The Institute Blog

Edward Fullbrook: Toxic Textbooks

Last week, Harvard students staged a walkout to draw attention to the bias they perceive in the intro economics course. The Harvard students are not alone, and the staged walkout is not the first protest against the economics curriculum. In June 2000, economics students in Paris circulated a petition calling for the reform of their curriculum. What began as a protest of French students developed into the Post-Autistic Economics Movement. A brief history of the movement here.

The Toxic Textbooks movement devotes energy to curriculum reform as well. Its purpose is to galvanize student protests and “encourage schools and universities to use economics textbooks that engage honestly with the real world.” Edward Fullbrook, Editor of Real-World Economics Review, is a key figure in the movement. Here, INET reproduces one of his key articles.

Toxic Textbooks


No discipline has ever experienced systemic failure on the scale that economics has today.  Its fall from grace has been two-dimensional.  One, economists oversaw, directly and through the prevalence of their ideas, the structuring of the global economy that has now collapsed.  Two, except for a few outcasts, economists failed to see, even before the general public saw, the coming of the biggest economic meltdown of all time.  Never has a profession betrayed the trust of society so acutely, never has one been in such desperate need of a fundamental remake.

As an epistemological event, the 2008 meltdown of the global financial system ranks with the observation of the 1919 solar eclipse. If professional practice in economics resembled, even in the slightest, that in the natural sciences, then in the wake of today’s global disaster economists would be falling over each other to proclaim the falsity of their theories, the inadequacy of their methods and the urgent need for new ones.

It is now evident to nearly everyone except economists, and increasingly even to many of us, that our collective failure to see the calamity before it occurred and the fact that the system that collapsed had been tailored to fit mainstream teachings means that we, the textbooks we use, and the courses that we teach harbour fundamental misconceptions about the way economies, most especially their markets, function.  And in economics nothing is more important than teaching, because, as Galbraith senior once observed, economics is primarily a teaching profession. This makes economics pedagogy a natural starting point for both an analysis of how economics went so horribly wrong and how it might be made less a facilitator of human disaster in the future.  Gregory Mankiw’s Principles of Economics, in its five versions, has internationally been the dominant basic text for more than a decade.  Also its author, as chairman of President Bush’s Council of Economic Advisers from 2003 to 2005, was directly involved in the engineering of the disaster.  So Mankiw’s textbook seems an ideal place to look for clues as to how both the economics profession and the public which it educates became so ignorant, misinformed and unobservant of how economies work in the real world.

Because we are dealing with a systemic failure, in what follows I am concerned not with specific issues covered by the Mankiw’s text.  Instead I want to consider its general approach to understanding economic phenomena and, no less important, how the author treats the position of trust that he enjoys vis-à-vis the student.

A defining characteristic of traditional or orthodox economics is that it subscribes to a Neo-Platonist theory of truth, i.e., it holds its basic tenets or propositions from which it then deduces everything else, to be self-evident.  This quaint epistemological doctrine was notably enunciated for economists by Lionel Robbins in his 1932 An Essay on the Nature and Significance of Economic Science.  He wrote:

. . . the propositions of Economics are on all fours with the propositions of all other sciences.  As we have seen, these propositions are deduction from simple assumptions reflecting very elementary facts of general experience.  [p. 104]


In Economics, as we have seen, the ultimate constituents of our fundamental generalisations are known to us by immediate acquaintance.  In the natural sciences they are known only inferentially.  There is much less reason to doubt the counterpart in reality of the assumption of individual preferences than that of the assumption of the electron.  [p.105]

To a real scientist, of course, economics’ Neo-Platonism is anathema.  For example the eminent physicist JP Bouchaud [2008, 9. 291] recently commented:

To me, the crucial difference between physical sciences and economics or financial mathematics is rather the relative role of concepts, equations and empirical data. Classical economics [meaning today’s mainstream] is built on very strong assumptions that quickly become axioms: the rationality of economic agents, the invisible hand and market efficiency, etc. An economist once told me, to my bewilderment: These concepts are so strong that they supersede any empirical observation.” 

This doctrine, which alone radically separates economics from the scientific tradition, shapes Mankiw’s textbook from cover to cover. As one would expect, it performs heroics at the book’s beginning.  With a real science its basic principles, rather than being its beginning, are its highest achievement.  But on the second page under the heading HOW PEOPLE MAKE DECISIONS, Mankiw unveils his “four principles of individual decision making”.  At no point does he allude to how his basic principles were discovered.  No names, no dates and no processes of discovery are mentioned.  Instead he seeks, by appeal to folksy stories to persuade the student to accept them on faith.  Only a confirmed Neo-Platonist or a snake oil salesman would think to begin an epistemological exercise that way.

A major device which Mankiw and other textbook writers use in persuading the student to accept on faith their principles is to subtly yet forcibly bring emotionality into their presentation.  Mainstream or neoclassical economics, especially in the last fifty years, has made a point of raising its flag over snow-white abstract nouns such as “rationality”, “choice”, “freedom”, “equity” and “efficiency”, whose meanings change with the wind and are bottom-heavy with emotion and so float like icebergs through public discussion.  Textbook writers like Mankiw use these words of the general culture -- and it would be naive to think that they do so accidentally -- to emotionalise their presentations and to bully their mostly teenage readers.  For example, consider how Mankiw when presenting his putative four principles of how people make decisions introduces “efficiency”, “equity” and “rationality”.  Set off in a wide empty margin and opposite where the text says that society faces a trade-off “between efficiency and equity“ one finds:

the property of society getting the most it can from scarce resources

the property of distributing economic prosperity fairly among the members of society

At best two students in a hundred will notice that these “definitions” are gems of question begging: “the most” of what and “fairly” meaning what?  Nothing of substance has been broached.  What is happening is that the student is being taught to use these words as placeholders, so that gradually and almost imperceptibly they can be filled with neoclassical meaning as the student progresses through the text, lectures, quizzes and exams of the course.  All this will be done without a single mention, let alone discussion, of ethical lenses other than Utilitarianism through which one might view economic reality.  The students will not even be told that they are being introduced into an ethical system of thought.  That could derail the indoctrination process, because students, even nineteen-year-olds, have assorted views on what is fair and have different conceptions of what it means for a society to get the most out of its resources, and some would not knowingly give up their views without a fight.

Mankiw deploys a different tactic, bullying, with his introduction of “rational”:

PRINCIPLE #3: Rational People Think at the Margin [p. 6]

Mankiw explains that by thinking at the margin he means “by comparing marginal costs and marginal benefits”.  Why is this bullying?  The student, as the author must know, will not read that as meaning “We are going to define ‘rational people’ as those people who think at the margin.” The student will read it not as a definition but as a statement of fact.  Most likely the student will not even know that rationality is a normative concept.  Nor is the student apt to have any general views to offer in opposition.  But what students will have, especially the nineteen-year-olds, is a compelling desire to be regarded both by themselves and by others, most especially by their teacher, as “rational”, whatever the word means.  I don’t mind telling anyone that I don’t think at the margin, but the student, and rightly so, will fear the consequences of putting him or herself forward as “irrational”.

Even if “rationality” is taken in the narrow sense of referring to the adjustment of means to ends, it does not begin to escape its status as a normative concept because different people, depending on the forms of ethics to which they subscribe, will have different notions about what one’s ends are or should be.  Unfortunately, among economists the obvious needs to be emphasized: not everyone is a Utilitarian.  Not everyone believes that the maximization of individual “utility”, whatever that might be, is or should be the goal of human and hence economic life.  “Economists have no right to select one ethics as the ‘correct one’ for purposes of economic analysis.” [Söderbaum, 2004, p. 162]   But they do, and in doing so go about as far away from the scientific as it is possible to go.

If economics textbook authors placed education ahead of indoctrination, the epistemological role of their theory ahead of its ideological one, how might they proceed?  Hugh Stretton’s Economics: A New Introduction [1999] shows how it can be done.  For example, look at how he introduces “efficiency”.

If you measure efficiency by more than one criterion, you have to decide how much weight to give to each of the criteria.  The facts can’t do that for you.  It takes a value judgment, and that value judgment will be built into your measure of efficiency.

     Earlier, you read this: ‘Common sense says it is efficient to get a given output from the least input.’ But what does ‘least input’ mean? Does it mean least raw materials? Least work? Least expenditure? You have to decide. [p. 48]

A little further on, after addressing non-dogmatically the vexed questions “Efficient at what?” and “Efficient for whom?”, Stretton tells the student:

Most tests of efficiency require some value judgments.  They can be made into objective tests by precise specifications: output of what per input of what. But that merely shifts the conflicts of interest and the necessary value judgments from the conduct of the test to the choice and design of the test.

This principle applies to judgments of many other things besides efficiency. [p.49]

These passages characterize the approach throughout Stretton’s book and which could and should be the approach of every economics textbook: no attempt to mislead, intimidate or bamboozle the student, no dishonesty by omitting known crucial facts, no misusing the educator’s position of trust as an opportunity to indoctrinate, no reluctance to encourage the student to observe from more than one perspective economic issues pivotal to democracies, in short, no inhibitions about trying to educate in the deepest possible sense.

Mankiw continues to present his “TEN PRINCIPLES OF ECONOMICS” in the style of a sales pitch. In the space of a page and a half he invokes “the invisible hand“ eleven times and  speaks of its “magic”, [p. 9-10]  Then having presumably sold without offering evidence his “Ten Principles” to the student, Mankiw proceeds to paint “THE ECONOMIST AS SCIENTIST”.  He is quite right in assuming that the student will not notice his previous chapter’s display of Neo-Platonism nor know that it is anti-science.  Mankiw sets about building in the student’s mind an association between economists like himself and real scientists.  For this he is only willing to associate himself with the most prestigious of scientists: physicists, biologists, and astronomers. He hopes to acquire some of their persona by in the space of a few pages repeating over and over a few key words: “physics” four times, “physicist(s)” seven, “biology” five and “biologist” twice”.  He especially favours combinations like “physics, biology, and economics”.   But even this is not elite enough for Mankiw’s tastes.  In the first three paragraphs of this section he mentions Newton and Einstein each four times. 

Of course this affectation has a long history in the discipline.  It goes back much further than Robbins, and all the way to Walras and Jevons.  But perhaps its most humorous example is due to the inventor of the textbook prototype of which Mankiw is now grandmaster.  The science historian Yves Gingras [2002] relates the notorious incident at the award ceremonies for the 1970 Bank of Sweden Prize as follows:

Paul Samuelson (1970 winner) wrote about his ‘Nobel coronation’ – not his ‘Bank of Sweden Coronation’ – and filled his talk with references to Einstein (4 times) Bohr (2 times) and eight other winners of the (real) physics Nobel prize (not to mention, of course, Newton) plus a few other names as if he were part of this family.

For the last fifty years economics as a profession has shown exceptional talent for self-promotion.  Spurred on by self-delusion, it has persuaded the media to call its Bank of Sweden Prize a “Nobel Prize” and in the main has escaped ridicule even when, like Samuelson and Mankiw, it has represented its pursuits and achievements as resembling those of Newton and Einstein.  This self-exaltation has in the main enabled its anti-scientific methodology to escape outside notice, with the result that the broader intellectual community has accepted economics’ self-assessment.  But this was not always the case.  Four years after Robbins published his essay lauding the methods of economics, the American pragmatist philosopher John Dewey favourably reviewed a book by a zoologist and medical statistician condemning the same.  Dewey, after referring to “the conceptions and methods” of economics as “obscurantist and fatally reactionary” quotes from Lancelot Hogben’s The Retreat from Reason. [Dewey, 1936]  It pertains as much to our time, especially to Economics 101 and Presidential Advisors, as it did back then.

We can only conclude that economics, as studied in our universities, is the astrology of the Machine Age; it provides the same kind of intellectual relief as chess, in which success depends entirely on knowing the initial definition of moves and proeesses of checking, casting, etc. . . . In science the final arbiter is not the self-evidence of the initial statement, nor the facade of flawless logic that conceals it. A scientific law embodies a recipe for doing something, and its final validation rests in the domain of action.

And the message today from the physicist Bouchaud is much the same.

Most of all, there is a crucial need to change the mindset of those working in economics and financial engineering. They need to move away from what Richard Feynman called Cargo Cult Science: a science that follows all the apparent precepts and forms of scientific investigation, while still missing something essential. An overly formal and dogmatic education in the economic sciences and financial mathematics are part of the problem. Economic curriculums need to include more natural science. The prerequisites for more stability in the long run are the development of a more pragmatic and realistic representation of what is going on in financial markets, and to focus on data, which should always supersede perfect equations and aesthetic axioms. [Bouchaud, 2008, p. 292]

For economics the final arbiter, economic history, has spoken and this time with deafening loudness.  Economists in the main may or may not hear, but most of the rest of the educated world has already.  Although there is now talk of “intellectual crime”, it would be wrong to punish the guilty.  But I plead that everyone, students included, do what they can to reform the teaching of economics, especially at its introductory level.  If universities continued to use for nuclear engineering a textbook by an engineer who had headed a team managing a nuclear power plant that without external causes exploded causing huge devastation, there would be an enormous public outcry, including student demonstrations.  There should be a similar outcry if Mankiw-type textbooks continue to be foisted on the world’s million or so young people who every year in good faith take up the study of economics. Because of human error propagated by a virulent ideology skilfully camouflaged as science, millions of American families are losing their homes, a 100 million people in the world stand to lose their jobs and a generation has been deprived of the hope it deserves.  We cannot undo that, but we can greatly reduce the chances of it happening again if with all possible speed we bring into use pluralist textbooks that look at real-world economic problems from different points of view, that do not make false claims about economic knowledge, and most importantly, that seek not to indoctrinate but to educate.  To these ends I offer the following list.

Eleven ways to think like a post-crash economist

  1. Don’t try to pass yourself off as a kissing cousin of natural scientists.
  2. Don’t speak, except to very small children, of invisible hands and magic.
  3. When possible avoid the use of emotive words.
  4. Remind yourself every morning that your duty as a teacher is to educate your students, not indoctrinate them.
  5. Try to look at economic phenomena from different points of view and teach your students to do the same.
  6. Encourage diversity of conceptual frameworks in economic research.
  7. Don’t be condescending to your students.
  8. Keep your eye on real-world economies rather than imaginary ones.
  9. Don’t try to hide the troubled but fascinating history and contemporary diversity of economics from your students and the general public.
  10. Avoid cranks and try to avoid becoming one yourself.
  11. Never try to pass off ideology as objective truth.


JP Bouchaud [2008], “Economics needs a scientific revolution”, real-world economics review, issue 48, December, p. 291.

John Dewey [1936], “Rationality in Education”, The Social Frontier, December,  Vol. lII, No. 21, pp. 71-73.

Yves Gingras [2007], “Beautiful Mind, Ugly Deception: The Bank of Sweden Prize in Economics Science”, Real World Economics, edited by Edward Fullbrook. London: Anthem.

Gregory Mankiw [2007], Principles of Economics, 4th edition, Thomson.

Lionel Robbins [1932], An Essay on the Nature and Significance of Economic Science. London: Macmillan.

Söderbaum, Peter (2004) “Economics as Ideology and the Need for Pluralism”, A Guide to What’s Wrong with Economics, edited by Edward Fullbrook. London: Anthem, pp. 158-168.

Hugh Stretton [1999], Economics: A New Introduction, London, Pluto.



Edward, I think this is a very fair critique of Neo-Platonist tendencies in neoclassical - and not only Mankiw's - model-building strategy and theoretical endeavours.

Most models in science are representations of something else. Models “stand for” or “depict” specific parts of a “target system” (usually the real world). A model that has neither surface nor deep resemblance to important characteristics of real economies ought to be treated with prima facie suspicion. How could we possibly learn about the real world if there are no parts or aspects of the model that have relevant and important counterparts in the real world target system? The burden of proof lays on the theoretical economists thinking they have contributed anything of scientific relevance without even hinting at any bridge enabling us to traverse from model to reality. All theories and models have to use sign vehicles to convey some kind of content that may be used for saying something of the target system. But purpose-built assumptions, like invariance, made solely to secure a way of reaching deductively validated results in mathematical models, are of little value if they cannot be validated outside of the model.

All empirical sciences use simplifying or unrealistic assumptions in their modeling activities. That is (no longer) the issue – as long as the assumptions made are not unrealistic in the wrong way or for the wrong reasons.

Theories are difficult to directly confront with reality. Economists therefore build models of their theories. Those models are representations that are directly examined and manipulated to indirectly say something about the target systems.

There are economic methodologists and philosophers that argue for a less demanding view on modeling and theorizing in economics. And to some theoretical economists it is deemed quite enough to consider economics as a mere “conceptual activity” where the model is not so much seen as an abstraction from reality, but rather a kind of ”parallel reality”. By considering models as such constructions, the economist distances the model from the intended target, only demanding the models to be credible, thereby enabling him to make inductive inferences to the target systems.

But what gives license to this leap of faith, this “inductive inference”? Within-model inferences in formal-axiomatic models are usually deductive, but that does not come with a warrant of reliability for inferring conclusions about specific target systems. Since all models in a strict sense are false (necessarily building in part on false assumptions) deductive validity cannot guarantee epistemic truth about the target system. To argue otherwise would surely be an untenable overestimation of the epistemic reach of “surrogate models”.

Models do not only face theory. They also have to look to the world. But being able to model a credible world, a world that somehow could be considered real or similar to the real world, is not the same as investigating the real world. Even though all theories are false, since they simplify, they may still possibly serve our pursuit of truth. But then they cannot be unrealistic or false in any way. The falsehood or unrealisticness has to be qualified (in terms of resemblance, relevance etc). At the very least, the minimalist demand on models in terms of credibility has to give away to a stronger epistemic demand of whtI have called “appropriate similarity and plausibility.”.One could of course also ask for a sensitivity or robustness analysis, but the credible world, even after having tested it for sensitivity and robustness, can still be a far way from reality – and unfortunately often in ways we know are important. Robustness of claims in a model does not per se give a warrant for exporting the claims to real world target systems.


The irrelevance of current curricula in economics to training economists reflects the irrelevance of current economic theories to understanding realities or making policy. The link tying both micro- and macro economics to measurable reality pivoted once about accounting, a knowledge area that parallels medicine on the gap between its questionable epistemic foundations and its unquestionable usefulness. Steeped in Anglo-Saxon (more specifically, Scottish) Utilitarian self-referentiality, modern accountancy was culturally instrumental for the explosion of American prosperity after WW1 and its extension to the Western world after WW2. But the link was unhinged by the 1980s’ anarchization of the financial markets. Gone are the times when a certified or chartered accountant, (CPA, CA or the like) enjoyed the same opportunity for a handsome income and social prestige as a MD or an attorney, or when financial reports independently audited under the FASB beacon were crucial sources of trustworthy information to professional investors. Before receding to bookkeeping and rubberstamping, the accounting profession even suffered a short lived fame as public laughing stock in consequence of scandals such as the ENRON affair and the shameful demise of the profession’s most aggressive standard bearer, Arthur Andersen. Meanwhile, the FASB (along with the SEC) receded to a memorial of itself, economics to institutionalized abstraction and the economy to chaos.


Why stop at blacklisting autistic people? Now that Obama has the authority to conduct drone strikes on U.S. soil, we have the perfect vehicle for eliminating the authors of toxic textbooks. Just Google "axiomatic economics" to locate any economists who are using the axiomatic method and Obama will take them out!

Post new comment

The content of this field is kept private and will not be shown publicly.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
  • Allowed HTML tags: <a> <blockquote> <br> <cite> <code> <dd> <div> <dl> <dt> <em> <h2> <h3> <h4> <img> <li> <ol> <p> <span> <strong> <sub> <sup> <table> <tbody> <td> <tr> <ul>
    Allowed Style properties: display, float, height, margin, margin-bottom, margin-left, margin-right, margin-top, width
  • You may insert videos using embed codes like these:
    • [video_large:KoqLu5CKx-o]
    • [popupvideo_mini:KoqLu5CKx-o right]
    • [lightboxvideo_mini:KoqLu5CKx-o]
    • [text_popupvideo:KoqLu5CKx-o nostart noicon|Click here to open the video.]
    • [text_lightboxvideo:KoqLu5CKx-o|Open this video in a lightbox.]
    To learn more, please click on the "More information..." link below.

More information about formatting options