INET and reforming economic education: can history help?

One INET project is to “reconnect the teaching of economics with the working of the actual economy,” which is to begin with a reform of the undergraduate curriculum. For this purpose, a two-legged task force was established, with Robert Skidelsky chairing the British committee and Perry Mehrling the American one. Both committees reported on their progress at the Bretton Woods conference (see the videos of the sessions)

The purpose here is not to discuss the task force’s proposals. Nor is it to argue for the reintegration of history of economics to the curriculum. Some historians and economists alike have repeatedly advocated such reform since the current crisis broke out. The only problem being that the “history” economists have in mind doesn’t seem to be the “history” historians are writing. But I shall elaborate on this in future posts.

My concern is that, while I have something to say about reforming economic education as a former student and a teacher, I’m not sure what my contribution could be as a historian – assuming that economists need historical insights to devise their reforms.

Perry Mehrling began his Bretton Woods talk with the idea that “things (e.g. economic education) are the way they are for a historical reason and they stay the way they are for an institutional reason.” He then proceeded to a one-slide account of the development of american economic education as a methodological shift from the “T Ely” way of doing and teaching economics to the “Samuelson” way, before jumping to the present state of affairs and possible reforms. The task force seems to have a documented view of where we are (in the US, as well as in the UK), but very little notion of how we got there, and why. There are a few elements though that historians are – or rather, I’m afraid, should be – able to throw into the discussion.

On the idea of helping undergraduates grasp reality (with both hands, ten tentacles or a prehensile tail). What are the similarities and differences between our present situation (social and economic context, students’ demands, criticisms against the economic profession) and the crises economics have experienced over the past decades? In the seventies, for instance, introductory courses were substantially reformed in response to a demand for greater relevance emanating from students who, as it happened, remained worryingly illiterate at the end of their curriculum. This is what Jean-Baptiste Fleury relates in a recent paper on the origins of the “economics-made-fun” movement. “Relevant” meaning relevant for the then burning real world issues such as racial discrimination, the energy crisis, etc. He details economists’ reactions, from the institutionalization of the emerging field of economic education, through the creation of the Journal for Economic Education in 1969, to the decision to focus introductory courses on the application of a limited set of economic principles to relevant issues. Several textbooks illustrating this “issue-oriented approach” were published. In the eighties and nineties, professionals continued to complain that economics lacked relevance, e.g. lacked connection to observation and empiricism, and for students, lacked reference to situations of the everyday life. As the concentration of the publishing industry entailed a standardization of introductory textbook, pedagogical innovations flourished in the kind of popularization books which had already proved successful in other fields such as physics or biology. This “economics-made-fun” movement, which culminated with the publication of Freakonomics, was an inspiration for those economists who worried about the apparent decrease in the enrollment in economic major and who, by the end of the nineties, attempted to reform the curriculum again (rather unsuccessfully).

Today’s reformers may find some interest in a clear identification of what past challenges to undergraduate education and past responses have been. Though I’m not familiar with the JEE literature, I wonder whether a review of the knowledge produced in its issues would provide a sense of what the forces driving the evolution of economic education have been in the past thirty years. Finally, there’s no explicit mention of these pop-economics books in the current discussion. Is it because this literature is considered already integrated to undergraduate education? Or irrelevant?

→ One way to think about economic education is to identify the questions we want our students to answer at the end of our courses. In other words, what the appropriate exams and assignments should be like. Hence this question to historians: how did the form of econ exams evolve over time (and if you’re in a cynical mood, is economists’ claim that their science is progressive warranted, are today’s students able to answer an exam given by Marschak in the twenties, one given by Samuelson in the forties, or the tricky and much reality-based questions Friedman was used to asking in the fifties ad sixties.) A parallel set of questions deals with the practices of past education leaders, from Friedman to Solow. How did those famous economists teach? What made their success? During the INET session, Axel Leijonhufvud pointed to those economists who could not do or teach theory without history of thought, such as Jacob Viner. If there are any lectures notes in the archives, they might be worth studying.

→ Another important issue is that of textbooks/ teaching material. Some proposals have been made for the development of online material, videos, reading lists and text anthologies. And when Merhling mentions Samuelson as the one who changed the way economics was not only made but also taught, Economics pops up in our mind. Except that, as explained by Samuelson and contextualized by Yann Giraud, Economics was not written for an economic audience. In the late forties at MIT, most engineering and science students had Ec11 and Ec12 (introductory econ) on their curriculum. Made compulsory. They hated it, and Ralph Freeman, then chairman of the department of economics, asked Samuelson to write a textbook to correct this. Yann and Loïc Charles are currently investigating how, during the Great Depression, visuals such as Neurath pictorial statistics were used as a major vehicle to spread information and opinion on economics in textbooks, professional periodicals and by US administrations. Much more narratives of that kind is needed on how and why influential textbooks were written, and how they spread.

→ Finally, econ education everywhere in the Western world seems nowadays modeled on the curricula proposed by leading American econ departments, in particular MIT, Chicago and Harvard (unless you have an alternative narrative). Have historians anything to say about how economic education was developed at these leading institutions?

On Chicago, a quick search brought a much more meager harvest than I expected. A few reminiscences (for instance Deidre McCloskey’s remark that the undergraduate and graduate curricula were strictly separated), vague statements on the large number of students accepted in both programs, and on the thus large number of students failing exams. The importance of the graduate price theory course taught by Friedman, then Becker, then Friedman again, to socialize the Chicago graduate into the proper way of doing economics. Friedman as a teacher. And thanks to Ross Emmett, the role of the workshop system in ensuring that the right tools were used the right way in thesis writing and research. Fragments.

On MIT, I know a few stories. Some of which make sense to understand the current state of affairs.

At MIT, before 1965, there was no economic major. No undergraduate students in economics. Undergraduate students took 80% scientific or engineering courses, and 20% humanities courses, with a core humanities sequence during the first two years, and a major sequence in economics (or psychology, or political science, or literature or else) in the subsequent two years. A few dozens students enrolled in a course XIV, a sort of double major which allowed students to pursue a standard science or engineering curriculum AND an economic undergraduate major. 50%-50%. Three options were offered: general economics, labor relations, and quantitative economics (from statistics to Operation Research). According to the faculty reports, none of these students subsequently chose to specialize in economics. They either became engineers, OR specialists or worked for a trade union. Therefore, the curriculum economics undergraduates were presented with in the next decades, the lectures Lawrence Summers attended as an MIT student in 1973 or 1974 were designed to introduce physicists and engineers to social issues. The tools, the methods and the approach were designed for them.

The best way to get greater exposure to economics at MIT in the fifties an sixties may have been to go to the business school, where economists and business scientists were working hand in hand (they were located in the same building at the far end of the campus, away from other hard and social sciences): people at the Sloan business school were applying new methods for quality control and transportation optimization. They were obsessed with trading and they developed models to account for stock behavior. They also recruited Franco Modigliani.

At MIT in the sixties, elementary macro was taught before elementary micro. The order was reversed in 1974 when, in the context described above by Jean-Baptiste and in response to repeated students’ protests and petitions, introductory economics courses were reformed under the leadership of Peter Temin. It was decided that “micro will precede as to introduce economics through problems that are most apparent to the non economist and to the engineer in particular.”

At MIT, in the late sixties, the use of problem sets was developed. In 1968, the “Committee on the undergraduate economics program” chaired by Duncan Foley reported that :

“Students at the Institute seem to prefer subjects in which homework assignments are required to be turned in at frequent intervals. There is also some evidence that they work more consistently under such arrangement. Therefore, it seems desirable that “problem sets” be required frequently – probably every other week. Student reaction to the workbook has been negative for the most part.

It is important that these problem sets do not degenerate into routine mechanical algrebraic exercises. Some of the problem sets may well be manipulation of models, but others should be short essays on the sort of questions which are used for examination.”

Six years later, in his revision of introductory courses, Temin suggested that:

“The use of problem sets will be increased. While problems are used currently in 14.01 and 14.02, there are only a few problems sets given during each term. In the revised courses, there will be problem sets every week or two weeks. These problems will provide practice in the use of economics to analyze particular questions and an opportunity for the student to think about some of the problems raised in the readings outside of class time. They are the beginning of independent thought on economic problems.

….In general, 14.01 and 14.02 aim to introduce to the student a new way of looking at some aspects of his environment. The traditional way of accomplishing this end is through the examination of historical ideas. Considering the needs of MIT students, a different approach is suggested here. Through a sophisticated look at current economic concepts and problems, the student’s appreciation of his surroundings should be enhanced.”

I have been unable to decide how this evolution relates to Jean-Baptiste’s account of the implementation of the “issue-oriented approach.” Possibly because I don’t have the cultural background. Or because we don’t have enough material to understand exactly what these two pedagogical practices covered in the seventies.

 I don’t know any articulated account of the development of curricula at Harvard and other relevant places.

Thoughtful reforms of undergraduate education requires a knowledge of how economic education was shaped at least in the XXth century. It’s thus a pity (and a shame) that we, historians of economics, are unable to provide at least fragments of such history. Oh, but wait…. We’re busy debating -again- on “Adam Smith, the ‘Founding Father’ of Modern Economics?

Cartoon borrowed from techno converging zone blog.

14 thoughts on “INET and reforming economic education: can history help?

  1. geeezzz… what a post!
    I feel dwarfed by the cascade of knowledge displayed here, but here is my grain of salt: I’d be curious to know where monetary economics fitted and fits in economics curricula. By monetary economics, I don’t mean monetary theory really (which is touched upon in macro), but rather courses on how monetary institutions actually work. I’d suspect that such courses are very rare. That’s why Perry Mehrling’s point (we live in financial times, so let’s learn about financial institutions with the FT) is a great one. And yet, largely untried, I’d bet.

    1. Thank you very much.

      On monetary matters, my knowledge of the MIT research and education ends – for the moment – in the early seventies, and I’m not sure the question of how monetary institutions work does make sense, both because the macro knowledge and the institutions themselves were different. I don’t have my MIT material with me now, but from memory, it’s only around 1969 that the faculty set to reframe the graduate macro and monetary courses so that they stop overlapping. As for how money plays in the financial system, remembers that the late sixties and early seventies was a time when economists just became to understand how stocks were priced, and argued over whether markets were rational and efficients (the Chicago-MIT business school debate). Yet, I also believed MIT economists did pay close attention to how monetary institutions actually worked. The debates on the role of the Fed in the Great depression was raging: Solow (with Tobin) analyzed the monetary vs supply and demand causes of the Great depression and MIT economic historian Peter Temin published “Did Monetary Forces Cause the Great Depression?” in 1976 as a response in the controversy surrounding Friedman and Schwarz The Monetary History of the US (1963). Both Friedman-Schwarz and Temin’s works payed a great deal of attention to the institutions in which money demand and supply were embedded. Finally, in the late sixties monetary economists Modigliani and Ando (former MIT professor, then at Penn) buit the Fed-MIT-Penn macroscale forecasting model, at a moment the brooking model was update and the Saint-Louis monetarist macro models was also devised. A large part of discussions during the confs of macro models in these years dealt with how to take money into account in they global models of the US economy, and it was not only a theoretical question (macro MIT models will be my next move).

      And Perry’s point is indeed a great one. I’ve been asked by the task force to comment on their preliminary reports, and my advice, in a nutshell, was “since World War two, American business schools have attempted to make their practice more scientific by creating intellectual and institutional partnerships with economists and economic departments. Now that we want to make our science more pratical, why don’t we look at how business schools are teaching management?” And I proceeded to explain that at the ENS, I had to do a double BS/MS, economics and management, with a major in finance and accounting (MS is not an overstatement, the admissibility to the econ-management agregation gave us an equivalence with the written exam of the professional accountant diploma.) I explained that at that time I had a hard time with my accounting assignments (“take the balance sheet of an existing middle size firm and provide a complete analysis of its financial situation”), but that I later discovered how useful such training was to understand the nooks and crannies of the banking system and to teach financial economics. Since my (and your ) training was kind of idiosyncratic, I was very surprised to see the unanimity around Perry’s INET proposal.

  2. Beatrice, I think every member of the inet taskforce would do well to read this. Fascinating.

    Not sure what to make of my new thinking from this which is that economics is a subject tailored for engineers and pop-econ readers. I need to ponder further. Thanks!

    1. They have. This post largely stem from the comments they asked me to give to their preliminary report before BW. In particular, they wondered how the generalization of problem sets in economic education occurred.

  3. Beatrice: Great post. A couple of things.
    1) For more of my stuff on Chicago (incl. how general education fit with graduate education), see my “Entrenching Disciplinary Competence: The Role of General Education and Graduate Study in Chicago Economics.” In From Interwar Pluralism to Postwar Neoclassicism, edited by Malcolm Rutherford and Mary Morgan. History of Political Economy 30 (1998 supplement), 134-50. Durham: Duke University Press, 1998.
    2) I hope you and the others will contribute to the session at HES 2011 on teaching the history of economics. Avi Cohen and I prepared an entry for an handbook on teaching economics that will be the basis for the session. See
    3) Course notes are frequently published in the “C” volume of Research in the History of Economic Thought & Methodology. Most of these notes come from private sources (not available in public archives). Because we’ve published several sets of notes from the 1940s-1950s, you might want to look there for material. Marianne Johnson edits the “C” volume.

    1. Thank you very much. I should have remembered your 1998 reference on Chicago. The C volumes is also what I need, provided that i can find there somewhere in a French library. As for your paper with Avi Cohen, gret. I know that he presented it last friday at Duke. Maybe the Duke crowd of the blog can chronicle the presentation and throw in further ideas.

  4. Nemi, welcome to the playground. I have published three exemples (from Marschak, Samuelson and Friedman) a few months ago:
    I added the link to the post. Otherwise, there are a few exams given by Friedman in the book edited by Dan Hammond whose references you can find by following the post’s link on “Friedman as a teacher”. Economists’ archives, whether at Duke, Hoover, Michigan, Chicago or elsewhere usually contain boxes and files with courses notes and exams subjects. Yet, I don’t know any edited collection of exams subjects from one or several economists of a given period. One idea to work on in the future

  5. What if when economics education tried to reform itself to become “more relevant” in the 70’s it just found the wrong relevance, and that’s why students were still just as bored as before? I’ve had loads of fun for decades studying how nearly most natural systems evolve as economies in their own right, building innovative organization around various specializations that emerge with complex connections linking them through open mediums of exchange. Most anywhere you find growth that’s what’s going on at the micro scale, it seems. The diversity of ways nature solves the growth problem, both getting it started and resolving it’s ends are instructive too.

    1. Phil, I’m not sure what you suggest in terms of curriculum. Do you mean that undergraduate should be taught natural systems?

    2. Well, it depends on the audience, whether teaching how uncontrolled environmental systems work with nursery rhymes to small children or simple nature experiments in elementary school, or different kinds of more careful studies, the subject of how natures systems behave by themselves is oddly unaddressed in nearly every field. It’s highly relevant in economics, of course, as we see the interaction between the economy and the environment itself developing all kinds of unexpected emerging systems behaving by themselves in ways we don’t expect.

      Does that give you a sense of what I’m talking about? I do have difficulty just defining the subject, it seems so unaddressed by the sciences. It’s as if everyone readily sees all kinds of natural systems that behave by themselves, but then switches to describing them as if they behaved deterministically, controlled by some theory, when we go to describe them.

      Treating them as exceptions to rules to ignore might work when their variety could be seen as statistical, but lots of natural systems are very individually eventful, and their individuality is the key to seeing what they’ll do next. It’s those unique eventful parts of economies that investors seek out to invest in, for example, so it would be good to study them as parts of nature, rather than as expressions of theory that doesn’t actually account for what they do individually.

  6. Beatrice,

    One goal for new economic thinking, and the education that will produce it, might be stated as “The World Needs More David Laidlers.” I am sure you saw the review (copied below) from the SHOE list.

    I think David is possibly the best example out there of a current economist who has had major policy impact and who would credit much of his insight to a knowledge of history — both the the history of economics and economic history.

    As you are involved with the INET curriculum committee, I would suggest someone talk at length with David about his thoughts about economics education. I know there are many steps between the goal of producing more David Laidlers and concrete proposals for economics education, but it seems to me to be one (of many) good places to start.


    Title: Canadian Policy Debates and Case Studies in Honour of David Laidler

    Published by EH.NET (April 2011)

    Robert Leeson, editor,/ Canadian Policy Debates and Case Studies in Honour of David Laidler/. New York: Palgrave Macmillan, 2010. xiii + 234 pp. $100 (hardcover), ISBN: 978-0-230-23734-6.

    Reviewed for EH.Net by Herb Emery, Department of Economics, University of Calgary.

    This Festschrift volume honoring David Laidler presents a collection of papers by prominent economists and policy analysts focused primarily on Canadian policy issues. David Laidler is one of Canada’s most influential monetary economists. As noted throughout the volume, Laidler’s academic
    publications and policy commentaries influenced decisions and operations of the Bank of Canada, most notably the Bank’s adoption of inflation targeting in the early 1990s, and other areas of governance in Canada. Reading the volume, it is difficult to not be impressed by the fact that two previous
    Bank of Canada Governors (Gordon Thiessen and David Dodge) pay tribute to Laidler in the Preface to the volume and a third, John Crow, provides a discussion of a chapter in which he provides praise of the highest order when he states that “David is also a bit of an economic historian.”

    This volume is not a history book but instead an example of the utility of history for informing policy making and perhaps a reminder to reconsider what we consider history. In her chapter “The Lender of Last Resort: Lessons from Canadian History,” Angela Redish summarizes David Laidler’s career as “insightfully combining the history of monetary thought with a hands-on
    approach to monetary policy” (p. 80). In his chapter, “Inflation
    Targeting in Canada,” Peter Howitt highlights Laidler’s belief that to understand macroeconomic performance involves understanding the role of money in the adjustment mechanisms and behavioral rules of a modern economy which “evolved differently across time and space depending on particular
    historical circumstances” (p. 42). It is notable that an accomplished macroeconomist like Howitt identifies this part of Laidler’s work as something that distinguishes him from mainstream macroeconomists. Economics as a discipline has become largely ahistorical often counting information from the pre-2000 era of limited use or interest unless it aids as an
    identification strategy in an econometric model. The Laidler tribute volume is a reminder that this orientation of economists away from history is not consistent with the intellectual approach of earlier generations of great and influential economists for policy such as Maynard Keynes, Milton Friedman and John Kenneth Galbraith.

    Angela Redish’s chapter, “The Lender of Last Resort,” is the only
    chapter in the volume which is clearly “economic history.” While the chapter is motivated as building on some of Laidler’s more theoretical work on lenders of last resort, Redish’s chapter is an excellent overview of the evolution of Canada’s banking sector and its comparison to that of the United States. This chapter provides an accessible overview that would be an outstanding addition to reading lists for courses in Economic History or
    Monetary Economics. Several other chapters are not historical studies but historical context is prominent in the material. Bill Robson in “The Canadian Monetary Order: Past, Present, and Prospects,” provides an overview of monetary policy in Canada since World War II as part of making his case that the adoption of inflation targets for monetary policy in the 1990s has brought Canada close to having an ideal monetary order. John Whalley describes Canadian trade policy since Confederation in his chapter, “Canadian Policy and the Economic Revolution in Asia,” to help the reader understand how Canada’s trade interests and trade policies may change with the high rates of growth in many of Asia’s national economies. The chapters on Canadian Medicare by Ake Blomqvist and tax incentives for owner
    occupied housing by Finn Poschmann consider historical context as well, but over a shorter time period.

    Another feature of the chapters in this volume that historians will appreciate is the comparative aspect of the discussions. Redish and Poschmann consider Canadian policies and institutions in comparison to the United States, while Blomqvist discusses options for reforming Canada’s health care system using experiences from the U.S., UK, Australia, Sweden and
    other European nations. Goodhart’s chapter on the political economy of inflation targets looks at the experiences of New Zealand, the UK and Canada. Clark Leith investigates whether Laidler’s work on the desirability of Canada entering into a North America Monetary Union has lessons for informing Botswana’s policy options around joining a monetary
    union of southern Africa countries.

    I am often asked by colleagues in other countries for recommended sources describing Canadian institutions and policy. This volume is one that I will add to my list of recommended sources given the high scholarly caliber of the
    chapter contributors and the accessible and highly readable discussion of a wide range of macroeconomic policy topics. Perhaps the highest praise I can give a volume paying tribute to an economist is that this volume is an efficient way to learn about Canadian policy issues.

    Herb Emery is the Svare Professor in Health Economics at the University of Calgary and Managing Editor of /Canadian Public Policy/Analyse de Politiques/. He recently published “‘Un-American’ or Unnecessary? America’s Rejection of Compulsory Government Health Insurance in the Progressive Era,” /Explorations in Economic History/ 47 (1) (2010): 68-81.

    Copyright (c) 2011 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (April 2011). All EH.Net reviews
    are archived at

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