I was talking to some English PhD students today, and when the conversation turned to economics they were dismayed to learn that no one in “top” economics departments ever read Marx, much less understood any of his theories. Then I was caught off-guard when I was asked, “so what thinkers do most students in economics programs read?” The student just assumed that we must read someone. But as far as I can tell, and the answer I gave, was “none.” The training of economists in the “top” programs does not entail any reading of books.
My first reaction was: top economics departments? You think this only applies to "top economics departments?" My second reaction was: you mean English PhD students understand Marx's theories? Could I get one of them to explain coherently the labor theory of value, please? Or if not explain it, point me to a reliable way of identifying the value of labor as opposed to the value of capital across all the production processes that exist today (under my naive assumption that incentives matter so there probably has to be some return to capital if we're hoping to deploy it in a way that serves us all well)? My third reaction was: OK, so how much time have those English PhD candidates spent reading non-Marxist economics?
My guess is very little for all the reasons Dufresne cites, not least that the mathematization of economics has rendered much of what we do incomprehensible to English majors. Dufresne's post reminded me of how I came to read both more on economic theory and the history of economic thought and more on topics traditionally viewed as outside of economics.
As a new Assistant Professor, I had been dutifully traveling across campus once a year to a Divinity School to deliver a single lecture in a course for Masters of Divinity students on work and vocation. The questions I routinely received indicated that the students were very familiar with Marx, at least the class consciousness, class struggle Marx, but completely unfamiliar with, say, Adam Smith or Amartya Sen.
I remember shocking them once by suggesting that Walmart was not all bad. My point was that consumers benefit from lower prices. It frees up money to be spent on other things or saved for children's education (for example). It's true that I then went on to point out that dumping your employee's health insurance costs on taxpayers and local hospitals' charity care as well as any distributional effects should be included in the final calculations of net benefits. But I also pointed out that on the plus side Walmart's $4/month generic drug program has been a boon to the poor and near-poor uninsured and to those who provide care to them. It's not entirely clear that Walmart is irrevocably on a journey to the dark side of the Force.
What was remarkable to me was that they had not considered possible positive aspects of market activity (free or otherwise). Don't get me wrong. I'm no defender of Walmart, but I expect that if someone is going to read Marx, they should also read the other "side." Otherwise, we risk throwing out the baby with the bathwater so to speak.
As a result of my brief forays to the Div School, I was eventually offered an adjunct appointment and an opportunity to teach a tutorial one summer. In it, I and four very bright, inquisitive, open M.Div. students explored "social justice" aspects of economic thought and theory.
One of the best parts of the course (and one of the major challenges) was figuring out how to relate economic thought to Christian thought in nuanced ways, when I had only a very superficial knowledge of Christian thought (and, at that time and maybe still, a very superficial knowledge of economic thought).
I developed a topic called "Loaves and Fishes" that explored efficiency-equity trade offs (see Uwe Reinhardt's third piece on Arrow's Uncertainty and the Welfare Economics of Medical Care for a sense of that discussion). The topic title reflected what I consider to be one of the most efficient allocations ever reported: five loaves and two fishes used to feed a multitude. We had readings and discussion about the ways that markets, when they work, allow us to feed more people with less.
There was a topic called "Water into Wine" in which we discussed the ways in which commercial exchange using a (money) numeraire allowed anyone to "change" the money-metric equivalent of a case or two of Italian sparking water into a not-too-shabby bottle of wine.
Another topic called "As you do to the least of these..." covered and critiqued economists' conceptualizations of altruism, Smith's concept of sympathy or fellow feeling, and Sen's distinction between deontological commitment to another's well-being and a more egoist conceptualization of altruism derived from interdependent utilities. We also discussed Rawl's difference principle, of which the students were already well aware, because it seemed to fit so well with the topic title (and it gave me an opportunity to discuss some of the economic aspects of it).
We concluded with readings on trade liberalization, globalization, and microfinance, for which I'm still looking for a clever title. If I ever teach the tutorial again, I'm going to add a topic called Moneylenders in the Temple, that deals with finance and uses the "Temple" as a metaphor for the public interest or the social fabric.
It was really striking how little my M.Div. students knew about economics or how economists think about the world or about the potential benefits of efficiency or (and this is most important, I think) about markets and market failure. They had no clue how to have a meaningful discussion with anyone who was wedded to a free market ideology (think members of their future Vestry or Board of Elders on whom they will depend for their salaries and their advancement in the church hierarchy). I don't mean to imply that such discussions can always be meaningful, but my own experience has been that one must be pretty conversant in both the benefits that may accrue from market exchange, the characteristics of markets under which the benefits may be realized, and the ability to recognize a market failure when it occurs (as it frequently does), if one is to have any hope of holding up the other end of that conversation.
It was also surprising how they had all formed opinions about Adam Smith without ever having read him. I suppose this is not so surprising given that many card-carrying economists have done the same (myself included up until about 10 years ago). By the end of the course, I believe I had helped them to develop a more informed view of a man who almost certainly did not believe that self-interest was all that was required for a moral life or a moral society.
A year or two later, I was offered an adjunct appointment at a business school, to teach MBA's about ethical aspects of economic thought and theory. None of the MBA candidates (except for one Eastern Orthodox priest) had heard of John Rawls, but they were all pretty sure they knew everything they needed to know about Adam Smith, self-interest, and (I'm sorry to say) Ayn Rand. You can get a sense of the overarching theme of the course by reading my essay on The Market for Morals. We also read, write, and talk about market failures and how they facilitate the exploitation of the unsuspecting by the less than ethical. (See my essays here or here, for example.) Or the more mundane problems of monopoly power or private interests not aligning with public interests (here and here, for example). In addition, we cover several case studies. The Ford Pinto case with it's unethical use of cost-benefit analysis is always a shocker for them as is Dennis Gioia's personal account of it. I also present Roy Vagelos' exemplary and successful effort to produce a cure for river blindness for a population that would never be able to justify the costs or investment. Vagelos points to an oft-overlooked positive side-effect of ethical firm behavior: employee morale. Merck also attributed favorable trade relationships with Japan (before 1994) to their ethical decision to help the Japanese manufacture Streptomycin to treat tuberculosis after WWII. (This isn't an unqualified endorsement of Merck, we also cover the Vioxx episode that is so very well described by Steve Ziliak and Deirdre McCloskey in their book, which I use as a basis for a discussion of ethical aspects of statistical inference and uncertainty in decision-making.)
I have since changed institutions and now have a joint appointment at a different b-school. I'm in the process of revising the b-school course syllabus, which I think is why Dufresne's blog post captured my attention. None of us read enough outside of our own field and that includes English PhD candidates who presumably understand Marx better than Econ PhD candidates (or me). It certainly includes me. I'm reminded of this every time I prepare for this course.
What I have found by venturing outside my "comfort zone" is that there is a remarkable wealth of literature within economics, much of it published prior to, say, 1980, along with a lot of more recent work, especially since the financial crisis. One benefit of the financial crisis IMHO is that it has shaken us up and opened us up. That may have very long-lasting positive effects for us all. There is also a rich, rich literature in the history of economic thought and in journals that combine economics with philosophy and/or ethics. And I've discovered books. Books are often where creative, thoughtful people write about stuff that for various reasons won't make it into journals.
This is a very exciting time to be an economist who is interested in ethics and who would like to see markets (when they work) remain the basis of our economy. I only wish I had more time to read or could go back and do it all again, but with more attention to history and economic thought.