What is wrong with the Reserve Bank’s push to encourage the study of economics?

For several years now the Reserve Bank of Australia (RBA) has been responding to declining levels of enrolments in the study of economics by diligently extolling the personal and societal benefits of studying economics and by producing research on the topic of falling enrolments. For example, it has just released a research paper that examines the sharp fall of economics enrolments in high schools.

Source: RBA 2021

In general, the RBA diagnoses the underlying problem as one of ignorance. It is assumed that students, their parents, careers advisors and other stakeholders, simply do not know what is good for them. The primary task then is to explain to students, and those that advise them, that their thinking in regards to the study of economics is in some way distorted, prejudiced or unwarranted. In business terms, this amounts to arguing that the customer is always wrong.

The RBA’s analysis fails to see that a key part of the explanation for declining economics enrolments is to do with the product itself, i.e. it is to do with what currently passes for an education in economics.

The economics curriculum, by any reasonable measure, is overly narrow, out of date and unable to sufficiently illuminate contemporary realities. As a consequence, economics is unique in the extent to which its students so regularly rebel against the content of their instruction. All this suggests that the fundamental problem is not that current and potential students do not know what they study of economics is about, but that they do.

There is tremendous scope for reform. There are approximately 8 major schools of economic thought. Economists need to encounter and evaluate them all, even if they ultimately affiliate strongly with just one school. As the classical economist John Stuart Mill long ago noted, if you don’t understand the arguments against your own chosen way of thinking, you don’t really know much about your own way of thinking. Alas, universities generally only teach one of these schools, and nearly always teach that school in an astonishingly uncritically manner.

Another problem is that it is increasingly rare that students are even given the option of studying economic history, history of economic thought or comparative economics. Furthermore, there is seldom any requirement to undertake study in cognate disciplines like politics, philosophy, history or sociology. All the problems just described could be summarised as a lack of plurality in the curriculum.

How then to create a more plural curriculum? Well you could write a PhD or a book in response to that question but the short answer is that a plural economics education will need to be achieved via a pluralism of strategies.

First, any reform of the existing economics curriculum is to be welcome and encouraged. For example, a few universities are now using the Institute for New Economic Thinking’s CORE Econ learning materials for introductory economics. This constitutes a first step in the right direction. Furthermore, Boston University’s Economics in Context Initiative has produced a range of textbooks and teaching modules that have been designed to allow instructors to seamlessly transition from the curriculum of old towards a more 21^st century economics.

Second, teaching economics in other academic departments such as politics or management, or even in dedicated ‘departments of political economy’ is a sensible division of labour that lets the traditionalists serve up the same old fare as ‘economics’ but allows scholars who want to teach something else to do so without being blocked. Whilst political economy is the traditional name of economics, most orthodox economists eschew the term, so this allows a plural economics education to be offered to students almost as if it were a completely different discipline. One that is largely free of some of the more serious brand problems that currently afflict economics.

Third, student-based organisations such as Rethinking Economics or the International Student Initiative for Pluralism in Economics should be supported and listened to.

Fourth, the teaching of a pluralist economics need not have to occur inside the university. For example, the School of Political Economy offers a pluralist education in economics, which includes some orthodox economics but also all the other content that is usually absent in an economics education.

It is true that contemporary societies need much higher levels of economic literacy but they also require a much higher quality of economic literacy than is currently offered. We won’t get a higher quantity of economics enrolments until we offer a higher quality curriculum.