Teaching Economics - epw.in

T H E E C O N O M I C W E E K L Y A N N U A L January, 1960

T e a c h i n g Economics Joan Robinson

For many years I have been employed as a teacher of theoretical economics; I would like to be­lieve that I earn my living honestly, but I often have doubts.

I am concerned particularly for India and other developing countries whose economic doctrines come to them mainly from England and in English,

Is what we are giving them helpful to their development?

I N Cambridge, one o r two o f our best men, in most years, come

f rom the sub-continent. This is not a t all su rpr i s ing . I f talent is f a i r l y evenly d is t r ibuted in various popu­lations, there must be eight poten­t i a l l y first-class men there for every one bred in B r i t a i n and where eco­nomic problems are of great i m ­portance and the natura l sciences not very wel l endowed, a larger pro­po r t i on of talent is attracted to the subject than w i t h us. ( I n the Thi r t i es , when unemployment was an urgent p rob lem and the discovery of remedies intel lectual ly exc i t ing , economies attracted more talent in England than it docs now.) A small p ropo r t i on come to Engl ish Universi t ies , but a small p r o p o r t i o n of a large total comes to qui te an appreciable number.

These good men who come to us to be taught (and the not-so good ones also) go home often to teach in their t u rn , and their pup i l s , too, become teachers and influence thought th rough other channels. Moreover, the books and the sub­jects chosen for examinations bear the stamp of Engl i sh teaching. We have a great responsibi l i ty on our shoulders. Are we do ing more ha rm or good?

In a gloomy mood, I t h ink of the h a r m . Most students, of course, approach their studies merely w i t h t i le a i m of passing an examinat ion and acqu i r ing a degree. (Th is is not a matter of na tura l talent, but of character and circumstance. Some who are na tura l ly b r i l l i a n t may set themselves this l im i t ed a i m . Some less clever may be more seri­ous.) The exam-passers learn the t r i c k of saying what is expected; of not asking themselves what is meant by what they are saying ( f o r that is d i s t u rb ing and dangerous and may lead to losing m a r k s ) , of repeating the par t i cu la r formula w h i c h sounds as though it was relevant to each par t icu la r question. In I n d i a , espe­c ia l ly , where the ancient belief in the power of words as such is s t i l l

strong, this comes qui te na tura l ly . The exam-passer who does wel l be­comes in due course an examiner and by then he has quite lost any doubts he may once have had to stifle. He has come to believe that this k i n d of th ing really is education. A n d so the system feeds on itself.

What about the few who are serious, who really want to learn something? W h a t do we do fo r them? The serious student is of ten attracted to economics by humani -ta r ian feeling and pa t r io t i sm—he wants to learn how to choose eco­nomic policies that w i l l increase human welfare. Or thodox teaching dellccts these feelings in to the dreary desert of so-called Wel fa re Econo­mics, a system of ideas based on a mechanistic psychology of a com­pletely i nd iv idua l i s t i c pursu i t of pleasure and avoidance of p a i n , w h i c h no one believes to be a cor­rect account of human nature, dish­ed up in algebraical formulae w h i c h do not even pretend to be applicable to actual data. As he goes deeper in to the matter, he reads some b r i l ­l iant and subtle authors who debunk the whole subject and show conclu­sively that its methodology was i n ­admissible. For most, this is too bi t ter a p i l l to swallow and they desperately c l ing to some scraps of what they have learned because no other way has been offered of for­mu la t i ng the vague benevolent feel­ings w i t h wh ich they began.

The serious student was hop ing , also, to learn something that would help h i m to make up his m i n d on the great question that lies open be­fore all the developing countries. How far can private-enterprise capi talism l*e made to serve national ends? W h y is i t that the Socialist countries appear to develop faster than the democracies? Is the cost that they exact f rom their people necessary, or could the j o b be done w i t h less pa in? Must he make an all-or-none choice or is there a m i d ­dle way? 3

He soon begins to notice that, wi thout any overt discussion of the question, he is being indoctr inated w i t h notions soaked in a pre judice for laisser-faire. Th i s is pa r t l y the result of a mere t ime-lag. Nine­teenth Century economic teaching was bu i l t .up round the conception of the meri ts of the free market , and in par t icu lar , of free trade ( w h i c h at that t ime favoured Br i t ­ish nat ional interests, though it was damag ing to I n d i a ) ; the modern text-books are s t i l l much influenced by the masters of that per iod . I t is p a r t l y the result of the choice of c u r r i c u l u m . A large p r o p o r t i o n of his t ime is taken up by the theory of relat ive prices. The question of the d i s t r i bu t ion of given resources amongst alternative ends, subject to the condi t ion that there is an equit­able (and not very unequal) d i s t r i ­bu t ion of purchasing power among the famil ies concerned, lends itself to e x h i b i t i n g a free market in a favourable l i g h t ; the student is re-qu i r ed to work out exercises devised to show how, in these conditions, interference w i t h the free play of the forces of supply and demand causes ha rm to the ind iv idua l s who make up the market. A l l this is very complicated, and when modi­fied by modern embellishments such as the theory of ol igopoly and i m -periect competi t ion, may well occu­py a year of lectures and reading. If the serious student has the ha rd i ­hood to ask: but are resources given, and is income d i s t r ibu ted equi tably? he is made to feel fool­ish. Do you not understand that these are necessary s i m p l i f y i n g as­sumptions for the analysis of prices? Y o u cannot expect to do everything at once.

It is t rue that we cannot, in the t ime avai lable , leach everything that we would l ike . But why do we pick out fo r treatment just that selection of topics that is least l ikely to raise any questions of fundamental im­

p o r t a n c e ?

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January, 1960 THE ECONOMIC WEEKLY ANNUAL

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THE ECONOMIC WEEKLY January, 1960

A R I D LANDS

T r u d g i n g th rough these a r i d lands, the serious student s t i l l hopes to l ea rn something about develop­ment, p l a n n i n g , inf la t ion and al l that concerns the b u r n i n g questions of Ind ia today. Here the mere p a s -sure of events has forced some new questions into the c u r r i c u l u m and a new theoretical apparatus of c a p i t a l / output ratios and g rowth rates has been hastily botched up to meet the need. Systematic teaching, however, for the most par t s t i l l rests at the stage of the o ld e q u i l i b r i u m theory. Take, for example, the question of choosing the c a p i t a l / o u t p u t rat io in f r a m i n g the plans for industrial isa­t i on . The text-book theory says, no more than that, i f we compare two economies, each already in e q u i l i ­b r i u m , w i t h the same total value of capital already in existence in each, the one w i t h the lower level of real wages w i l l have (on certain stated assumptions about compet i t ion etc) a h igher level of employment . That is where the argument is left . If the student falls in to the t rap of concluding that cu t t ing wages would cause employment to increase, very l i k e l y no one w i l l go out of their way to expla in w h y this is a non-sequitur.

The prestige of the teachers and the books bears down on the serious student w i t h a heavy weight . l i e learns to distrust his native common sense and to curb his generous im­pulses, He submits himself to a course of miseducation and comes out, not " b y the same door wherein he went''- but by another door, in the wrong street.

So in my gloomy mood. But even at the gloomiest, I do not th ink of g i v i n g up. The subject does exist. For better or worse it has become the basis of a flourishing profession. There is no s topping i t now. We must keep on pegging away and t r y to make the best of i t .

BEGIN WITH ECONOMIC SYSTEMS

H o w wou ld I l ike to sec teaching reformed? First , do not let us bother about the exam-passers. Whatever we teach they s t i l l reduce to slogans, and new slogans cannot be more mis-educating than the o ld ones. If the new ones are less easy to detach f r o m real i ty , they migh t even be a shade less mis educating.

For the serious students, I w o u l d take the b u l l by the horns and start f r o m the beg inn ing to discuss various types of economic system. Every

society (except Robinson Crusoe) has to have some rules of the game for organis ing p roduc t ion and the d i s t r ibu t ion of the produc t . Laisser faire capi ta l ism is on ly one of the possible sets of rules, and one in fact which is unemployable in a pure f o r m . It always has to be mixed w i t h some measures of col­lective cont ro l . The I n d i a n scene provides examples of pre-capitalist, capitalist and socialist games being played side by side. Students ac­quainted w i t h the old fast-vanishing w o r l d can help in t r y i n g to puzzle out the economic analysis of i ts func­t ion ing and to test out the meaning of concepts such as wages and capi­ta l in non-capitalist contexts.

A d a m Smi th , Ricardo, M a r x , Mar-shall and Keynes would be treated in terms of the model of an economic system that they each had in m i n d and of the actual problems that each sought to solve.

DISPLACE THEORY OF RELATIVE PRICES

I should displace the theory of the relative prices of commodit ies f rom the centre of the p ic ture and make the m a i n topic product ion , accumu­lat ion and d i s t r ibu t ion looked at f rom the po in t of view of an economy taken as a whole. Keynes's General Theory then falls in to place as the short-period section of a t ru ly gene­ral theory. Here pr ice theory comes in as an element in the theory of d i s t r ibu t ion , for the relat ion of prices to money-wage rates in the indust r ia l sector of an economy is one of the determinants of the dis­t r i b u t i o n of proceeds between work­ers and capital ists or the state, and the relat ion of agr icu l tu ra l to manu­fac tur ing prices is a ma in determi­nant of d i s t r ibu t ion between sectors of the economy.

Markets and the laws of supply and demand I should treat not only in terms of an ideal e u i l i b r i u m already achieved but also in terms of actual dealings in commodities, w i t h their tendency to develop cob­web cycles, and the violent shocks that arc given f r o m t ime to t ime to the communit ies dependent on them.

Welfare I should treat in human terms and teach the students to look, not for "preference surfaces", but for objective tests of standards of n u t r i t i o n and health.

In all this I should emphasise that economic theory, in itself, preaches no doctrines and cannot establish any universally v a l i d laws. It is a

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method of o rder ing ideas and fo rm­ula t ing questions. For this reason, I should pay a good deal of atten­t ion to method. I should insist upon the d is t inc t ion between an account­ing ident i ty , a statement of equi l i ­b r i u m conditions and a summary of econometric facts. Y = C + S, (where Y is net value of national income of a per iod , C is the value of purchases of consumable goods and S, net saving,) is an ident i ty . The word 'net ' covers a balancing factor (amort isa t ion of pre-existing capital) wh ich makes the two sides equal by def in i t ion . S = sY (where s is the p ropor t ion of national in­come normally saved) is a statement of conditions of e q u i l i b r i u m ; its whole significance lies in the sense given to normally. A table of figures g i v i n g estimates of S and Y over some past per iod is a statement, ex post, of supposed facts; its signi­ficance depends largely on the rel i­ab i l i t y of the estimates. None of these tells us anyth ing about causa­t ion and models b u i l t w i t h these bricks w i l l never stand up. To f ind causal relations wc want to know how individuals behave and bow the behaviour of various groups reacts on each other. I should t ry to break down the awe that students feel for formulae, not so as to induce a sceptical d r i f t into intellectual n ih i ­lism but so as to fo rm the habit of p i ck ing them to pieces and put t ing them together again, w i t h the ambi-g u i t i e s cleaned o i l , and keeping them f i r m l y in their place as useful adjuncts to common sense, not as substitutes for i t .

A l l this sounds dry and fo rma l i s t s but, i l lustrated first w i th precise imaginary simple examples, and then w i t h rough and inexact actual examples, leading up to questions of real importance, it can be made in -leresting and educational for the serious students. The exam-passers wi l l not be any the worse for i t .

A generation well educated, re-sistent to fudging , imbued w i t h the h u m i l i t y and the p r ide of genuine scientists, could make contribution? both to knowledge and to the con-duct of affairs that no one need be ashamed of.

Re tu rn ing f r o m this happy day dream, my gloom is a l l the deeper. To w r i t e down what I want to see emphasises how unl ike ly i t is that I ever, shall . But, courage! We must t r y as best we may to do a l i t t l e good here and there to set in the scales against all the ha rm.