Matías Vernengo

Greg Mankiw wrote a response to his students, who protested his teaching, in his last New York Times column.  He basically blames the students for not knowing enough economics. He goes on to say that the complaints of the Occupy Wall Street (OWS) movement, in support of which the students had boycotted his class, are also a “grab bag of anti-establishment platitudes without much hard-headed analysis or clear policy prescriptions.”

He also suggested that students boycotted the wrong class, since his lecture that day was on inequality. Note that his views on inequality are strictly based on conventional mainstream neoclassical theory. Inequality for him is based on education (see here his critique of Krugman’s views on inequality). So basically the top 1% are more educated, more productive and, as a result, receive more. You cannot protest market forces.

Income distribution, according to neoclassical theory, is determined by the relative productivity of the factors of production. If wages are stagnant it must result from the fact that labor productivity is also sluggish. However, the evidence for that is thin at best. As it is well known, labor productivity has increased over the last 30 years in the US, while real wages have not budged.

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Arjun Jayadev

It’s easy for people involved in progressive political movements to be jaded by political discourse. One of the reasons why the Occupy movement has been interesting is that it has been something genuinely new and experimental. And it is not afraid to use the ‘C’ word in an unadmiring way.

The blogger JW Mason writes: “Most of us very seldom experience ourselves as political agents, in the sense of being active participants in the collective decision-making of our community. For better or worse, most of the time we delegate collective decision-making to specialists who represent us more or less faithfully, as the case may be. The only reason for protest — for any kind of mass politics — is that this system has broken down. The message of any protest is: There is a political subject, a We, that is not being represented.”

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Mehdi Shafaeddin

In its September Communique, the UN’s Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development referred to a “crisis of confidence in advanced economies”. In other words, there is a crisis of confidence in capitalism as a system. We have been witnessing a series of crises in recent years: the financial crisis, debt crisis, commodity crisis, etc. In the meantime, unemployment and growing inequality, particularly in the USA, has led to the 99% movement, “Occupy Wall Street” and upheavals in other countries unprecedented since the Civil Rights Movement.

What has received less attention is the upheaval by economics students at Harvard University. They walked out of a “Principles of Economics” class objecting to the way economics was taught and protesting the “corporatization of higher education”. Their main point was that “the biased nature of Economics 101 [basic economics course] contributes to and symbolizes the increasing economic inequality in America..” and that  “Harvard graduates play major roles in financial institutions and in shaping policy around the world”. In other words, they implied that the crisis in capitalism and growing inequality in wealth and income is not only due to the way financial institutions (and the Wall Street) operate, but is also to a large extent, rooted in the way economics is taught.

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