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3. The ‘contending perspectives’ approach

Table 3a shows a module structure (plus readings and selected activities) for an Introductory Microeconomics module taught over one semester at a US college. Table 3b provides a contrast between the structure of a contending perspectives module and a conventional module.

Table 3a: Introductory microeconomics module (contending perspectives)

Topic

Heterodox resources (orthodox resources assumed readily available)

Introduction to economics

What is economics? How is economics done? Some views on economics

Stretton, Chs. 1–3, 5, 7

Orthodox and heterodox perspectives on economics

Heilbroner, Teachings from the Worldly Philosophy (TWP), Chs. I–II, pp. 333–336, 208–211, 219–235, 297–330

Stretton, Chs. 7–10

Heilbroner, The Worldly Philosophers (WP), Chs. 1–2, 10

Demand

Basic principles of demand; elasticity

Heilbroner, WP, Ch. 8

Heilbroner, TWP, Ch. V, pp. 247–263

Dollars and Sense, 2016, Chs. 2-3

Stretton, Chs. 19–27

Veblen

Figure 7: biscuit experiment

Demand and advertising

Informational advertising vs. persuasive advertising

Figure 8: Media watching exercise

Firms and production

Costs, revenues and production

Dollars and Sense, 2016, Ch. 4

Stretton, Ch. 31–35

Smith, Book I, Ch. 1

Heilbroner, WP, Chs. 3, 6

Heilbroner, TWP, pp. 73–86, 90–95, Ch. IV

Marx, Karl (1867) Capital, Vol. 1, Chs. 1 (sections 1, 2 and 4), 7

Figure 5: paper aeroplane experiment

Firms and competition

Competition, monopoly, oligopoly and mergers

Dollars and Sense, 2016, Ch. 5

 

Profits

Mechanics of profitability

 

Profits

Consequences of profitability

 

Markets

Supply and demand analysis

Heilbroner, WP, Chs. 3, 9

Heilbroner, TWP, pp. 55–98, 235–238

Stretton, Chs. 40–42

Market experiment

Markets  

The free markets approach. How free are ‘free markets’? Do markets work? Stock markets

Dollars and Sense, 2016, Chs. 6-8

Stretton, Ch. 36–9

Keynes, Chs. 12 and 19

Figure 3: Kemp/Wunder

Markets and government

Various views on the market–government relationship. Public goods, etc.

Dollars and Sense, 2016, Chs. 9-10

Heilbroner, WP, Chs. 5–6, 10

Heilbroner, TWP, pp. 98–105, 275–296

Table 3b: Contending perspectives module contrasted with a standard module (introductory microeconomics)

Contending perspectives

Standard

Introduction to economics

What is economics? How is economics done? Some views on economics

Introduction to Economics

What is economics? How is economics done?

Orthodox and heterodox perspectives on economics

Markets

Supply and demand analysis

Demand

Basic principles of demand; elasticity

Demand curves

Demand and advertising

Informational advertising vs. persuasive advertising

Elasticity

Firms and production

Costs, revenues and production

Production and costs

 

Firms and competition

Competition, monopoly, oligopoly and mergers

Profit maximisation

Profits

Mechanics of profitability

Factor markets

Profits

Consequences of profitability

Structure–Conduct–Performance:

Perfect competition

Markets

Supply and demand analysis

Structure–Conduct–Performance:

Monopoly

Markets  

The free markets approach.  How free are ‘free markets’?  Do markets work? Stock markets

Market failure

Public goods and externalities

Markets and government

Various views on the market–government relationship. Public goods, etc.

Government intervention

Although the readings in Table 3a suggest that Stretton is being used extensively, the author did not require students to buy the book. Certain key parts of the book were placed in a reader and many copies were placed in the library for reference. Other key readings, such as short handouts and newspaper articles, were placed in the reader.

In the author’s contending perspectives module, there were two recommended texts: Real World Micro (Dollars and Sense, 2016), which encompassed a heterodox slant on real-world issues connected to consumers (such as credit card companies’ marketing schemes), firms (such as price gouging), markets (living wage movements), government policy (such as welfare reform), plus environmental and globalisation articles; and Heilbroner’s Worldly Philosophers. As Earl discusses, it may be useful to explain how economists came to their own views; but in any case, Heilbroner’s book adds some colour to the thoughts of famous economists in terms of their personal backgrounds and their historical context. Thus, engagement is achieved, as is the heterodox attention to history of thought. As shown in Table 3a, the readings from Heilbroner are interspersed into the programme as appropriate to invigorate certain topics. An alternative is to teach a block of history of thought at the beginning of the course (Barone, 1991).

One benefit to the teacher of such a module is that allows flexible thinking about the order of topics. A teacher could in theory adopt the conventional ordering of topics and begin with markets. The students learn the supply and demand diagram in order to grasp the concept of scarcity and its relation to price movements. Indeed, the first time the author ran the module, that was the path chosen. However, it is unnecessary to teach supply and demand first; moreover, that order is in many ways strange. For instance, we know that markets are where buyers and sellers meet yet we discuss markets well before buyers and sellers are discussed. Further, in a traditional introductory microeconomics module, we begin with markets and often end with them, i.e. through market failure and the role of government. It may make more sense to group those topics together.

Alternatively, we treat the level 1 micro in the same way as we do at level 2: we begin with the consumer rather than with the market. One way of introducing the topic of demand is to run a classroom experiment, as discussed in Figure 7.

Figure 7: Chocolate chip biscuit experiment

One student volunteers to eat chocolate chip biscuits. They are asked to eat a biscuit and to rate the satisfaction they get from it as ten, as a standard by which to gauge further biscuits. They are then asked to eat successive biscuits. The objective is to test the principle of diminishing marginal utility. In most cases when the author ran this experiment, the resulting marginal utility curve was anything but smooth, but about half the time it was generally downward sloping. The students are then asked to consider what the results mean for the theory that demand curves are smoothly downward sloping. Some students will respond that as an approximation it is good enough. Others will simply argue that the results refute it. For example, the heterodox concern with history, discussed already, and concern that ceteris paribus is an unreasonable assumption, brings into question the ability to plot a demand curve at all. These objections in turn are countered, for example, by the argument that the demand curve need not be fact, but is illuminating. The ground for this discussion has been set by the discussion of economic method earlier.

The biscuit experiment is useful in another way. It illustrates the usefulness and difficulties of classroom experiments. In a typical American classroom, the invitation to eat biscuits would invariably be accompanied by a query as to where the milk was, given that usually biscuits and milk are eaten together. The author had to explain that the milk might corrupt the experimental conditions and could not be allowed. The fact that eating biscuits without a drink may cause less satisfaction for successive units was significant to the experiment. Some students also picked up on the fact that chocolate chip cookies were being used. Chocolate chip cookies can never, of course, be assumed identical: the obvious variable being the volume of chocolate in each biscuit. Good students realise that the experimental results may simply reflect the chocolate content of successive biscuits.

Further discussion can illuminate that students’ responses to the results may be conditioned by their prior beliefs about orthodox/heterodox and concepts such as ceteris paribus. The biscuit experiment is therefore a good exercise in any microeconomics module, but it is particularly effective in a contending perspectives framework because it follows from and leads into differences between the orthodox and heterodox approaches.

At level 1, it is possible to discuss constrained maximisation, even without the formal framework or indifference curve analysis. By introducing the orthodox approach first, in which maximisation is a key element, the notion of constrained maximisation is intuitively more understandable. Similarly, though, by being made aware of heterodox objections, the student is already primed to criticise the notion. Students are thus able to ask questions about the demand curve itself, even as fundamental as questioning its existence.

The discussion of demand may lead into a discussion of the formation of preferences. Again, at introductory level, there need be no detailed discussion of the assumptions underlying demand theory. However, it is possible to state that choice is a product of prices, preferences and income; and that preferences are unexplained in the orthodox approach. Students may ask what the sources of preferences are. Various sources can be used to identify several factors, including the law, peer groups, families, religion and other traditions. This discussion leads into a heterodox theory of persuasion. At this point, as above, a discussion of Veblen can be slotted in, and students will become familiar with the concept of conspicuous consumption. At higher levels, one can examine at length heterodox critiques of the orthodox model of the consumer. However, at introductory level this is not necessary. Nevertheless, one can take the simple contrast that in the orthodox approach, advertising is informative, and in the heterodox approach, advertising is persuasive. This can lead to an interesting lecture and classroom discussion of a selection of advertisements. A way of exploring advertisements is to give students an assignment that involves watching television or some other media. It is assumed that students would enjoy this. The assignment is described in Figure 8.

Figure 8: Media watching assignment

The essence of the assignment as originally designed is that students watch a specific 30-minute commercial television programme and note its time, channel and content. They then note all the advertisements shown during the programme. From that list they are then asked to infer what audience the programme’s advertisers believe is watching it and what message(s) the advertiser is attempting to send. They are then asked to analyse in detail one of the advertisements in a similar way to that done in class. This could be the subject of a student presentation.

Further, the analysis of advertisements can be a good examination or test question: present the students with an advertisement (or several) and ask them to analyse it from an orthodox and heterodox perspective and to contrast the two. The student should first be able to explain the essential points about the orthodox and heterodox perspectives on the consumer. Thus, their retention of the material is assessed. But their understanding can also be tested. The student should be able to identify what about the advertisement is informative and what is persuasive. Further, the student should say how the advertisement seeks to persuade and which social norms or pressures are being appealed to by the advertisement.

The exercise can be modified for other media too. Students could go to a film and note the adverts shown there. Commercial radio is another option, with little modification required from the TV assignment. Podcasts and vodcasts from commercial providers can be used similarly. However, streamed content offers a different challenge because of the interactive nature of advertising: providers know an individual’s previous behaviour, age group and possibly identity and can tailor content to them. Again, this can be a learning opportunity for all participants (including the tutor) to consider internet advertising. For instance, students can consider how advertising is embedded into content. Consequently, they may become aware of such advertising as never before.

That form of assignment illustrates the key elements in assessment using the contending perspectives approach. First, ascertain that the material has been understood. Second, apply the knowledge to an issue. So far, so conventional. Third, ask the students to compare the contending approaches; and fourth – perhaps most difficult of all – ask them to reach a reasonable, argued position on the merits of the theories. Another way to do this is simply to ask the students to write a paper on which theory of the consumer is best. The weak student will merely express their understanding of the theories. A better student will be able to compare the theories and identify their weaknesses. A good student will understand what is meant by ‘best’ in the context of a theory and reach a clear conclusion that weighs up the pros and cons of each approach. This assessment method might be called ‘opinion essays’, but essentially, the essays are reasoned arguments towards a particular view. The student’s ability to present a clear structured argument and, where necessary, evidence, will be crucial.

The pattern of the module described so far continues throughout. From Table 3a, we can see that the next topic covered is the firm. The paper aeroplane exercise (Figure 5) above is useful here. Again, as with the biscuits experiment, it can be used simply to test an orthodox precept. It can also be useful as an experimental method for discussion by the students. Further though, as outlined above, the experiment leads into a discussion of production, costs, prices and profits. Orthodox U-shaped average costs can be compared with their heterodox L-shaped counterparts. Marginalist pricing can be compared to mark-up pricing. At higher levels, more detailed treatments of full-cost and normal-cost pricing theories can be undertaken. Again, the students’ understanding of the topic can be assessed by an essay in which they are asked to reach a position and construct an argument for it. It may be the case that as in Salemi (2005), less detail is presented on cost curves; however, their critical analysis means that the concepts are being reinforced. Again, private study allows for practice and revision of key diagrams or formulae.

The treatment of market structure in this module is less detailed than in an orthodox module. Nonetheless, those concepts are encountered. Furthermore, the length of time discussing profits, their origin and their effects, is a stimulating and useful addition. The students exit with a much broader concept of profit and of the firm in its social environment than otherwise would have occurred.

As noted already, the structure of this module is different from a standard introductory framework because, thus far, there has been little if any formal discussion of markets. ‘Markets’ is the final main topic covered. Again, the basic supply and demand analysis can be considered. This could even be applied, in a very basic way, to labour, which is a topic not covered in the module although usually it would be. Now, of course, students are more primed to be critical of markets and to enquire whether the supply and demand formulation is correct. Some students may even question the notion of equilibrium. This is another crucial concept in economics, which is often taken for granted: economists think in terms of equilibrium – why? Students who have already questioned ceteris paribus may be less likely than others to merely accept the importance and validity of equilibrium. Once again, the student is encouraged to interrogate that concept in order to understand and justify its use.

The market exercise (Figure 3) discussed above may be useful at this point in the module. To reiterate, that exercise can be run as a simple game of seeing markets clearly. However, with the additional heterodox material, students can see that the process towards equilibrium is complicated by a number of factors. The questions raised in the game about the role of the State, the institutional features of markets and the distributional (and other) outcomes of markets lead nicely into a comparison between the free market approach and its criticisms, and into a discussion of market failure and the role of government. It is even possible to cover general equilibrium, if only conceptually, at this point, because the students have seen the necessary component parts, such as perfect competition; but they are also more likely to understand the use of a model such as general equilibrium and to be able to reconcile its apparently fantastic assumptions with the need to model, because that issue has already been covered several times.

The heterodox value added can also be shown in a discussion of market failure which, to many heterodox economists, is a misnomer since many of the so-called rigidities in markets are in fact features which make markets function. An example is long-term contracts. Students are able to see an orthodox model in which long-term contracts are a distortion, but also understand from a heterodox perspective that such contracts may be a response to uncertainty. That thought process could then lead into a consideration of risk. If done at level 1, the discussion may be necessarily brief.

An introductory macroeconomics module on at the University of the West of England, Bristol, UK is discussed in Figure 9.

Figure 9: A Contending perspectives macroeconomics module

This module is delivered over one semester for six hours per week, so is more intensive than a typical module. It uses this space to cover more topics, such as sustainability. The module also introduces special topics, which may change to reflect current events. It also has time to adopt a contending perspectives approach. Like most macroeconomics modules it is organised around topics such as growth, unemployment and inflation. It looks at each one from two main perspectives. One of these is orthodox macroeconomics. The other is heterodox, more specifically Post Keynesianism – it especially draws on the work of Michal Kalecki. This contrast is deployed throughout the module.

So for example, on money: the teachers compared the money multiplier approach with the endogenous money approach. An alternative might be to draw on Modern Monetary Theory. The module also contrasts the Solow growth model and IS-LM with the Kaleckian model. It juxtaposed monetarist, New Keynesian and Post Keynesian approaches to inflation and unemployment (and their relation). As a final example of the contending perspectives approach, on financial balances, students were asked to consider the Ricardian equivalence and the twin deficit approach with Post Keynesian (including Godleyan perspectives). Students were encouraged to think about the differences and similarities between the different approaches and in some tutorials data were provided (e.g. UK financial balances, wage share and growth in the Eurozone) in order to help them reflect on the theories.

Significantly, the module uses a multi-resource approach, including drawing from CORE. Articles from the Bank of England, and those by Godley and others, were combined with texts, for instance the book on Post Keynesianism by Lavoie (2014). This may have reflected that no existing text covers all the relevant material. However, an alternative could be Dorman (2014b). A final point to note about the module is that is also adopts a multi-faceted assessment strategy, including an exam, a literature review (recently this was on de-growth), multiple-choice questions, and a group presentation. Thus students were thoroughly assessed, usually with a formative purpose.

Some other examples of contending perspectives modules are:-

  • Harvey (2014) evaluates a module on contending perspectives delivered at Texas Christian University. The module was the model for a specialist textbook, Harvey (2015), which introduces a large range of alternatives, including orthodox economics. Core reading is supplemented by YouTube videos. An interesting feature of the module is that it commences with questions about logic, and science. This creates a base from which students can appraise the various approaches they meet. A key purpose of considering the nature of science is to explain how messy it is, and how biases are an important part of it. This prepares students for biases within readings, and alerts them to their own tutor’s biases. This is clearly aimed at critical, autonomous thinking. The other feature of the module is the use of a large set (around 120) study questions. These range from being quite factual (for example: What is conspicuous consumption?) to more discursive (for instance: In what sense are definitions and statistical categories value-laden?). These questions are used in class but also might be on the exams on the module.
  • McDonough (2012) explains how he integrated heterodox criticism into a standard introductory economics module at the National University of Ireland, Galway. This module is a stepping-stone to a contending perspectives module but retains a standard textbook order of topics. The module exposes students to Marxist and institutionalist approaches, as well as to orthodox material. The key here is that the heterodox material is introduced early on and considered throughout.
  • A first year core Economics for Management module at the University of Leicester, taught to approximately 200 students every year, offers a different approach to contending perspectives. This module may be the only contact with Economics these Management students have, so there is more scope to give them a flavour of the subject, expose them to different views, teach relevant content, and without any pressure to prepare them for higher level economics. The module starts with a discussion of the nature of economics and its scope (from the breadth of Smith and Marx, say, to the narrower focus of neoclassicals, then ‘colonisation’ and ‘fortress economics’) and a discussion of relationship/distinction between wealth and value. This then leads into a discussion of theories of markets, in which neo-classical views on hpw markets work are contrasted with a Stiglitz-type critique of the neoclassical; and then Austrian views contrast with the Marxian. This material provides a base for subsequent lectures, with markets as thread which holds them together. For example, globalisation is treated as the expansion of markets. Money and finance are discussed in the context of financial markets. Markets relating to climate change, education and intellectual property are also considered.
  • Parrique (2015) presents a module delivered at Uppsala University, Sweden, which discusses “issues of political economy in the context of the Anthropocene”. Specifically, it examines globalisation and sustainability. Thus it represents a species of pluralist, problem-based module, many of which consider environmental questions; however, they reflect different principles from those found in orthodox environmental economics modules.

Section 4 of the handbook chapter discusses general points about contending perspectives modules, including some common objections.

Association for Heterodox Economics

Teaching Resources for Undergraduate Economics