Reconnecting Economics Education with Today’s Global Realities

In a world of worsening climate disruptions and growing economic inequities, what is the economics education that people need? 

Last spring, Michael D. Higgins, the president of Ireland, called out the dangers of how economics is taught in most mainstream economics programs, which often assume there is no limit to the extraction of physical materials. He said,

[Our] failure to facilitate a pluralism of approaches in teaching economics is a deprivation of basic students’ rights, indeed citizen rights leading…to a narrow, blinkered, and distorted education.

In a world of worsening climate disruptions and growing economic inequities, what is the economics education that people need?Higgins’s speech, given at a reception honoring a prominent social justice organization in Dublin, hit on an important theme: given the ecological limits of the earth’s systems and, therefore, the impossibility of maintaining an economy dependent on never-ending growth and resources, a course correction to how economics is taught is urgently required. 

Indeed, one leading ecological economist (that is, an economist who focuses on the intersection of the environment and the economy), Jon Erickson, has labeled current mainstream economics education a form of deception. Calls for a radical change in how economics is being taught are growing.

The Economics Profession’s Defense of the Status Quo

To some, the need for a change in economics education may seem obvious. But this view is certainly not universally held. One central challenge is that the majority of mainstream economists believe that capitalist markets can solve all (or at least most) global problems, and they contend that continual economic growth within this system is required to improve the lives of the billions of people living in poverty.

Within the economics community, however, a growing number of heterodox economists, including ecological economists and proponents of feminist economics, have been calling out what Erickson calls the fairy tale of the economics profession. Once economists acknowledge the obvious point that the earth is a finite system with distinct material boundaries and limits, the need to expand and diversify economics education becomes quite apparent.  

Just this fall, in an interactive session designed to kick off October’s National Economics Education Month, Federal Reserve Chair Jerome Powell praised economics educators for helping the Fed conduct monetary policy by teaching economics. As he shared with educators his enthusiasm and appreciation for economics education, he failed to connect economics to major societal issues.

The climate crisis requires changes in the inputs, outputs, methods, and practices regarding the production and consumption of goods and services.

For me, an academic studying the climate crisis, this session represented everything wrong with the dangerously limited way economics is taught in the United States. Not only was the framing restrictive—the discussion focused narrowly on teaching individual students so that they could become obedient consumers responding appropriately to the Fed’s interest rate changes—but also, throughout the hour-long event, none of the major challenges facing society were even acknowledged. 

As Powell talked directly to educators from around the country about the importance of teaching and learning about how the economy works, he did not even mention the economic implications of the worsening climate crisis. During this session, there was no discussion of growing economic inequities or the widening racial wealth gap. Nor was there any reference to the rising cost of living or the expanding economic disparities in access to healthcare, education, and housing. 

The lack of connection to the issues that students and teachers around the country face every day was not only disappointing but also arrogant and disrespectful. It was as if Powell himself was disconnected from the realities of 2023. Does Powell believe that dumbing things down and not talking about the problems facing society will somehow make those problems go away? Why is he reinforcing a narrow and distorted perspective on the centrality of economics in society? 

During his remarks, Powell referred to economics as “the science of public policy.” Powell has previously stated, however, that he does not see climate change as within the jurisdiction of the Fed. But this exclusionary perspective is precisely the problem. To put this in plain economic terms, the climate crisis requires changes in the inputs, outputs, methods, and practices regarding the production and consumption of goods and services. Economics education must change to connect with this reality.

Powell’s simplification of the potential of economics education is not only insulting to teachers and students grappling with the complex and interconnected issues facing society, but it ignores critical questions of how to create a more healthy and stable future for all. Powell and other mainstream economists who continue to ignore these issues are dangerously reinforcing and strengthening an increasingly unstable and inequitable system.   

Building a Movement to Reform Economics Education 

Can mainstream economics education change? Multiple global networks—and individuals such as myself—have arisen to challenge how economics is currently taught. But intervening is difficult. 

Take the earlier story about Powell. It should be noted that Powell’s failure to address the issues I named above was not because the questions were not asked. Indeed, before the Fed’s education session, over 120 educators submitted questions asking Powell to discuss climate change in economics education. We coordinated through the nonprofit Positive Money, an international network that advocates for changes in the monetary policy of central banks to prioritize climate justice and facilitate a transition away from fossil fuels. However, to our collective dismay, none of our questions were selected. 

Students need to be taught about the potential for consuming and investing differently to…sustain human flourishing within planetary limits.There are others who have also taken up this mantle. For instance, the International Society for Ecological Economics, the School of Feminist Economics and the International Association for Feminist Economics all have formed to advocate for change in how economics is taught. Rethinking Economics International is a global network of students and academics, which includes student chapters in over 120 locations and a global academic membership in over 60 countries. Advocacy has achieved wins in many places, but the reality is that by and large the economics education touted by Powell in his address this fall remains the dominant form of economics education, especially in the United States.

The Consequences of Inaction

Unfortunately, it is not just Fed Chair Powell who separates the field of economics from the real world of our economy and society. Study economics today, and it is as if the reports of the Intergovernmental Panel on Climate Change—which tell us that our current practice of economics is leading to devastating impacts of runaway global heating—do not exist. Ironically, for a profession that claims to pay attention to “scarce” resources, most economics students today are not even introduced to the planetary boundaries of our world or the realities of how human socioeconomic systems are destabilizing the earth’s regenerative and renewable systems. 

The focus of mainstream economics education—which often assumes that the present extraction of materials can continue forever on its current path without considering the earth’s physical limits—is not only deceptive but also disempowering to students and educators. As ecological destruction accelerates, students need to be taught about the potential for consuming and investing differently to allow for a more equitable and stable allocation and distribution of the goods and services that can sustain human flourishing within planetary limits. 

Exploring a diversity of economic theories that explain worsening climate vulnerabilities and growing economic precarity around the world should be a fundamental part of economics education in 2023. Integrating ecological principles into economics education is essential for creating a healthy future for humanity. Clearly, a broader, more diverse, and pluralistic approach to economics education is urgently needed. 

Opening the Field

A wide range of economic ideas beyond neoclassical economics and beyond neoliberal policies need to become mainstream in economic education. The resources for creating this revised curriculum already exist. Economists such as Mariana Mazzucato (who writes about the role of the state in setting overall economic direction) and Kate Raworth (whose “doughnut economics” concept graphically illustrates the connection between ecological sustainability and economic wellbeing) receive widespread recognition. Yet their findings remain largely orphaned in the classroom.  

Additionally, while the late Elinor Ostrom won the Nobel Prize in economics back in 2009 for her work on how communities maintain common resources, her findings remain largely absent from US economics classes. Like many others who challenge neoliberalism, Ostrom found academic success in the United States outside of economics—in her case, in political science. 

In 2023, the Nobel Prize winner in economics was Harvard-based economic historian Claudia Goldin, whose award reflects recognition of her groundbreaking research on gender-based wage gaps. Yet, according to recent research by Rethinking Economics USA conducted just last year, only 7 percent of economics students have taken courses that study race or gender stratification in the economy. The same survey, which polled over 2,000 US economics undergraduate students from across the nation, also found that only 22 percent had learned about environmental or ecological economics in their courses. 

Hunger for New Thinking

Today’s economics students have a deep desire for new thinking and expanded curricula. In the Rethinking Economics USA survey, 95 percent of economics students indicated that they believe that the US economic system should change, with 61 percent indicating that the economy “should be drastically amended/reimagined or fully replaced by something else.”  

To address the many current challenges facing humanity, one emerging alternative paradigm of economic thinking that is gaining support is the solidarity economy. Promoted by scholars and activists from around the world, the solidarity economy provides a framework that rejects patriarchal, racist, and ecologically destructive capitalism and instead charts a just and sustainable postcapitalist future based on an economy that embraces and values cooperation and care. 

Whether or not the field of economics moves fully toward a solidarity economy, what is clear is that economics education must widen its scope to include analysis of systemic alternatives. Given that a “just transition” to a post-carbon world cannot occur without transformative changes in the distribution and allocation of resources—the study of which is, after all, the main purpose of economics—achieving systemic societal change to create a healthier, sustainable and equitable world must be core, not tangential, to economics education. 

It is past time to update economics curricula to meet the desires of today’s students—and to create the knowledge base necessary to create more sustainable and equitable economies amid the global climate crisis.