Putting Modern Economics in Context: Lessons from a Soviet Curriculum Reform Project

Editor’s note: This blog post is based on an interview with Dr. Neva Goodwin conducted in May 2021.

In 1989, just before the fall of the Berlin Wall, the Soviet Academy of Sciences began sourcing for an American economics textbook for translation and use in the Soviet Union. They requested help from the distinguished Soviet-American economist, Wassily Leontief.

Leontief in turn approached Dr. Neva Goodwin, then a research associate at the Boston University World Development Institute, for a recommendation. The two had met through mutual friends when Goodwin was a PhD student while Leontief was already a distinguished economist and Nobel laureate. They quickly found shared interests – including a skepticism with mainstream economics.

Initially, Goodwin had hesitations around the project. She found American teaching materials, with their idealized assumptions of rational individuals and perfectly competitive markets, largely irrelevant to real-world economics, much less to the Soviet context.

Nonetheless, the project became feasible when she discovered a textbook, authored by the economist Kelvin Lancaster, that she described as “down-to-earth, common sense and [that] kept bringing in reality.” With Lancaster’s blessing, Goodwin and her team at the Global Development and Environment Institute (GDAE) at Tufts University (where Goodwin was the co-director) created a microeconomics text, based 40 percent on Lancaster’s textbook that sought to analyze the economy within its social, historical, institutional and physical contexts – an approach they termed “contextual economics.”

The new textbook included discussions about the goals of economics and the limitations of markets. According to the textbook, how the economy functions depends on the goals that policymakers establish for it, whether that be maximizing consumption, or profit, or something else. Contextual economics assumes that the goal of economics is to maximize human well-being via a just, equitable and sustainable economic system, implying care of the Earth and environment.

Creating a New Economics Curriculum

Expanding the project into a full-scale venture to revamp the mainstream curriculum was slow and tedious, particularly given the Soviet Union’s dissolution in 1991 and political transition, Goodwin confessed. Work spanned an entire decade. The first iteration of the introductory textbook, Mikroekonomika v kontekste (Microeconomics in Context), was published in Russian in 2002. A translation into Vietnamese was published in Hanoi the same year.

Goodwin and her co-workers subsequently added four more textbooks to the “In Context” series. Those texts discussed issues often overlooked in mainstream economics, including climate change, environmental sustainability, economic and social inequality, financial instability and the changing nature of work. Later, more scholars joined the project, contributing insights from feminist and ecological economics, consumerism and modelling methodologies.

“Adam Smith Minus Karl Marx,” and Other Problems with the Field

Goodwin has long criticized mainstream neo-classical economics for its neglect of class domination – in her words, it is “Adam Smith minus Karl Marx.” Smith, a founding figure of modern economics, is widely touted as a champion of free market capitalism. However, economists often disregard his extensive analysis of power within the economy and society, and the ways it extends from one sphere to another (say, from the political to business arena). Thus considered, Marx’s emphasis on power relations – as manifested by class domination and stratification – is far from alien to Smith’s formulation of the political economy. To Goodwin, economics today can hardly be relevant if it fails to address how large corporations shape policies to benefit themselves, often at the expense of smaller businesses, the broader public and the environment.

Goodwin’s disillusionment with economics began during her own doctorate education in the 1980s. Unlike most of her peers, she entered the field with an undergraduate degree in literature and following a 13-year break from school while raising children. She ploughed through undergraduate pre-calculus and economics courses to acquire the requisite skills for admission into a PhD program, which she had hoped would equip her to address real-world issues in development, housing and agriculture.

However, the discipline’s inclination toward mathematical abstraction left her disappointed. “I became surprised and saddened that what we were taught has little to do with real world,” she commented. In a subsequent working paper, Goodwin posited that mainstream Western economics’ push toward mathematical complexity can be attributed, at least in part, to Cold War ideological rigidity. Assumptions about perfect competition and profit- and utility-maximization reflect not only scientific concerns, but also political pride and faith in the ability of markets to function optimally to achieve ideal outcomes.

Additionally, academia’s tendency to establish barriers to entry – whether to maintain robust standards or to keep salaries high – creates a preference for rewarding testable skillsets like mathematical ability. Consequently, less quantifiable skills such as reasoning, judgment and critical thinking are often overlooked. Goodwin has heard complaints from economics faculty that the criteria for tenure, promotion and publication are more aligned with specialization than with interdisciplinarity.

What’s Next?

Unsurprisingly, such drifts have shaped not only the incentive structures within the discipline, but also the way economics is taught. As students progress to higher-level economics, they encounter the same concepts presented more narrowly, but with more mathematics and less real-world content – an approach that is uncommon in other disciplines, observed Goodwin.

This approach makes it difficult to reform the curriculum by including more contextual and pluralistic analysis. Although instructors using the “In Context” series of teaching materials strongly approve of them, the neo-classical approach continues to dominate the discipline. According to Goodwin, some instructors find it challenging to switch to the “In Context” materials because upper-level courses do not support interdisciplinarity. Her conversations with community college instructors revealed that students who want to enter university after community college prefer to take standard courses that have easily transferrable credits.

Rather than attempting to reform the “extremely defensive” discipline from within – which would require establishing upper-level courses in contextual economics and tackling the structural bias toward mathematical abstraction – moving away from mainstream economics would be a wiser investment of time and resources, Goodwin suggested. Creating alternative standalone departments that emphasize interdisciplinarity is critical. She envisions an economics curriculum that equips students to tackle issues of labor, wages, finance and industrial organization as they progress to higher levels. In a positive development, several universities have already established branches in ecological economics and political economy that look beyond “debates” with standard economics, she noted.

Goodwin has identified a crucial, immediate audience for the teaching materials in contextual economics: the more than 90 percent of American students who take introductory courses, but do not go on to major in the subject. Although faculty may be more focused on creating a pipeline of economics majors, it benefits neither the field nor the majority of students who have no interest in specializing.

“For these students, what matters is that they understand the economy as it actually is,” Goodwin added.

Currently, the Economics in Context Initiative (ECI) at the Boston University Global Development Policy Center, is continuing Goodwin’s work on developing contextual teaching materials in economics. ECI’s most recent project aims to create a new “learning system” including a short textbook along with a set of web resources, that helps understand the current global economy and explore ideas on creating a just and sustainable world. The material will be designed for students in institutional niches and for people outside the university system interested in learning about the economy. ECI has also been pursuing various work, such as presenting at conferences, publishing articles in various platforms and expanding outreach through social media and email campaigns to promote the contextual approach to economics.

Stacey Yuen was an Economics in Context Initiative Communications Fellow from 2021-2022 and is a Boston University graduate student in Theology.

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