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24 June 2002

Julie A. Nelson is the author of Feminism, Objectivity, and Economics (London: Routledge, 1966) and (with Marianne A. Ferber) Beyond Economic Man: Feminist Theory and Economics (Chicago: Uni. of Chicago Press, 1993). She may be contacted at julie.nelson@tufts.edu.

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PAER Issue No. 14
Last modified
30 November 2006
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Post-Autistic Economics Review - Issue No. 14

What should be retained from standard microeconomics?

Julie A. Nelson

Bernard Guerrien’s question, "Is There Anything Worth Keeping in Standard Microeconomics?" is one that I have been thinking about a lot, recently. In working with colleagues on writing an alternative Principles of Microeconomics textbook, we’ve had to address the question of what it is that we actually want students to know.

My co-authors and I come from a variety of backgrounds-ecological, social, feminist, institutionalist, and radical. While, to have a chance at adoption in most departments, a textbook must cover a number of neoclassical concepts, we’ve given ourselves some leeway in putting these "in context," and in deciding which to stress, and which to downplay.

We certainly don’t think that the number one priority is to inculcate students into adopting a free market ideology, which is the apparent goal of many of the currently available textbooks.

Nor should it be to teach students about the elegance of mathematical and graphical modelling.Even if that were to remain a priority at more advanced levels (which we would debate), the vast majority of Principles students will use their knowledge for citizenship, not further study.
Lastly, we don’t think, given the pressing nature of real-world economic problems, that our number one priority should be to tell beginning students about our internal professional debates about philosophy and methodology. So what should we teach?

We’ve rejected the usual emphasis on models of "producer and consumer choice," with all its focus on technique and all its bizarre assumptions (e.g., that efficiency is the only goal, that households are not productive, that perfect competition is the default scenario). But-and here we differ from Guerrien-we do see value in teaching some parts of the standard introductory microeconomics toolbox. For example: The general notion of choice. Choice behavior is one facet of human economic behavior-though not the only one. Putting choice in context means also recognizing the roles of habits or customs (as stressed by institutionalists) and power (as stressed by radical economists) in explaining behavior. Certain traditional microeconomic concepts like opportunity cost, and "rational" (read: reasonable) economic decision-making, in the sense of weighing both costs and benefits in coming to a decision, we have concluded, are worth teaching.

Supply and demand curves. We introduce these as mental constructs that can give us some insight into real-world price variations, not as curves that exist "out there" in the world. While we also (for adoptability of the book) expose students to marginal cost curves and utility theory, we demonstrate that the usefulness of supply and demand analysis does not depend on identifying supply curves with marginal cost curves, nor with identifying demand curves with the result of indifference curve analysis. In fact, our central example in the supply and demand chapter is a highly politicized national market for petroleum. Further elaboration introduces students to the relevance of elasticities for business and government policymaking.

Gains from trade. Ricardo’s old England-and-Portugal story is the basis for the neoliberal push for globalization today, so it is important that students understand the argument. However, we also complement this story with a discussion of the drawbacks of trade. In addition, we include transfer as an important form of distribution right alongside exchange, bringing discussions about intra-household and government transfers into the core of analysis.
Our book, Microeconomics in Context, takes well-being as the goal of economic activity.

Teaching from it will probably feel less "secure" for many instructors in that it will hold fewer cut-and-dried answers and subjects for chalk-and-talk lectures, and more opportunities for discussion. But, we believe, such teaching will be a considerably more intellectually challenging and socially responsible.

Of course, much of Bernard Guerrien’s criticism might more aptly be taken to apply to advanced graduate work and professional research-Slutsky matrices and general equilibrium theory are not usually the stuff of Principles classes. I would attribute much of our profession’s fascination with mathematical elegance, over understanding of the real world, to warped notions of "rigor" and a misguided attempt to achieve certainty and absolute control (see Nelson essay in post-autistic economics review, Issue no. 9, 20 October 2001). By keeping our eyes on the more pragmatic goal of developing and disseminating economic knowledge in the service of promoting well-being, I think we can keep what is useful in existing bodies of work-even neoclassical-while working towards developing new and more adequate forms of research and teaching.

 
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