KEY:
I: Interviewer Dr. Constantinos Repapis
R: Respondent Professor Sheila Dow

I: Professor Sheila Dow, thank you for agreeing to participate in this interview series organised by the Independent Social Research Foundation and Economics at Goldsmiths. 

I would like to start with something that I read more than ten years ago actually, back in 2002. It’s a joke in a book you published on economic methodology and it starts like this.1 You say an economist is on a flight from New York to London in a four-engine plane, there is a bang, the plane drops, the pilot announces that there’s going to be a delay because one engine has failed and that the passengers should not worry. The delay was for half an hour. The same thing happens again, another engine fails, then an announcement that the delay is going to be for two hours. Then the third engine fails and there’s an announcement that it’s going to be for five hours. The economist who is one of the passengers turns to the man next to him, and says “At this rate, if the last engine goes, we’ll be up here all night.” What do you think is the message of the joke? Do you think it’s a joke that has more of a resonance after 2008?

R: This is a joke that I learnt from Tony Lawson. It’s funny just because it so completely ignores reality, relying on extrapolating from past evidence and not thinking about what it actually means. It’s interesting on a variety of levels. Keynes himself said that normally when we don’t have enough knowledge to make firm predictions about the future, one of the things we do is we rely on extrapolating from the past. But he would be the last person to say, “And don’t pay attention to the context.” With the crisis, clearly an important element was the extensive use of risk models in the financial sector which purported to be able to predict the future in very complex ways, still extrapolating from the past. In a way you could see why reality would get lost for people involved in that kind of exercise. It’s not as easy as figuring out that if the engine goes the plane is going to crash, but it’s the same kind of thing; they weren’t thinking about the knowledge basis on which they were making predictions about the risk attached to the assets that they were investing in.

I: So do you think they were using the wrong model then? If they had a better model in this case, a better model of the plane rather than simply thinking about the engines, would they be able to countervail that problem?

R: They would be able to countervail it to some extent by understanding the limitations of their models, but these models inevitably are limited.

I: Why?

R: Because the future is uncertain. In order for these models to work properly there has to be structural stability, for example, and in a crisis, when there is no structural stability, these predictions all break down.

I: So what can they do? I mean, what can we do? If all models fail should we simply abandon models, should we do something different? What is your suggestion?

R: Models have their uses as partial arguments. The problem is making them the whole argument. Financial institutions that have succeeded in the past know this. Why do some financial firms have better profitability than others? It’s because they are smarter and they are able to combine more outside material with the models. Otherwise, because these models are effectively for sale, you’d think everybody would have exactly the same predictions, which they don’t. So in practice there’s a recognition that models are imperfect. But they became so persuasive for a whole variety of reasons that this understanding kind of got lost in the wash. What I mean is, thinking about their limitations was really lost. The same obviously applies to a lot of academic economics which is based on a similar kind of thinking.

I: I was going to ask you about that, actually, the relation between firms and the academic world- that is if you see a rift between the policy world or the real world and academic work. Is it simply that they are using different models, or is it something else that is driving a wedge between the two?

R: In the case of the financial sector, the models are very similar to standard finance models. Their use is moderated as I’ve suggested. When it comes to the policy arena, academic models clearly are powerful and they are powerful rhetorically. It’s useful for government to be able to cite academic justification for what they are doing. But if we think of monetary policy, even more than fiscal policy, that’s a matter of responding quickly to events. That was something also that was clear in the crisis, that actions had to be taken, and if what was happening wasn’t dealt with by the models that were on the table, nevertheless a decision had to be taken, judgements had to be made, and so there’s a requirement to step out beyond models.

I: So if you were in that plane, and you were thinking that there is a fourth engine to fail, what would you do? Some would say that that economist, the only thing they could do was simply project what would happen if another engine fails, after all, she’s only a passenger, she’s powerless to do anything else.

R: Well exactly [laughs]. Whatever gives you comfort, I suppose.

I: What I mean to say is maybe that’s all economists are, they are simple accountants that use models, mainly complicated models and we shouldn’t ask more of them.

R: No, we are not just passengers of the economy. We influence what happens in the economy. We influence behaviour. We influence policy. No, we have a much bigger responsibility.

I: So what should we do? She’s not only a passenger, as you say, she’s obviously closer to the captain than we think. What would be the contingency plans? What would be the appropriate response?

R: The proper response requires a whole lot of back work which means: A) understanding the limitations of models and therefore being alert to when those limitations are really going to be important. B) Having a really good knowledge of the history of the situation, the institutional framework, the current context in order to deal with having to make a judgement quickly when conventional models are inadequate. So a lot of it is about alertness and consciousness and awareness, and that’s something which was clearly very much lacking.

I: Why? Why was this awareness of the broader situation lacking? And have we regained it now that we’ve had, for five years, a crisis and, there is some soul searching by economists.

R: Yes, but not nearly enough. Economics took a different turn in the last few decades of the 20th Century so that there’s a much greater focus on models as providing the full argument. People were lulled into a sense of security by what’s called the great moderation, which was a long period of stability, steady growth. Various people were making statements “We’ve got it cracked. No more issues to be addressed,” so the crisis was a huge, huge shock. Even though people were starting to say that risk pricing was going awry in financial markets, nevertheless, there was this confidence… I mean, because that framework is based on a notion of equilibrium and markets being able always to bring situations back to equilibrium, there seemed to be this blind confidence that the same would happen again. Okay, there’s a bit of mispricing, we have to deal with that, but equilibrium will be restored.

You ask about the current situation. The crisis itself was regarded as a problem of mispricing due to impediments to market forces. So all the solutions now coming from mainstream economics are couched in these terms – how to reconfigure incentives, how to reconfigure constraints on destabilising activity, how to make information more transparent so markets can make decisions better. A lot of the thinking that’s gone into bank regulation has been very constructive but the underlying thought processes are still in line with what went before and the expectation is we can sort this so that it won’t happen again.

I: You mentioned a couple of things that I think are very interesting. One, you mentioned mainstream, which is a very difficult term because a lot of people define it in different ways. And the question is: what did you mean when you said mainstream? Don’t most economists agree, that equilibrium is a useful concept and that the market tends to give the right solution if unhindered? Or that there may be small issues relating to reaching this optimum that we need to deal with through different institutional settings?

R: What you are talking about is characterising the mainstream, effectively, as involving a particular understanding of equilibrium. What we are getting into with your question is the fact that there are different ways of understanding the economic system and sometimes common words are used like equilibrium and rationality, but they are being used in very different ways. This inhibits communication. It’s partly what makes this kind of discussion difficult, that if one is trying to convey what non-mainstream economics consists of, whoever you are talking to is going to understand what you say in terms of the way in which they think about economics. So mainstream economics is what is taught in most universities, it’s in the main textbooks and it views economics as mainstream economics. The two are regarded as equivalent. 

I: You speak about the economics taught in universities, at the same time you say mainstream economics is a self-constituted entity; to some degree; which is what’s taught and therefore replicated both in research and teaching. Leaving aside issues of definition, what kind of change do you see/envision in teaching in universities if we are to break the cycle?

R: What’s required is what I would call a pluralist approach to teaching, which is recognising that there are other ways of addressing economics. This could start at a very simple level of just making it clear that there is an other. An awareness of otherness is actually the foundation for starting this kind of alternative approach to teaching. Within mainstream economics there are obviously debates, there are differences, but the meanings of terms are held in common and so it’s a debate within a particular approach.

I: So just to understand, there are other social scientists other than economists, there are sociologists, anthropologists, psychologists. They provide also views about what human society is. Is that what you are looking for? Is that the idea that you have -something that we borrow from other disciplines?

R: Well, certainly there’s scope for borrowing from other disciplines. But no, what I’m talking about is economics but doing economics differently. This is even prior to questions of which is better, which is worse, whether it’s possible to say one is wrong. That’s something else. I’m just talking at the level of the fact that there are different approaches to economics and it seems to me it’s crucial for educating future economists, whether practitioners or academics, that they be aware of the possibilities and be given the equipment to make their own choices about how to approach the subject.

I: Could you give us an example of those differences? I think you identify as a Post-Keynesian. 

R: Yes.

I: There are, of course, other Keynesians. What is the difference? 

R: One example would be that New Keynesians focus on market imperfections and that provides the justification for intervention. But the implication is that without those imperfections we would be in the perfect general equilibrium world and intervention wouldn’t be required. So, it’s great that they are focusing on limitations of markets and therefore proposing policies which often would be supported by Post-Keynesians. But Post-Keynesians would approach the question very differently; the rationale for intervention, and the starting point in other words would not be an ideal general equilibrium world. This is difficult to talk about because the differences are so profound. A Post-Keynesian would start with a historical understanding of a particular context, not seek a universal solution; understand ways in which the market economy does not ensure full employment (the principle of effective demand is a core principle within the Post-Keynesian approach); look at the role of money; look at the way in which financial markets create instability and through financial instability create economic and monetary instability.

I: Is it more historical and descriptive to some degree than New Keynesian?

R: Yes. But I’m a bit wary of the word descriptive.

I: Why?

R: Semantics are kind of critical in all of this. Descriptive makes it sound like something that’s not analytical. My approach to history is that what we need is analytical history; in other words pure description (even if feasible) actually is not our objective. When we are talking about undergraduate courses, clearly description of a particular context is fair enough, but if we take it beyond that, we are getting to analytical history where we are recognising inevitably that when we look at history we are imposing a framework but also drawing out a framework. It’s a two-way process.

I: Yes. So are there different ways to do economic analysis?

R: What do you mean?

I: Well, New Keynesians are very technical, they do analytical work in the sense that they model everything. Are Post-Keynesians equally; from a methodological perspective; are they equally technical or scientific?

R: Some are very technical, while many are not. I mean, there’s a range of approaches within Post-Keynesian economics and some Post-Keynesians develop formal models and test them and yet know about the limitations of models and therefore talk about them in a different way. This is quite critical. Outside economic models, certainly Post-Keynesian economics is analytical. I think you mentioned the word scientific. This whole question of science and rigour is another huge topic.

I: It is. If you would like to touch upon it, please do so.

R: Sure. The question is rigour with respect to what? Defining economics in terms of formal models and presenting that as the entire argument involves rigour in the form of internal consistency, internal clarity and so on, and that’s often identified as scientific rigour. But, if you asked a physicist, they would find this a little puzzling because for them rigour needs to be with respect to evidence. So you would think applied economics would qualify as science, but it’s interesting in economics that it’s the pure theory that in a way is regarded as more rigorous because it’s pure, it’s less messy than applied theory. But, if we are talking about rigour with respect to the goals of economics, which is to understand the economy, understand it enough to consider ways in which policy can ameliorate situations, improve the world, then the rigour has to be with respect to that understanding, and if that’s a concept of rigour and what’s scientific, then anything that is not closely aligned with that kind of understanding is less rigorous.

I: This is actually an important stepping stone because I want to return to what you said about pluralism. If we look to physics, we can go back to a system where the earth was a centre of the universe but we see it from a history of science perspective. We have, to some degree, found that this is not a good representation of our reality. So, in this, I think physics is slightly different to economics. Or maybe it is not in how it approaches reality.

R: I don’t know enough about physics. Nevertheless, I will say something, which is that societies are far more complex. I mean, Max Planck said that he thought about becoming an economist and decided against it on the grounds that physics would be easier.

I: Fair enough. I was trying to get to something different. This is can you have competing interpretations of social phenomena without saying that one should be right and the other should be wrong? Or that difference approaches to social phenomena have something to add to each other, or are of value, equally of value?

R: Yes. It’s inevitable with something as complex as society and economies within society that there are going to be different perspectives, there are going to be different understandings of the way the world works. There’s bound to be simplification/abstraction and therefore scope for different choices as to how one goes about that, which of course is : a) inevitable but b) very helpful if this is fostered because then we get a better understanding of the whole. There is the old metaphor of an elephant. A blind person would get some understanding from feeling a leg, another from feeling the trunk, another from feeling a tusk and so on. While each disagrees with the others about the nature of the elephant, you get a better understanding of the elephant if you bring all this together. It’s not as easy with an economy but it’s a useful metaphor, I think.

I: To put the things that you discussed together, pluralism is important. Does this mean different models or systems of thought?

R: Yes. I’m talking about different systems of thought.

I: Does that mean the different economists have different systems they employ? Can they move between systems? What do you think?

R: Yes. The idea of a school of thought is in a way a category like any other category, it’s a way of encapsulating something very complex- for example, I call myself a Post-Keynesian. That’s shorthand for the way I use language, the concepts I use and so on. Many people don’t like being put in a school of thought because they differ in various ways. But I find it a hugely helpful shorthand which aids communication, that you know where somebody is coming from if you know what school of thought they are identified with. But I also think it’s helpful to dig a bit deeper than schools of thought, and for students I think this is particularly important. In a way, before I approached the question of schools of thought, when I was trying to figure out how economists were thinking- this was what was driving a lot of my research. Why do economists get so excited about the slope of the IS curve? I couldn’t understand that. What’s really getting them excited? So I drilled down further to what can be called mode of thought. Whitehead wrote about modes of thought; it’s an old concept. There are no doubt – and this is important – many modes of thought but I picked on two, one called the Cartesian/Euclidean mode of thought and the other the Babylonian mode of thought. And you’ll see in a minute why it’s important that I stress that there are more than two. Each has various characteristics. The Cartesian/Euclidean mode of thought is axiomatic. It’s what I would now call a closed system and that’s a way of explaining it that I developed subsequently. It involves dualism, which is why we need to recognise there’s more than two schools of thought. (You can imagine how people came back to me when I suggested that dualism is important.) With students, I think it’s helpful to invite them to try to think how they think. And it is not easy. Some people think dualistically and others don’t. I don’t know why. A psychologist, presumably, could try. Victoria Chick wrote something where she sort of ventured into this territory. But if we just accept this as a fact that, for whatever reason-

I: Excuse me, could you give us an example what you mean dualistically?

R: To think in either/or terms. Either you are rational or you are irrational. A variable is either endogenous or it’s exogenous. 

I: I may regret saying this, but I think this is related to Aristotelian logic, if I’m not mistaken. A statement is either true or false. I think it can’t be neither of the two or something in between. A lot of western thought is based on that.

R: Yes.

I: And of course there are other ways of thought which do not have this element as you say.

R: Absolutely, yes. But it’s been a hugely powerful tradition in western thought and in our educational tradition it’s been tremendously important. And the reason that I think it’s important to ask students about this, is that naturally people seem to think that way or they think some other way. But sometimes they naturally don’t think dualistically and yet are forced into it by their education system. Or as economic students maybe they are forced into it by the way in which economics has been taught and they don’t understand why they feel they are dissatisfied by it. If you naturally think dualistically then you are going to be drawn to the mainstream way of doing economics, that’s going to be what you are going to defend as the best way of doing economics. Which is fine. This is the point of pluralism.

I: You can also exist. Work together with others who think differently.

R: Yes. But the important thing is to try and understand not only how you, yourself, think but also how others think because this aids communication. It’s really hard to have the debate if you don’t recognise that. 

I: But can you have communication if the level of disagreement is so deep that you cannot agree with what you disagree, because this is very fundamental, it is a mode of thought. 

R: It is. 

I: So can you have a conversation between people who don’t even share that basic understanding of the differences of mode of thought?

R: You get a better understanding if both parties understand this. It’s a tall order and really the people that need to use this are methodologists in analysing how economists do economics. The alternative mode of thought which I used as contrast is Feynman’s Babylonian mathematics as an exemplar of a different way of thinking which is not to start with axioms but to start with a problem and then use different lines of argument to take different starting points. Thus there’s no necessity to start with one place rather than another- the starting point is determined by the nature of the problem. And then you build up arguments using different trains of logic and different types of evidence and you may be noticing here that it’s very Keynesian, actually.

I: I was thinking that there is an empiricist element, an English empiricist element in what you say. It might be Keynesian but possibly emanate from Hume…

R: I can’t let you get away with that, Scottish empiricist.

I: Apologies! it is Scottish empiricist. Do you think there is a difference between the English school of thought, especially Marshall, and some of the continental schools of thought, which became more important after the war? 

R: Yes, Marshall is a difficult character to categorise because in many ways he was influenced by the Scottish approach to epistemology which had this tradition through Cambridge, in fact. That’s a whole other subject about Marshall. 

I: One of the interesting things -especially after the war- is the axiomatisation of economics -of general equilibrium- and at least to some degree this has affinities with more continental work. Do you see this relating to a difference in the mode of thought in some way and the type of economics which are being practiced?

R: Yes. It’s a way of thinking about it. Yes. 

I: Not all continentals have that, obviously.

R: The clearest contrast is with French rationalism. But there are echoes now in the sort of open system, closed system distinction. That corresponds exactly to Babylonian versus Cartesian/Euclidian, which brings me to an issue of dualism, if I may carry on with this. Sharing the view that the social world is an open system and the economy within it is an open system and the way we think about it should be more along the lines of different strands of reasoning drawing on different pieces of evidence and so on, doesn’t preclude the emergence of schools of thought - different understandings of what the nature of the real world is. And that immediately opens up possibilities to different schools of thought, which have different takes on what that methodology should consist of. Neo Austrians would pick one type of reasoning and approach to evidence. Marxians would take another approach. Post-Keynesian another and so on.

I: So they are constituted across different ontological lines. Or not even necessarily that, I suppose. They might have different methodologies. 

R: Well I would want to start with ontology.  And I know this is controversial: that beyond accepting that the real world is an open system, I see different schools of thought as being identified with different ontologies and that’s what drives differences in methodology. There are crossovers. Ontology is important and that’s why I think one should start with the way in which a school of thought understands the nature of the real world.

I: It’s very interesting because then these disagreements are very deep. 

R: Yes, which is why they need to be recognised.

I: How would you approach students to think with different systems of thought? Is it something that can be done? Or is it something that would confuse them too much? Are we leaning towards anything goes, anything, maybe a system of thought or any analytical device, may be something we can bring in?

R: Well, there are two big issues. I’ll deal with the anything goes one first, because this is a very frequent critique of pluralism. At one level, at the epistemological level, that is at the level of theory of knowledge it’s possible -and I would argue desirable- to recognise that there is scope for different systems of knowledge and each should be respected in the sense that each is open to challenge. When it comes to developing from that principle schools of thought in economics, the range of possibilities inevitably has to be limited. It’s something called structured pluralism. There has to be some structure, and this is for the purely logistical reason that a school of thought functions as a community and there’s only scope for so many communities. This comes back to what we started off talking about in terms of language, because concepts are understood in a common way and words are used in a common way within a school of thought that allows constructive research to flourish. We know people who are individuals who don’t fit in any school of thought and often it’s very difficult for them to communicate. So for economics to flourish there’s only room for so many schools of thought. It’s not a question of eventually arriving at one which is right and the other is wrong. The point of pluralism is that each should be both willing and able to justify the approach. Which means that schools of thought can’t be fully incommensurate. I mean, if we are thinking about Kuhn, then paradigms are incommensurate but they can’t be fully incommensurate. And I would say that the reason that they are not is that they are all dealing with the economy, which we understand in different ways but it’s there as a common focus for attention.

I: Can they become outdated? I don’t want to be provocative but someone could say Post-Keynesians is an outdated school because now most Keynesians are New Keynesians.

R: Well, my first answer would be that Post- and New Keynesians are very different as I discussed before, and if I had a lot of time I would explain more fully why they are different. But to return to your question, a school of thought can become outdated if it doesn’t keep up with context. Part of the Post- Keynesian approach is to emphasise the argument that there are no universal theories, that theories are provisional and in each context, at the same time, never mind overtime, there may be differences. This goes way back to Newton’s experimental philosophy and the way in which it was adapted by Smith and Hume: an axiomatic approach was the wrong way to go, rather one takes a starting point which makes sense for a particular problem. Then, given what we know from the past, we try it out in a context, but we should be willing to adapt. And if Post- Keynesianism doesn’t adapt well it will indeed become out of date. However, today, Post-Keynesianism has got so much to say. It’s been saying it for decades, things that are relevant to the crisis and what one should do about it. So I don’t see it being outdated for a long time.

I: I agree. It’s very interesting the use that you have of language because you said it’s a community and people who have lost their community, if we can go there, find it very difficult to communicate with outsiders.

R: Yes.

I: What about resurrecting communities or returning to texts of communities that may have a ‘chequered’ past? What I’m getting at is, first, the creation of new communities. Is it possible to have new systems of thought? And second, what is the place of the text within a school of thought? 

R: Right. Certainly new communities can form. I’ve seen, over the years, really interesting crossovers between what used to be distinct schools of thought, and, in a sense, that’s forming new communities. This is something that PhD students often do when they are looking for something new to explore. They see some ideas in one school of thought and some ideas in another school of thought and they see connections. This, to my mind, is how economics often has progressed. If that develops into a kind of synthetic body of thought then that’s a new school of thought. It’s not one and it’s not the other, it’s something different and it’s something very creative and constructive. 

I: That’s very interesting because it brings me to the second part of the question, which is: You spoke about language and you spoke about oral communities. I want to speak a bit more about texts.

R: Oh yes, I didn’t answer that. 

I: What’s the difference in texts, or are texts important in the different schools of thought, or in your work? You mentioned language as important in all the communities but there’s also the written word, a lot of research and teaching these days happens to be written work and my interest is in how does that fit within what you were discussing with schools? 

R: Clearly, if you are talking about Post-Keynesian economics, Keynes’ texts are very important. They’ve been important to building up the foundations of Post-Keynesian. I mean, particularly in the 1970s when the Royal Economic Society published The Collected Writings, there was a huge amount of research done particularly on the Treatise on Probability and from that developed the understanding that Keynes’ economics built on his philosophy, so that informed the understanding of his economics.

I: So do you see that as enriching a tradition? Part of what I’m trying to get to is: do texts have the same place in different traditions? Is it simply different texts? Do mainstream economists go back to other texts than you go back to?

R: No. The mainstream take the view of history of thought that it has progressed and anything in the past therefore by definition is an inferior version of what we have now, so that it’s of historical interest to look at all texts but generally speaking it’s not informative.

I: Why do you find them informative? That is why do we need the old texts if, as the mainstream says, they are outdated, they are discarded bits of theory that were left in the past?

R: We were talking earlier about approaches to science and I was referring to Newton and the way in which Smith and Hume picked up Newton’s experimental approach to science. For Smith and Hume, they were obviously not performing physical experiments. For them the evidence that they drew on was the past and so they studied different societies in different places and from that drew out provisional principles but they also studied texts to help them understand those contexts. And by the same token, we look at old texts as a way of understanding the context at that time, understanding how great economists addressed those contexts, how they developed their ideas. Now, obviously, things are very different now from the 18th Century or subsequent periods where we might look at texts but we learn a lot from the way in which principles were developed, amended, applied, added to other new principles and so on. And this is our experimental philosophy, this helps us deal with the current situation. And if you want a concrete example, it would have helped tremendously if a lot of people had read something like Kindleberger’s Manias, Panics and Crashes, through which they’d have understood that crises have happened before, people have talked about it, dealt with it and that would have been a tremendous help in the initial stages of dealing with the latest crisis. It was shocking how many people were unaware that this kind of thing had happened before.

I: Your answer reminds me of an article by Kenneth Boulding who spoke about the extended present. This was, I think, from the 70s2 but he said that reading past texts in economics could be approaching alternative viewpoints which cannot be found today within the current environment. Do you agree with that?

R: Absolutely. Yes. There’s a lot of reclaiming of old ideas that has to go on, particularly because the study of the history of thought has been discouraged in many places. There is more support for history of thought which is encouraging. I think there are more departments now which are interested in having it taught. But absolutely, it’s not just a matter of historical interest; it’s a resource for us to deal with the present.

I: This has been one of the things you have been doing research on. What has motivated you in doing research in this field?

R: Doing research on history of thought comes naturally. The way I was taught economics was in the old Scottish political economy tradition which is that everything is taught historically. If you go back to the time of Adam Smith, mathematics was taught historically. I mean, rather than teaching an approach as the best one, they would teach different approaches and show how different approaches to mathematics were useful in different contexts. And I would argue that this was tremendously helpful in the inventiveness in Scotland, that this encouraged lateral thinking. The students went out there equipped with the idea that there are different approaches and it was up to them to think through a particular problem drawing on different possibilities. Sorry, that’s a rather long-winded way of answering your question. But this is the tradition which I was taught. 

I still remember my first lecture on economics started with capital theory. I didn’t understand it till later but I obviously remembered it. We talked about the Greeks, ancient Greeks, and Romans and their thought that informs us on economics now. And throughout the programme there was always this reference to history. It was taught with reference to methodology. But not as something separate, it was just the way the material was presented. I was brought up in Scottish society, that’s how people approach things and why argument, not hostile argument but just argument, is just such an important part of civil society, well and religious society, in Scotland. So it comes naturally to me. But I became aware that it didn’t come naturally to other people coming from different traditions and in some ways it was trying to unpick that and figure out what was different, why I approached things the way I did, that I tried to sort of draw back from that and analyse it.

I: How has that informed the way you teach economics?

R: Well I try and teach economics that way. I can’t do it without talking about history of thought and methodology.

I: Have you seen, through your career in Scotland, and elsewhere, economics being taught in a different way, or has it changed through this period? 

R: Oh absolutely, yes. 

I: Is it’s simply updating the material, or is it a more substantial change?

R: No, the change is quite substantial. It’s the way in which economics is understood has changed. I mean, at the same time, there was a change of degree structure. It used to be compulsory in Scottish universities for students to take courses on either moral philosophy or logic metaphysics in their first year. This goes way back, centuries, so that meant that students had the basis for learning other subjects in the way I’ve described. That’s gone. So the background of students is different. But at the same time, there’s been this change that’s well documented in the way in which economics is understood. Departments are no longer called departments of political economy, they are economics departments. Benchmarking sets out what a core curriculum should consist of and so on.

I: One argument usually is that economists need to know much more mathematics to be able to do what they do in modelling and therefore you have to free up other parts of the curriculum. Do you see that as a valid critique?

R: Well, it’s a fact that if you want to spend more time developing technical skills then inevitably that crowds out other things. So it’s a matter of priorities. Formal mathematical modelling doesn’t have to be drawn out so much within the programme. And motivated students will pick it up more quickly anyway. The evidence from departments which have been taking a different approach to teaching recently is that students are more engaged if they are taught in a political economy way. In other words, with some economic history and exposure to different approaches, they are more motivated, they are more satisfied and therefore we know that improves the capacity to learn and the motivation to learn.

I: In some ways this relates to a discussion of whether economics should be taught more as a humanist subject and more what can be traditionally called liberal arts or it should be taught in a technical way which is that it produces good economists the same way that engineering produces good engineers. What are your thoughts on the matter?

R: It depends how you understand the discipline. If you think of economics as a technical discipline, then that’s what ought to be taught, but there are many other approaches to economics. And while a pluralist, I would nevertheless argue that the technical approach to economics is very limited and students should be given the equipment to understand the history of economies, understand different perspectives on the economy. Having said that, I don’t think it’s necessary to teach a full array of schools of thought. I mean, in advanced courses there is scope for that. But there are very simple things that can be done to just start students off in thinking in these terms just by exposing them to the possibility of even one other school of thought and not presenting that other as being the right one, in other words, not replacing one mainstream by another mainstream but just starting off the idea that it’s all contestable and that they, the students, can contest it. My teaching experience is that the most effective thing I was able to do in my history of thought and methodology course (which the students actually used as a vehicle for talking about economics), was the task assigned for the first seminar: I asked them to prepare a presentation on a piece of writing that they found interesting for some reason – either they liked it, didn’t like it or whatever - and they found that opened their minds. It was quite remarkable. If they got the point right from the beginning, fine, but for many students, just the notion that they were invited to express an opinion about a piece of writing was liberating and once they got that they were off and running. It was really quite remarkable. 

I: This has been something occasionally brought up in these debates, that students these days can finish an economics degree with a distinction without ever -in an exam- voicing an opinion of any kind or indeed taking a position. Do you think that is a loss?

R: Absolutely. For these students, if that’s indeed the case, then they are going to be at a disadvantage. Particularly looking for jobs outside academia, economists are expected to be able to express an opinion and to take a new situation and do something with it. Within academia, if you are an academic and are not equipped to express an opinion, then it’s so limiting that it’s hard to talk about.

I: I’m just going to unpick a bit what you said if I may. Are you not expressing an opinion, or are you expressing a specific opinion that you are unaware of, you think? What is the right way to put it? 

R: No, you are right. There is an implicit opinion that the answers that they can provide are the best answers, but the trouble is a) they may not be aware of it and b) circumstances can arise where you can’t express an opinion. I taught money in banking and I would teach about financial stability and their eyes would glaze over when things were calm because they didn’t quite understand what the relevance of it was. But what I was trying to do was equip them to deal with something unexpected that would happen to them in the future when they were working for a bank, that they’d be able to say, ‘Oh yes, I understand why that’s happening,’ and then the crisis happened, didn’t it, and I heard from some students that they were able to express an opinion.

I: You mentioned earlier teaching and discussion and opinion. Do you think all schools are equally open to different opinions? If you go for a Cartesian divide between something being right or wrong, these schools would naturally consider opinions difficult. Well, I don’t know how you could fit an opinion within that system of understanding.

R: Yes. This is a big area for discussion within non-mainstream economics about what this means, what it entails. And there’s a suggestion that some non-mainstream schools of thought are monist, that they do take a right/wrong attitude, which I dispute on the grounds that every non-mainstream school of thought sets out its stall, justifies it, in relation to something else, normally the mainstream. As soon as you recognise another you are on the road, you’ve moved away from monism. So there are differences clearly but some non-mainstream economists might not accept that they are pluralist. But I would argue that they are because just the very act of justification means that you are recognising that there’s another. 

I: You know we could turn this argument on its head and say that all other schools of thought, the non-mainstream, are reactions to the mainstream rather than self-standing structures.

R: Oh. Yes, in the current environment. But I was just in a session where somebody was talking about the strategy for non-mainstream economists should be to reclaim economics. These traditions which underpin the different schools of thought now go way, way back. They are political economy traditions which have a much longer pedigree than what is now the mainstream, which is why it’s important to look back at old texts, not to sort of cement schools of thought in the past but just to inform the way in which they can address the future.

I: Some economists found it very difficult to respond to the current crisis because they did not have such a view. So I wanted to ask you, from your past, has something changed your view about things, maybe an event in your career made you rethink your stance in economics. In what way has that happened?

R: I can’t think of any particular event. Obviously, there have been changes in my way of thinking. This is perhaps not answering your question but a particular enjoyable experience was when I was asked to write a contribution for a volume on Keynes on endogenous money and I thought oh dear, I’m going to have to write something dealing with Keynes not having an endogenous view of money. I thought, okay, well this has got to be done. But the more I read, the more I discovered he did have an endogenous view of money. And it was great fun. It was like a sort of detection exercise. So I changed my mind about Keynes. What makes what we do fun, I think, is discovering new things that challenge what we think.

I: That answers my question- in that that you started with a preconception and you changed it through this process. And since you are on Keynes, I’m slightly changing topic but it was something I wanted to ask you. How do you think economics relates to moral philosophy? 

R: Well, it’s inextricably bound up with moral philosophy. This goes back to my training, that the way in which we understand the world, the way in which we construct knowledge about it and therefore the way in which we proceed as economists, is grounded in moral philosophy. And in a way to understand differences between approaches requires us to go back to moral philosophy and try to unpick what implicit moral philosophy lies behind different approaches within economics.

I: So you think this is an important part? It should be an explicit part of education?

R: Absolutely, yes. 

I: Do you think economic theories generally have implicit moral statements?

R: Oh yes. Yes. I mean, what’s immoral is for it not to be admitted. 

I: So do you think there are right and wrong ways of doing economics?

R: No. There are better and worse ways of doing economics. I’m prepared to argue fiercely for what I think is the best way of doing economics, but I recognise that others have different views. And not only is it legitimate that others have different views, but it’s beneficial that they do because they bring something different to the table and enhance our understanding. I mean, my understanding is clearly limited by my own perspective. 

I: I read somewhere… I’m trying to remember the reference. I think it was Kermode but I may be mistaken, who said that conversation is with someone you don’t completely agree but you can see somehow how another well-meaning person may hold that view. 3 

R: Yes. That’s really what should be happening, that there should be conversation between the different approaches. It happens substantially between different non-mainstream approaches. There are fierce arguments, obviously, but that’s the point, that’s how thinking progresses by expressing your point of view even if it is a direct challenge to somebody else’s point of view. Now, there’s an asymmetry with mainstream economics. And I want to qualify what I’m going to say by knowing that there are many mainstream economists who are open to discussion and debate but are limited by the fact that non-mainstream economics is not there in journals that they are familiar with, it’s not in the discourse of which they are part. So I think there’s a lot of scope for dialogue with mainstream economists who are open-minded and I do know many who are but there are many who are not and this is hugely problematic to my mind that we can’t have a constructive dialogue.

I: Do you think the crisis has changed this?

R: No, I don’t think it has. Well, I think it’s increased the number of mainstream economists who are uneasy and there’s a lot of pushing at the edges going on in mainstream economics and in good ways but, as I suggested earlier, the way in which the crisis was understood is still nevertheless predominantly expressed with respect to the traditional mainstream benchmark and that really constrains what can be said.

I: So do you have any thoughts about the future of economics before we close?

R: Well, by nature, I’m an optimist and I see signs for hope. And partly it’s because of the crisis, that it has shaken things up and it has opened up awareness of the limitations of relying on formal models as the full argument and it has encouraged a lot of work challenging mainstream economics around the edges. So that’s really good. At the same time, there’s a ground swell of activism outside the mainstream which is producing not only a body of thinking from different perspectives but it’s actually producing tangible materials on which economics of different perspectives can build. There’s lots of new teaching materials, lots of resources for research which are being built up. The student movement has been a hugely important part of this and I regard that as a very hopeful sign. They’ve got a fantastic organisation, they are producing lots of great material and they are the next generation. 

I: Professor Dow, thank you very much for your time. 

(End of recording)