Report of ‘Rethinking Economics’, March 8

During the Basta! event titled ‘Rethinking Economics’, we rethought the value of economics for the public debate with guestspeaker Irene van Staveren. More info on this debate here. What follows is a brief summary of the discussions during this evening.

The evening started with a brief summary of Mathijs Janssen (see his powerpoint), an economics student who participated in the KSU Reading Group ‘Roots of the Crisis and Cuts‘. Was the reading group a succes? Yes, Mathijs said, discussions were interesting, and it was good to have a plurality of topics and literature discussed, much more varied than in normal economics classes. One article from an anthropologist – David Graeber – discussed the role of debt in society. “And I had never heard of the ‘falling rate of profit’ of Marx in economics classes”, Mathijs added. One critique: expertise was often lacking as not all participants were equally knowledgeable of the topics. This made it sometimes difficult to know what to focus on.
     Irene van Staveren started her talk (see her powerpoint) with some bad news: economics has not really changed since the crisis. The ‘rational economic man’ has not been kicked of it’s throne. Economists still assume people act according to their rational self-interest and ignore the fact that people behave for a larger plurality of motives. Engagement, relationships, a sense of meaning are also important drives of human behavious, but dominant theories in economics don’t take these into account.
     What’s more, people are less competitive than the economists claim. It’s true that a feeling of ‘accomplishment’ (and competing with others) is an important drive, but people are cooperative as well, and often like to accomplish something with a team. Bonobos, who are closest to humans by DNA, have pretty egalitarian ways of organizing themselves.
     As it was International Women’s Day, and Van Staveren practices feminist economics as well, gender differences were also discussed. Research showed women are more cooperative than men, Van Staveren said. What’s more, “in the financial sector, women take on less risk and make more profits”, giving some proof for the ‘Lehman Sister’s hypothesis’. As the financial sector is the sector with the smallest percentage of women, it might be good to have more women in (the top of) this sector.
     Not everyone agreed. One man from the audience working in construction replied “men can be very cooperative as well”, which he experiences in his work. “It’s a bit offensive to portray men as very competitive and little cooperative”.
     Another visitor said “I don’t care if there are more women in banks, because I don’t care if these institutions work better. I don’t want them to work better and make more profits. Would that reduce the exploitation of people? Would that improve society? No.” But it wouldn’t only apply to banks, Van Staveren responded. Any institution might work better if more women are involved.
     From gender issues back to economics in general. Irene recommended to “read the classics. Also the contemporary literature, but you should read the classics as well. Smith, Marx, Mill.”
     A question from the moderator to Irene: Can there be a debate about economics from ‘extreme positions’ (e.g. libertarianism and marxism)? Yes, Irene said, but not about policy: they will always oppose each other. But about the fundamentals, about the underlying philosophy of different ideologies, there can be a debate.
     Another question: what’s the value of economics to the public? Does it have any? Very little, some said. “I feel I only study to learn to serve the rich”, an econometrics student said. Another said mainstream education in general is used to control people’s thoughts, not to emancipate people, and reminded the audience that in the past many had warned for the danger of putting ‘experts’ on social issues – like economists – on a thrown.
     One question from a sociologist to the economists in the room: “Not to criticize, but as an honest question; do you think economics is a science?”. It was met with laughing and applause from one side, less applause from the other side (where coincidentally economist students sat together). One physics graduate replied: “Just to clarify, from physics, economics is NOT viewed as a real science”.
     Mathijs defended the value of economics, saying that “it’s true that economics is often used by power, like the chicago school of economics, but in general, economists are relatively left wing I think. The fact that power uses economics as it suits them doesn’t mean economics is useless. It’s a social science and can be useful to analyse what happens in society in terms of production and distribution, etcetera. Economists should just be a bit more modest in their claims.”
     How economics can and should change, was asked; from inside the universities or outside? “In the 60s you saw a lot of activism which did both”, one answered. “Inside and outside the university people were changing their ways of thinking, and connections were very important. An independent reading group should have connections within the academia as well”.
     Existing initiatives were also discussed. One representative of a group in Amsterdam called ‘Real World Economics Amsterdam‘ was present and invited the audience to the next debate called ‘Going Dutch‘ on March 12, which will try to answer the question whether the Dutch economy can resist the global economic crisis.
     Another initiative, the ‘Platform for Sustainable and Solidary Economics’ (Platform voor Duurzame en Solidaire Economie) is organizing workshops on economic issues for any group who can guarantee a minimum of 10 people attending.
     The next reading group of KSU was also announced: it will start April 18 and is titled “Work in the 21st Century – Changing labour relations in Holland.”. Subscriptions will be open soon on