The Future of Economics

The Great Recession created questions about mainstream economic policies and the theories they are based on. Some economists have stood their ground, affirming that the market has not failed, while others cite how the profession was blindsided as a sign that change is necessary. This blog shares the discourse among professionals, journalists and academics on the future of economic study. 

Sanjay ReddyNew School Economics Professor Sanjay Reddy is known for his multidisciplinary approach to economics, looking at the mathematical and philosophical underpinnings of economic theories and policies. It’s no surprise, then, that his new INET blog post, “Externalities and Public Goods: Theory OR Society?,” investigates these two concepts from all angles.

The essay is part of Reddy’s “Reading Mas-Colell” blog series, for which he and New School PhD student Raphaele Chappe provide critical commentary on the widely used microeconomics textbook “Microeconomic Theory” by Andreu Mas-Colell, Michael Whinston, and Jerry Green. In this installment, he explores the historical development and competing definitions of the concepts of externalities and public goods.

Many economists view externalities and public goods as technical concepts with precise definitions, but Professor Reddy reminds us that social issues are generally subjective. “The extent to which public goods are provided depends on who we see as part of ‘ourselves’ and what we see as ‘ours.’” Policy responses to simple externalities, such as congested roads or localized pollution, are relatively straightforward. But solutions to epochal challenges like climate change require social, political, and institutional perspectives. In these cases, the “right” answer is more elusive.

Scott Carter

On March 17, 2015, Scott Carter, New School economics alumnus and Professor of Economics at the University of Tulsa, discussed the need to make public Piero Sraffa’s unpublished notes on his book, “Production of Commodities by Means of Commodities: Prelude to a Critique of Economic Theory.”

Piero Sraffa (1898-1983) was an Italian economist at the University of Cambridge known for his criticism of mainstream economics. Citing an insight made by Ajit Sinha, Carter noted that the Prelude's text can be considered as a ‘masterpiece of minimalist art.’ At only 99 pages, it fueled the neo-Ricardian school of economic thought with a critique of the neo-classical theory of value.

Written over 30 years and originally comprised over 7,000 pages, Carter is working to assemble the work into an online timeline and database.

On April 21, 2015, William "Sandy" Darity presented "Does Racism Make You Sick?: Health, Wealth, and Race in America" at SCEPA's Annual Robert Heilbroner Memorial Lecture on the Future of Capitalism. Sandy Darity is the Samuel DuBois Cook Professor of Public Policy, African and African American Studies, and Economics and the Director of the Duke Consortium on Social Equity at Duke University. His research focuses on inequality by race, class and ethnicity.

Tuesday, April 21, 2015
The New School, Wollman Hall
65 West 11th Street, Room 500, New York

Anwar Shaikh, Professor and Chair of the Economics Department at The New School for Social Research
Teresa Ghilarducci, Professor and Director of Schwartz Center for Economic Policy Analysis

Darrick Hamilton, Associate Professor of Urban Policy at The New School for Public Engagement

Join the conversation on Twitter with @SCEPA_economics using #Darity.

On October 3, 2014, SCEPA hosted a discussion with Thomas Piketty, leading economist and best-selling author of "Capital in the Twenty-First Century." This is a brief interview prior to the discussion in which Piketty shares his unique view on economic science and what it means to be an economist.

Rethinking Economics Conference LogoThe 2014 Rethinking Economics NYC conference was an entirely student-run conference in New York City from September 12-14, 2014 at The New School, NYU and Columbia University.

Rethinking Economics is a global movement to create fresh economic narratives that challenge and enrich the predominant narratives in economics. The movement unites all who support new ways of thinking. The Rethinking Economics conference asked students to consider economic schools of thought beyond the mainstream neo-classical approach. The conference focused on the concept of economic pluralism: the belief that economics should be a more interdisciplinary subject that embraces useful ideas from various schools of thought and subject fields. The New York conference brought together students and thinkers from North America in order to engage in student-led workshops and a series of interesting speakers including Deirdre McCloskey, Philip Mirowski, Michael Sandel, Dean Baker, Richard Wolff, Julie Nelson, Paul Krugman, Neva Goodwin, James Galbraith and many more.

Rick McGaheyby Rick McGahey, SCEPA Faculty Fellow
March 11, 2014

Today I attended a meeting at Georgetown University, on "Making A Living on a Living Planet: Toward a More Just and Sustainable Economy." This important session brought together representatives from two progressive movements who don't often cooperate or communicate effectively—the labor and environmental movements. (For more on the organizers, see this link, I'll blog about the meeting in a separate post.) There were about 40 people in the room—activists from both the labor and environmental movements, policy advocates, and progressive economists. And, in a tribute to The New School's economics program, five of those economists studied graduate economics at The New School.

They included: Ron Blackwell, former Chief Economist at the AFL-CIO, one of the principal organizers of the meeting; Bob Pollin of U-Mass Amherst, who co-authored the key paper outlining an economic program for jobs and sustainability (he recently presented this work as part of SCEPA's Robert Heilbroner lecture); Mark Levinson, Chief Economist for the Service Employees International Union; Ken Peres, Chief Economist for the Communications Workers of America; and yours truly.

All of us were in the program some time ago, and it was gratifying to see how everyone remained focused on linking economic analysis with the critical progressive policy issues of our time. But what accounts for the remarkable concentration of New School economists at this event?

I believe it's The New School's combination of heterodox theory and critical economics, coupled with a desire to engage with and support policy and social movements, something we were able to learn and do in our graduate education at NSSR. Although there sometimes can be a tension between theoretical and applied policy work, when it is done right—as I believe it was during our time at The New School—the two domains reinforce each other. The theorists keep the policy analysts honest and self-critical, focused on the big picture, while the policy work grounds the theory and keeps it from becoming sterile and academic.

Today reminded me of the recent, excellent session organized by current graduate economics students, "The State of Wordly Philosophy at NSSR." That event continued the department's long and honorable history combining theory and practice, and the program's health and vitality depend on keeping those two elements in balance.

Today's event was just one example—others include the prominence of New School graduates in international policy debates (such as Nelson Barbosa's tenure as Brasil's Deputy Finance Minister), the appointment of Heather Boushey to lead the new Washington Center on Equitable Growth, David Howell's major study on inequality and growth in the United States, and the recent edition of Social Research on austerity economics and policy featuring several faculty and alumni of the economics program.

By keeping theory and policy in creative tension and balance, The New School can continue to produce critical and useful economic thought and analysis for decades to come. As the economics profession offers fewer and fewer heterodox opportunities for graduate education, The New School's role in both theory and policy becomes even more important.

Sixty years after the publication of Robert Heilbroner's "The Worldly Philosophers", the economics department at The New School for Social Research extends a warm welcome to an Economics Student Union-organized colloquium.

WHEN: February 22, 2014
10:00am to 6:00pm
WHERE: The New School
6 East 16th Street, 11th Floor
New York, NY

Since its founding in 1919 as a refuge from political repression within the academy, the New School has had a reputation of being a fount and record of Worldly Philosophy within the social sciences. In the wake of the ongoing economic crisis as well as the crisis of the economic discipline, we will introspectively continue that tradition by discussing our department's vision in light of its illustrious history.

The day consisted of lectures and panel-moderated discussions assessing the past, present and potential future of the economics department in academia and policy making.

On May 4, 2012, SCEPA joined the Economics Student Union of the The New School for Social Research Economics Department to host a panel discussion with the economics faculty, "Vision in Heterodox Economics." The panel included faculty members Ed Nell, Anwar Shaikh, Duncan Foley, Teresa Ghilarducci, Sanjay Reddy and Christian Proaño and was moderated by economics student and SCEPA Assistant Lisa Selca.

Sanjay Reddy, Associate Professor and Director of Undergraduate Studies at the New School for Social Research and SCEPA Faculty Fellow, joins INET, The Institute for New Economic Thinking, to discuss his research on world poverty measurement and normative reasoning in economics.

INET's mission is to nurture a global community of next-generation economic leaders, to provoke new economic thinking, and to inspire the economics profession to engage the challenges of the 21st century. Sanjay Reddy's work supports this mission by arguing that normative criteria is essential to answering technical economic problems.

See what others are saying about Sanjay Reddy's research:

In celebration of the 80th anniversary of John Maynard Keynes' lectures at The New School, SCEPA's Robert L. Heilbroner Memorial Lecture hosted a speech by Lord John Eatwell, president of Queens' College and professor of Financial Policy at the University of Cambridge.

As Eatwell states, "Advocating sensible policies on 'pragmatic' grounds has never been enough to overcome primitive views on deficits, debt, and the role of the state."

The paralysis in policy-making that is exacerbating the economic crisis has its roots in the failure of economic theory. It fails to explain the causes of the breakdown or provide an unambiguous path of action to mitigate its consequences. Today's challenge is the same as that faced by Keynes in the 1930s: how to change the theoretical foundations of economic policy?

John Eatwell

Click 'read more' for pictures of the event.