Wise investment earns interest

November 6, 1998

The answer to the question posed by Francis Green, "Can economics stem a drop in (student) interest rates?" (THES, October 30), is an emphatic "Yes", provided academic economists react creatively and confidently to the now-entrenched trend showing a steady decline in students taking A-level economics and to the worrying signs of reduced demand for economics degrees.

. By far the most important factor behind the fall in numbers of A-level economics candidates has been the appearance of a new A-level subject, business studies, that students have - quite rightly -perceived as "softer" than economics, thus providing easier access to economics and related university degrees. Up to last year, the fall in A-level economics candidates was almost perfectly matched by the rise in business studies candidates. Faced with a "cheaper" competitor, the suppliers of A-level economics should resist the temptation to "dumb down" their subject and instead raise the quality and relevance of their syllabus.

. Green's argument is ultimately about the relevance and appeal of mainstream economics as taught at university level. A curious paradox is at work here: in the past 20 years or so, mainstream economics has definitely evolved from the much-caricatured Robinson Crusoesque world of "atomistic individuals (considered) as the elementary particles of economic life" into a much more complex system, which acknowledges interdependence, strategy, evolutionary behaviour and so on.

These developments ought to make economics not only a relevant, but also a most exciting subject. So why does it have "an image problem"? Two main reasons spring to mind. The first has to do with mathematics. While it is certainly the case that frontier research in economics is simply not feasible without fairly sophisticated mathematical and statistical techniques, the same does not apply to undergraduate economics, which nowadays can be taught rigorously with only a modicum of elementary maths.

The reason why economics is perceived as more mathematical than in the past is that the general level of basic numeracy and logic has plummeted in recent years.

The second reason for the ill-deserved image of the subject as uninspiring and boring is a direct result of the poor status of teaching and textbook writing in our universities. Government policy in this area has been totally mis-directed: serious academic economists have almost no incentive to divert their scarce time from publishable research to the time-consuming business of developing teaching materials designed to make the new and exciting developments in economic theory accessible to undergraduates. The scrapping of the pathetic and third-grade "staff development courses" and their replacement with a properly rewarded (academically and financially) competition for the production of first-class teaching material would be a welcome first step.

The perfect example of the false dichotomy between mathematical rigour and exciting relevance is Amartya Sen, the richly deserved 1998 Nobel prizewinner in economics, who has always combined the highest standards of analytical excellence with passionate defence of "humanistic values" and championing for the poor and exploited. The question here is why Sen's seminal contributions (for example, his beautifully simple and deep paradox of the impossibility of a Paretian Liberal or his more recent work on entitlements and famines) are not part of standard undergraduate economics textbooks. Mainstream economists have only themselves (and a perverse system of government-sponsored incentives) to blame if undergraduates are deprived of courses and materials that are relevant and exciting as well as rigorous.

Manfredi La Manna. Reader in economics. University of St Andrews

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