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Austerity and academia

March 28th, 2012

Austerity is hitting lots of people, across pretty much all social classes, except for the top 1 per cent, who are rapidly recouping their losses in the GFC and will soon be pulling even further away from the 99. Just at the moment, academics seem to be in the crosshairs, from Washington to Sydney and beyond. Here’s a post on the subject from my friend and former colleague Rohan Pitchford. To forestall a possible line of criticism, let me observe now that, while academics have it better than plenty of others under attack from austerity policies, anyone who plays on this kind of division is a tool of the 1 per cent, and will be treated as such by me.

Sackings Hit Economics School Hard (Guest post from Rohan Pitchford)

I was surprised and dismayed to hear that that several of my former colleagues at the School of Economics at the University of Sydney have been told to leave their jobs by July. A remarkable aspect is that the sackings happened by edict, several layers of administration above the School level. How is it possible for such a removed group to know the details of people’s work life, their roles and the reasons behind their roles without any form of consultation? (ANU also faces budget cuts, but is taking the enlightened bottom-up approach.)

I know all of those concerned personally, and the group includes both talented researchers, teachers and administrators. They were apparently selected using retrospective publication criteria. We all know that most people experience a ‘bare patch’ in their publications during the life course, whether it be because of a new child, a death in the family, illness (admin duties!) etc. Knowing the people involved, the criteria seem to me unfair and random.

Perhaps the most astounding fact in all of this is that Sydney Economics has been perennially understaffed– as a Professor there, I estimated that they were some 10 academics short of what is required to deliver requisite courses: The average class size is 110, I conjecture larger than any other department. There are not enough staff to cover all the classes taught, let alone to reduce class sizes to educationally appropriate levels. Sydney typically has had to hire part-timers to fill the gap. The department generates some 20 million dollars per year in revenue from its teaching program. I cannot imagine that this will do anything but hurt this important revenue base.

A big question is this: Are the sackings due to productivity, or are they in response to an administration that has grossly over-spent on buildings? I have heard rumours of expenditure of 100m on a new medical centre, and 360m on a new obesity centre preceded these sackings.

Solutions? I discuss a possible way forward for Australia here:

  1. Freelander
    April 7th, 2012 at 14:07 | #1

    @Michael Harris

    Don’t hold back. Better you left the venom out in this forum than we read of another case of road rage.

    Here. Its a chance to correct an era.

  2. Freelander
    April 7th, 2012 at 14:32 | #2

    I’m so demonstrably awful. Like ashamed. —–

  3. Dan
    April 8th, 2012 at 10:09 | #3

    @Chris Warren

    This is still a hand-waving explanation.

    If I were you, I would argue something like: ‘The global financial crisis’ (caused by excessive financialisation in a bid to maintain unsustainable growth) impact on int’l student numbers led to lower-than-projected revenue at USyd, and the university administrators found themselves out on a limb. It doesn’t help that government funding has collapsed as a function of declining tax receipts and market-knows-best, user-pays ideology.’

    I don’t know whether this is the whole truth (my feeling is that it gets most of the way there, although the retrospective performance management thing sounds about right too; I saw Brian Pink at ABS try this on, largely unsuccessfully as it turned out). But the above does have the definite virtues of a) being coherent and comprehensible, and b) answering the question I posed, joining the macro and the micro.

    C-
    See me.

  4. Chris Warren
    April 8th, 2012 at 11:42 | #4

    @Dan

    It is useful to abstract from such specifics as the underlying reality existed before, created the UoS instance, and will continue after.

    If particular cutbacks are forced, then this is only because previous cutbacks were also forced on others, and it means that there will be future cutbacks (which will be even worse – as threatened by Abbott).

    The general ongoing reality is the significant point – not some local problem to do with the UoS. This is just a point of illustration, and there will be many more in the future.

    However, when it comes to Economics Department, it is relevant to recognise that they are out on a limb, a limb they built. I enjoy their tantrums (eg Michael Harris).

    Some good work is being done overseas, see: Stephen Maglin’s short video in particular at:

    http://www.economics-antitextbook.com/2011/12/great-talk-by-stephen-marglin.html

    The relationship between macro and micro is not handwaving. It is pointing.

  5. Freelander
    April 8th, 2012 at 13:36 | #5

    Yes. Sad tantrums. Tantrums simply give succour to one’s enemies. Or is that sucker?

  6. Dan
    April 9th, 2012 at 12:23 | #6

    @Chris Warren

    We’re on the same page here, you’re just saying things in a really obtuse way. That’s what I was taking issue with.

  7. Ernestine Gross
    April 9th, 2012 at 12:35 | #7

    Not sure to whom I should direct it, but this is Ross Gittins’ Easter message:

    http://www.smh.com.au/business/what-jesus-said-about-capitalism-20120408-1wjmm.html

  8. Freelander
    April 9th, 2012 at 14:09 | #8

    Who knows what he said? Or if a cult leader named Jesus ever existef. The Jesus we have anyway was an invention of “St” Paul. With much of it made up to help his faction’s contol struggle for leadership of the cult.

  9. Ernestine Gross
    April 10th, 2012 at 11:07 | #9

    So, Freelander, St Paul’s invention about the past (retrospectivity) creates a cult with factional struggles for leadership. But retrospectivity imposed on economics departments at universities results in ? On this occasian your usual subtleties are, IMHO, misplaced.

    (And what is left of your ‘non-empty set-strict logic’ argument if you were asked to make the word ‘name’ precise in context).

  10. Adit
    April 10th, 2012 at 15:30 | #10

    I tend to sympathise with Chris Warren’s views, but agree with some of the other points made regarding the fact that neoliberal policies generally do not come from academic economists occupying universities.

    Im still an economics student, and have nearly finished my masters at usyd. While I certainly don’t pretend to know the political leanings of my lecturers and professors, I think the way economics is taught requires serious overhaul. It is taken as given as if it’s ok that models (IS/LM, RBC, DSGE) do not include money or debt (they have no affect on ‘real’ variables), that micro analysis of individual behavior can be aggregated to market behaviour, there is no discussion of how depressions can occur within the models taught, no models with true dynamics (disequilibrium using ODEs). The implications of the assumptions used in these models are not made clear during undergraduate classes, and again even in masters courses I’ve taken.

    Is it really a wonder you have managers, public servants, etc spouting neoliberal talk after taking only introductory or intermediate courses (or even complete undergrad training) in economics where models which are completely incorrect are taught as if they are an adequate representation of how the economy works. Even in an advanced unit like macro analysis in my masters course, I’m yet to see discussion of an alternative to the incorrect money multiplier model of credit creation.

    When you teach incorrect models they have real world effects. But I’ll be conservative and concede the link between academics being fired as a result of the ideas/policies informed by their own research may be tenuous.

    But misinformed policy does have an intellectual home, and it’s in what our economics faculties teach students who take their courses.

  11. Freelander
    April 10th, 2012 at 15:37 | #11

    Re: what I said in relation to sets, would you like me to provide an example of such a set to prove my point?

  12. Ernestine Gross
    April 10th, 2012 at 21:03 | #12

    “Legally carbon dioxide emissions are State property”.

    http://www.smh.com.au/opinion/political-news/carbon-tax-is-unconstitutional-says-tax-expert-20120410-1wlqh.html

    I can’t think of one neo-classical or other mainstream economist who would have provided the ‘intellectual home’ for the above quote.

  13. Freelander
    April 10th, 2012 at 21:11 | #13

    @Ernestine Gross

    Have to agree with you on that one. Legally, the property of the states is the property of the crown. Same crown, simply the mechanismd of administration and jurisdiction differ. We are citizens of Australia, and residents, rather than citizens, of individual states.

  14. Freelander
    April 10th, 2012 at 21:43 | #14

    By the way, the CO2 might legally be outside of Commonwealth jurisdiction if those gases had the property of remaining where they we emitted rather than diffusing across the states and internationally . But they don’t, so it doesn’t .

  15. Ernestine Gross
    April 10th, 2012 at 22:45 | #15

    @Freelander

    The ‘by the way’ is the important point. And it is environmental and resource economics (Michael Harris’ area included) which is relevant.

    And we are back on topic. How many financial resources are made available at the university of sydney (and elsewhere) for fundamental economic research (a program may take decades with only a few publications; eg from Arrow-Debreu to the theory of incomplete markets took a good 4 decades) and how many financial resources are made available for cobble stones and imposing buildings?

  16. Freelander
    April 10th, 2012 at 22:57 | #16

    Shock. You’re suggesting that there are such things as public goods. Or that if such things exist the ‘market’ is deficient in providinh them.. There are plenty of libertarians who would deny that. The only role for government they see is a court, police and military to enforce their property rights. Property rights being the only legitimate rights.

  17. Freelander
    April 10th, 2012 at 23:00 | #17

    Surely the blogosphere provides all the free goods you need?

  18. Chris Warren
    April 11th, 2012 at 08:42 | #18

    @Freelander

    Property rights to your own property – not other peoples?

    But how did Australians get their property?

    Killed off the original owners?

  19. Freelander
    April 11th, 2012 at 09:23 | #19

    People can be property under the doctrine.

    Legally Australia was empty when the Europeans ‘found’ it.

    As aborigines were not recorded in the census until. 1965,they must have ‘sneaked’ in sometime after 1960. (Who knows where from?))

  20. Ernestine Gross
    April 11th, 2012 at 09:30 | #20

    Surely, even Adit would have come across the notion of a ‘public good’ during his undergraduate degree in Economics. Adit might have noticed that the concept of ‘externalities’ is better suited than the notion of a ‘public good’ to seriously question the thoughts, or otherwise, underlying the statement: “Legally carbon dioxide emissions are State property”.

    Perhaps some difficulties are due to lack of elementary education in natural sciences in high school or even primary school. Perhaps difficulties in later life arise when pre-school children are banned from the kitchen and hence never having the ‘opportunity’ to observe cold water being brought to the boil and steam evaporating. Perhaps difficulties in later life arise when household kitchens are replaced by market transactions in food halls in shopping centres.

    I mean, a ‘bright’ masters student in Economics (‘bright’ in a broader sense than end of term KPI values) might notice that the notion of ‘externalities’ by itself is not adequate to integrate the ‘material’ base of all economic activity – the biosphere – into economic models.

    So, what is the justification for academic staff cuts in general and wrt the School of Economics in particular?

  21. Freelander
    April 11th, 2012 at 09:32 | #21

    Anyway under the doctrine you don’t revisit those sorts of injusticed because to do so might introduce all sorts of ‘uncertainty’ about property rights. And we couldn’t have that! (What’s worse you might lose your ill gotten property and we certainly couldn’t have that!)

  22. Freelander
    April 11th, 2012 at 09:41 | #22

    Being a libertarian is like being a Christian. Once you learn your ‘catechism’ you can talk endless nonsense and argue a justification for anything you want.

  23. Freelander
    April 11th, 2012 at 09:47 | #23

    @Ernestine Gross

    Reality has a well know liberal bias, and after the climate change hoax better to clear the decks of a few scientists!!

    All perfectly rational. Or at least among those who might vote for Tony!

  24. Freelander
    April 11th, 2012 at 09:51 | #24

    If some on the left believe in a socially created reality, those on the right believe in an anti-socially constructed reality!

  25. Chris Warren
    April 11th, 2012 at 10:18 | #25

    @Freelander

    Viking property rights?

  26. Freelander
    April 11th, 2012 at 11:20 | #26

    Their rights have expired. But that spirit lives on.

  27. Adit
    April 11th, 2012 at 11:57 | #27

    @Ernestine Gross

    Wow such snark. Not sure what you are trying to prove by plucking news articles at random. If you’d like a comprehensive look at what neoclassical Econ (that originated and is taught in unis) has gone on to inform, I suggest you read/reread the profs book. Fantastic that you have a phd in economics, but many who don’t make it that far learn garbage and then go into the real world making decisions based on that garbage. Though I suspect your axiomatic math-econ approach which you constantly elude to (we get it, you are very good at maths!) simply means you have blinders on.

    Maybe have a look at Kirman’s “Whom or What Does The Representative Individual Represent” from Journal of Economic Perspectives, for an example of some of the questions that need to be asked of mainstream econ. There’s no shortage – also Solows similar critique in the same journal about the state of macro is pretty scathing. Remember these are models used by central banks! There are alternatives, the best that I’ve come across and engaged with so far are prof Keen’s monetary circuit model that is still a work in progress I believe.

    I’m not trying to justify academic staff cuts in the economics dept, I know the staff cuts probably have nothing to do with this criticism – so I guess this is probably a discussion for the sandpit (I can see tho how some people may find it almost poetic).

  28. Chris Warren
    April 11th, 2012 at 12:42 | #28

    @Adit

    In fact, (like all sciences) all mathematical economics is bounded by assumptions and never seems to have any units. They also mix logarithms and linear variables in wild abandon.

    Maths creates blinkers when a GFC finally emerges. Steve Keen’s “mathematics”, which attempts to represent instability, is a real mess.

  29. Ernestine Gross
    April 11th, 2012 at 16:06 | #29

    @Adit

    There is only 1 item in your post I consider worth while responding to. It concerns the ‘representative agent’. This construct is used in macro-economic models which claim to have a micro-economic foundation. It has been the subject of much critique for a long time (at least 30 years). There are some problems where this approach may be considered adequate but this approach is definitely not adequate when the subject of investigation concerns problems where ‘incomplete markets’ is a crucial factor (eg negative externalities such as CO2 emissions).

    As you can see, I don’t pick the new items at random. Like many people, I am interested in finding the sources of neoliberalism applied and, so far, I found many places other than academics in economics departments locally.

    Hope your masters thesis is ‘comprehensively’ free of garbage, as defined by you.

    Glad to hear you don’t claim your posts are relevant to the topic.

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