Headline, June09, 2014



The students of economics  -find themselves engaged in  rote learning  of models based on rational choice. They are fobbed off with assurances that acquisition of these skills is a necessary foundation-

For understanding of the great issues of the day; but somehow  ''these great issues never make it into the curriculum''.

They suspect, rightly, that many of their teachers are not much interested.

This is the burden of a powerful and detailed critique of their courses prepared by students at the University of Manchester.  

Their demand for more  pluralism  in the economics curriculum is well made. Yet much of the  'heterodox economics'  the Manchester students suggest including is flaky-

The creation of people with their own political agenda, whether Marxist or Neoliberal; or one of those who cannot do the mathematics the dominant rational choice paradigm requires.

Their professors request the reject the introduction of these alternative schemes for the same good reasons their science colleagues would reject phlogiston theory or creationism.

Yet teachers are mistaken in their conformity to a single methodological approach  -encapsulated in the claim that has taken hold in the past four decades that approaches not based on rational choice foundations:

Are unscientific or   ''not economics''. The need is not so much to teach alternative paradigms of economics as to teach that pragmatism, not paradigm, is the Key to economic understanding.

This eclecticism is reflected in the curriculum proposals being developed by the Institute for New Economic Thinking, led by Professor Wendy Carlin of University College London.

The subject of economics is not a method of analysis but a set of problems  -the problems that drew students to the subject in the first place.

The proper scope of economics is any and all ideas that bear usefully on these topics:

Just as the proper scope of medicine is any and all therapies that help the patient.

And now onwards to the !WOW! equation:

As China slowly moves away from investment towards consumer-driven growth, demand is shifting from what one analyst calls  ''mining to dinning''.

With the super cycle in hard commodities over, the premium on softer ones   -dairy, meat, fish and grains  -has risen.

A Chilean banker recently observed and to boast of his country's booming exports to China  -not of copper,  but of plums, berries, beef, salmon, trout and chicken feet.

If the economics shifts were not enough. Asia has been transformed politically. By this July, Indonesia will join China and India in choosing a new leader.

Asian countries with a combined population approaching  3billion  will be under new management.

In Europe, Banks aren't lending across borders anymore, period. Why would a German banker want to take a bet on Spain or Italy when there is still no common way of insuring deposits or winding down  too-big-to-fail banks.

And then China has  $10.2 trillion  of loans on its books, and up to 30% of them may go bad!

The bottom line is that all this is The End Of Easy Money. It's getting tougher and tougher for capital to move around the world.

But as I sum up, allow me one more economic sweep, and state that : The Philippines, the regions perennial laggard is growing at 7pc. It has low debt, low inflation, and a young, expanding workforce that will add a percentage point-

To growth each year, just as China's shrinking one will shave off 0.4 percentage points.

Sri Lanka,  for years at war, is also growing at  7pc. As if to underline the shock of  the new, Japan  -growing at 5.9pc     -is outpacing  India   even if that is just a one-quarter aberration resulting from a tax change.

Every economic waltz  - O''students is damn dangerous for everyone. Just remember the history  of wars, insecurities, crisises, hot flows,  inflation, interests  -or

Think of flares and the magic wands too. That, for sure, would be interesting and may even help keep the temperatures and tempers down!

With respectful dedication to the Students, Professors and Teachers of economics. See Ya all on !WOW!  -the World Students Society Computers-Internet-Wireless:

'''  Knock - Knock  '''

Good Night & God Bless!

SAM Daily Times - the Voice of the Voiceless


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