oh yeah!

00:00:43: I'm not sure if totally reject the initial idea yet but boy there were some holes in it.

00:00:47: so what happens to our students generally speaking?

00:00:50: is they only here the neoclassical view?

00:00:53: They only heard a view of capitalism.

00:00:55: That's it.

00:00:57: Hello and welcome to Invisible Handcuffs A podcast that seeks to expose economic ideology underpinning crisis And explore ways we can free ourselves from its chains.

00:01:07: My name is Katie Shields and I'm a recovering mainstream economist, your host.

00:01:11: This podcast is all about freeing ourselves from economic orthodoxy.

00:01:15: but how did the economics that are taught in practice today come to be?

00:01:19: What alternative thought schools have And why aren't they taught more broadly?

00:01:24: That is the topic of discussion this week where I'm joined with Professor John T. Harvey, of Texas Christian University and like most people, John was fortunate to have been exposed her range of thought schools during his education as he explains in our interview.

00:01:36: it's one other reasons He fell in love with economics and wanted become an economics professor.

00:01:40: when he succeeded any wanted to expose his students The same kind of education he had.

00:01:46: he discovered that there was no textbook on the subject So he ended up writing it himself, and it really is a very accessible and fascinating read.

00:01:54: Start with asking John to explain what are the core assumptions underpinning neoclassical or mainstream economics as it's taught today?

00:02:01: And then we go into some of the alternatives.

00:02:03: I was particularly fascinated here about institutional economics which according to john Was almost leading thought school before the second world war and i think It has A lot Of interesting insights that could be useful for addressing The challenges That were faced With.

00:02:17: Today.

00:02:18: We don't just talk about the different thought schools, we also talked about the confluence of historical factors.

00:02:22: Why it is so hard to do what John's doing and expose students new or alternative ideas?

00:02:28: If you are a teacher economics –or any teachers of economics– I would particularly encourage you listen this episode And maybe even consider checking out John book.

00:02:36: I certainly found this an incredibly useful interview.

00:02:39: It gives a really useful basis for the rest of the series, in which we're going to on one hand explore some of these alternative schools and more detail but also start trying to unpick various ways where economics as we know it today is upheld.

00:02:53: with that please join me in welcoming Professor John T Harby.

00:02:57: Welcome Johns!

00:02:58: Thank you for joining us.

00:03:00: thank you i've been looking forward too

00:03:03: great.

00:03:05: I like to get stuck in.

00:03:10: You trained as a neoclassical economist or an orthodox economist, we might go through some of the definitions but you have a PhD anyway and economics.

00:03:20: then at some point you switched sides.

00:03:23: now call yourself a heterodox economist.

00:03:28: so can i ask When did you realize some?

00:03:32: when do you realized?

00:03:32: You wanted to switch?

00:03:33: or when did you realise there was something I missed?

00:03:35: maybe with the economics that you had been taught and your practicing,

00:03:38: right well Okay.

00:03:39: So th-there's a cool thought called institutionalism.

00:03:42: That was essentially.

00:03:44: people may have heard of Thorsten Vevelen Probably almost certainly heard of the term conspicuous consumption.

00:03:49: he came up with it so his His approach emphasized more these sort of value systems different economies use, which is just a very brief background on that and very popular in the state of Texas by the way.

00:04:05: Okay

00:04:05: so...

00:04:06: A bunch of my professors at The University of Tennessee-the ones I really liked were institutionalists.

00:04:13: only i didn't know what that meant!

00:04:16: I had no idea this was any different from the professor's I was taking.

00:04:19: that we're mainstream economists..I guess where I'm trying to establish here.

00:04:22: I thought this was just one big happy family.

00:04:29: And they also, the institutionalists did make a point of saying we're institutionalist you know?

00:04:34: This is a bit different.

00:04:36: um so i really loved economics.

00:04:39: uh to the point that i thought well i'm gonna get a phd in it.

00:04:41: and In grad school It finally started to sink-in That The professors i liked the most were not the mainstream ones.

00:04:51: Okay now here's where John Harvey rejects the main stream.

00:04:55: Okay, so

00:04:56: I figured it's all one big happy family which it wasn't.

00:05:00: uh and i'm really interested in international economics Uh and macroeconomics.

00:05:05: Which is you know the the economics of unemployment inflation interest rates that sort of thing

00:05:10: The big system.

00:05:10: yeah

00:05:11: those classes are awful.

00:05:13: um II okay.

00:05:16: So to give you a quick example In my mainstream oh, I'm sorry should have made it pretty clear.

00:05:21: Those were all taught by mainstream economists

00:05:23: right?

00:05:24: And Now, one of them was talking about the Great Depression and this is from Milton Friedman in a modest perspective that apparently the unemployment in The Great Depression was all voluntary.

00:05:37: Huh?

00:05:39: That what happened was prices fell which caused firms to have to lower wages Which cause workers to quit.

00:05:48: so I'm learning at this point that twenty five percent unemployment United States is voluntary.

00:05:54: And so I thought, Mike, if it's just so silly what am i going to do?

00:05:59: I've got no backup plan.

00:06:00: I want to be an economist then!

00:06:03: I came down in my office one day and grad school.

00:06:05: there on my desk was a copy of A Guide To Post-Kinzie In Economics by Alfred Eichner.

00:06:12: It is another different School Of Thought Now.

00:06:14: post-Kinsie economics despite the name Is The Economics of Tanks.

00:06:19: So who's book is this?

00:06:21: Let me cleanse Uh, so I'll start reading it.

00:06:24: Oh my gosh It was all about.

00:06:26: our theories must reflect real world institutions and phenomena like okay?

00:06:32: iIll do your dumb phd in the classical economics But when i'm finished i'm gonna do post kainzian economics.

00:06:39: this stuff sounds great.

00:06:40: Also ended up being an institutionalist too but i didn't understand what that meant yet.

00:06:44: um So The thing was...i-was naive!

00:06:48: I thought you could go anywhere and do post Canesian economics.

00:06:51: I didn't realize that in those places, i wouldn't get tenure because it would be publishing the wrong journals.

00:06:57: but But That was my point of epiphany.

00:06:59: It's finding that book after classes.

00:07:02: yeah

00:07:02: Wonderful thank you for that.

00:07:04: so You mentioned a lot of terms there which?

00:07:06: I'm thinking some other people are quite A lot of people listening maybe won't know.

00:07:09: So you talked about...I'd like to Get back To institutionalism And Post Canesanism.

00:07:14: Who Cainz Was?

00:07:15: You also Mentioned Milton Friedwin Which I think we should Also get too.

00:07:18: maybe we can backtrack a little bit.

00:07:20: So when we talk about mainstream economics, we're kind of talking about neoclassical economics is that?

00:07:25: That's right?

00:07:25: yeah

00:07:27: Yes yes if you picture the Venn diagrams at Mainstream and Neoclassicle there's whole lot overlap

00:07:34: Yeah And We also sometimes use the word orthodoxy because neoclasical has become orthodox.

00:07:40: so for purposes this uses interchangeably I guess to next time.

00:07:45: So you've written a book which, um...I read cover-to-cover and i said it took so many notes!

00:07:49: I struggled to prepare for this interview but we're gonna try to get there.

00:07:52: You are the author of a book called Contending Perspectives in Economics A Guide To Contemporary Schools Of Thought And so It goes through kind of some these main schools Which would like to get into.

00:08:02: But what I thought was really interesting is that its important if were you to understand also What economics Is?

00:08:09: That your start talking about economics as science And this is, I think really important to why also studied economics have a master's in economics and mainstream neoclassical.

00:08:19: It didn't like you know at the time that sort of was doing but it turns out now I realize... But does present itself as kind of an objective science guided by these natural laws about how economy works?

00:08:32: You write in your book that objective facts do not exist absolute truth does not exist, therefore we must constantly work hard to value alternative theories.

00:08:42: To see which holds the greatest explanatory power in a given context.

00:08:46: and I think our economy is constantly evolving.

00:08:49: so this seems to be important.

00:08:51: but

00:08:52: why

00:08:53: are there no such thing as objective facts?

00:08:56: I don't know if you can give an example there.

00:08:59: quite easy really because like i'm going to quote from institutionalist A very famous one who shared a Nobel Prize, and it was Gunnar Myrdal.

00:09:10: And he said that there is no such thing as a view except from the

00:09:14: viewpoint.".

00:09:16: The example I like to use this very choice of what you want study value judgment?

00:09:25: Okay let's say your reading an economics paper about long term decline in the rate yet I can pretty much guarantee that's a Marxist paper.

00:09:37: Because Marx argued, over the long run one of things is going to destroy capitalism... ...is that rate-of-profit will slowly decline!

00:09:46: So if you told somebody there was this paper on the declining rate profit oh well it sounds interesting and probably just very objective and scientific.

00:09:54: but did he then tell them from a Marxists perspective?

00:09:56: I'm gonna guarantee you most your mainstream economists are immediately dismissive because well its Marx.

00:10:03: and what a bunch of crap that is.

00:10:05: And so it's impossible, whatever the very choice of what you think is important to study Is a value judgment.

00:10:14: So on top of that we're limited by our ability To interpret events.

00:10:20: It always are human centered and impacted By our ability to analyze Our ability to calculate and our preconceptions Are inevitably coming in and influencing, I don't want to say contaminating because there's no other way to do it.

00:10:37: I mean the institutionalists are like well we're all coming from perspective when there is simply nothing that can be done about this rather than to admit it!

00:10:46: And then do our best try to overcome that.

00:10:49: so... That would have been a quick explanation.

00:10:51: yeah

00:10:52: No thats'a great explanation.

00:10:53: So

00:10:53: you know.

00:10:54: on that point then You would argue and many others, perhaps except for the newer classical economics is also coming from a particular point of view.

00:11:07: And that point-of-view then if I understand this lens they're viewing the economy through.

00:11:14: it's built on assumptions about how the economy works.

00:11:19: so can you maybe talk us to some key assumptions?

00:11:24: encountered economics or even if they haven't maybe it was a long time ago.

00:11:28: Right, you already mentioned one and that was natural law.

00:11:31: um the idea of what we're trying to explain here.

00:11:34: well this goes back to Adam Smith.

00:11:37: okay where we first met was very close to where he was born in grew up.

00:11:42: uh yeah And um He was coming...he was kind of drawing from The.

00:11:49: Oh what's his name?

00:11:49: Isaac Newton.

00:11:50: Isaac Newton hadn't died all that much earlier than when Smith was born.

00:11:56: And so this is one of the things I talk about, and I want to teach history of economic thought—is always think about what was a popular idea of today?

00:12:04: When this person was developing their new ideas.

00:12:06: we're like wow!

00:12:07: This is fighting this whole natural law thing coming from a surmising Newton you know for a body in motion stays in motion... A body at rest stays… You know

00:12:17: what?!

00:12:17: I'll bet the economy works the same way.

00:12:20: I'll bet that it comes to equilibrium points and so forth.

00:12:23: And, you know...I guess we see the origins of that with Smith in that he's developed further by his followers.

00:12:29: but uh..that one of basic ideas is that were describing something natural.

00:12:33: now To flip back a little bit go back institutionalists they say as cultural capitalism did not always exist It was relatively recent phenomenon and evolved from following things Are there thing are natural to homo sapiens?

00:12:49: Yes, there are.

00:12:50: but we should not assume these things.

00:12:53: We should at the outset Assume they're not natural and then kind of study to see you know what is it isn't so.

00:12:58: So from a mainstream perspective If economic behavior is natural Then if I understand economic behavior in Edinburgh In The eighteenth century that i understand Economic Behavior in Zimbabwe today Because It's the exact same thing.

00:13:15: so once I have one model?

00:13:16: That Works Everywhere because it's like Human Physiology.

00:13:19: You know, once I know how someone digest food in ancient Rome.

00:13:22: I know they digest food now it's not any different.

00:13:26: Whereas for me institutions perspective even more like understanding language.

00:13:30: There are some basic concepts or perhaps some similarities.

00:13:33: But we need to go and figure out how Romans talk with each other.

00:13:35: It is that simple.

00:13:36: So there one thing.

00:13:39: Another would say the idea of political individualism And discipline of economics evolve together.

00:13:49: You know, of course Adam Smith's Wealth Of Nations is seventeen seventy six and there's also a famous thing that happened in the country.

00:13:55: I'm sitting right now.

00:13:56: That happened at seventeen seventy-six And Those are not total coincidences.

00:14:01: i mean they're depressing.

00:14:02: The idea that individuals have rights Individuals.

00:14:06: did you know this?

00:14:07: Is it a side issue?

00:14:08: i love military history.

00:14:10: i found A book on um naval mutinies which by the way, The Navy covers up for them most hard because they're not really happy that these things happen.

00:14:18: But...the number of mutinies went up after the American Revolution and French Declaration on the Rights Of Man Because there were like oh!

00:14:27: I don't have to be pushed around?

00:14:29: I-I had the right say something about how i'm being treated in this ship.

00:14:33: So anyway You know..the idea that individuals have rights And pretty much all economists would toss with that one.

00:14:40: but then to shift the analysis in a neoclassical perspective too.

00:14:46: Okay, so the ultimate unit of analysis is the individual and individuals are somehow unaffected by culture and society where all our you know Catholics don't decide something people decide stuff You know?

00:14:59: Society doesn't decide anything And that's another aspect sort of mainstream.

00:15:06: Now when I say the mainstreamy...and you brought this up implicitly earlier It's a huge group of people, so it's difficult to say they all believe X. You're gonna find somebody somewhere that disagrees with some aspect of it.

00:15:24: So I don't know...I used the example- I was born in London and my mother's side are from London And her sister also married an American serviceman who then abandoned her.

00:15:36: Then she had to get divorced.

00:15:38: Well, the first priest she went to because my English family are really Irish Catholic.

00:15:43: Said well no you have to fix this and The second priest is like sure what guy sounds like a jerk?

00:15:49: So You know.

00:15:50: the whole idea that all Catholic priests not just Catholics believe X is not quite true.

00:15:56: so But when I argue in the book and saw it cuz I had to sort of struggle with this myself Like okay, well am I gonna say they don't believe anything in common but They started from this core.

00:16:08: They started from this core and they sort of had to self-consciously reject the idea that humans aren't, you know impacted by culture.

00:16:17: I guess the other thing would unite a lot of neoclassical commas is there's the manner in which they model things...they're really crazy about.

00:16:24: oh i'll bet all the lispers have seen a supply & demand diagram right?

00:16:28: So

00:16:29: yes!

00:16:30: That is..that's a general equilibrium model.

00:16:33: um everything comes to a resting point which again is sort of drawn from the natural law, but you know...from a different aspect.

00:16:39: Yeah!

00:16:40: The maths focus.

00:16:41: I think it's really important and also kind.

00:16:46: who gets attracted to then studying economics and practicing another assumption?

00:16:53: Is that all about kind of market right?

00:16:55: The market being the optimal for them would do say can we as part of neoclassical economics?

00:17:00: Well yes!

00:17:01: That the market is somehow natural by default, superior to other solutions.

00:17:07: Now when neoclassicals come across a situation where they don't think the market quite gets the job done... They call it Market Failure.

00:17:15: in this sense that which you know their very name of it implies well The Default Solution at the Market.

00:17:20: and there's also This Sense That Prices And Wages Are Somehow Objectively Determined Their Objective Determinance Of Your Value.

00:17:30: and Neoclasical Economists Wonder Why They're Dominated By White Males.

00:17:34: So you're in an intro econ class, and your learning that your wages are objectively determined.

00:17:42: And I'm a woman or person of color—I am like done with economics!

00:17:45: This does not match my experience.

00:17:47: It's very interesting to see Neoclassicals struggling why they can't attract women or people of color.

00:17:54: They have all these strange reasons Not by nature but the way we do our education system is simply not as good at math.

00:18:03: Perhaps that's why they're not econ majors.

00:18:06: Women care too much about grades, and econ is hard!

00:18:10: Now notice the self-congratulatory nature of this weakness you know?

00:18:14: That well women cared so much about greats... The guys don't care if they got to see an Econ They are still going be an econ major but the woman who has a B is done with them.

00:18:22: And other big one when do is perhaps women are simply by nature Not as interested in economic problems Or it could be you.

00:18:30: It couldn't be your the problem.

00:18:31: when I say, yeah, I mean neoclassical economics You're the problem?

00:18:34: That's not that people are taking your class.

00:18:37: The fact that you were starting them off with The market is an objective measure of your value.

00:18:43: now again You will find neoclasical economists who well, you know tweak that.

00:18:48: but that's where they start and that's why we still Are like the most white male dominated more than the sciences.

00:18:55: I

00:18:57: was actually, and i looked up this data recently so that can concur for the UK it's even higher than tech.

00:19:06: The male dominance yeah right.

00:19:08: um.

00:19:09: So there is a market And This also means That kind of we're all.

00:19:13: It's about the individual Everyone sort Of looking to optimise their Their value Whether its their Salary whether Its their

00:19:23: Utility Is what they usually narrow down.

00:19:26: Maximize utility,

00:19:28: yeah.

00:19:29: Yeah and

00:19:31: so the markets are important to the individual.

00:19:33: it's about kind of personal gain I guess and also this concept of property rights often comes in because if you want to have markets that function then you also have to protect those property rights which is interesting.

00:19:44: cause thats where.

00:19:49: But so is it correct to sort of say, and now you maybe get onto others in particularly Marx I think would point this out.

00:19:55: that also means effectively neoclassicalism is teaching the capitalism as a economy because if you can't really have growth capital growth and gains.

00:20:04: If Do you think it's fair to say that, when your sitting in a new classical economics class.

00:20:12: You're getting taught capitalism even though capitalism might often not get mentioned as it wasn't actually on my experience?

00:20:18: Right no its all implicit.

00:20:24: the explanation is being given where I learned economics for this system already exists and Its kind of easy initially to imagine that's true because you're like, oh yeah we are doing pretty well here.

00:20:43: We have a market system.

00:20:45: and boy some of these explanations which is really simple quick easy-to-grasp analogies without any challenging of them shifting into why it so important learn other schools of thought.

00:21:05: if only one view and all the ways to support that view, you come out thinking well it makes a lot of sense.

00:21:11: Until your here is somebody who's challenged there... And you find out oh!

00:21:16: Oh yeah I'm not sure that i totally reject the initial idea yet but boy there were some holes in them..and this happened to me by the way....I was also political science major ...And It Was In I believe nineteenth-twentieth century Political Thought Class.

00:21:32: um That Were maybe eighteenth to twentieth.

00:21:36: We're learning, like say Jeremy Bentham.

00:21:38: And I'm learning about Jeremy Benthams ideas of how to organize a society and i can vividly remember this Dr Gorman's class.

00:21:44: really nice man.

00:21:46: um oh man that Bentham guy he is genius!

00:21:49: I guess ima Benthamite.

00:21:50: then maybe we'll cover the next person who rejected Bentham.

00:21:52: it was like aww yeah I hadn't thought of that.

00:21:55: uh okay alright so fair enough right but Im a follower of this Next Person for sure.

00:22:04: liberating experience, and this is what I want my students to go through.

00:22:08: To suddenly realize because i tell them about that experience... I guess don't know the hell im talking of it!

00:22:14: And why would I?

00:22:15: Im a college sophomore learning these things That these scholars had spent their lives taught.

00:22:24: Why would be able to figure out now?

00:22:26: So you know what im gonna do?

00:22:27: Im just going sit back and listen.

00:22:30: But..that experience never happened.

00:22:33: if the class had just been Jeremy Bentham a whole time, I would have convaled Benthamite.

00:22:37: So what happens to our students generally speaking is they only hear The Neoclassical View.

00:22:43: They only here the view that supports capitalism.

00:22:46: That's it.

00:22:47: and in fact...I don't think i bring this up on the book.

00:22:50: uh..i can't remember.

00:22:52: In fact there-there was guy named John Siegfried who as well known neoclassicle economist Who has written alot on pedagogy And one of things he wrote once And by the way, when you're introducing students to economics don't introduce more than one school of thought because they'll get confused and demoralized.

00:23:13: Oh!

00:23:13: By the way let's do my School Of Thought.

00:23:15: John Zeke pre-sets Because that One School of Thought could be marked right?

00:23:19: I mean there is no reason... You know it can be something else.

00:23:21: Well No We wouldn't Do That.

00:23:23: So He Is Absolutely Totally Dead Wrong In How Self Serving That Is To Say If we taught them More Than One School?

00:23:31: Obviously not.

00:23:32: Students love controversy, students love hearing that so-and-so argued with someone about this and the

00:23:39: other.".

00:23:40: And I actually wrote a paper once... Everything is biased right?

00:23:46: So as we said earlier there's no such thing as view except from viewpoint.

00:23:59: And one of the many questions I asked was, when the course was over did you feel more confident or less confident?

00:24:08: Or the same about your knowledge of economics.

00:24:11: It was like ninety.

00:24:12: some percent felt more confident but even more interesting.

00:24:16: The few that felt less confident were nevertheless more excited About learning more economics because education isn't about going from one level Of confidence to another.

00:24:26: it is having this level of confidence challenged and then thinking Oh, I guess.

00:24:33: Don't know how that works the man?

00:24:35: I want to work it out.

00:24:36: i'm gonna figure this out.

00:24:37: That's The way.

00:24:40: Yeah Sorry so sounds a bit like the the Dunning Krueger curve right when you start at When You started At the top and you think you Know everything And then you read A little Bit more and Then you Become less Certain and then Finally you Kind of get More Towards.

00:24:54: This kind Of Wisdom I guess Where you can Kind of handle the complexity, and handle them not knowing.

00:24:59: And that's okay in your interest to learn more.

00:25:03: Right?

00:25:03: It is OK if you do not know everything or have the humility to believe but there are lots of more on that one.

00:25:09: so I will shut up!

00:25:10: Yeah.

00:25:11: Lots we can dig into maybe a little bit later about letting go because this new classical economics gives us certain certainty which might be hard too give-up.

00:25:23: Maybe

00:25:23: maybe we can just go through a couple of the others.

00:25:24: So, maybe we could talk about little bit about Marx because he was kind of you.

00:25:28: mentioned Adam Smith.

00:25:29: He is also classical economist Coming out if that school.

00:25:34: so before neoclassicism may be some work?

00:25:37: Maybe maybe talked to a couple like yeah core I guess his core assumptions about me.

00:25:44: And what's your touchdowns?

00:25:45: yes now Is something that absolutely blows away students That we include marks and adam smith in The same School Of Thought.

00:25:53: I can remember first learning that from Dr.

00:25:55: Jensen, he was my hero and my mentor.

00:25:58: He taught the history of economic thought at University Tennessee Originally from Denmark And it fought in the resistance in World War two.

00:26:07: how much more could you love a guy?

00:26:08: That yeah, and then any which really really fun.

00:26:12: So anyway from dr.

00:26:13: Jenson i learned that marks an Adam Smith and David Ricardo are In The Same School Of Thought.

00:26:19: well they use the same tools of analysis.

00:26:23: I always start with this.

00:26:25: You have to understand where Marx is coming from, he's looking around in his world and he is seeing Bob Cratchit in Tiny Tim.

00:26:32: That that to him it's capitalism.

00:26:36: these people who were undoubtedly suffering now It's interesting economic historians from every perspective argue well its not entirely clear.

00:26:47: they're suffering more than before.

00:26:50: Under say, you know a feudal system But they were suffering in a new and different way.

00:26:55: And You've given up control of your immediate family.

00:26:59: perhaps under feudalism you are out farming together being oppressed just like in the money python scene.

00:27:06: but now we're all on A factory.

00:27:08: so where's little Jimmy?

00:27:09: Well he is online number six down there trying to clean out a machine or something Like that.

00:27:13: my family has broken up.

00:27:15: There was no question.

00:27:17: it was, at least for a period of time.

00:27:20: A horrible factory system.

00:27:22: that's what Marx has in his head all right.

00:27:24: oh he's like.

00:27:24: well this system sucks but Marx is a scholar.

00:27:28: Marx isn't just going to make up a sign capitalism sucks and walk around town with it.

00:27:32: He wants to understand capitalism.

00:27:34: so who do you go too?

00:27:35: To understand capitalism?

00:27:37: uh In the middle of the eighteen hundreds Adam Smith All Right.

00:27:41: So he goes and sits in The British Museum Library and read Adam Smith in David Ricardo, one of not as well known to the general public.

00:27:50: but David Ricardo is probably more influential on Marx maybe than Smith was.

00:27:54: He's a follower of Smith And he's reading about capitalism.

00:28:00: One of things that Marx really tags onto Is both of them, Smith & Ricardo their use of the labor theory value The idea.

00:28:10: what actually creates value is the act of labour.

00:28:15: Marx says that late in Smith's Wealth of Nations, Smith acknowledges hey wait a minute you know what.

00:28:25: if only labor creates value.

00:28:29: and capitalists which is not a term that Smith uses because Marx makes it up.

00:28:34: Capitalist don't do any labour then capitalist doesn't really deserve any income.

00:28:44: But, but, but Marx is like no.

00:28:46: No you nailed it!

00:28:47: You had it...you let go.

00:28:49: that's the problem.

00:28:50: That's why Tiny Tim and Bob Cratchit are suffering.

00:28:54: It was because Mr.

00:28:56: Scrooge Is taking value.

00:28:58: he did not create all right.

00:29:00: so now He has got this intellectual foundation.

00:29:03: And then his also heavily influenced by Hagel The idea of society.

00:29:08: history moves through stages.

00:29:10: Capitalism is simply one stage.

00:29:12: It is better than all the previous stages.

00:29:15: And so it's better that what occurred before, but its not there yet and eventually we'll have a socialist revolution then hopefully if technology increases sufficiently communism.

00:29:27: So anyway thats my very quick introduction to Marx.

00:29:30: Again students are more surprised by Marx Than any other school of thought we cover.

00:29:35: I don't think they become Marxist.

00:29:38: My own personal problem has always been with the labor theory value in the teleological nature of the Hegelian stuff.

00:29:46: I'm more of an institutionalist, institutionalists believe that if the economy evolves but we don't know which way it's going to evolve there is no.

00:29:52: oh-it goes this system and this system... And Marx also uses the term um socially relevant labor.

00:30:01: uh so like well gosh!

00:30:03: So If i decide to take twice as long to make something does that make it twice as valuable?

00:30:07: Uh or if i decided just spend ten hours on something nobody wants socially useful, I think that was it.

00:30:14: Does that make it more valuable?

00:30:15: No no its got to be socially useful.

00:30:17: uh well that to me is the value system and then goes back to institutionalism.

00:30:21: i'm sorry i went a lot of different directions here.

00:30:23: we'll stop talking

00:30:24: about that's great!

00:30:24: And I really came together bit onto institutionalism.

00:30:27: um but you know...I can imagine there's a reason why people are also turning to Marx now little bit more.

00:30:33: maybe not in their mainstream departments..but we hear them cited more.

00:30:36: one other quotes from your book.

00:30:40: This is your wording about capitalism or the neoclassical assumption story of individuals maximising their utility, whatever Marx would ask.

00:30:48: How was it a choice when one class people own means production and other must access in order to live?

00:30:55: And I think that's so relevant for where we are just now, not at least having this perspective and ability to critique the current system through?

00:31:02: you know... Not take everything but also the feminists have some issues with Marx.

00:31:06: What is useful?

00:31:07: Labour can talk about it as well.

00:31:09: But atleast having those perspectives was very enlightening and do feel a little bit shortchanged by my economics education.

00:31:17: No, that wasn't part of my curriculum and it's not actually most curriculums now.

00:31:31: Yeah so maybe I would quite like to touch on Keynes because you've described yourself as kind an institutionalist in a post-Keynesian.

00:31:38: this is another point that surprised me.

00:31:42: when i was starting to discover new economic thinkers people were describing themselves And I thought, well...I studied Keynes.

00:31:53: Then I started to read Stephen and then I've read your book and realised that actually I didn't get Keynes.

00:32:02: so maybe we can start there?

00:32:03: So Keynes is known as the economist most associated with this or let's say the post-war consensus of the war era in Britain and sometimes attributed to sort of that, you know the thirty glorious years Lytrand Glorious after The Second World War.

00:32:24: I don't know... That's my interpretation.

00:32:25: maybe i'm wrong there but ... Maybe You can talk a little bit about what is core?

00:32:30: What are his core kind of contributions?

00:32:34: As you could imagine I would love too because I am big fan of it!

00:32:38: And what has been told to us as what Keynes said is really in Joan Robinson's words, she was a contemporary of Keynes at Cambridge and the Econ department.

00:32:53: She called it bastard Keynesianism because he was the bastard offspring of neoclassical slash classical economics and Keynes.

00:33:02: And The easiest way that I've come up with to explain the difference between Keynes and Keynsian Is this?

00:33:10: Keynes believed The capitalist system, the market-system without any what they would call frictions or interferences still tends to come to rest at less than full employment.

00:33:24: Still has difficulty maintaining economic growth and a job for everyone who is willing to work.

00:33:30: The Keynesians—the Keynesian's–still are really latching onto a classical slash neoclassical model that says And there's always enough jobs, you know.

00:33:45: Well we made it to wait a couple of years for the long run.

00:33:48: just show up because that the long-run apparently is where everything lives.

00:33:52: That uh The market creates a job for everyone who's willing to work.

00:33:57: Only if they're some interference like at minimum wage law or people don't understand what going on only then do We end up with less than full employment?

00:34:06: That's Keynesianism!

00:34:08: It is not Keynes!

00:34:10: Keynes didn't say that Keynes took pains to say that, you know when unemployment is well okay.

00:34:17: so here people say that workers refuse to accept a lower wage and that's why we have unemployment.

00:34:24: And if you read Keynes' general theory chapter two You will see him mention that!

00:34:29: If then stop reading your like.

00:34:32: oh thats what he believed.

00:34:33: but might aswell finish the rest of his chapter where goes on saying But Thats not whats going On.

00:34:40: And so, and I love to show those quotes in class because it's like so clear that he says look.

00:34:45: He said well none of women is twenty five percent.

00:34:47: workers are not especially back In.

00:34:50: you know during the Great Depression when there are no social programs to speak up People are not being less willing to take another job.

00:35:00: They're going wherever they can define a job.

00:35:02: So so Keynes believed that this system was inherently unstable.

00:35:07: Keynesians believe it's not inherently unstable, but sometimes some external force causes us to be knocked off this glorious path high employment and low prices.

00:35:26: When we're taught Keynes today in a mainstream economics course is essentially just part of neoclassical economics that have taken a little bit and interpreted the wrong way.

00:35:36: Is that kind of a fear assessment?

00:35:38: Yes,

00:35:39: I just got back from the presentation at University in Illinois where i talked about why didn't Keynes get his point across?

00:35:50: and The first problem is okay.

00:35:52: So then the general theory comes out on thirty six Where he's trying to say That this system is inherently unstable And He has watered down some Of what he believes At This Point because hes desperate To Get People To Believe Him because we're in the middle of The Great Depression.

00:36:06: Your canes are thirty-seven, thirty eight and you have people not quite grasped what they were agreeing with on what needs to be done.

00:36:15: You don't make a huge fuss over it.

00:36:17: That is all that I need to talk about later.

00:36:24: And then What happens in September?

00:36:27: first, nineteen thirty nine?

00:36:28: Germans invade Poland And two days later, France and the UK declare war on Germany.

00:36:37: And Keynes is busy now!

00:36:38: Keynes was very busy... ...and so throughout the war he's working with the government and funding the war.. ..and then he dies in forty-six!

00:36:47: So He never really gets the opportunity to stop and say okay but that not what I'm saying.

00:36:55: One thing if i were direct listeners is his theory of uncertainty versus risk.

00:37:06: I won't say any more than that, because it takes a while to explain and understand but its absolutely critical in the neoclassicals totally missed it and still do this day.

00:37:19: It's the absolute key understanding what Keynes was saying about whats so unstable with the macro account.

00:37:25: So maybe, correct me if I'm in a simplified way we can say that Keynes he wasn't sort of anti-capitalism but didn't believe capitalism could create full employment.

00:37:40: He also called the phrase animal spirits and instability.

00:37:46: therefore what governments would need to intervene?

00:37:53: That's kind Yes.

00:37:55: And a stronger and stronger role over time that eventually he thought we would sort of solve the economic problem with scarcity, which we already have.

00:38:06: honestly there will be bigger and bigger roles.

00:38:09: no one could better place to figure out what needs done next than government.

00:38:14: right yeah I think it's worth mentioning again.

00:38:18: Cain has been someone off his time.

00:38:20: you mentioned scarcity less the problem now, and he famously also wrote a paper letter to his grandchildren where he envisaged we'd all be working less.

00:38:29: So he did see that this was I guess more like an evolutionary approach... ...to the economy.

00:38:38: Similar to Marx in some respects and that Marx also expected technology increase.

00:38:43: so by the time we reach communist society which is you know there have been communists parties and communist governments, but they were communists by philosophy not by economic system.

00:38:57: They were socialists by economic systems because we have not reached the point to where can be communists in society Because that is technology.

00:39:06: so high productivity rather it's so high That you don't really do anything You Don't Want To Do.

00:39:12: There Is A Famous Quote From Marks.

00:39:14: I Think i Have In The Book It Has Also Been Criticized By Marks.

00:39:18: But I Like The Quote that in common society, In the morning I think i might like to be a cattle herder.

00:39:25: Um...In the afternoon I think ill criticize poetry and then evening I'll think Ill be..I don't know uh...a butcher or whatever without ever having become A herder critic Or a butcher because he thought That this division of labor was horrible thing to impose upon people.

00:39:44: You have spend rest your life for most part Whatever you're part is in the capitalist system Doing that job.

00:39:51: That does not.

00:39:52: I tell students marks wanted you to major in whatever You want the major in regardless of whether you go to a job or not just because you like it And you can change your mind if you want.

00:40:02: so this is yeah, but there's dependent on this slow increase In technology too where which is true today?

00:40:10: But we're not doing it properly.

00:40:13: When when we have an increased in technology In in the system and the capital system it causes unemployment.

00:40:20: When we have an increase in technology in the household like I'm doing laundry today Alright, so i'm not going to have to go down to the river with a rock right?

00:40:29: And It's not gonna take very long.

00:40:31: I'ma toss some things in the washer Then when I hear that buzzer go off I'll put them in the dryer.

00:40:35: So does that?

00:40:37: did that make John unemployed and hungry?

00:40:40: No, it gave me more time than do other stuff which is what technologies should be doing for us in The economy.

00:40:46: But the economy is set up to where.

00:40:48: unless you can make profit for somebody, you can't eat.

00:40:51: So when we have AI take something over.

00:40:54: this isn't a yay.

00:40:56: now We have more time to socialize.

00:40:59: No Now You Have More Time To Look For A Job because your job skills just got wiped out.

00:41:03: Sorry I drifted into Something Else There but i feel

00:41:06: no but it's a nice.

00:41:07: so Thank You Because It's Nice.

00:41:10: Lead Actually Into Institutionalist Because As I Mentioned I find This The Most fascinating, one of the most fascinating parts in a book because I again thought i had learned.

00:41:20: I took an elective and institutional economics it turned out must have taken new institutional economics Because It Was Not The Institutional Economics That You Described In A Book.

00:41:29: We Maybe Get To That But What Are You Mention About It?

00:41:31: So you said before, you know, institutionalism is about seeing the economy as driven by culture not bias so its not individual choices.

00:41:40: traditionalists seek to understand the rules that are driving our decisions, is that correct?

00:41:45: And you mentioned like as profit being one of the key rules.

00:41:49: Like actually probably the core rule which prevents a lot of other things we want to... I found it fascinating if i understood that correctly.

00:41:56: or what would your answer be?

00:41:57: Yes no

00:41:58: an outfit To The Neoclassical Economist Is An Internal Motive Of The Homo sapiens.

00:42:03: People Want To Make Profit.

00:42:05: That's What They Wanna Do By Nature and Thats Why A Capitalist System Takes Advantage Of That Natural Proclivity And turns it to good, you know by the invisible hand and so forth.

00:42:17: To be institutionalized profit is a rule of our system.

00:42:21: If you love books and love people who love books You might want to start a bookstore just to hang out with people Who like books but you better make a profit because if you don't make a prophet they're not allowed to do It.

00:42:33: So that's why I don't know how Starbucks has gone elsewhere in the world.

00:42:37: Well, lots of our Starbucks now no longer have the seats inside because it turned out that was a really poor profit.

00:42:44: A really poor business model for profit.

00:42:48: I used to go and sit in their work you know?

00:42:50: And they had couple cups of tea over course several hours while they needed churn through.

00:42:55: Now is this fault of nasty people at Starbucks?

00:42:59: not necessarily there's rule in place with society if we don't earn more than spend then shut down.

00:43:07: So, yes.

00:43:07: From the institution's perspective and... The analogy that I got this through from my professor Terry Neal who was a very famous institutionalist economist—I didn't know it!

00:43:19: —I would just taken him for class but he is a really famous guy.

00:43:23: He said what if you walked into room of people And they're all playing cards?

00:43:28: You are trying to figure out…you try understand action Maybe even predict.

00:43:33: next What more important to understand The Motivations for sitting at the table.

00:43:40: one person really wants to make a lot of money as it's a gambling game.

00:43:43: One of them just enjoys that they come Rotary another ones trying to get away from their home life, you know whatever.

00:43:49: or Would it be nice?

00:43:50: To know the rules of the game?

00:43:52: They said the rules in the game are what tell You why That person that laid down three aces got to pull In all that money.

00:44:00: There was an issue with love.

00:44:02: the motivations would Be wonderful to have that too All right, because maybe they aren't playing as hard or whatever.

00:44:07: But he said the rules of the game and I hate to use the word Trump.

00:44:10: Um but trump every.

00:44:12: all it is about cards isn't it?

00:44:13: Uh trump everything else.

00:44:15: The rules of this game.

00:44:16: we have to figure out the rules.

00:44:18: What are the rules in this institution?

00:44:20: uh And they're not the same everywhere.

00:44:22: so anyway that's yes you were right.

00:44:25: Uh profit is a rule.

00:44:28: Yeah, and this i think is so important.

00:44:29: um You know i've.

00:44:31: so i kind of got into new economic thinking through being concerned about climate change, I studied environmental economics.

00:44:38: One of the reasons that I liked so much this institution is because... Because of the overlap with systems thinking?

00:44:45: So during my sort of re-education i came across The Limits to Growth and did a deep dive on this famous MIT study from the seventies which was based on system dynamics.

00:44:58: And I understood from your book that system dynamics is actually a tool that many institutionalists use.

00:45:03: That would make sense to me, because this was a model that tried understand what are the rules governing our world economic systems?

00:45:14: You know, there are laws of nature.

00:45:15: So you can only take so much out of the earth at a certain amount of time and then There's causal effects or you've got builds up pollution in that impacts this and this impacts That I found it really interesting probably not doing very good job of describing system dynamics Maybe encourage people to look it up but Dinella Meadows whose work Really?

00:45:35: Then i was really influenced by while i was doing This research kind of mother systems thinking.

00:45:41: She talks so much about that, how you have to get the rules and structures of a game.

00:45:48: That's what governs systems work in every system.

00:45:50: if we don't give them a goal it will basically optimise based on what they are.

00:45:58: It is going for growth or profit but those as well are influenced by by the values and beliefs in this system as well.

00:46:09: So like you said, Neoclassicals kind of believe that we want to make a profit.

00:46:13: so our developed rules then fit that belief right?

00:46:18: Yeah okay first of all... You're right I did say on the book that System Dynamics is OK.

00:46:25: let me tell what it says first.

00:46:27: You mentioned MIT.

00:46:29: A guy named Jay Forester was an engineer at MIT.

00:46:35: he in fact helped create some of the anti-aircraft guns that The American Navy used into Pacific with feedback effects Of trying to shoot down, you know Japanese kamikaze planes.

00:46:46: In particular they were.

00:46:47: obviously it was a big worry and They asked him at MIT Hey we want to do this project where?

00:46:54: Where did the business school works alongside the sciences?

00:46:58: could you write something on?

00:47:00: Something business oriented is like I guess all right whatever.

00:47:04: So he puts together this approach to understanding social systems.

00:47:10: that is based on the same idea, you will describe there.

00:47:15: That systems first of all they're marked by feedback.

00:47:20: when A causes B then feeds into C and goes back to a. And in neoclassical economics we generally especially with genomic delivery models There's no feedback.

00:47:32: It just goes to an equilibrium point and stops.

00:47:34: And so anyway, that was a big deal for him.

00:47:37: Anyway... So the whole idea is these things are interlocked.

00:47:41: Very I would say very accepted in institutionalism but not used a lot.

00:47:47: There's only a handful of people who really use it because it requires specialized software.

00:48:02: understand the economy when you start to think in those terms, like you say.

00:48:05: When you started thinking of cause and effect feedbacks it's not as I said programming is.

00:48:12: these models might be complex but we don't have to do that programing.

00:48:16: i don't understand how to program this model.

00:48:17: so i can draw a simple causal loop diagram a simple diagram where connect everything up right and that helps me understanding better.

00:48:24: anyway Maybe just then I finally found a question.

00:48:31: I had on institutionalism.

00:48:33: So what it wasn't able to sort of figure out from our nice overlooked?

00:48:36: It was where did institutionals stands on capitalism?

00:48:41: if we say Marx's very critical Keynes with sort of in between We're institutions?

00:48:47: Yeah, no absolutely and in fact Markets are a tool That that all they are.

00:48:56: And so you know To say there someone is pro-market.

00:49:00: What if you had a carpenter that said they were pro hammer?

00:49:03: That would be kind of weird.

00:49:05: I mean, okay Yeah, i'm pro hammer too when I have a piece Of metal that I need to drive into a piece of wood But i'm actually pretty pro saw.

00:49:14: When I have A big piece of Wood I want To make it into smaller pieces of wood and there's no moral You know like Oh no, Bob over there is pro-Saw but Susan is pro hammer.

00:49:28: But we do have these sort of moral judgments that were making when somebody was pro market or not pro market.

00:49:35: and the institutions are like God.

00:49:37: what a stupid thing to get locked up in!

00:49:39: It's just a tool.

00:49:40: it's only a tool... And so they're very much on experimentation institutionally.

00:49:48: sorry We try a policy, we see how it works.

00:49:51: And of course this fits in with all the feedback—we fix if didn't work and adjust at end —the system changes.

00:49:58: so things change within the system.

00:50:00: So even if market worked quite well for some phenomenon there are jobs that you know…for example restaurants.

00:50:10: For most part I think the market system does okay now because certainly argue that weight staff doesn't get paid paid enough, but we can deal with that as well.

00:50:21: But in terms of gosh you know there simply aren't enough Mexican restaurants—we need the government to get involved and create some more Mexican restaurants!

00:50:30: We don't really need that all right?

00:50:32: So let's say the market does a reasonable job with that.

00:50:36: health care in the United States is a nightmare an absolute nightmare.

00:50:40: I believe we're fourteenth-in-the world And yet we're number one in the world by a wide margin.

00:50:51: and how much we actually pay for it.

00:50:52: So, institutions would be very neutral on pro or anti-capitalism On the surface of it.

00:51:01: Okay Underneath

00:51:03: course they are going to lean heavily towards some style Of socialism because They generally come with conclusion Yeah you know market doesn't do such great job on creating enough jobs But they don't really have a stance.

00:51:19: Okay, okay thank you.

00:51:21: then I'd like to work.

00:51:23: so there are couple of schools that i'd like get into.

00:51:25: They're somewhat newer.

00:51:25: but before that because we've sort been talking around this topic That Neoclassical Economics has come to dominate and also bring it in now.

00:51:39: So you write New Classism did not emerge as the dominant school thought after a spirited scholarly debate.

00:51:46: We do not sift carefully through all the non-mainstream approaches and incorporate whatever was deemed helpful while dropping the rest.

00:51:52: Rather, historical developments were responsible for putting neoclassicism at the top of the food chain and institutional inertia... And path dependence have kept it where is?

00:52:03: so we've historical development's and then in Russia can maybe talk about the inertia.

00:52:07: but historical developments are a couple things new thing that I learned from your book as well?

00:52:12: In particular, The Impact Of Cold War.

00:52:15: Briefly talk to what happened there.

00:52:17: Yeah, let me go pre Cold War first and Because institutionalism was almost the dominant schools of thought in the United States.

00:52:27: Okay before

00:52:28: World War two Several presidents at The American Economics Association I believe i mentioned this In a book um with the very well regarded Index Of leading indicators To decide whether or not There's gonna be A recession Or Not Was invented by Institutionalists.

00:52:44: the National Bureau of Economic Research, which is still... The official organization to decide whether or not the

00:52:50: U.S.'s

00:52:51: expansion and recession invented by institutionals!

00:52:54: So it was a very popular school thought.

00:52:58: Then we have World War II And coming out of World War Two There's already some anti-communist kind of stuff before World War two But man afterwards.

00:53:08: Now We've got the US versus Soviet Union in China And with McCarthyism and there was very clear, many books written on this that taxed on academic freedom.

00:53:21: And if you were not a pro-capitalism then you exposed yourself... You became very vulnerable!

00:53:32: Not all neoclassicals are described themselves as liberals.

00:53:38: Liberals in the US, sort of sorry for

00:53:41: U.S.,

00:53:43: so like progressives maybe slightly left-of-center...

00:53:46: Right on social issues and economic issues.

00:53:53: they you know I don't we could argue with them or whether not that's a left-leaning position.

00:53:58: he really wiped out all these schools have thought there were extremely pro capitalism.

00:54:02: And um We never recovered from Nowadays, you know that the path dependency really shows up in these journal rankings.

00:54:12: Yeah That which by the way we're in the middle of a conversation at my own department about this.

00:54:18: Which is exhausting and So so these rankings emerge during this period of oppression.

00:54:27: And now You Administrators especially get obsessed with rankings, you know we have to be up here.

00:54:34: We're gonna track students and so forth.

00:54:36: And even though the Cold War is over although then had thatcher and Reagan Afterwards Then we still have the results of it.

00:54:47: there was no debate.

00:54:49: That never happened in.

00:54:51: nowadays Students almost never hear about any other school of thought, other than the mainstream.

00:54:58: So they have no idea.

00:54:59: so you alluded to this earlier.

00:55:01: uh these self-selection that takes place that...the people that I mean i don't know how else to word this we end up with one kind of person as economics majors and they tend to be white males.

00:55:16: um yeah not all them obviously but ...so then they never get a chance.

00:55:23: Now, at my university right now students are required to take the contending perspectives class.

00:55:30: Lord knows if they'll keep that after I'm gone and I'm gonna retire most in five years it will probably go away.

00:55:38: then.

00:55:39: Oh!

00:55:39: At Cambridge It was just announced...I don't know If you saw this on your email or not.

00:55:44: They have a class On different schools of thought..they're about to not only get rid but cancel the class that was already put on schedule for fall.

00:55:55: So Cambridge, Keynes' home is also going in the same

00:55:59: direction.".

00:56:00: You know, you mentioned Joan Robinson.

00:56:07: If a woman economist I would have loved to read about John Robinson when I was studying economics and didn't get too.

00:56:13: she was sort of carrying on the Keynesian tradition at Cambridge And there were these... There's this point where it was like quite heated debate between the Cambridge School in Cambridge and Cambridge Massachusetts.

00:56:25: I

00:56:26: understood that also, so that was a victim of neoliberalism.

00:56:30: So you mentioned Reagan and Thatcher coming in And it was actually under Thatcher that school was defunded.

00:56:38: It wasn't just sort of the Marxist purge In The US.

00:56:40: we had the Neoliberal Purge which is something i wanted to pick up on Which i was slightly surprised by.

00:56:48: You didn t talk about the Montpellarans society.

00:56:52: That opportunity came because of also what was happening in the Cold War.

00:56:59: But we do know that the Mont Pelerin Society, you know?

00:57:03: The sort-of birthplace of neoliberalism... Also very well funded by some major wealthy elites to help get some of these academics like Friedrich Hayek who would go on to advise Thatcher Like Milton Friedman Who Would Go On To Advise Reagan Into These Sort Of Seats Of Academic Power As Well.

00:57:21: So Yeah I don't Know If There Was A Reason That Was Not There.

00:57:24: Yeah,

00:57:26: well no there wasn't a reason.

00:57:27: I just um to me.

00:57:29: the roots were The Cold War.

00:57:32: yeah and you know that book you read is a second edition.

00:57:36: In addition i did a little bit of the cold war stuff?

00:57:39: I really expand this time.

00:57:41: okay put it for more evidence on That.

00:57:44: but now what i mean.

00:57:46: if i was gonna write an article On It i would have included all that as Well.

00:57:49: i will tell You There's A lot Of collusion That Goes on.

00:57:51: it's Actually Kind of Funny at the top of The Journal rankings, you know because these are almost all neoclassical journals.

00:57:59: At the top Of The Journal Rankings they're their Top Ten Journals.

00:58:02: Only Three Of Their Typical Top Ten.

00:58:06: Actually Practice Double Blind Review Which Means That Out Of The Other Seven Six Of Them Do Single Blind Review which means that the referee who was reading an article that has been submitted knows Who You Are and Knows Where You Teach.

00:58:25: That's not the way science is supposed to be done.

00:58:28: And you know dang well, it is influencing them.

00:58:31: The other that seventh one is only by commission.

00:58:34: they ask you to write stuff for them.

00:58:36: But so oh these top ten journals.

00:58:38: this is the place-to-be You know right?

00:58:40: These are these are the most scientific Objective journals.

00:58:45: I don't even practice double blind review which is the gold standard of how you know scientific research is supposed To Be Done.

00:58:52: So anyway, I've been pushing out a lot in our department meetings from the people that are like to be using this list.

00:58:58: That's interesting to know because something i did pick up on for your work and also...I think i saw some statistics on us as well elsewhere And I don't know if it's sort of the heterodox schools, all these different schools that we've been talking about which are not neoclassicals.

00:59:12: Sort of are united in this kind being left out.

00:59:15: but there is more collaboration and also more attempts to engage with the Neoclassicles whereas i think in other direction its almost non-existent.

00:59:24: Its one or two percent If anything.

00:59:27: Quite right.

00:59:29: They have nothing to gain from reaching onto us.

00:59:36: They don't know we exist.

00:59:38: Yes, I mean yes

00:59:40: they've never even heard.

00:59:41: that might have heard of Marx or what?

00:59:43: That was a dead guy years ago feminist economics.

00:59:48: They had some idea it has to do with women which is not really the case.

00:59:52: So

00:59:54: maybe we can pick up there on feminist economics because you know part of this inertia that You talk about.

00:59:59: i think Maybe partly explains their work.

01:00:02: you know, why it's hard even for more developing schools of thought like feminist economics.

01:00:07: Like ecological economics also to get away in given what we've talked about the fact that economics is such a monoculture and so male driven The fact they're so little engagement with feminist economics seems pretty wild.

01:00:24: but maybe there are feminist economies isn't just women reject the idea that economics can be value free and objective.

01:00:35: And I argue, actually it should about making recommendations so-called normative versus positive—and we didn't really go into that.

01:00:42: but often neoclassicals would say that we're doing positive economics or very objective analysis —but they said that economics should be about improving lives.

01:00:50: That sounds to me really fundamental!

01:00:54: Is not only school maybe ecological?

01:00:57: Some of your schools are going more in this direction.

01:01:00: We should be, you know what are we doing if we're not trying to make people's lives better rather than some sort of abstract goal of economic efficiency?

01:01:10: Is that would you say is one the core assumptions.

01:01:14: Yeah I think that the institutionalists very much feel their way too and me.

01:01:21: there was so much overlap between the institutionalist in the feminist economics And a lot my favorite feminist economists were describing themselves as institutionals.

01:01:32: Um, but you know in a sense if we're gonna be Charitable to people with whom?

01:01:37: We do not agree.

01:01:38: Yeah even the neoclassicals think that's what they're doing.

01:01:42: They think that they're Doing things to try and make peoples lives better.

01:01:45: all right.

01:01:46: so You know we would just say yeah But you're not.

01:01:49: uh, you Know I think that in fact when i've talked about this In class So you know one thing That I think unites all schools of thought And perhaps it's a place where we can you know, sort of reach out to each other is that in general all schools have thought are about the um welfare of the average person.

01:02:08: Capitalism was never supposed to be about the rich.

01:02:10: they were already the rich.

01:02:11: now did it turn out to be like that when we twisted and make it into something new?

01:02:16: And we can use it as a defense for free markets which are not really free at all but which are being dominated by a few industries.

01:02:25: But sense, capitalism is supposed to be about the average person.

01:02:31: You know that the invisible hand is helping you when you go to the butcher or whatever.

01:02:35: so in that sense.

01:02:37: but then uh...you get back to the positive versus normative.

01:02:42: The positive economics says well I'm just describing it way the economy works.

01:02:45: i am not making a value judgment here which of course is impossible and the institutions say its impossible And the feminists say It's Impossible.

01:02:54: No, and while we're at it to me.

01:02:57: Okay So let me back up a little bit and say something about the book.

01:03:01: First of all I never intended directly.

01:03:05: We were teaching this class At my university Texas Christian University.

01:03:09: when i go To The Edward Elgar booth at the conference That's that's a publisher And A gentleman named Edward Elgarr is in charge so he's there?

01:03:18: Do you guys have a Book on This subject right here?

01:03:21: i'm using one for You already but It' s twenty years old I swear to you, it was like a Jedi mind trick where he said to me.

01:03:30: You need to write this book and so i walked away having decided To write a book on this which i had with nowhere On my radar.

01:03:38: um i Had been the head at one point of The international confederation Of associations for pluralism in economics Which is a group For all those of us that feel you know exiled.

01:03:50: uh So i had been And I do have a field in the history of economics, and I do know more than one school of thought.

01:03:57: But man, I don't know that much about Marx or about feminism nor about ecological

01:04:02: economics.".

01:04:03: So with that as background...I said all right!

01:04:06: Imma write the book.

01:04:06: while i sat down and started writing on The Plane On The Way Back took several years.

01:04:10: obviously One of things I decided was.. ...I didn't want my book to be propaganda.

01:04:16: so what I have to do is I have send every chapter.

01:04:21: I sent the Marxist chapter to a famous Marxist.

01:04:24: I said, The post-Kangian Chapter off...I send every chapter after somebody in that school of thought for them to

01:04:29: critique.".

01:04:30: The last chapter was a feminist one and Gillian Hewittson and Janice Peterson read it for me And i can still remember Gillians words John!

01:04:38: I'm sorry but I fundamentally disagree with you.

01:04:42: So uh.. I got back made all changes.

01:04:46: they're like okay now no this is pretty good.

01:04:48: And one of the things I said wrong was that it really isn't a feminist economics.

01:04:54: There's like, you know, feminists from Marxist perspective, feminist from institutions' perspectives and they disagreed.

01:05:00: They said no there is a feminist perspective.

01:05:04: so i rewrote whole chapter based on that to their satisfaction.

01:05:10: So that's a long way up getting around too.

01:05:13: To me.

01:05:14: what feminist economics about is agency.

01:05:19: When we say schools of thought are about trying to improve people's lives what I get What really jumps out at me?

01:05:26: Was really focused on differently in the feminist economics is.

01:05:30: I want to give you enough power over your own life In a way that you can now affect the outcome whether that be because you're woman first of color or You know, but ethnic background whatever Whatever The reason it our goal here.

01:05:45: when you said earlier about uh, economics for what?

01:05:51: What's our point?

01:05:52: and instead people in specifically about giving them agency.

01:05:56: About giving them power.

01:05:58: Uh And so like I said that was the last chapter i had checked over it.

01:06:01: That was the first edition.

01:06:02: I didn't have the ecological chapter yet.

01:06:04: um It was so painful but it came out much better after they After they had to look at it and that was my takeaway.

01:06:12: uh complicated a lot of other things in feminist economics but I really like that.

01:06:17: if i want to say something that distinguished it from the others uh,I would say agent.

01:06:21: Okay wonderful yeah thank you.

01:06:24: and um Yeah, I also found it very helpful.

01:06:28: We'll be having a Feminist Economist as well is part of this series so we can dig deeper into that.

01:06:34: but just the point you picked up on there and the fact... This happens in mainstream or neoclassical economists will sort-of say feminist economics?

01:06:45: Well its not really economics, its sociology.

01:06:49: It's hard honestly to conclude sexist environment.

01:06:57: If you're seeing feminist economics, what your doing doesn't count?

01:07:01: I just want to make sure that we don't miss out on ecological economics because this was a new chapter in your book and which have found interest as well.

01:07:09: it says something... I guess back at the point where we need to be updating our theories based on best information clearly is that we are an ecological crisis.

01:07:20: Um, so if we say that sort of feminist economists would see you.

01:07:26: We have to understand...we had to look beyond GDP and account for care or uncured work on paid work I think?

01:07:32: That's a core argument they make.

01:07:35: Ecological economists are seeing the same about nature right?

01:07:38: We can't discount nature which is one problems with me with neoclassical models.

01:07:45: Yeah!

01:07:45: The ecological stuff uh..that was most depressing chapter.

01:07:50: I wrote

01:07:51: this.

01:07:52: Getting in touch with Clive Spash, anyway very dynamic individual and i got him touched with Richard Norgaard who is at Berkeley on the fundamental starting point for as you already said earlier or ecological economics is that there are natural laws Adam Smith but not These are the laws of thermodynamics and the fact that the planet can only take so much waste.

01:08:22: And I love, don't remember where I read it now?

01:08:25: I cited in a book—I came up with what this citation is now —that capitalism... ...is like growth for growth's sake which is the philosophy of cancer cell.

01:08:36: So, growth-for-growth-sake is why it drives capitalism!

01:08:43: As an economist Thinking, oh yeah grow.

01:08:46: That's what we need to generate more income and you know More goods in services and so forth.

01:08:52: but the planet a the planet can only take so much.

01:08:55: And b there's lots of things that okay.

01:08:57: So I've had this cell phone good lord i don't know for ten years now?

01:09:02: I Don't need another one.

01:09:03: I just don't need it.

01:09:05: But the cell phone industry needs me to need Another one.

01:09:08: uh and so he was going back To be institutional stuff.

01:09:12: There's a rule here, a rule in place to our society that unless they can sell more of these cell phones then they have go out into business.

01:09:20: So there being driven by something not so many problems are society don't has be because bad people.

01:09:27: it could be the good organization or bad system.

01:09:30: and so this system is generating you know more growth uh...and its impossible maintain us.

01:09:37: we know the answers We Know What To Do.

01:09:41: I shouldn't say it's not complicated.

01:09:44: It is just that the biggest violators are people who have the least to lose because they talk about climate apartheid where we can build walls and protect ourselves from all of our climate migrants, reduction in income but... We need a new system.

01:10:07: The neoclassicals are like, well we need a tax on carbon.

01:10:11: Oh

01:10:11: okay I don't have anything against doing that but that's not gonna do it.

01:10:17: We need to have a system.

01:10:18: That is just like in the household where as i said earlier when A dishwasher and washer dryer were invented It did NOT cause someone In the household To become unemployed.

01:10:31: They got to Have more leisure time and social interaction, it should be something that we should place high on our list of priorities in society.

01:10:41: And we don't!

01:10:45: We show off to each other about how much we've worked.

01:10:47: you know?

01:10:48: I was exhausted this week...I must have worked sixty hours....that's a bad

01:10:51: thing!!

01:10:52: Why should our society work that

01:10:53: way??

01:10:54: On top everything else is making the climate crisis even more terrible.

01:11:01: No, I think so.

01:11:02: And this is where there are many good quotes.

01:11:04: but you sort of mentioned that the system we're in essentially wants us not to be satisfied, like we can't be satisfied.

01:11:13: Which goes against what new class goes as you say clean-to do.

01:11:16: they're trying improve the average person.

01:11:17: there are not really.

01:11:19: it's really just about the GDP and not how that's distributed in.

01:11:22: obviously Not the impacts but um You know We could talk a lot.

01:11:27: I'm actually going to have Clive uh As well But i've did Really appreciate That chapter.

01:11:31: And so maybe coming Actually To The young people because I think we Can build on that one of them.

01:11:36: One Of the points you also make is when you talk about the difference between environmental economics and ecological economics, environmental being within the classical school.

01:11:44: So it's not that you can't learn about climate change in the environment and mainstream courses but your taught only to see really as kind of a market failure something we can price are actually changing this system.

01:11:55: so... To me.. You know It does feel like if we want young people be empowered To help change these systems, we have to also give them the tools.

01:12:05: And I feel that's something that we really ought think about and see this actually knowing some environmental economists who are like...I interviewed quite a well-known one recently will be posting it soon fully committed, fully agrees.

01:12:21: they're doing something positive but within framework which evidence suggests is not going enough if you stick with markets in capitalism.

01:12:31: so Having said all that, where can we go?

01:12:34: You mentioned it.

01:12:35: That you think when you retire there's no one going to be there.

01:12:38: so what are you doing at Texas and What do you think We Can Do To Change Economics To Reclaim It?

01:12:44: Okay When

01:12:46: I was a grad student And this must have been about in nineteen eighty six I finished my PhD in eighty seven.

01:12:53: The University of Tennessee already had institutionalists.

01:12:57: Ann Mayhew and Terry Neal were two very well-known ones And may he was the chair of that apartment also probably, The best teacher i ever had.

01:13:06: I still designed my exams after how she wrote her tests.

01:13:11: They had just hired at university tennessee paul davidson who?

01:13:15: Was the number one post-cainzian economist in the u.s At least in the us if not world and already been reading his stuff Already decided on want to be a post-Cainzians.

01:13:26: then they hired him.

01:13:26: oh And Then the first speaker they had command was a guy named Alfred Eichner, I was the big fan of his.

01:13:33: So point being Chris Browne, a graduate contemporary at mine.

01:13:39: he and i were invited to go out for lunch with Terry Neal and Mayhew Paul Davidson in Alfred Echner!

01:13:45: And we're like wow so we didn't say much.

01:13:48: you just sort of sat there listening right?

01:13:50: You know what they said.

01:13:52: remember back when we thought we could make a difference then And I don't want to hear this.

01:13:56: That's not what...I'm just starting

01:13:59: and

01:13:59: you're telling me that these heroes of mine are talking about, remember back when we thought it could make a difference than we did?

01:14:05: Okay well so two things about them.

01:14:08: one is they kept ideas alive for younger economists will find out about then into build careers on the whole MMT phenomenon with you know Stephanie Kelton.

01:14:21: Modern monetary theory sorry, MMT Modern Monetary Theory just for this

01:14:24: reason.

01:14:26: yeah that exists because okay.

01:14:28: so so Stephanie Kelten is in.

01:14:32: uh she's an accounting major in school and she takes a class econ class from John Henry.

01:14:37: oh he was a nice man.

01:14:39: he's passed away.

01:14:39: now it's a great guy.

01:14:41: and john henry says to her you're pretty good at this.

01:14:44: uh you should probably minor in economics.

01:14:46: Okay, so then she's doing her minor and then John Henry says to her you know You could probably make us into a major And then he ends up telling him go to grad school.

01:14:56: And now obviously She is a major force A New York Times best-selling author on economics of all things.

01:15:04: It's because John Henry who if you look at just John Henry's career Geez where did he move the needle policy wise?

01:15:12: Well not really much at all but he kept ideas alive, all right?

01:15:17: So one thing we can do is to continue trying to teach these other ideas.

01:15:23: Now it's being pushed out so that at the very least while they're pushing them now you could have people be exposed of this idea.

01:15:40: I don't know what we are doing in a classroom.

01:15:45: I was at a conference down in Austin, Texas.

01:15:47: It's about three hours away.

01:15:49: and do you know Jamie Galbraith?

01:15:52: No personally but by name of course.

01:15:54: yeah right

01:15:55: And his father John Kenneth was extremely famous and Jamie is outstanding economist.

01:16:01: So i'm talking to Jamie the conferences over him or drinking beer.

01:16:05: and I said to Jamie so what Do you think we can do to fix The econ discipline?

01:16:09: and he says oh it's lost its gone there's nothing We could do.

01:16:13: Oh, well why can't we do that?

01:16:14: He said, well stuff like this and he was having a conference where you had policy makers there to try to influence them.

01:16:23: And uh...he also said I said but what else are we gonna do?

01:16:26: What else were going to with our lives?

01:16:28: but fight for what we think is

01:16:30: right?".

01:16:30: And i actually found that very inspiring.

01:16:33: That yeah..you don't have t-.

01:16:35: I don't know if you've seen the series Andorre.

01:16:38: I love Star Wars and Andorres absolutely and rebellions are built on hope.

01:16:44: And I don't know, I might disagree with that a little bit.

01:16:47: It doesn't have to be.

01:16:49: it just has To me.

01:16:49: you think this is right and we Have two daughters.

01:16:57: my wife Is especially politically active.

01:17:01: i'm more of A placard carrier than other Than books or articles.

01:17:07: I like the thing our Daughters are who they Are because at The example We were It's important to also keep the ideas alive.

01:17:15: Keep them alive, so what you're doing... So I was reading the AAUP guidelines—the American Association of University Professors' Guidelines about protecting academic freedom and they had a list of things that you need to do —and one of them is don't be quiet.

01:17:30: Document!

01:17:30: Don't Be

01:17:31: Quiet.".

01:17:32: And at Cambridge right now where they are trying to get rid of student rebellions at institutions over the years where they have argued you need to teach us something else.

01:17:46: Now unfortunately, even if the professors in the department are sympathetic going back to rules... Yeah If they left and meet that journal ranking system They can't do.

01:17:57: what the students want them to Do is their successful career.

01:18:02: I'll say this This last thing about I think that, okay so i mentioned earlier.

01:18:09: I love military history and one of the things about these Soviet strategy in tactics when they were going to talk me about you know world war three was That they would push everywhere at once And wherever they felt like there weren't making more progress.

01:18:25: Okay now we reinforce them And not knowing what particular avenue is going to be the one where we succeed, oh two things.

01:18:36: Push everywhere, speed where might making some progress and reinforce that one.

01:18:41: Yeah At least keep ideas alive so another generation if it's our opportunity to rise up then its somebody else because they know how to do.

01:18:54: Thank you yeah I can only support.

01:18:57: That's also what we're trying to do here.

01:18:58: Maybe just, you know... To the point on The Student Rebellions maybe one thing that we do have as a tool is things platforms like this.

01:19:06: I didn't realise the significance of these rebellions when i was growing up.

01:19:09: What Was Happening?

01:19:10: We now have the opportunity to hopefully help people make those connections so that People from outside can support This!

01:19:15: Thats kind Of what Im Hoping to Do With This!

01:19:17: More People Can See the Significance of Getting These Ideas Out Because They Are Given Legitimacy by the system that they're in right now.

01:19:25: And if we want to have new approaches, We also have to get support from them.

01:19:30: But John thank you so much.

01:19:34: I realize we've gone way over time.

01:19:36: i really appreciate our conversation and hope will have some more.

01:19:40: Thank You for all That your doing!

01:19:42: Thank

01:19:42: you So Much.

01:19:43: I've been looking forward to this Really enjoyed it and happy To do It again sometime.

01:19:48: Wonderful Thank You Don Bye.

01:19:49: bye You've been listening to Invisible Handcuffs, Unchaining Economics hosted by me Katie Shields with Music Art and Production by Philip Melchers.

01:19:58: If you have enjoyed this episode please consider liking us on YouTube or your favourite podcasting platform and subscribing our website at TheVisibleHandcuffs.com where you can also find the show notes for more about the project!

01:20:11: With that thank-you.