London, 14 September 2017. Promoting Economic Pluralism, an economic educational reform group is launching with the OECD an accreditation system to promote a more pluralistic approach to economics in academic institutions, to counter the ‘group think’ responsible for the financial Crash.
As we move towards the tenth anniversary of the worst financial crash since the 1930s, people are asking: ‘Have we learnt the lessons of the crash, so we can prevent it happening again?”.
Promoting Economic Pluralism (PEP), a pressure group working to promote innovation in economic thinking, believes the answer is ‘no’ as there is too much ‘business as usual’ thinking. Many of those informing key economic decisions have only studied neo-classical economics and are largely unaware of, or disregard, more modern economics, which takes behavioural, institutional, complexity and ecological aspects into account.
Gabriela Ramos, OECD Chief of Staff and Sherpa to the G20 who also leads the work of the New Approaches to Economic Challenges (NAEC) at the OECD, says. “We need economists trained to use a wide range of analytical tools to better capture complex realities. This will help us develop new approaches to the economic challenges we face. Hence we are supporting this initiative to look at how economics is taught, and how to bring different perspectives and disciplines to enrich our understanding and results”.
Not long after the Crash in response to the Queen’s question to the economists, members of the British Academy, the UK body for the humanities and social sciences, gave their view that “Financial and economic models were good at predicting the short-term and small risks, but few were equipped to say what would happen when things went wrong as they have”. They stated that ‘It is difficult to recall a greater example of wishful thinking combined with hubris’.
“The current economic paradigm remains unfit for purpose despite widespread pressure for reform from both students and employers”, says Ian Harwood, a City macro-economist and Councillor at the Society of Business Economics, and PEP Trustee. “Employers have argued – and continue to argue – that the teaching of Economics at the undergraduate level needs to be radically reformed with the adoption of a pluralist approach constituting an essential ingredient”.
TUC General Secretary Frances O’Grady said “The TUC welcomes the growing demand for a different approach to economics. We hope that PEP can help achieve some of the change needed. Academic economics needs to restore its reputation after the financial crisis. To start with, it should escape the groupthink about financial and labour deregulation that helped contribute to the crash, and reflect about how austerity has worsened the aftermath. In future, economics needs to pay more attention to the everyday experiences of working people. Businesses, government, NGOs and trade unions will all benefit from employing economists trained in a range of skills and theories who can bring a fresh perspective on today’s challenges.”
On 14 September, Promoting Economic Pluralism will be launching an accreditation system for pluralist economics courses. The launch is just one of a series of events organised by PEP, the Royal Society of Arts, and a network of other organisations to initiate a process to look for new answers that involve as many people as possible.
More emphasis needed on micro-economics, says PEP
While PEP welcomes the Economic and Social Research Council (ESRC), the UK’s leading economic and social research agency’s funding of a ‘Network Plus’ course to ‘Rebuild Macro-economics’, it points out that it is also crucial to address the limits of micro-economics, which impacts across government departments and policies.
At present PEP fears that most economists in the Government Economic Service, consultancies, trade associations, think tanks, etc. are in danger of ignoring new economic approaches. This means for instance that we don’t have the tools and analysis to adequately support the development of an industrial strategy, develop innovative new regulatory regimes post Brexit or assess large infrastructure investments in line with Treasury guidelines.
PEP believes that launching a dialogue on the need for an accreditation system for pluralist economics courses will support economics departments which are taking a more forward-looking approach, will encourage others to take those steps and build up new economic thinking.
The launch of the accreditation system takes place at 11am, 14 September at a workshop hosted by Gabriela Ramos, Ian Harwood and Ann Pettifor.
Place: Royal Society of Arts, 8 John Adam Street, London, WC2N.
For more details contact
Daphne Davies: firstname.lastname@example.org (media)/ +44 07770230251
Notes for editors:
This is part of a series of talks and workshops events: 11–18 September marking 10 years after the financial crash. Please go to: https://10yearsafterthecrash.com/ for more details.
Speakers at the events include: Alistair Darling, former Chancellor of the Exchequer, broadcaster Robert Peston, who broke the Northern Rock story; Eric Beinhocker, Executive Director of the Institute for New Economic Thinking, Oxford, Avner Offer, author and academic, Kate Raworth on Donut Economics, and Frances Coppola, financial commentator.