University of Vermont Penalizes Rethinking Economics

By Steve Keen, professor and Head of the School of Economics, History and Politics at Kingston University in London
Cross-posted from his Patreon page.

Mainstream economics clearly failed humanity in 2007, when, as the world sat on the brink of the biggest economic crisis since the Great Depression, mainstream economic models were predicting that 2008 was going to be a great year.My favourite such prediction was the OECD’s bi-annual Economic Outlook, which proclaimed in June of 2007 that “the current economic situation is in many ways better than what we have experienced in years“.

EDITORIAL

ACHIEVING FURTHER REBALANCING

In its Economic Outlook last Augutm, the OECD took the view that the US slowdown was not heralding a period of worldwide economic weakness, unlike, for instance, in 2001. Rather, a “smooth” rebalancing was to be expected, with Europe taking over the baton from the United States in driving OECD growth.

Recent developments have broadly confirmed this diagnosis. Indeed, the current economic situation is in many ways better than what we have experienced in years. Against that background, we have stuck to the rebalancing scenario. Our central forecast remains indeed quite benign: a soft landing in the United States, a strong and sustained recovery in Europe, a solid trajectory in Japan and buoyant activity in China and India. In line with recent trends, sustained growth in OECD economies would be underpinned by strong job creation and falling unemployment.

That was two months before the crisis began.

You might think that, after such an extreme failure, economists would be trying to find what went wrong with their modelling. That has happened at policy institutions like the Bank of England and, to its credit, the OECD.

The Bank of England established the “One Bank” research unit after the crash, has employed many researchers from outside economics, and is, in my personal experience, very receptive to non-mainstream ideas now. The OECD established a new unit called New Approaches to Economic Challenges, and is also much more receptive to non-mainstream views than it was before the crisis.

But universities have been a very different proposition.

In university departments, the reaction of the mainstream has been to defend their paradigm, and to penalize those who criticize it. Whereas in the past they would tolerate the odd dissident as just “that guy down the corridor with those weird views” and let him/her teach a range of service subjects, now they are actively targeting such non-conformists for removal.

A recent instance of this was the decision of the University of Vermont to sack a popular lecturer, John Summa, for teaching mainstream economics in a critical manner. The case has all the nasty characteristics of an academic bunfight, of which I’ve experienced several myself. Do read John’s GoFundMe appeal, even if you don’t wish to make a donation.

In the end, he was dismissed, and he is now challenging that dismissal via a court action. I wish John the best, hope that justice will prevail, and I’ve made a small donation ($100) to his cause. I’d be pleased if you did too. He needs $4000, and he’s about 60% of the way there.

I’ve reproduced some of John’s evidence below, but there’s much more on his GoFundMe site.

John Summa’s Statement

Despite solid evidence of exaggerated and false claims used against me to persuade the Dean to deny my reappointment at UVM, these mischaracterizations were ignored by the Vermont Labor Relations Board when they ruled on my grievance. The case is now being appealed to the VT Supreme Court.

But I need help! Click here to learn more:

I allege that proven false and exaggerated claims masked disapproval of my ecological critiques of standard (supply and demand) neoclassical model economics (which I fully and fairly taught according to over 2,500 student evaluations). I maintain that there is no evidence whatsoever to support the Chair’s biggest claim that I was not teaching the standard (neoclassical) model “fully and fairly”.

Make a donation and help me fight academic bullies who don’t want ecological and alternative economics being taught to students. 

I argue that the Chair was leading the removal of a popular and maverick veteran teacher who was exposing students (after teaching models fully and fairly and getting good reviews from students) to the truth about the profound failures of core curriculum models students are required to learn (and do learn). Among other shortcomings I highlighted is the failure of these models to address global warming, growing inequality and systemic market failure.

Purging popular and challenging teachers cannot be tolerated. Help me fight against academic cronyism and intellectual nepotism at UVM. Make a pledge!

Despite some Nobel prize winning economists saying these models are “foolish” and “dead-end” approaches in today’s world  (information I shared with students), I was nevertheless removed based on the belief that I was not teaching “good” economics (Chair’s choice of words) —  a reference to the same models now discredited by some of the profession’s own leading practitioners. Apparently  the Dept. Chair is unaware that there is no consensus on what constitutes “good” economics. Your good economics is my bad economics and vice versa.

The Faculty Standards Committee (FSC) at the University of Vermont was not fooled by the actions of the Chair and voted unanimously to reappoint me and described the review process as “tainted” (and believed the Chair was “out to get” me, according to a whistleblower who came forward to inform me of this fact).

If you would like to help me, please make a donation at my gofundme page. Here is the link

Thanks for helping me stand up to the enemies of freedom of expression and alternative thinking about economics.

New Issue!

0718cover--for-blog

Our July/August 2018 issue is now at the printers, and the electronic version has been sent to e-subscribers.  (Not a subscriber? You can subscribe here!)

Here is the editors’ note from p. 2, with a guide to what’s in the magazine:

This Is Your Economy on Corporate Rule

This June, the U.S. Supreme Court issued a five–four ruling in Janus v. AFSCME that stops public-sector unions from collecting fair-share fees from non-members. The decision is a major victory for big business interests in their long-standing campaign to undermine union power. The ruling was no surprise. (D&S readers were prepared for the ruling by Gerald Friedman’s Economy in Numbers in our May/June issue on “Why Janus Matters.”) A similar case would have produced the same result two years ago if not for Justice Antonin Scalia’s timely demise. A few commentators hoped that the Court’s renowned “swing vote,” Anthony Kennedy, would side with the unions this time, but most expected what actually happened: Kennedy voted with the conservatives, as he did almost unfailingly in cases concerning workers’ rights and corporate power.
On the day of the Janus decision, Kennedy announced he was retiring from the Supreme Court. As our issue goes to print, it looks likely that Brett Kavanaugh will be confirmed as his replacement. Kavanaugh is a product of the Federalist Society, the right-wing legal association that has seen huge success in pushing the Republican agenda through judicial appointments on courts across the United States. Advocates for reproductive freedom rightfully fear that Kavanaugh will spell the end of the legal right to abortion—as attenuated as that right has already become in many states.
On many issues, Kavanaugh will be a more consistent conservative vote than Kennedy was. But when it comes to backing capitalist class power, Kavanaugh will be almost indistinguishable from Kennedy. Business interests have had a reliable friend in the judicial system in recent years, on issues ranging from private arbitration hearings to class action suits to protections for whistleblowers. These victories have taken place on courts both high and low. Indeed, Trump has appointed dozens of Federalist Society-approved judges in seats that remained vacant under President Obama due to Senate Republican obstructionism. But many of these victories came at the hands of both conservative and liberal judges. Now, as for most of U.S. history, the courts are a vexing obstacle to any challenge to corporate dominance.
In our cover feature for this issue, Rob Larson looks at a case where some major corporations had positioned themselves on the side of progressive change: the battle over net neutrality. Tech companies fought alongside First Amendment activists and consumer advocates to retain net neutrality under Obama, but when Trump’s Federal Communications Commission moved to end net neutrality last year, the biggest companies had abandoned the cause. What happened? The answer, in short, is that the tech companies are transforming into the telecommunication companies they once opposed. This story reminds us, as Larson puts it, that “Capitalists are only social-change allies as long as it suits the bottom line.”
John Miller’s column in this issue examines another measure of corporate power: the ratio of pay for a CEO to an average worker at their company. New SEC data reveals how drastic the CEO pay gap really is, whatever corporate allies in the media might claim. Yet as Gerald Friedman explains in his column, the country’s wealthiest people haven’t been investing all that money back into the economy. The best explanation for rising public debt across the Global North in recent decades has been government spending to maintain growth in the face of declining private investment. Though this growth has slowed, especially since the Great Recession, Arthur MacEwan notes in his column that the Federal Reserve has started to raise interest rates in order to slow it even further. The Great Recession also contributed significantly to both public and private debt, as Steve Keen emphasizes in his recent book Can We Avoid Another Financial Crisis?, reviewed in this issue by Steven Pressman. Raising interest rates will only make another financial crisis more likely.
There are alternatives to an economy at the mercy of corporations. In the second installment of her series on developing an equitable economy in Los Angeles, Jane Paul shows us that another world is possible, and that the seeds of it are visible in our own. Cooperatives and other organizational models that shift power to workers can begin the slow work of economic transformation. As Costas Panayotakis writes in his review of Catherine Mulder’s important new book on co-ops and capitalism, these efforts will face challenges both external and internal. But they remind us that working people, so often on the defensive, can build their own power when bound together in creative solidarity.