In June 2000, several Parisian economics students circulated a petition calling for the reform of their economics curriculum. Their complaint was the inability of the neoclassical economics they were studying to satisfy their need for a deep understanding of the operation of real-life economies. They called for a reform of the university curriculum that would tolerate analytical diversity and foster critical dialogue across contrasting approaches to economics. Their demand was taken up by large numbers of students, and a similar demand was formulated by Ph.D. students at Cambridge University in the UK the next year. This reform movement has grown in Europe, under the rubric of "post-autistic economics." This volume presents their case, but with voices of professional economists rather than students.
My interest in this book and this movement stems from my life-long battle against neoclassical orthodoxy. My conclusion from reading this edited volume is that the post-autistic economics critique is intellectually shoddy and incapable of leading to positive change in how economics is done and taught. Their central critique is that neoclassical economics does not describe real-world economies, and must be replaced by or supplemented with other approaches. This is just wrong. While the elementary courses are far from the real world, advanced courses in such areas as labor, international finance, macroeconomic policy, economic development, law and economics, environmental economics, and so on, are quite real-world. If undergraduate students left with a degree in economics that allowed them to understand The Economist and the Journal of Economic Perspectives, the level of economic awareness in the world would be considerably higher. If the undergraduate curriculum does not bring students to this level, the curriculum is, to my mind, faulty. Perhaps less stress on arcane theories that are relevant only to professional economists should be replaced by a more historical, institutional, and hands-on approach to microeconomic and macroeconomic issues. But, this is not a critique of neoclassical orthodoxy, and does require a move towards a "heterodox" analytical environment in the economics profession.
There is a reason that neoclassical theory has triumphed: it is the only promising approach to economics. Marxism, Keynesianism, Institutionalism, Syndicalism, Austrian economics, and the like developed strongly for a while and then foundered. They certainly do not present analytically interesting alternatives to neoclassical economics. My own view is that neoclassical economics has profound problems, but they can only be addressed from within, not by embracing some "heterodox" alternative. Nothing in this book even remotely shakes my confidence in this matter. With enemies like post-autistic economics, neoclassical economics doesn't need much in the way of friends.
[...] There is a short piece on behavioral economics, which has been one of the most vibrant areas in economics over the past 25 years, but the author makes the mistake of thinking that behavioral economics is an alternative to neoclassical economics. It is not. It uses decision theory and game theory to critique the Homo economicus of traditional economic theory, but the profession is responding by revising Homo economicus, not by rejecting behavioral economics (see recent papers in Econometrica, the Quarterly Journal of Economics, and other journals). I believe the post-autistic economics people are simply ignorant of the phenomenal work of Ernst Fehr, Abijit Banerjee and Esther Duflo, Colin Camerer, Samuel Bowles, George Loewenstein, Daniel Kahneman, Benoit Mandelbrot, Edward Glaeser, David Laibson, Matthew Rabin, Bruno Frey, Elinor Ostrom, Armin Falk, Simon Gaechter, Jean Tirole, Aldo Rustichini, and many others. They never heard of neuroeconomics or econophysics or the notion of the economy as a complex system, with its stress on agent-based modeling. All of these authors present profound critiques of standard neoclassical economics, and some actually would sympathize with the post-autistic critique. But, the current movement is to transform analytical economics to meet the empirical challenges posed by new data, not retreat to some defunct 19th century doctrine.
This volume shows that the leaders of the post-autistic economics movement prefer quantity to quality. The papers in this book are generally quite lacking in challenge for the professional economist. Many are just silly, and some are egregiously incorrect. Perhaps the worst is the paper by Bernard Guerrien, "Can We Expect Anything From Game Theory?" Guerrien asserts, without evidence, that "game theory models are always `stories', like fables or parables, with no relation to real-life situations." Really? What about auction theory, which has been so successful in organizing the sale of bandwidth in many countries? How does one explain the role of game theory in revolutionizing Industrial Organization? Moreover, game theory is the basis for all of behavioral economics, and accounts for its experimental success in large part. Guerrien's description of game theory is quite faulty. "...players are supposed to choose separately and simultaneously one element of their strategy set...", says Guerrien, and launches a broad critique on that basis. But, he is just wrong. Evidently he never heard of extensive form games or behavioral strategies. In short, the intellectual level of this critique is abysmally low.
This book is just on the wrong track. It's as simple as that. They argue that the success of neoclassical economics is due to bureaucracy, ideology, and partisan politics. In fact, it is the only game in town, although it is a flawed game that deserves to be treated with continual hostility---but hostility from within, since there is no credible alterative. Let me be even more positive: I find contemporary economic theory extremely deep and challenging, and I believe it has some of the answers, and will aid in the development of other areas in which its answers are stupid and absurd. For instance, in perhaps the best piece in the book, Geoffrey M. Hodgson asks "Can Economics Start from the Individual Alone?" He argues persuasively that it cannot. However, traditional institutional economics is hardly the remedy. Rather I suspect that a fundamental theorem of Robert Aumann on the relationship between correlated equilibrium and Bayesian rationality is the key to transcending neoclassical economics' methodological individualism. But, the post-autistic people probably haven't a clue what Robert Aumann has written, and if they did, they would write incredibly sloppy critiques, on the order of Guerrien's critique of game theory.