Dr. Alex M. Thomas teaches economics at Azim Premji University, Bengaluru. He studied economics at the universities of Madras, Hyderabad, and Sydney. His research in the history of economic thought has been published in national and international journals such as Artha Vijnana, Economic & Political Weekly, European Journal of the History of Economic Thought, History of Economic Ideas, History of Economics Review, Indian Journal of Human Development, and the Journal of Interdisciplinary Economics. His co-edited book with Ajit Sinha Pluralistic Economics and its History was published by Routledge in 2019. In early 2021, his (text)book, Macroeconomics: An Introduction, will be published by Cambridge University Press.
1. What aspects of Classical theory do you think still hold significance today or could be used to tackle the current economic downturn?
Dr. Alex: The works of classical economists such as Adam Smith, David Ricardo, Robert Malthus, and Karl Marx provide us with an alternative lens to understand our economic surroundings. Their economics is conceptually and methodologically distinct from the mainstream microeconomics and macroeconomics taught in universities.
In my forthcoming (text)book Macroeconomics: An Introduction published by Cambridge University Press, I use insights from the classical economists, John Maynard Keynes and Piero Sraffa to provide an alternative macroeconomic framework to understand contemporary economies.
For instance, in the book, I introduce the readers to demand-led growth theories, which highlight that carefully planned government investment can generate desirable economic growth (and development). In fact, the current economic downturn can be traced to our collective apathy towards public spaces and institutions--education, health, roads, parks, libraries, etc.
2. What are the major paradigm shifts in the history of economics?
Dr. Alex: The dominant approach to economics was that of classical economics or the surplus approach to economics until the 1870s paradigm shift towards marginalist economics. The pioneers of the marginal revolution were William Stanley Jevons, Leon Walras, and Carl Menger. Since then, the marginalist paradigm has been strengthened by the contributions of Alfred Marshall, John Hicks, and Paul Samuelson. This shift meant that income distribution came to be explained by recourse to the marginal productivity theory whereas in the classical economists it was partly explained by historical factors and conventions.
However, within the dominant paradigm of marginalist (or neoclassical) economics, there have been several churnings. This is visible from the sub-specializations of welfare economics, New Keynesian economics, environmental economics, and new institutional economics. Besides these internal critics of marginalist economics, heavy criticisms have been mounted from the sub-specializations of Post Keynesian economics, Feminist economics, and ecological economics; they can be characterized as largely operating outside the marginalist paradigm.
3. The recent announcement by the IMF has shown that India is likely to slip below Bangladesh in 2020 per capita GDP. What lessons, according to you, can India learn from its neighbor, and how can India rise back up?
Dr. Alex: As I mentioned before, I think the only way for India to achieve economic progress is by putting in place a long-term vision of planned economic development where the idea of the public is reinvigorated.
4. In the current scenario, a number of people have lost their livelihood, especially in the travel, cinemas, food & beverage, and other industries. The upcoming job opportunities are also not promising. What can be done in this case?
Dr. Alex: Alongside the long-term plan, I indicated earlier, the current crisis warrants targeted government spending in these sectors. The nature of the spending will depend on the particular characteristics of these sectors. In addition, the current employment guarantee program can be expanded. Moreover, to achieve the long-term plan, the government has to create capacity, and this means that more jobs will be created.
5. We, as undergraduate economics students, often feel that there is a gap between the course curriculum and the real-world scenario in the Indian context. How do you feel that undergraduate economics education can be standardized all over the country and be made more relevant for the students with the practical application?
Dr. Alex: Currently, most curricula exclude non-marginalist economics (such as Post Keynesian economics or Marxian political economy), history of economics, and economic history. I think it is important for students to be exposed to at least two paradigms in economics as well as some of the key internal and external critiques. Theories are important to study and critique because they underpin our worldviews and consequently our politics. The history of economics, for instance, will highlight the close connection between utilitarianism and the value/price theory found in mainstream marginalist economics. A good economics education should impart knowledge of different, often contending, paradigms.
Alongside a pluralistic theoretical education, the students should be exposed to specificities of the Indian economy as well as the respective state/regional economy. The inclusion of courses such as the Tamil Nadu economy, the Bihar economy, or Nagaland economy, therefore, is essential for students to be able to make sense of their immediate economic experience. To further engage with economic experiences, the assistance of pedagogy and assessments should be taken.
More of my thoughts on this issue can be found in ‘Rethinking Undergraduate Economics Education’ published in the Economic & Political Weekly.
6. Undergraduate economics education is deeply focused on the financial and mathematics aspect, do you feel that the relationship between economics and politics is something that should be stressed upon in the course curriculum?
Dr. Alex: Marginalist microeconomics makes a distinction between positive and normative economics and thereby highlights that ‘what is’ questions can be answered independently of ‘what should be’ questions. However, as stated before, the standard marginalist value/price theory has strong connections with utilitarian philosophy and politics. While such histories are taught in the history of economics or philosophy of economics courses, it can very well be taught in any conventional microeconomics course.
The value/price theory found in Ricardo or Marx offers a different guide to action and politics than that found in standard marginalist microeconomics. The chief concern in the work of Smith and Ricardo is the production and distribution of the social surplus, both of which are significantly influenced by historical and contemporaneous power structures. As students of economics, we must also pay attention to the shift in terminology from ‘political economy’ (of Smith, Ricardo, Marx) to ‘economics’.
In the works of the classical economists, income distribution is significantly determined by politics and policies, and consequently a fair distribution warrants the active role of politics and policy. What role does standard marginalist microeconomics ascribe to policy and politics?
Interviewer- Sanaa Munjal