A Role for Heterodox Economists

This is my entry in the discussion of Chris Hayes' article on heterodox economists at TPM Cafe. It should appear early tomorrow. There are currently entries from Chris Hayes, Thomas Palley, Tyler Cowen, James Galbraith, Nathan Newman, Max Sawicky, and James Galbraith with a follow-up, and there are others yet to come. [Update: Here's the link to the post at TPM Cafe]

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Most of the points to be made about Chris Hayes' recent article on heterodox economists and their place  within the economics profession have been made here already, so I am going to take a bit of a different approach and talk about one of the heterodox economists discussed in the essay.

One of the first heterodox economists mentioned  is Michael Perelman:

I strike up a conversation with economist Michael Perelman in the hallway. ... Perelman, who is there for the EPI reception, works at the margins of the discipline; he is one of a few hundred self-described "heterodox" economists at the conference. ... I ask him about how he relates to the so-called mainstream of his profession. "It's a mafia," he says quietly, his eyes roving over to the suits spilling out of the Freedom to Choose room.

I first met Michael in the late 1970s during my undergraduate days at California State University at Chico where he was a faculty member. I never took a class from Michael, and that is part of the story, but I also want to use his example to talk about how heterodox ideas are expressed within economics departments more generally.

Here's what the department website says about him today:

...Michael Perelman, Professor of Economics, is the most prolific author in the Department of Economics at Chico. He enjoys teaching a wide range of courses including [principles of micro and macro], ... Economics of the Future ..., ...U. S. Economic History..., ...Economics of Big Business..., ...History of Economic Thought... and ... Marxist Economic Thought... His classes emphasize critical thinking about the application of economic thought... He likes to publish what is discussed in classes. To date, Professor Perelman has authored fifteen books.

"Although known for his radical views, Professor Perelman is widely respected throughout the campus. Dr. Perelman is a scholar of high productivity--he has a record of scholarly research, writing and presentations that is prodigious. Even more, his level of work has been consistently high since he joined our faculty in Economics in 1971." (Arno J. Rethans, Dean, College of Business)

The term "widely respected" is not one I would have used based upon my experiences while at Chico. Far from it. It seems things may have changed over time, and that would be nice for Michael - he earned it the hard way - but I wonder. I can't say how he is treated  by his colleagues today, but when I was an undergraduate at Chico I was told point blank not to take his upper division classes on Marxism, etc., by another member of the faculty, and I followed that advice. His ideas were not mainstream, not by a long shot, and they were sometimes belittled by other members of the department. I was told I'd be much better off spending my time elsewhere, especially with aspirations of graduate school.

I remember another instance. Chico would occasionally bring in outside speakers and somehow I got put in charge of creating the posters for the events through University printing. One poster I did was for a speaker Michael  brought to campus for a seminar and I didn't know what picture to put on the poster advertising the talk. So I asked another faculty member and was told, laughingly, to just find a hammer and sickle and stick that on there. So I did.

Unfortunately, the Soviet style hammer and sickle on the poster had nothing at all to do with the talk being given and Michael was not happy about the publicity. I felt kind of caught in the middle - I just did what I was told - but the tension between the "mainstream" faculty and Michael was very evident. He had little respect from his colleagues.

But you know what? Looking back, Michael was one of the few faculty who was continuously engaged in doing research, willing to give his time to students, one of the few doing what you expect of faculty. He has fifteen books! I can remember him taking the time to show me a detailed outline for one of his books on the boards in his office, and then I saw him work further on the outline day after day as he wrote each chapter. That was a useful example when I faced similar tasks myself later on.

Chico  doesn't have a graduate program and, though things may have changed over time,  in the late 1970s there wasn't much of a research requirement for faculty. But  Michael did research anyway (notice that he was at the AEA meetings). It's not the kind of research you will find in mainstream journals, and I don't know enough about it to offer an evaluation, but I think he deserves credit for continuing to do his work despite the lack of support from within the Department and from the profession more generally (here's a list of his books in Amazon, and he has a blog as well, Unsettling Economics).

Turning to the influence of heterodox economists more generally, as I look back and think about my days at Chico, I realize Michael had more influence over the Department than I understood at the time, and part of that was his active research effort. He brought in seminar speakers as I just noted and they would present non-traditional ideas. Also, Chico had a visiting faculty member one semester, I can't remember who it was, but I'm pretty sure Michael had something to do with it. I took a class on Comparative Economic Systems from the visitor that turned out to be a very valuable class, one where you stepped outside of capitalism and viewed it from a more philosophic perspective. The course gave me a perspective on economics that I wouldn't have had otherwise. So having heterodox economists on a faculty can shape the curriculum in other subtle ways.

More directly, I see Michael is now teaching the History of Economic Thought, and this is another place where heterodox ideas are expressed. I think of this course as, in part, "standard heterodoxy," as a place where some of these ideas can be preserved and discussed. There are some very fundamental criticisms of economists' approach to capitalism that come out of studying the history of thought. Is capitalism an apologetic for the existing income distribution? Do we eliminate the most important societal questions from our analysis when we push aside questions about the income distribution and focus only on production and exchange? That's just a start - there is lots to be learned from the "standard heterodoxy" that comes out of courses such as these, and heterodox economists can help to ensure that these types of courses remain part of the curriculum. There may be room for the small enclaves of the heterodox Jamie talks about at places like Harvard, but their presence at a typical state school is harder to maintain and history of thought courses are one place to take a stand (I might be biased).

Thus, heterodox economists have an important role to play in keeping these ideas alive within economics departments. As budgets are cut and universities are encouraged to cut the "fat," it is all too easy to see courses such as the history of economic thought as expendable when departments are forced to reduce their course offerings. That's understandable, we have to deliver the core curriculum from the standard paradigm as defined by the profession and that tradeoff works against courses that are the slightest bit out of the mainstream. But being understandable is not the same as being desirable. Too often economics is taught narrowly, as though there are no questions about the basic paradigm, as though there are no alternative views, and students graduate failing to ever ask the bigger questions or even understand that questions exist.

So how do we protect these ideas and keep them alive within economics departments, and how do we allow new ideas to come forward? One way is to try to keep history of thought courses in the curriculum, but that's too narrow, there needs to be other ways for alternative ideas to come forward. Those outside of economics departments can contribute, and they do, but that's not enough either. For all of you aspiring to pursue the heterodox path, to make sure that students hear alternative ideas, here's my advice. Get hired at the best place you can and get tenure first. We need you in economics departments, not just on the outside looking in, and we need you to be respected when you are there. That is going to require you to play the game and establish yourself, to prove that you understand the model you are railing against well enough to make original contributions on the research front.

The neuroeconomics literature has been successful in large part because it played the game within the standard framework. The papers were published in respected journals and, though there is resistance, nobody who reads the research can doubt that these are serious academic efforts. My colleague George Evans provides another example. He is a leader in the learning literature and he has challenged the assumption of rational expectations. But he has done so rigorously and through respected research outlets. Again, there is resistance to the challenge, but the ideas have been able to permeate the inner sanctum and gain a hearing (to some extent - I don't know for sure, but raising questions about rational expectations may be why he is not a member of the NBER despite his impressive research record).

We can complain all we want about how unfair the process is, about the cliques, about how unreceptive mainstream journals are to alternative ideas, and others here have expressed complaints such as these very well and very passionately. But no matter how valid the complaints, it's not going to change. If you want to be part of the discussion, to change things from the inside, you are going to have to earn respect first and that means publishing and getting tenure, at least in the academic world. Positions for heterodox economists are unlikely to suddenly appear, so you will have to start by working within the existing boundaries.

Then, once you've established yourself, once you have the freedom tenure gives you, branch out, push against the edges, fight for new courses in your departments or to preserve old ones, look for interdisciplinary opportunities in new hires, develop new paradigms and ideas, but do it with the intellectual rigor needed to allow the work to appear in journals, books, and to be presented at academic conferences. It won't be easy, and you will likely feel excluded, undervalued, and underappreciated (that's a reason to get tenure first, so you don't have to care), but if you think you are correct, then don't stop trying to find a way to place your work in places where it will get noticed.

If you choose the heterodox path, you will be on the outside, and you need to understand that going in. You might get lucky and gain respect over time, and if you make a really big splash economics departments may then start hiring people in the area, but don't expect that because it's unlikely to happen. At best, you might become part of a small group with common ideas and interests, but larger acceptance will be elusive (though not impossible). It will be harder to publish, your colleagues will wonder why you've drifted so far out of the mainstream, the work you do publish won't get the respect you think it deserves either within your department or in the profession more generally -- it's likely to be a frustrating experience on a lot of fronts. That's how it's going to be.

It's not an easy path, but there's an important role for the heterodox to play in the profession beyond that described above. It's never easy to challenge orthodoxy, but somebody has to ask new questions, look at things from new perspectives, and remind us of older unresolved issues; somebody has to challenge the established model and also challenge the vested interests that seek to preserve it. Most of the time, the existing model can be amended so as to withstand the assault, but even so, the process is valuable because it exposes and shores up weaknesses in the predominant paradigm. And more importantly, every once in awhile the heterodox are right - the existing model won't be able to overcome the challenge - and it is the willingness of the heretics to persevere in the face of so much doubt that helps to move the discipline forward.