Luigi Pasinetti on Disrupting Neoclassical Hegemony in Economics

The renowned economist reflects on the rise of neoclassical economics, the post-2008 surge of interest in non-mainstream, heterodox thought, and how young economists can remain independent in the face of biased evaluation systems
Economics is one of the fields where the contradictions and limitations of the academic research evaluation system in Italy is most clearly felt. This still fragile science—which in order to evolve requires openness, pluralism and appraisals of different approaches—is today conditioned in its development by academic evaluation and selection criteria, which are largely arbitrary and modelled on a single paradigm subject to increasing epistemological, theoretical, and empirical objections. Luigi Pasinetti, one of the world’s leading exponents of critical economic thought, expresses his views on the subject in the following interview by Emiliano Brancaccio and Nadia Garbellini.

In Italy, decisions on the quality of research, scientific qualifications, and competition procedures are dominated by the zealous application of controversial criteria for the classification of journals, at times even more restrictive than those drawn up by ANVUR (the Italian National Agency for the Evaluation of the University and Research Systems). Economics is one of the fields where a strong tendency exists to evaluate publications based on journal rankings rather than the actual research content. Within this context, moreover, lies a further problem: in the current ranking system, journals which accept alternative research approaches to the so-called prevailing “mainstream” vision in economics are strongly discriminated against. The obvious consequence is that economists, especially younger ones, are induced to stifle their interests in alternative scientific paradigms simply to survive in academia. This fact is all the more grave if we consider that economics is far from being a mitigated science; it is a field in which the analyses and suggested solutions, based on the dominant paradigm, often produce contradictory empirical results and epistemological and theoretical objections. In 2010, a Manifesto for the Freedom of Economic Thought, signed by hundreds of economists from different streams of research, attempted to raise awareness on the issue, but with little success. We had the opportunity of discussing the matter with Luigi Pasinetti, Professor Emeritus of Economic Analysis at the Catholic University of Milan. A leading exponent of that alternative line of economic research sometimes called “post-Keynesian” that developed in Cambridge in the 1960s, Pasinetti has written numerous frontier articles in the fields of growth theory, income distribution, and structural change. His renowned debates with some of the leading figures in dominant economic theory—including Nobel Laureates Robert M. Solow, John Hicks, Paul Samuelson, Franco Modigliani, and Joe Stiglitz—have helped identify relevant illogicalities and have objectively modified the course of contemporary research. Moreover, Pasinetti has been expressing his opinions on the quality of research since 2006, when as a member of the Italian research evaluation committee CIVR – forerunner of ANVUR – he differed with the proposals of Guido Tabellini, former Rector of Bocconi University, who already at the time was in favour of adopting evaluation mechanisms based on journal rankings.

Emiliano Brancaccio and Nadia Garbellini: Professor Pasinetti, current evaluation criteria for economic research and academic careers are based on journal classifications that clearly damage paradigms which are alternative to the mainstream. To cite one of many examples, in the list of over one thousand economics journals defined as “Class A” by ANVUR, and needed to qualify for national competitions, the ones which accept critical contributions are less than 0.5% of the total. Guido Tabellini, when CIVR existed, defended this type of criteria, claiming that alternative schools of thought were mere “sects of economists in danger of extinction.” In that sentence, which at the time seemed more of a hope than an observation, the concept of “extinction” seemed to refer to a sort of spontaneous, so to speak, natural phenomenon. Perhaps a different expression should be used today: in light of the current criteria for evaluating research, could one say that in Italy alternative economists are in the process of “being eliminated?”

Luigi Pasinetti: Of course, the situation has changed now. Yet in some respects, it would appear to be even worse: and this is particularly worrying. The alternative approaches are now no longer being taught. Once, one could discuss with neoclassicals on an equal footing; adhering to one or another approach was a choice, and all approaches were known. The “old” neoclassicals knew the alternative approaches, and the same was true for us. That is no longer the case now. The younger generations are no longer familiar with the alternative approaches. Since they are not being taught, young economists at times even ignore their existence, convinced, as told by their teachers, that they are simulacri of the past, i.e. of elaborations of now extinct “sects of economists.” As things stand today, it is no longer a question of pluralism, but of hegemony: a process which is being carried out extensively.

EB and NG: Some members of the prevailing economic approach have recognised the risk that excessive conformity could jeopardise the overall development of economic research. The former IMF Chief Economist, Olivier Blanchard, said that following the Great Recession of 2008, “hundreds of intellectual flowers are popping up.” He made explicit reference to a renewed interest in some alternative contributions typical of critically thinking schools, such as the hypothesis of financial instability in Minsky, or the growth and income distribution models developed by Nicholas Kaldor and yourself. What are your main reasons for safeguarding the pluralism of economic research paradigms?

LP: It is a fact that “alternative” economists are, in spite of everything, increasing in numbers. The economic crisis has given a strong boost to the launch of new journals which aim to examine alternative explanations and solutions. At the same time, moreover, a number of stratagems have been developed to combat the exclusion induced by the criteria for evaluating research. Mainly, there has been a tendency to split research results into several articles with multiple co-authors. In fact, there has never been such an accentuated increase of co-authorships. Short articles, with 3 or 4 authors, have almost become the rule. This strategy is used to allow a greater number of authors to cite the publication of an article in one of the few A-ranked journals, which by and large do not accept alternative approaches. Of course, none of this promotes quality, neither of the research, nor of the published articles themselves. However, the fundamental concern is the use of this method of classification for evaluation purposes; veritably, the fact remains that those who should evaluate the quality of the work no longer read the content. Yet, it is clearly self-evident that only by reading a work can one possibly understand if the content and results of the author(s) are original. If the contents are not read, this not only harms the authors, but the science of economics itself, which will not progress. One could suspect that these criteria have been designed with the explicit intent of marginalizing those who do not follow the mainstream, however, there is no way of proving this. Yet, it is impressive to witness the renewed attitude of continuously affirming that alternative theories are becoming extinct, while at the same time, the research results published in what are considered prestigious journals continue to fail to provide useful indications for understanding the economic facts.

EB and NG: In the course of your career, you have contributed not only to building an alternative approach to economic theory, but also to a criticism of current economic policy guidelines, which you published in 1998 in the Cambridge Journal of Economics. There, you considered the infamous Maastricht Treaty’s limit of the 3% ratio of public deficit to GDP as a “myth” and “folly”. That constraint, which still exists today, has been made in some ways even more stringent. Moreover, the problems of debt sustainability, both public and private, in Europe seem far from resolved. Do you think a link exists between academic and political conformism? In other words, between an absent debate of alternative paradigms in university classrooms, and the reiteration by government authorities of economic policy formulas that disregard the announced objectives of growth, employment and debt sustainability? 

LP: The answer comes straight from the facts. The economic and financial crisis has been on-going for ten years now; not only has it not ended, but we are becoming prisoners of an unsuccessful attempt of finding a solution. All this is paradoxical. We continue to pursue economic policies that have proved inefficient, without considering alternative analyses and therefore solutions. Occasionally, mistakes are even discovered in official calculations, as was the case of the multipliers. Nonetheless, the theory that led to the wrong predictions has not been abandoned, nor have the alternative approaches been explored. Yet, alternative policies could be easily justified on analytical grounds. My own criticisms of the parameters concerning the sustainable amount of budget deficit and public debt were not invented by me. They derive from the analytical contributions, already elaborated at the end of World War II, by an authoritative American economist, Evsey Domar, and published (with great surprise by the mainstream) in the American Economic Review. From his analysis, it is clear that, in times of recession, applying measures to expand effective demand could have a positive effect on employment and output, yet it is not being done. The tragedy is that when productive capacity remains unused and labour is unemployed, what is lost is lost forever, it will never be recovered in the future. Nobody ever states this, and academia has settled for the status quo. Instead of at least helping to apply the best known measures, it does nothing. Instead of exploring new and different approaches, it appears as if it wants to hide them. The very phenomenon of financialisation has been used as an expedient to cover-up bankruptcy policies, when it would have been more useful to analyse and study it from an alternative point of view, which would have allowed us to understand it more fully. Rather than a desire to broaden knowledge and explore different approaches, what prevails is maintaining a conservative stance, along with—it would seem—fear of what is new, which invites stasis. There is, of course, also a desire for serenity and non-exposure. But, this does not justify the situation. It is not possible to determine whether the academic debate influences the political debate, or vice versa. More aptly, the flow is in both directions, as it has always been, yet beset with impressive pressure for conservatism.

EB and NG: In your view, what alternative criteria could be adopted for a more balanced academic evaluation system, without undermining the plurality of research paradigms? More specifically, should the current mass evaluation procedures continue, or not?

LP: It seems to me self-evident that the mass evaluation procedures should be changed. In what academic evaluation process can the implicit invitation to not read researchers’ texts be blindly accepted? Of course, and unfortunately, we must be realistic and aware that we are dealing with “regulations” which impose precisely this; that is, to ignore publications which are outside the preferred and “privileged” lists. It is something that has been imposed, but against which we must react. A solution that is already underway abroad (more commonly adopted in the Anglo-Saxon world) is of never being too rigid and always leaving some margin for discretion and autonomy in making decisions. Recruitment can at times take place in the form of co-optation, provided that it is guided by ethical principles. We all know that it should be based on the quality and originality of the submitted contributions. In any case, it would certainly be a good thing if both those who evaluate and those who are being assessed had a reasonable knowledge of the existence of different and conflicting paradigms.

EB and NG: Since the 2008 economic crisis, in many countries numerous student associations once again have made themselves heard, insisting on the need for including alternative paradigms in university curricula and economics Ph.D programs. At the same time, many young researchers, eager to delve deeply into alternative schools of economic thought, fear that pursuing such an interest risks undermining their academic career opportunities. What can a researcher, facing this kind of dilemma today, be told?

LP: I do not have the perfect answer to this question. I have always advised my students to follow their own instinct, despite the existing conditions. In spite of everything, it is worth going forward and indeed we must move forward. There is, of course, the risk that only those who can afford it will succeed. Yet I do not think that scandalous situations can persist indefinitely.

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