Diversity of theories and methods offers students a broader range of insights and helps them see the difference between the map and the territory.
The primary purpose of academic education is learning to dissect important questions with the help of analytical tools. To be able to understand complex economic topics, a diversity of theories and research methods is needed. No single approach is able to fully capture all aspects and dimensions of the economy, so pluralism is not only useful but imperative. We therefore argue that economics education should have a foundation of pluralism: the side-by-side use of fundamentally different approaches to studying the economy.
The economic world is large and complex. To grasp its workings and many elements, we need to use different perspectives and methods as each enables us to better see and understand certain aspects. Furthermore, these different approaches can lead to starkly different insights even when the exact same aspect of the economy is studied. For these reasons, only using one approach can never lead to a full and complete understanding of the economy and using multiple approaches will improve our understanding.
The chapter starts with an overview of what pluralism is, followed by a section describing four common false or ‘straw men’ versions of pluralism. We then discuss the question whether the latest mainstream is automatically also the best version of a science. Then, we turn to
the reasons why teaching in a pluralist manner is important for the intellectual development of students. The chapter ends with some practical notes on how to teach in a pluralist manner and what challenges may occur.
“The world is better served by syncretic economists and policymakers who can hold multiple ideas in their heads than by ‘one-handed’ economists who promote one big idea regardless of context.”Dani Rodrik (2011, p. 134)
1. What We Mean by Pluralism
Pluralism is about looking at the world from a broad variety of vantage points (Fullbrook, 2008; Garnett Jr et al., 2009). In economics education, this means teaching perspectives that make different assumptions, focus on disparate economic problems, use different units of analysis, apply various methodological approaches, and have distinct ways of reasoning.
The Indian parable of the blind men and the elephant is a beautiful illustration of what pluralism entails. None of the men have ever come across an elephant before, and they can only conceptualise what it is by touching it. The first man’s hand lands on the trunk of the elephant, so he thinks it must be a type of snake. The second touches its ear, and says it is a fan. The third places his hands on a leg, and argues that that an elephant must be a kind of tree. The fourth man encounters the side of the elephant like a wall. The fifth man holds the tail and feels a rope. The last man feels the tusk, thinking it to be a spear. Whilst all of their perceptions of the elephant are real, they are incomplete pictures of what an elephant is, and by combining all of these perspectives together, our knowledge is enhanced.
Similarly, all economic theories are incomplete pictures of the world. Any model (whether or not it uses mathematics) is a simplification or an abstraction of the real world. The art of creating a good model or theory is in selecting the most important aspects of the phenomena or process to focus on. However, it is not possible to include an infinite range of variables or concepts in a theory, and even if it was, it would be too unwieldy to use in analysis. Instead, different approaches should be taught and used in tandem, just like the blind men sharing their knowledge about the elephant.
Although one could view the use of a variety of models within the confines of a single theoretical approach as pluralist, we argue that this is not the case. It is as if you would go to a restaurant and get a menu with a wide variety of dishes made up of courgette: roasted courgette, courgette pie, courgette pizza, courgette fritters, courgette soup, stuffed courgette, courgette bread, courgette pasta, courgette pancakes, etc. No one could deny the diversity of dishes, but at a more fundamental level the menu is severely limited in its options. Pluralism requires openness in terms of making fundamentally different theoretical assumptions.
In most contemporary economics programmes, neoclassical economics takes up ⅘ or more of teaching time in theory courses, while all other approaches are largely ignored or marginalised (Proctor, 2019). We suggest that the proportion devoted to neoclassical economics should instead be roughly ⅕.
A proper scientific approach requires us to take seriously relevant ideas about how economies work, irrespective of who developed the idea. There are many important ideas that have been developed outside of academic economics. In particular many other social scientists and philosophers have studied economic topics, leading to the development of the behavioural, feminist and institutional schools of thought.
The subfields of economic history, political economy, economic sociology, economic anthropology, and economic geography have also arisen from the interaction of economics with other social sciences. Various natural scientists, such as biologists and physicists, have also analysed economic topics, contributing to approaches such as econophysics, ecological economics, systems thinking and complexity economics. Ideas from these fields should be taken just as seriously as those developed within economics.
Furthermore, it is not only academics who think about economic matters. Many important economic thinkers worked as policy makers, investors, activists or journalists and were never trained as academic economists. For instance, Karl Marx was a journalist and author. David Ricardo was a stockbroker and then a Member of Parliament. Neither ever held academic positions, but both still had a huge influence on economics. It would be a waste if economics education would ignore all these important contributions simply because these people do not have the label of being an academic economist. Modern-day examples of such thinkers would include journalists such as Rana Foroohar of the Financial Times, policy makers such as Andy Haldane of the Bank of England or investors like George Soros.
Finally, pluralism goes beyond theory: diversity in research methods is also required. Time series and other descriptive statistics can provide a quick insight in trends and developments. Interviews or other textual forms of knowledge can provide a richer structural understanding, through the eyes of insiders. Direct observation can highlight different aspects yet again, showing for instance how economic interactions are interwoven with other social dynamics. Geographical overviews can show the physical shape of a sector or supply chain and help students understand the role of practical and political factors. Historical and institutional methods can give valuable understanding of processes and change.
Methods courses in current programmes tend to exclude all the above, focusing instead purely on quantitative data analysis. We suggest spending perhaps ¼ of methods teaching time on this, to make space for some of the above approaches. In addition to including diverse research methods, pluralism means teaching when and why each method should be used, as well as what their underlying assumptions are. Without such diversity, crucial aspects of the world would be ignored, creating collective blind spots. For details, see Building Block 7: Research Methods & Philosophy of Science.
2. What We Do Not Mean by Pluralism: Four Common Straw Men
Under this heading, we set out four popular straw men versions of pluralism: relativism, pseudoscience, political diversity, and strategic pluralism. For each of these four, we explain why it is not what we mean by pluralism.
Pluralism, not relativism
We believe that a combination of approaches is required to gain a good understanding of the economy. In the words of Martyn (2017, p. 1): “[Pluralism] does not reject [neoclassical] economics, it rather suggests that this is only one part of the story. It frees us from both scepticism (nothing goes) and relativism (anything goes)”.
Diversity and openness in thinking should be disciplined by how they help us understand the real world. Embracing pluralism does not mean embracing relativism. We are not saying that all approaches are always equal, but rather that for different economic questions, it will be different perspectives that are the most useful. For example, when teaching how economic agents make decisions, the neoclassical, behavioural and institutional perspectives could be taught. Whereas for labour economics, the feminist, Marxist and post-Keynesian perspectives could be taught.
The way to decide which approach is superior for a specific case is to compare to what degree different approaches are capable, or incapable, of providing a good explanation of the phenomena in question. This has also been called ‘disciplined eclecticism’, as it does not rigidly hold on to one single paradigm, but at the same time does not allow for an ‘anything goes’ approach (INET, 2011).
Scientific diversity, not pseudoscience
While we argue for going beyond the current mainstream, we do support having clear boundaries. Amongst others, pseudoscience, conspiracy theories, climate change denial and creationism have no place in the curriculum.
Where, then, should we draw the line? Distinguishing science from pseudoscience is not as simple as it might look. It has been a core topic of debate within the philosophy of science, referred to as the demarcation problem. There are many ways in which one can conceptualise what the scientific method is. A perspective often referred to by mainstream economists is falsificationism, formulated by Karl Popper in The Logic of Scientific Discovery in 1934, which argues one should try to falsify hypotheses, as opposed to trying to verify them. Another influential approach is instrumentalism, proposed by Milton Friedman in The Methodology of Positive Economics in 1953, arguing that theories should be judged based on the simplicity and fruitfulness of their predictions, not the realisticness of the theory. These approaches have received substantial criticism since their publication, both for proposing an undesirable principle for demarcation and for not providing an accurate description of what economists actually do (Boumans & Davis, 2015; Maas, 2014; Thornton, 2016). Since then many different methodological ideas have been developed. The following categories outlined by Coates (2005) and Thornton (2016), of the many criteria on the basis of which theories could be evaluated, seem most relevant:
- Explanatory coherence: Internal consistency
- Explanatory power: Fit with evidence and ability to explain or predict real-world phenomena
- Explanatory reach: The scope and depth of explanation, although more is not necessarily better
- Explanatory openness: The flexibility and capacity to absorb new insights and adapt to new circumstances
- Explanatory impact: Influence on the world, ability to help solve real-world problems and the values associated with the theory.
In sum, there is certainly pluralism within the field of philosophy of science (see also Building Block 7: Research Methods & Philosophy of Science). However, while the exact definition of ‘science’ remains contested, we are confident that you will find the vast majority of ideas in this book clearly within the realm of science.
Intellectual diversity, not political diversity
The issue at hand here is teaching students different scientific approaches, not teaching them different political ideas. Of course, it is important that economic programmes are not indoctrinating students into a particular ideology, but that is not the problem we are trying to address here. We don’t have the impression that economics programmes are systematically skewed toward left-wing or right-wing ideas. The issue we raise here is that economics education is theoretically homogenous.
The dominant neoclassical approach can be combined with various political beliefs. Research on the political beliefs of economists shows that most economists self-identify as centre-left or (socially) liberal (Berggren et al., 2009; Colander, 2008; Colander & Klamer, 1987; De Benedictis & Di Maio, 2011; Klein & Stern, 2006; van Dalen & Klamer, 1996; van Dalen et al., 2015a). The common critique that most economists are free-market right-wing ideologues is therefore ungrounded. Most programmes today include both new classical and new Keynesian macroeconomics, which respectively typically have right-wing and left-wing policy conclusions. Political diversity is there. Both, however, are based on the neoclassical assumptions of the homo economicus with farsighted rationality, who as an isolated individual is driven by utility maximisation and arrives at equilibria in markets through the price mechanism. Theoretical diversity, then, is lacking.
We argue not for including left-wing or right-wing ideas in economics education, but instead for including ideas that are built on different theoretical assumptions, irrespective of what policy conclusions they might lead to.
Pluralism, not a new dominant paradigm
Advocates of pluralism are sometimes accused of another motive, strategic pluralism (Jackson, 2018; Sent, 2006). That is, they would only be interested in pluralism insofar as this would give their personally favoured approach more room. The true motivation behind the scenes is then to turn their own approach into the new dominant paradigm, thereby undoing pluralism. As such, pluralism would be a temporary stepping-stone towards a new paradigm.
In some cases, this accusation may be correct. Rather than truly believing in pluralism, some might indeed see it as an instrumental tool to promote their own ideas. We are, however, firmly opposed to replacing the current monopoly of ideas with a new monopoly. As we described above, the problem is not neoclassical economics. Neoclassical economics is, in fact, a very useful approach to help us understand some economic topics, so we do not want to remove it from economics education. The problem we address in this chapter is that mainstream economics education focuses almost exclusively on one approach, which simply happens to be neoclassical economics. Replacing the old paradigm with a new one or expanding the current paradigm, for example by incorporating behavioural economics, does not solve the problem. A diversity of theories and methods is needed, not another dominant paradigm.
A good example to explain this is the influential and innovative textbook The Economy by the CORE team (2017). Their book shares our core philosophy: economics should be defined as the study of economic systems, not the application of a specific method. It also contains many of the concrete topics we call for in our building blocks: history of the economy, prominent treatment of political-economic systems, serious attention for institutions, capstone chapters on major economic challenges of our time, and much more real-world knowledge in general. In short, The Economy is a great textbook, which we highly recommend.
However, in terms of pluralism it is important to realise that this textbook replaces the conventional paradigm with a new one, which they call ‘the new benchmark’. Bowles and Carlin (2020), the team’s lead authors, describe their approach as embracing ‘pluralism-by-integration’, as it builds a synthesis out of insights from multiple schools of thought, aiming to create one coherent framework. This means that ideas that are complementary to each other are included, while ideas that are in conflict with each other are not included.
While this is a great step in the right direction, ‘pluralism-by-integration’ remains somewhat of an oxymoron when it comes to education. Pluralism means including multiple, plural, approaches, while integration refers to constructing one approach. So, while the new emerging benchmark is much broader than the old neoclassical framework, the risk of pluralism-by-integration is that students will still get the impression that the textbook and the teacher simply present ‘the truth’ about the economy, rather than as presenting one possible synthesis out of a diversity of economic ideas.
In this book, we make the case for a different kind of pluralism: ‘pluralism-by-juxtaposition’. That is, to teach students about multiple contrasting approaches and debates between them. We think this is vital: being able to deal with economic debates and conflicting ideas by making independent and informed judgements and admitting intellectual uncertainty is a core skill for any economist (Denis, 2009; Eliassen, 2016). As long as students are not exposed to the existence of multiple contrasting perspectives and debates, we give them the impression that there is only one way of looking at issues that is relevant enough to learn about. This may hamper their ability and skills in independent and critical thinking, and increasing the risk of groupthink in their later professional lives.
This should not be read as a dismissal or rejection of The Economy. The point is rather that we also advocate taking the next step: incorporating conflicting ideas and ‘pluralism-by-juxtaposition’. The textbook is an excellent ingredient for such teaching: it incorporates new ideas and insights, and pays more attention to empirics, history and institutions. We highly recommend using it. And while they do not make this explicit in their textbook, the CORE team also very much encourages pluralism-by-juxtaposition programmes, with one ingredient being their textbook (Carlin, 2021).
Sometimes it is argued that teaching students conflicting approaches will lead to inconsistent and incoherent reasoning. We believe the opposite is true. By teaching students how and when ideas are in conflict with each other, they learn to identify contradictions and deal with them. Pluralism in teaching does not mean that students should believe conflicting ideas simultaneously (Courvisanos et al., 2016; de Langhe, 2009). What it means is that students should become aware of the conflicting ideas and acquire the skills to form an independent and informed opinion on issues (Mearman et al., 2011). The key difference is between ‘having knowledge of ’ and ‘believing exclusively in’. If one would have to trust one approach without having knowledge of the different ideas and approaches, this would require blind faith in the approach which is scientifically unjustifiable. As such, being able to deal with a diversity of ideas and make informed judgements “is an intrinsic part of intellectual development” (Sen, 2005, p. 3).
Whig History: Is the Mainstream of the Moment Always the Best?
Some economists feel that whatever change the economic discipline has undergone over the years has been for the better, the so-called ‘Whig history’ interpretation (Samuelson, 1987). The term Whig history was first coined by the English historian Herbert Butterfield in 1931 to describe interpretations of history that saw everything as constantly becoming better, and specifically saw the British constitutional settlement as one of the highest achievements in human history (Butterfield, 1931).
Applied to the development of economics, this implies that knowledge just keeps on accumulating and that the science of economics progresses linearly. In this view, the only cause of change within the discipline is improvement and all of the good ideas of the past have been incorporated in the mainstream. Mainstream as a category, therefore, becomes synonymous with ‘the best’. Anything outside it is by definition irrelevant, and the past becomes an imperfect version of the present. From this perspective, it is no problem that mainstream economics in the second half of the 20th century increasingly came to be dominated by neoclassical economics, since its dominance can only be a result of its superiority (A. Freeman et al., 2014).
Such a simplistic view of scientific progress is certainly attractive. However, historians of economic thought and other experts on developments within economics generally view Whig history as incorrect. They view it as overly optimistic regarding the internal workings of science and note that it ignores all external influences on science. In decades of research, they have identified many other important factors that influence the development of economics. The most important among these are the organisational structures within universities and other research institutions, social networks, path dependencies, changes in the economy itself, and the cultural and political context in which economic thinkers operate.
Such institutional factors have prevented relevant ideas from being incorporated within the mainstream, while they also have prevented dominant ideas from being properly scrutinised. Or in W. Arthur Lewis’ (1955, p. 174) words: “Collective judgment of new ideas is so often wrong that it is arguable that progress depends on individuals being free to back their own judgment despite collective disapproval”. The history of economic thought thus casts serious doubt on the assumption that the current mainstream is always necessarily better (e.g. Akerlof, 2020; Backhouse, 1994; Blaug, 2001; Cedrini & Fontana, 2018; Cedrini & Fontana, 2015; Colander & Landreth, 1998; Davis, 2006; Dequech, 2017; Dow, 2009; Fourcade, 2009; Gans & Shepherd, 1994; Gräbner & Strunk, 2020; Lee, 2009; Morgan & Rutherford, 1998; Samuels et al., 2008; Weintraub, 2002).
In short, allowing only one approach is problematic, since it can neither be assumed that this dominant approach is the ‘best’ approach, nor that it has incorporated all of the relevant ideas from other approaches.
3. Why Pluralism Is Important
Pluralism is a critical feature of any economics education. To fully answer any question about an economy, an economist must look at the problem from multiple perspectives that utilise different assumptions, units of analysis and methodological approaches. Economies are such enormously complex systems that they require different perspectives to understand their many elements. In addition, even for the same aspect of the economy, different perspectives often provide startlingly different insights. In the language of philosophy of science, the former point refers to an ontological reason for pluralism and the latter to an epistemological reason (de Langhe, 2009; Lawson, 2012; Salanti & Screpanti, 1997). Hence, no one approach provides a full and complete understanding of economies. Or in Chang’s (2014, p. 453) words:
“As the saying goes, ‘he who has a hammer sees everything as a nail’. If you approach a problem from a particular theoretical point of view, you will end up asking only certain questions and answering them in particular ways. You might be lucky, and the problem you are facing might be a ‘nail’ for which your ‘hammer’ is the most appropriate tool. But, more often than not, you will need to have an array of tools available to you.
You are bound to have your favourite theory. There is nothing wrong with using one or two more than others – we all do. But please don’t be a man (or a woman) with a hammer – still less someone unaware that there are other tools available. To extend the analogy, use a Swiss army knife instead, with different tools for different tasks.”
To give an example, neoclassical economics takes the individual as its unit of analysis, assumes that humans are rational and relatively independent of their society, and uses mostly quantitative methods to assess formalised hypotheses. In contrast, institutional economics takes institutions and systems as its unit of analysis, assumes that humans are heavily influenced by their social context and uses more qualitative methods and broad reasoning to answer questions. None of these choices are wrong, even though they are very different.
The value of pluralism is that both of these perspectives can be used to answer the same question. The insights that are gained from both perspectives can be combined to give the economist a fuller picture of the problem in front of them, and when they contradict each other help us arrive at sharper analyses. Beyond knowledge of the relevant perspectives, this also requires students to be able to think for themselves. Once the models and theories they have used have yielded their output, an economist must use their own judgement on how much weight to place on the various results obtained, particularly when the results lead to incompatible conclusions.
Not every perspective is equally valuable for any given situation, they all have their points of focus and blind spots. Economics students need to be taught a broad range of perspectives during their education so that they have a bigger toolbox of analytical tools to use in their professional lives. This will allow them to be of far greater value to their future employers and society at large, as Andy Ross (2018, p. 2), former deputy director Government Economic Service in the UK, explains:
“The need for pluralism is self-evident to practising economists in their day-to-day work, even when, for exposition purposes, such approaches must be played down in final reports to stakeholders. Some economists fear that pluralism equates to ‘anything goes’ or implies that economics is all just a matter of opinion. Yet the opposite is true. Pluralism demands critical evaluation in order to select the right tools for the job in hand. Most of the mistakes in economics that I encounter have not arisen from technical errors, but from failing to appreciate whether the methods and data used are appropriate.”
Beyond the direct benefits of providing budding economists with a broader knowledge base, pluralism also teaches intellectual humility and open-mindedness. When students are being taught only one way of thinking, they may develop the unfortunate idea that this is the best, or the only reasonable way to think about the economy. Such ideas are detrimental to intellectual development and real-world applications. In contrast, an economist trained in the pluralist tradition is used to comparing and combining competing viewpoints, and well aware that even the approach that they are most convinced by personally does not have a monopoly on truth. A good economist is modest and tries to understand other scholars, especially when they have a different point of view. Sometimes it is said that pluralism is undesirable because it is uncomfortable for students when the teacher cannot ‘simply tell how the world truly works’ and instead has a complicated story about scientific doubt and different possible explanations (Denis, 2009). We would, however, argue that cognitive comfort should never be the goal of academic education. Confronting students with the complex reality and teaching them to question and investigate, rather than to believe and assume, should be central. Or as Max Weber (2009, p. 147) put it: “The primary task of a useful teacher is to teach his students to recognize ‘inconvenient’ facts”.
Pluralism encourages creativity and innovation. Indeed, pluralism is more than a worthwhile addition to a programme: it is essential for the training of critical and creative open minds. If everyone is supposed to think in the same way, existing ideas are less likely to be criticised and new ideas are less likely to develop. All ideas and assumptions should be open to questioning. Students should be given the chance to study different schools of thoughts and methodologies, irrespective of whether the idea goes against the status quo or mainstream approach within the field.
Teaching students multiple perspectives on the same issue also allows for the easy integration of critical thinking into any course or programme, something that is normally very difficult to achieve. Pluralism supports students in developing their own critical thinking process; they are forced to consider the potentially contradictory concepts and assumptions that they are being taught. It can be included only in a rudimentary fashion by critiquing the single model or perspective that is presented. Although students might be encouraged to think about what the problems or limitations are, if they have never been taught other perspectives it remains very hard for them to challenge what they learn. Moreover, students can then be encouraged to question the logical soundness of their own interpretations of those ideas. In this way, pluralism, especially when combined with the integration of critical thinking, can lead to improved economic understanding.
Pluralist education, furthermore, helps students learn to effectively communicate with people coming from a different perspective. As their education teaches them that there are multiple perspectives on issues and focuses on developing skills to understand and compare these perspectives, students will be better prepared to work in interdisciplinary teams and communicate with non-economists. However, sometimes it is argued that pluralism will complicate communication among economists, as it means they would use different approaches rather than all adhering
to the same approach (Gräbner & Strunk, 2020). If economists would isolate in groups based on economic approach and only have knowledge of their own favoured approach, communication among economists would indeed become more difficult. But what we are proposing here is, however, something else. We are advocating to help students become familiar with the main different economic approaches, so that in their later career they will be better able to effectively communicate with economists who use different approaches than they do.
Finally, teaching only one perspective can have harmful performative effects (Parvin, 1992). Learning only one approach will not only limit the thinking of students, it will also influence their behaviour. One example is how several empirical studies have found that the current dominance of neoclassical theory has caused students to behave more like the homo economicus, calculated and self-interested (Aldred, 2019; Bauman & Rose, 2011; Wang et al., 2011). To prevent such performative effects, it is important to expose students to different ideas about the economy and human nature, and hence a range of counterbalancing influences on their development.
Teaching only one approach will also have consequences at the societal level for outcomes in areas such as human wellbeing, the natural environment, and income, gender and racial inequality. This is because economic thinking has a key influence on policymaking. The way we understand how an economy works – and should work – changes how we behave and how policies and other decisions are advised and made.
4. Practical Suggestions for Pluralist Teaching
A common objection from academic economists to incorporating pluralism into their teaching is that it would be too confusing for their students. However, it is in fact standard practice in every other social science: sociology, geography, political science and so on. In these disciplines, several major schools of thought or individual thinkers are juxtaposed with each other within the same course, often within the same lecture. Students seem to have little trouble with this. The challenge is, however, to change the teaching, as the current monist approach is deeply ingrained in the materials and practices used by most economics educators. This book aims to help broaden these materials and practices.
However valuable and worthwhile pluralism may be, committing to pluralism in educating opens up a thorny and ongoing question. If not all approaches should be taught all the time, then what approaches should be taught, and when? We suggest focusing on the most important ideas and insights on every topic when teaching theories. So, for each topic, one does not try to teach all or just one theory, but one teaches a couple of theories which are most relevant. To assist with this, in the chapter Tool 1: Pragmatic Pluralism we have applied this logic to twelve core economic topics. For each topic, we provide suggestions of which approaches are most helpful, including literature references.
Different perspectives can enhance and complement each other, as they concern different aspects of a topic. But approaches can also be in conflict and contradict each other, when they provide opposing explanations of the same phenomenon. We suggest teaching students both about ideas that are in conflict with each other and about ideas that go together.
For instance, the efficient market hypothesis and the financial instability hypothesis are in fundamental contradiction with each other. For any concrete real-world situation, when one of these theories accurately describes it, the other one is bound to be less accurate, or even completely useless – for that particular situation. The credit theory of money and theory of earmarking money, however, are complementary to each other: they can both be true at the same time, describing different facets of the same situation.
Finally, it is important to get students started on pluralism early on. People speaking one language find it very hard to learn a second one, but people who have already learned several languages have the mental apparatus to abstract from “language” and see it in a way that helps them to incorporate the subtle differences of another tongue. Hence, we do not believe that every plausible approach needs to be taught in order to be effectively pluralist: get students started and they will continue on their own. Throughout the building blocks, we suggest both advanced and entry-level teaching materials to get students thinking in open and pluralist ways. In Building Block 8: Economies Theories, we focus specifically on ways to teach theoretical pluralism.