One paradigm or many? Toward a democracy-oriented economics
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Democracy is a big issue these days in many countries. The leadership in some nations tries to systematically weaken democracy, it appears. I am thinking of Hungary and Poland. Even in the USA Donald Trump behaves strangely in relation to normal principles of democracy.
What are those principles of democracy? How do we deal with democracy in economics education? When consulting the standard textbook of mainstream neoclassical economics (Mankiw and Taylor, 2011) I realize that the word “democracy” is not part of the index at the end of the book. There are a lot of references to “demand” in the index but nothing to “democracy”. This lack of interest in democracy within the subject of economics can be understood as part of an assumed value-neutrality of economics (or assumption of being close to value-neutrality).
Mankiw and his colleague try to deal with this by making a distinction between “positive statements” which are “descriptive” and “normative statements” which are “prescriptive” (Ibid. p. 32). I share Gunnar Myrdal´s position that “values are always with us” in economics research and education (Myrdal, 1978, p. 778). Even so called “positive” or “descriptive” statements are built upon values about how to frame an issue and about what to describe and how to describe it.
My point in this short essay is that democracy should be seen as an essential building block in any economics. As economists we should be part of those who want to strengthen democracy rather than weaken it in any country and even globally (Shiva, 2005). Democracy is about involving as many citizens as possible in governance and it is opposed to authoritarian regimes; it is about how power should be allocated in society. It is about the human right to have an opinion (without being sent to jail). It is about voting procedures and many other things.
The mentioned position of Myrdal implies that there is no value-free paradigm in economics. The neoclassical paradigm is ideologically oriented toward markets, commodities, prices, competition etc.. Analysis is generally carried out in monetary terms. There is no questioning of the main features of the present political-economic system. This is OK and may be useful to some extent and in some situations but such a perspective cannot claim to be the only one in a democratic society. Heterodox economists suggest other conceptual frameworks connected with other ideological orientations. In my case of an “institutional ecological economics”, the United Nations 17 Sustainable Development Goals (SDGs) are at the heart of my ideological orientation and I am even ready to question some essential elements of the present political-economic system in the attempts to improve performance in relation to the 17 SDGs.
This reasoning suggests that limiting analysis in economics to one single paradigm is not compatible with democracy but rather with its opposite, dictatorship. It is a kind of manipulation that should not be permitted in a democratic society.
The fact that many ideological orientations, for example connected with different political parties, are present in a society should be reflected in how we work as economists. Each economist is an actor (with an ideological orientation) and thus a political economic person among many. She (he) can clarify her (his) views in specific ways but need to be aware of the existence of other paradigms. Humility is a quality that needs to be cultivated by all of us as economists. Pluralism appears to be a relevant position. In a social science such as economics, the “paradigm-shift” idea – implying that at any one time only one paradigm is respected – should be replaced with a “paradigm-coexistence” view.
So, the question raised in the title of this short essay about whether we should think in terms of “one paradigm or many” is answered in the direction of some diversity. There are many paradigms and connected ideological orientations rather than one. We can learn from each other; paradigms can be compared with respect to conceptual framework (and performance when applied) and you do not need to be critical about everything outside your preferred paradigm. While neoclassical theory and method does not go well with sustainable development, I can well admit that taxes, charges or monetary budget instruments can be used in influencing the members of society and the economy. It is only the case that something more and different is also needed.
Mankiw, N. Gregory and Mark P. Taylor, 2011. Economics (Second edition). South-Western CENGAGE Learning, Andover, UK.
Myrdal, Gunnar, 1978. Institutional Economics, Journal of Economic Issues, Vol. 12, No 4, pp. 771-783.
Shiva, Vandana, 2005. Earth democracy. Justice, Sustainability and Peace. Zed Books, London.
From: pp.7 of WEA Commentaries 10(4), December 2020
You talk as if we have far more democracy than we actually have. I think that is because we have what is somewhat misleadingly described as representative government rather than democracy. Ancient Athens had real democracy in which all adult men who were citizens participated in a meaningful and maximal way in the legislative, judicial and defensive functions of government. Slaves and women were denied participation but it was not democracy for slave owners only. The strongest supporters of Athenian democracy were the poorer citizens of the polis. The ancient Athenians manged to achieve a higher level of participation in democratic life than any modern societies that have eliminated slavery and reduced the subjucation of women. They were able to do that because they did not settle for representative government which amounts to another variant on rule by the few or oligarchy.
To John R. Bell; Thank you for your comments. While there is aggreement in many ways, democracy is still a contested concept in the sense that it can be interpreted in more ways than one. And democracy may refer to different contexts and communities. In my short essay I am essentially referring to the community of economists and how such a community relates to the larger society. As I see it, democracy is essentially about “listening to many voices”. In the community of economists, some dialogue is possible (as in these WEA Commentaries) but there is “too little democracy” as you say. Neoclassical economists are protecting their paradigm in ways that are close to dictatorship. And they are in a power position in relation to the larger society.
The situation with respect to democracy differs among countries. The (essentially) two-party system in USA or UK differs from the multi-party system in a nation such as Sweden. I believe that the Swedish system has certain advantages in terms of listening tomany voices for example.But my main point is that democracy can be strengthened in any country or community. As economists we need to be part of that discourse about how to strengthen democracy. In my case as ecological economist I am eager to facilitate life for those who take sustainability issues seriously.