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Economics as brain damage

By Karl North | February 4, 2010

Economics as Brain Damage*

Karl North 2004

On the first day of my first formal introduction to economics as an undergraduate, the professor defined the discipline as the scientific study of the distribution of scarce resources. But the course from then on was concerned only with such matters as market variables like supply and demand, and market mechanisms like price and interest rate. Although I learned that the course was typical of American introductory economics courses, I was confused and disappointed with it, but could not at the time articulate why. As American popular culture tends to subsume the dominant themes of its intellectual culture, so my enculturation until then gave me few clues about what bothered me about the course. The following year I spent in France as a student at the University of Paris. I studied political economy, took part in massive demonstrations against French colonial domination of Algeria, and was able to read in the European press about economic events, patterns, structures, and empires interpreted from a wide range of points of view. All of this was (sadly) new to me, and enlightening, and it finally hit me like a ton of bricks what was wrong with American economics.

Economics, as my undergraduate professor defined it the first day, claimed a particular territory in the realm of human experience for uninhibited scientific study. But instead of a wide-ranging inquiry into the various ways humans have organized (or could organize) the distribution of scarce resources, and how this distribution affects the distribution of power and other impacts that might concern members of society, the professor offered only vocational training: the study of the peculiar political economy of the United States (a market economy driven largely by private capital), and of only those aspects of the system that would be most useful for people pursuing the limited goal of succeeding in business. And by defining this tiny piece of the social science pie as “the science of economics” the professor was adding a huge dollop of ideology.

Why? Because, as any anthropologist knows, in virtually all of the many millennia of human history, societies practiced a wide variety of ways of organizing access and distribution of scarce resources, and none of them evolved the type of organization that began to appear in the last few centuries: a regime of values where the value of everything depends on its market price, where use-value surrenders to the stamp of commodification, where everything material and even ideas become ‘property’, and where even hold-out niches to protect such relics as ‘family values’ eventually succumb to market fundamentalism. Why elevate the study of this apparent aberration to the status of ‘science’? Why not devote economics to designing alternatives to this temporary misstep in human creativity?

Well, economists will have no truck with such subversion of their discipline. To protect its heavy ideological foundation, neo-classical economists have erected an intellectual firewall between their discipline and the rest of social science to preclude such contaminations as the analysis of class and power. Although in the forty years since my experience with ‘Economics 101’ I have been an avid amateur student of economic knowledge, I have learned nothing to disabuse me of the notion that economics as taught in the United States is mostly vocational training and ideology.

But why brain damage? After all at least the vocational training part has some positive use, however limited to short term business needs. To understand the problem, we need to consider the aims of a liberal education. For that is the context in which to properly evaluate any general introductory course in any discipline. A liberal education is generally thought to be education for life, and for informed citizenship. That is what the institution that offered my economics course claimed to provide, at a current undergraduate diploma price of over $100,000, like others of a small group of top-ranking schools focusing on undergraduate education. It is one thing for a business school to teach the economics of a market economy where private capital makes or influences many of the decisions that affect people’s lives. For there one expects a narrow vocational approach. To offer the same course as education for life is more like indoctrination. Moreover, to teach (by exclusion) that this is all there is to a science of economics is brain damage.

*title phrase courtesy of Hazel Henderson, renegade North American economist

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