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An International Open Letter to all economics departments
“The Kansas City Proposal”


Economics needs fundamental reform – and now is the time for change.

This document comes out of a meeting of 75 students, researchers and
professors from twenty-two nations who gathered for a week of discussion
on the state of economics and the economy at the University of Missouri -
Kansas City (UMKC) this June 2001. The discussion took place at the Second
Biennial Summer School of the Association for Evolutionary Economics (AFEE),
jointly sponsored by UMKC, AFEE and the Center for Full Employment and
Price Stability.

The undersigned participants, all committed to the reform of our discipline,
have developed the following open letter. This letter follows statements
from other groups who have similar concerns. Both in agreement with and in
support of the Post-Autistic Economics Movement and the Cambridge Proposal,
we believe that economic theory, inhibited by its ahistorical approach and
abstract formalist methodology, has provided only a limited understanding of
the challenging complexity of economic behavior. The narrow methodological
approach of economics hinders its ability to generate truly pragmatic and
realistic policy prescriptions or to engage in productive dialogue with
other social sciences.

All economics departments should reform economics education to include
reflection on the methodological assumptions that underpin our discipline.
A responsible and effective economics is one that sees economic behavior
in its wider contexts, and that encourages philosophical challenge and
debate. Most immediately, the field of economic analysis must be expanded to
encompass the following:

1. A broader conception of human behavior. The definition of economic man
as an autonomous rational optimizer is too narrow and does not allow for
the roles of other determinants such as instinct, habit formation and gender,
class and other social factors in shaping the economic psychology of
social agents.

2. Recognition of culture. Economic activities, like all social phenomena,
are necessarily embedded in culture, which includes all kinds of social,
political and moral value-systems and institutions. These profoundly shape
and guide human behavior by imposing obligations, enabling and disabling
particular choices, and creating social or communal identities, all of
which may impact on economic behavior.

3. Consideration of history. Economic reality is dynamic rather than
static – and as economists we must investigate how and why things change
over time and space. Realistic economic inquiry should focus on process
rather than simply on ends.

4. A new theory of knowledge. The positive-vs.-normative dichotomy which
has traditionally been used in the social sciences is problematic. The
fact-value distinction can be transcended by the recognition that the
investigator’s values are inescapably involved in scientific inquiry and in
making scientific statements, whether consciously or not. This
acknowledgement enables a more sophisticated assessment of knowledge claims.

5. Empirical grounding. More effort must be made to substantiate
theoretical claims with empirical evidence. The tendency to privilege
theoretical tenets in the teaching of economics without reference to
empirical observation cultivates doubt about the realism of such explanations.

6. Expanded methods. Procedures such as participant observation, case
studies and discourse analysis should be recognized as legitimate means of
acquiring and analyzing data alongside econometrics and formal modelling.
Observation of phenomena from different vantage points using various
data-gathering techniques may offer new insights into phenomena and enhance
our understanding of them.

7. Interdisciplinary dialogue. Economists should be aware of diverse
schools of thought within economics, and should be aware of developments
in other disciplines, particularly the social sciences.

Although strong in developing analytic thinking skills, the professional
training of economists has tended to discourage economists from even
debating – let alone accepting – the validity of these wider dimensions.
Unlike other social sciences and humanities, there is little space for
philosophical and methodological debate in the contemporary profession.
Critically-minded students of economics seem to face an unhappy choice
between abandoning their speculative interests in order to make professional
progress, or abandoning economics altogether for disciplines more hospitable
to reflection and innovation.

Ours is a world of global economic change, of inequality between and within
societies, of threats to environmental integrity, of new concepts of
property and entitlement, of evolving international legal frameworks and of
risks of instability in international finance. In such a world we need an
economics that is open-minded, analytically effective and morally
responsible. It is only by engaging in sustained critical reflection,
revising and expanding our sense of what we do and what we believe as
economists that such an economics can emerge.





SUGGESTED CITATION:
(2001) “An International Open Letter (to all economics departments)”,
post-autistic economics newsletter : issue no. 8, September, article 1.
http://www.btinternet.com/~pae_news/review/issue8.htm

_______________________________

Signatories of the Cambridge Proposal are posted at:
http://www.paecon.net/peitions/Camproposal.htm

Signatories of the "Kansas City Proposal" are posted at:
http://www.paecon.net/petitions/KC.htm




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