How three students caused a global crisis in economics - A review of The Econocracy

Aditya Chakrabortty in The Guardian

In the autumn of 2011, as the world’s financial system lurched from crash to crisis, the authors of this book began, as undergraduates, to study economics. While their lectures took place at the University of Manchester the eurozone was in flames. The students’ first term would last longer than the Greek government. Banks across the west were still on life support. And David Cameron was imposing on Britons year on year of swingeing spending cuts.

Yet the bushfires those teenagers saw raging each night on the news got barely a mention in the seminars they sat through, they say: the biggest economic catastrophe of our times “wasn’t mentioned in our lectures and what we were learning didn’t seem to have any relevance to understanding it”, they write in The Econocracy. “We were memorising and regurgitating abstract economic models for multiple-choice exams.”

Part of this book describes what happened next: how the economic crisis turned into a crisis of economics. It deserves a good account, since the activities of these Manchester students rank among the most startling protest movements of the decade.

After a year of being force-fed irrelevancies, say the students, they formed the Post-Crash Economics Society, with a sympathetic lecturer giving them evening classes on the events and perspectives they weren’t being taught. They lobbied teachers for new modules, and when that didn’t work, they mobilised hundreds of undergraduates to express their disappointment in the influential National Student Survey. The economics department ended up with the lowest score of any at the university: the professors had been told by their pupils that they could do better.

The protests spread to other economics faculties – in Glasgow, Istanbul, Kolkata. Working at speed, students around the world published a joint letter to their professors calling for nothing less than a reformation of their discipline.

Economics has been challenged by would-be reformers before, but never on this scale. What made the difference was the crash of 2008. Students could now argue that their lecturers hadn’t called the biggest economic event of their lifetimes – so their commandments weren’t worth the stone they were carved on. They could also point to the way in which the economic model in the real world was broken and ask why the models they were using had barely changed.

The protests found an attentive audience among fellow undergraduates – the sort who in previous years would have kept their heads down and waited for the “milk round” to deliver an accountancy traineeship, but were now facing the prospect of hiring freezes, moving back home and paying off their giant student debt with poor wages.

I covered this uprising from the outset, and later served as an unpaid trustee for the network now called Rethinking Economics. To me, it has two key features in common with other social movements that sprang up in the aftermath of the banking crash. Like the Occupy protests, it was ultimately about democracy: who gets to have a say, and who gets silenced. It also shared with the student fees protests of 2010 deep discomfort at the state of modern British universities. What are supposed to be forums for speculative thought more often resemble costly finishing schools for the sons of Chinese communist party cadres and the daughters of wealthy Russians.

Much of the post-crash dissent has disintegrated into trace elements. A line can be drawn from Occupy to Bernie Sanders and Black Lives Matter; some of those undergraduates who were kettled by the police in 2010 are now signed-up Corbynistas. But the economics movement remains remarkably intact. Rethinking Economics has grown to 43 student campaigns across 15 countries, from America to China. Some of its alumni went into the civil service, where they have established an Exploring Economics network to push for alternative approaches to economics in policy making. There are evening classes, and then there is this book, which formalises and expands the case first made five years ago.

 Joe Earle, centre, with the Post-Crash Economics Society at Manchester University. Photograph: Jon Super

The Econocracy makes three big arguments. First, economics has shoved its way into all aspects of our public life. Flick through any newspaper and you’ll find it is not enough for mental illness to cause suffering, or for people to enjoy paintings: both must have a specific cost or benefit to GDP. It is as if Gradgrind had set up a boutique consultancy, offering mandatory but spurious quantification for any passing cause.

Second, the economics being pushed is narrow and of recent invention. It sees the economy “as a distinct system that follows a particular, often mechanical logic” and believes this “can be managed using a scientific criteria”. It would not be recognised by Keynes or Marx or Adam Smith.

In the 1930s, economists began describing the economy as a unitary entity. For decades, Treasury officials produced forecasts in English. That changed only in 1961, when they moved to formal equations and reams of numbers. By the end of the 1970s, 99 organisations were generating projections for the UK economy. Forecasting had become a numerical alchemy: turning base human assumptions and frailty into the marketable gold of rigorous-seeming science.
By making their discipline all-pervasive, and pretending it is the physics of social science, economists have turned much of our democracy into a no-go zone for the public. This is the authors’ ultimate charge: “We live in a nation divided between a minority who feel they own the language of economics and a majority who don’t.”

This status quo works well for the powerful and wealthy and it will be fiercely defended. As Ed Miliband and Jeremy Corbyn have found, suggest policies that challenge the narrow orthodoxy and you will be branded an economic illiterate – even if they add up. Academics who follow different schools of economic thought are often exiled from the big faculties and journals.
The most devastating evidence in this book concerns what goes into making an economist. The authors analysed 174 economics modules for seven Russell Group universities, making this the most comprehensive curriculum review I know of. Focusing on the exams that undergraduates were asked to prepare for, they found a heavy reliance on multiple choice. The vast bulk of the questions asked students either to describe a model or theory, or to show how economic events could be explained by them. Rarely were they asked to assess the models themselves. In essence, they were being tested on whether they had memorised the catechism and could recite it under invigilation.

Critical thinking is not necessary to win a top economics degree. Of the core economics papers, only 8% of marks awarded asked for any critical evaluation or independent judgment. At one university, the authors write, 97% of all compulsory modules “entailed no form of critical or independent thinking whatsoever”.

The high priests of economics still hold power, but they no longer have legitimacy

Remember that these students shell out £9,000 a year for what is an elevated form of rote learning. Remember, too, that some of these graduates will go on to work in the City, handle multimillion pound budgets at FTSE businesses, head Whitehall departments, and set policy for the rest of us. Yet, as the authors write: “The people who are entrusted to run our economy are in almost no way taught to think about it critically.”

They aren’t the only ones worried. Soon after Earle and co started at university, the Bank of England held a day-long conference titled Are Economics Graduates Fit for Purpose?. Interviewing Andy Haldane, chief economist at the Bank of England, in 2014, I asked: what was the answer? There was an audible gulp, and a pause that lasted most of a minute. Finally, an answer limped out: “Not yet.”

The Manchester undergraduates were told by an academic that alternative approaches were as much use as a tobacco-smoke enema. Which is to say, he was as likely to take Friedrich Hayek or Joseph Schumpeter seriously as he was to blow smoke up someone’s arse.

The students’ entrepreneurialism is evident in this book. Packed with original research, it comes with pages of endorsements, evidently harvested by the students themselves, from Vince Cable to Noam Chomsky. Yet the text is rarely angry. Its tone is of a strained politeness, as if the authors were talking politics with a putative father-in-law.

More thoughtful academics have accepted the need for change – but strictly on their own terms, within the limits only they decide. That professional defensiveness has done them no favours. When Michael Gove compared economists to the scientists who worked for Nazi Germany and declared the “people of this country have had enough of experts”, he was shamelessly courting a certain type of Brexiter. But that he felt able to say it at all says a lot about how low the standing of economists has sunk.

The high priests of economics still hold power, but they no longer have legitimacy. In proving so resistant to serious reform, they have sent the message to a sceptical public that they are unreformable. Which makes The Econocracy a case study for the question we should all be asking since the crash: how, after all that, have the elites – in Westminster, in the City, in economics – stayed in charge?

The Econocracy is published by Manchester University.

Be Warned, the Assault on JNU is Part of a Pattern

Romilla Thapar in Outlook India


There is by now little doubt that we are currently being governed by those that seem to have an anti-intellectual mind-set. This spells trouble for universities that are concerned with high standards of teaching and research.

JNU students and teachers protest the police action against JNUSU president Kanhaiya Kumar. Credit: Shome Basu

Recent events at JNU raise many questions pertinent to us as citizens of India. The questions have become imperative because it is apparent that many who govern us have little sensitivity to understanding the fundamental issues crucial to governance. For example, what are the necessary aspects of a democratic system, or how essential are equality and human rights as components of democracy to be taught and nurtured in educational institutions. Every articulation of thought and action is judged these days by its immediate political implications and seldom by the wider context of ethics, society and citizenship.

A recent example was the discussion on capital punishment where a handful of students had gathered on the JNU campus. Obviously the names of those recently given this punishment cropped up in the discussion, and very soon this became the dominant political aspect and the sole consideration, setting aside all other questions. Slogans took over in a confused fashion as happens in such situations and the serious issue of capital punishment was lost. Capital punishment is not just an issue of concern to nationalism alone. It involves aspects of ethics, morality, religion as well as the context of the punishment, and it is not in the least bit surprising that opinions differ on all these issues. The logical follow-up could have been a more extended discussion of the subject, from other perspectives, rather than the insistence by some of those present that this was an anti-national issue, and their then proceeding to have the government intervene and clamp down on it.

Sedition and secession

As has been said by almost everyone who has written on this event, the terms that the government uses in its charges against the JNU students are problematic and cannot be bandied about in a casual way. Charges of sedition, extremely serious as they are, nevertheless are slapped on anyone for virtually any critical opinion about the country. Even the dictionary meaning of sedition is enticement to violence and the overthrow of the state/government. As others have pointed out, there is a considerable difference between advocacy of violent methods and actual incitement to violence. But such distinctions seem to be beyond the comprehension of most politicians.

To maintain that a statement made about the possibility of a segment of the Indian nation breaking away is sedition, shows neither an understanding of the word nor knowledge of the historical occasions in the last half century when such statements were made with reference to other parts of India. This is not the first time that Kashmir has been mentioned as part of such a suggestion. There have been earlier threats of secession from other parts of the nation, such as Nagaland and Tamil Nadu, and the intention of establishing the Sikh state of Khalistan to mention just a few. Some others are not completely silent even in present times. Threats of secession are in part the way in which nationalisms play out in nations that extend over large territories and multiple cultures. It has to be understood as a process of change and debated rather than being silenced by calling it sedition.

The debate on sedition goes back to the early years of independence when the attempt to silence free speech was successfully resisted by the Supreme Court, (Brij Bhushan vs. State of Delhi and Romesh Thapar vs. Union of India). Nehru was in favour of expunging sedition as unconstitutional. Those were the days when democracy was valued and was nurtured. We should familiarise ourselves with the many occasions when sedition has been objected to and on valid grounds, and therefore consider its removal from the body of laws. Laws that can be easily misused should be reconsidered. Governance does imply taking an intelligent interest in the debates on the laws by which we are meant to be governed.

The first foray

Then there are those who, because they are critical of some aspects of the nation, are immediately condemned as anti-national. Taken literally this adjective would apply to a large number of Indians who are critical of various aspects of events in India. Governments turn by turn have described people as anti-national but the frequency of this accusation has increased in the last couple of years. It has been applied so often by the BJP that the word has become virtually meaningless, but not harmless, because it can be used to politically persecute a person. The ancestor to the BJP – the Jan Sangh party, when it was part of the government of Morarji Desai, subsequent to the Emergency – criticized the history textbooks written by some of us and published by the NCERT. We were accused of being anti-Indian and anti-national for the views we held on ancient Indian history. The government demanded that our books be proscribed. But in the election that followed the government fell, so the books survived.

Almost 25 years later, in the first NDA government the matter was taken up again. The then education minister, Murli Manohar Joshi and his BJP cohorts referred to the authors of the textbooks – and I was included in this – as not only anti-Hindu but also anti-national, anti-Indian, and academic terrorists of the worst kind. Enthusiastic politicians demanded that we should be arrested and punished for writing these books. Fortunately, the first NDA government did not take itself too seriously and did not go around arresting many teachers and students for being anti-national, largely because their definition of what was anti-national became a matter for ridicule. Anti-national for them was in effect a limited term, namely anti-Hindu.

Pathetic attempt

In the latest move of the BJP-RSS government pertaining to universities, the student union president who was arrested at JNU has been accused of being anti-national and indulging in sedition. He has been accused of raising slogans on independence for Kashmir and praise of Pakistan. The irony is that the student union president who was doing just the opposite of what would be regarded as anti-national and seditious and was trying to close the discussion, was the one who was arrested.

It is now being held, very much as an after thought, that the group that held the meeting were instigated by the Lashkar-e-Tayyaba. This is at best a rather pathetic attempt to institute a charge of terrorism with no other evidence but a dubious tweet. Does government evidence rely on tweets? And are dubious tweets enough to accuse a person of sedition ? This is not just a case of the government and the police being adamant, but it appears to be a well-planned strategy to destabilise JNU. There was just too much unusual alacrity in the way events moved. One can’t help but feel that somewhere along the line, the present government has lost its initial confidence in itself and is now resorting to unpleasant tactics. An example of this was the way in which JNU faculty and students and some media people were beaten up at the Patiala House Courtby a bunch of lawyers, said to be of the BJP, when there was to be a hearing of the case against the student union president. Are the courts of law now going to have to resort to fisticuffs?

Education as catechism

The ideology central to the BJP-RSS has no space or use for liberal thought. Education for such organisations means only what can be called a kind of catechism. This is a memorisation of a narrow set of questions rooted in faith and belief and an equally narrow set of answers that prohibit any doubt or deviation. The same technique applies to all subjects. Therefore educational centres that allow questioning and discussion are anathema and have to be dismantled.

Since what is referred to as Hinduism does not confine itself to a single sacred book, nor is there exclusive worship of a single monotheistic God, the notion of blasphemy so crucial to the Christian and Islamic religions has little application to the Hindu religion. However, in the Hindutva version of Hinduism, aimed at establishing a Hindu Rashtra – a state where Hindus are the primary citizens and the purpose of governance is to uphold Hindu principles – the notion of a kind of blasphemy is applied to those that are critical of Hindutva that is equated with the Hindu Rashtra. This is then equated with the nation. Criticism of it is described as anti-nationalism so such criticism can be silenced. To call criticism as “hurt sentiment” is now much too mild. It has to be treated as blasphemy/anti-nationalism, and treated as a serious crime. This helps to convert a secular state into a religious state, which ultimately is the aim of the RSS.

The BJP-RSS government currently in power is unable to have a dialogue with an institution such as the JNU and other similar universities such as the Hyderabad Central University. The emphasis from the start in such universities has been on questioning existing knowledge, exploring new knowledge and relating knowledge to the existing reality. This is the very opposite of merely handing down selected information without questioning it. This is a problem that the BJP-RSS government has to face with a number of pace-setting prestigious centres of learning that do not substitute catechism for learning, and instead demand the right to debate a subject that may be thought to be blasphemous to the nation as defined by Hindutva. So the alternative is to try and dismantle such centres of learning by creating disturbances. This will eventually prevent them from functioning as they are intended to do.

Method in the madness

There seems to be something of a pattern in the organisation of such disturbances, since there is a repetition of the same procedure in each case. The similarities are curious. The first step is to ensure that the person appointed in a position of authority in the institution is relatively unknown, as have been many of the directors, chairmen, and vice-chancellors appointed in the last 18 months in various institutions. They are relied upon to follow the orders of the government. The next step is to locate a group preferably debating contemporary issues, and instruct the local AVBP cadres to create a confrontation with such a group in the course of the meeting, and the confrontation could even result in some violence. This allows the ABVP to claim that they were attacked first and for a complaint to be made to the local BJP politician, readily to hand, who then takes it up with the minister, and who then orders the authority concerned to rusticate the students, to bring the police into the premises and arrest the non-AVBP students, irrespective of whether or not they were involved in the confrontation.

The normal university reaction in the past has been not to allow police on the campus or to make arrests. The exception was during the Emergency. Generally, a committee of enquiry is appointed by the university. It is treated as an internal matter of the institution. Police action can only be permitted if there is a serious breach of law. A group of students shouting slogans is not a serious breach of law. What was done in the JNU reminds me of the saying “to bring a sledge-hammer to crack an egg.” The intention was obviously not just to crack the egg but to smash it completely. But it looks as if the egg is now on the face of the government.

One might well ask why the BJP-RSS is so bent on dismantling institutions of learning and converting them into teaching shops. Is it the premium on conformity and out-of-date knowledge that the BJP-RSS would like to define as education? Is it the kind of education that is given in the shishu–mandirs and madrassas that is seen as ideal in form? Interestingly the institutions that come under attack are those that are associated with freedom of thought, the asking of questions, the advancing of knowledge. Those that conform to education as learning by rote and providing supervised answers are not interfered with all that much, since this pattern of learning fits into a catechism style.

There is by now little doubt that we are currently being governed by those that seem to have an anti-intellectual mind-set. This spells trouble for universities that are concerned with high standards of teaching and research, and it would seem beyond the comprehension of those governing. One can only ask why the government is so apprehensive of intellectuals? Is the government being ham-handed with universities because from the minister down they fear the potential power of those universities that encourage their students to think independently? Or is this a deliberate way of creating a general ambience of fear in the institutions? The existence of such a fear would make it easier to impose syllabi, courses and methods of teaching emanating from the think tanks of the RSS. Not to mention that it makes those employed in universities more pliant.

A culture worth fighting for

For those of us who were among the founding members of JNU, the events of the last few days at the university is a moment of a far bigger intellectual and emotional crisis than has ever happened before in its history. JNU was founded on the principles of democratic functioning, both administratively and in the content of the education it imparted. It meant a generally positive relationship between teacher and student, and a frequency of free discussion both on matters academic and on the world we live in. It meant more rigorous training in the subjects taught and this experience improved the work both of teachers and students, and all of which was underlined by an insistence on critical enquiry. We were conscious of stretching our minds to beyond what was readily known and in encouraging students to look beyond the obvious. It was these factors that made it into a prestigious university, a trend-setter in many subjects that were taught in other Indian universities. It was again these factors that gave it international recognition, on par in many subjects with the best universities outside India.

This of course is the opposite of the rather pathetic BJP-RSS version of what is meant by education at any level, judging by the views of the HRD ministry. To see the BJP-RSS government trying to annul what we have achieved in JNU and reduce the university to a pedestrian teaching shop, is like having to see the work on one’s lifetime being systematically destroyed. Many of us chose to work in JNU rather than take up lucrative positions in universities abroad, because we had a vision that we could make it among the best academic centres located in India. And that excellence it has experienced. As one academic who lived a substantial part of my life working in the JNU, and contributing to this vision, the hostility of the current government to the JNU leaves me with a sense of despair and sadness for the future of universities in India. However, I must add that experiencing the protest of the JNU community against the attack that has been mounted on it, does make me feel that perhaps the values that we had tried to inculcate in its early years have taken root. When JNU recovers from the trauma of this attack it is likely to be even more committed to the values for which it was created – excellence not only in intellectual enterprise but also in endorsing a humane and open society upholding the rights of every Indian citizen.