The hidden side of economics
Sunday, 18 November 2007
Elayne Clift writes
AN award-winning economics professor at the University of Chicago, he attempts to answer questions that explain how the world works:
Q: Why did crime rates drop in America in the 1990s?
His answer: Legalised abortion meant fewer kids grew up in dysfunctional families that spawn crime.
Q: Why do drug dealers still live with their moms?
A: They can't afford not to.
Q: Do experts put their own interests first?
A: Yes.
Levitt is part of a growing tradition among young economists who believe that much of what we think of as conventional wisdom is wrong. They believe that intuition can lead to important research, and they fervently believe that knowing what to measure and how to measure it can explain a lot in the world.
At the Centre for Popular Economics (CPE) in Amherst, Massachusetts, Levitt's questions make sense. CPE is a non-profit collective of nearly 70 economists that was founded in 1978 to "demystify the economy" and "put useful economic tools in the hands of people fighting for social and economic justice". According to its website, CPE "examines the root causes of economic inequality and injustice, including systems of oppression based on race, class, gender, nation and ethnicity".
In its programmes, workshops and annual Summer Institute (a weeklong intensive training programme in economics; this year is their 26th), CPE strives to make connections between such phenomena as poverty, wages and welfare reform, financial markets and homelessness, or racism and environmental degradation. The programmes uncover links between seemingly isolated issues, so that groups working for progressive change can identify the root causes of social and economic injustice.
Economic literacy is especially important for women, says Emily Kawano, an economist and Director of CPE. "Women tend to shy away from the so-called hard science of economics," she says, "but when it comes to understanding how the economy works, women's groups are out in front." Kawano says that despite the under-representation of women in economics departments in universities, women are playing a key role on the activist front. She cites international organisations, such as the Self-Employed Women's Association in India, who are making a big difference to women's economic security. Micro-credit programmes and peer loans are another way that women are making their way into the world of economics.
Much of the popular economics work being done is with women's groups globally, especially in southern hemisphere countries. "Women are trying to hold together their families and they are taking the biggest hit when it comes to the neo-conservative agenda. When women find themselves in the path of that great big swath carved out by big business, they ask questions -What's going on here? What's forcing me into an unfavourable labour market? What can I get for my labour? In countries like the US, women are asking why there are cutbacks in social services that will hurt them."
Members of CPE -- which grew out of the interest of several economics faculty and their students at the University of Massachusetts, Amherst, believe it is important for "regular folks" and activists to have the tools to undertake a critique of economic policies foisted upon them by the government. They want to combat the jargon and emphasis on mathematical models that economists shroud themselves in so that their profession is mystified and they are viewed as experts. Kawano worries that this leads people to "cede power to the so-called experts. But why?" she asks. "If those models are not serving us well, we need to do something about them."
Thousands of people involved in women's groups, prison reform, global justice, economic development, environmental protection and more have taken CPE workshops or attended a Summer Institute. There they learn how to undertake a systemic analysis of economic theory and policy. "We start with the basics," Kawano says. "Who does what work? Who creates and controls surpluses? What is the logic of capitalism? We provide overarching and historical frameworks. We're all trained economists with a depth of knowledge, but we are very user-friendly."
CPE programmes emphasise the power of economic ideology in our daily lives. Since the era of Ronald Reagan, there has been a profound shift in economic ideology with impacts on people's lives that sometimes are "life and death".
Kawano cites the recession of the early 1980s. "That recession was created by the Federal Reserve, our central bank. The people in those banks aren't elected and they aren't held accountable. Yet they have the power to trigger a national and international recession.
The result was that the recession did have the intended effect of taming inflation but also achieved a less public agenda of undercutting labour, strengthening the hand of business, and ushering in the rise of free market, individualistic, cut-throat capitalism. Since then, we've seen rising inequality, greater corporate concentration of power, slow or no growth in real wages, an explosion of poverty wage jobs, and cutbacks in social programmes and regulations to protect the public or the environment."
CPE has worked with organisations and groups, such as the AFL-CIO (American Federation of Labour-Congress of Industrial Organisations; the largest affiliation of unions in the US), to educate people around the myriad issues that relate to workers, communities and economics. In 1997~ CPE wrote Common Sense Economics for the union, a study guide and curriculum that has been used to train more than 500 AFL-CIO workshop leaders to date.
CPE's Childcare Project, began in 1999, to look at turnover factors among childcare workers. The centre has also collaborated with groups in South Africa and Senegal. In addition, a series of Econ-Atrocity briefs are distributed via email. One of the most recent reports addressed 'Social Security: A Mythical Crisis'.
"Economics is a social creation, not a hard science," Emily Kawano says. "To the extent that it is not serving the greatest number of people we can and should change it. But I'm optimistic and hopeful," she concludes. "Exciting things are happening throughout the world." No doubt Steven Levitt would agree.
Courtesy: NewsNetwork
AN award-winning economics professor at the University of Chicago, he attempts to answer questions that explain how the world works:
Q: Why did crime rates drop in America in the 1990s?
His answer: Legalised abortion meant fewer kids grew up in dysfunctional families that spawn crime.
Q: Why do drug dealers still live with their moms?
A: They can't afford not to.
Q: Do experts put their own interests first?
A: Yes.
Levitt is part of a growing tradition among young economists who believe that much of what we think of as conventional wisdom is wrong. They believe that intuition can lead to important research, and they fervently believe that knowing what to measure and how to measure it can explain a lot in the world.
At the Centre for Popular Economics (CPE) in Amherst, Massachusetts, Levitt's questions make sense. CPE is a non-profit collective of nearly 70 economists that was founded in 1978 to "demystify the economy" and "put useful economic tools in the hands of people fighting for social and economic justice". According to its website, CPE "examines the root causes of economic inequality and injustice, including systems of oppression based on race, class, gender, nation and ethnicity".
In its programmes, workshops and annual Summer Institute (a weeklong intensive training programme in economics; this year is their 26th), CPE strives to make connections between such phenomena as poverty, wages and welfare reform, financial markets and homelessness, or racism and environmental degradation. The programmes uncover links between seemingly isolated issues, so that groups working for progressive change can identify the root causes of social and economic injustice.
Economic literacy is especially important for women, says Emily Kawano, an economist and Director of CPE. "Women tend to shy away from the so-called hard science of economics," she says, "but when it comes to understanding how the economy works, women's groups are out in front." Kawano says that despite the under-representation of women in economics departments in universities, women are playing a key role on the activist front. She cites international organisations, such as the Self-Employed Women's Association in India, who are making a big difference to women's economic security. Micro-credit programmes and peer loans are another way that women are making their way into the world of economics.
Much of the popular economics work being done is with women's groups globally, especially in southern hemisphere countries. "Women are trying to hold together their families and they are taking the biggest hit when it comes to the neo-conservative agenda. When women find themselves in the path of that great big swath carved out by big business, they ask questions -What's going on here? What's forcing me into an unfavourable labour market? What can I get for my labour? In countries like the US, women are asking why there are cutbacks in social services that will hurt them."
Members of CPE -- which grew out of the interest of several economics faculty and their students at the University of Massachusetts, Amherst, believe it is important for "regular folks" and activists to have the tools to undertake a critique of economic policies foisted upon them by the government. They want to combat the jargon and emphasis on mathematical models that economists shroud themselves in so that their profession is mystified and they are viewed as experts. Kawano worries that this leads people to "cede power to the so-called experts. But why?" she asks. "If those models are not serving us well, we need to do something about them."
Thousands of people involved in women's groups, prison reform, global justice, economic development, environmental protection and more have taken CPE workshops or attended a Summer Institute. There they learn how to undertake a systemic analysis of economic theory and policy. "We start with the basics," Kawano says. "Who does what work? Who creates and controls surpluses? What is the logic of capitalism? We provide overarching and historical frameworks. We're all trained economists with a depth of knowledge, but we are very user-friendly."
CPE programmes emphasise the power of economic ideology in our daily lives. Since the era of Ronald Reagan, there has been a profound shift in economic ideology with impacts on people's lives that sometimes are "life and death".
Kawano cites the recession of the early 1980s. "That recession was created by the Federal Reserve, our central bank. The people in those banks aren't elected and they aren't held accountable. Yet they have the power to trigger a national and international recession.
The result was that the recession did have the intended effect of taming inflation but also achieved a less public agenda of undercutting labour, strengthening the hand of business, and ushering in the rise of free market, individualistic, cut-throat capitalism. Since then, we've seen rising inequality, greater corporate concentration of power, slow or no growth in real wages, an explosion of poverty wage jobs, and cutbacks in social programmes and regulations to protect the public or the environment."
CPE has worked with organisations and groups, such as the AFL-CIO (American Federation of Labour-Congress of Industrial Organisations; the largest affiliation of unions in the US), to educate people around the myriad issues that relate to workers, communities and economics. In 1997~ CPE wrote Common Sense Economics for the union, a study guide and curriculum that has been used to train more than 500 AFL-CIO workshop leaders to date.
CPE's Childcare Project, began in 1999, to look at turnover factors among childcare workers. The centre has also collaborated with groups in South Africa and Senegal. In addition, a series of Econ-Atrocity briefs are distributed via email. One of the most recent reports addressed 'Social Security: A Mythical Crisis'.
"Economics is a social creation, not a hard science," Emily Kawano says. "To the extent that it is not serving the greatest number of people we can and should change it. But I'm optimistic and hopeful," she concludes. "Exciting things are happening throughout the world." No doubt Steven Levitt would agree.
Courtesy: NewsNetwork