If there is no universally accepted outside authority to tell us how to judge theories then knowledge is only going to progress by means of debate
The 2024 Annual Report on INET’s Young Scholars Initiative (YSI) provides an account of its many achievements over the year. Among these achievements, it celebrates the diversity of the cohort of young scholars coordinating the YSI working groups. The purpose here is to reflect on reasons for celebrating such diversity. In the process, we highlight the importance of the diversity agenda’s shared roots with pluralism.
The main focus of diversity discussions is promoting social justice through inclusion and addressing identity-related biases on moral grounds. Diversity policies are promoted in economics, not just within universities and other research communities but also by professional bodies. For example, in 2019, the American Economic Association established guidelines for best practices on equity, diversity, and professional conduct, while the UK’s Royal Economic Society has a Diversity and Inclusion Programme.
The purpose here is to focus on a further motivation for promoting diversity which addresses how we build knowledge in economics and what we make of that knowledge. In particular, we consider the additional benefit of diversity in facilitating the contribution of different voices. Diversity-focused hiring policies, which encourage the inclusion in the profession of members of marginalized groups, facilitate the inclusion of important knowledge based on different perspectives. As a result, new research topics may be opened up, such as the economics of care in feminist economics, drawing on women’s perspective, for example, or the social and cultural consequences of colonization in decolonized development economics, based on the perspective of colonized societies. At a more fundamental level, it is important to note that these two examples of diversity have developed approaches to building knowledge that explicitly differ from conventional economic approaches. The outcome is epistemological diversity, raising its own issues of inclusion.
Both examples from the diversity literature draw our attention inexorably to the importance of perspective. We can broaden the focus out to the notion of difference of perspective itself more generally and its role in economics. This notion has a long history within the literature on (methodological) pluralism in economics. Pluralism differs from diversity in that it is not associated with social groupings, but rather with schools of thought, like Post-Keynesianism and neo-Austrianism. As with diversity in economics, each school of thought is distinguished by its own shared understanding of the nature of the economy and the forces that shape it. While for example Post-Keynesians have a structural understanding of the economy and regard the potential for instability as the norm, neo-Austrians focus on the individual agent within a framework where stabilizing forces are the norm. Each school is also distinguished by its moral values (whether made explicit or left implicit).
Mainstream economics, with its common methodological approach, is a further example of a school of thought. But since it is not methodologically pluralist it doesn’t present itself as one among several approaches. (The pluralism that some commentators identify in mainstream economics occurs at the level of theory rather than a general methodological approach.) A further distinguishing feature is therefore a school of thought’s epistemological values, i.e. its view as to what makes for a good argument. Supported by an important current in the philosophy of science, pluralists have long pointed out that judgments about which is a good economic theory cannot be settled definitively purely by deductive logic and empirical evidence.
The fear that pluralism aroused among many economists was that there would therefore be no way of agreeing as a profession on what was the best argument: anything goes. Clearly, that has not been the outcome of pluralism; there is not an infinite number of schools of thought. Rather, not only has there not been a fragmentation into a large number of silos, but rather there has been a significant amount of interaction between pluralist schools of thought, whose number is fairly limited. Indeed the boundaries between them are porous and dynamic. It is the commitment to pluralism that allows, and indeed fosters, the interaction we observe in a variety of workshops, conferences, and publications.
What pluralist schools of thought have in common is an understanding of the economy as some form of complex, evolving system, i.e. as an open system. This type of system accounts for the absence of a single universal set of criteria for theory choice. It requires an open theoretical system for building knowledge. The resulting theories cannot claim to account for the whole economic system or for all time, or indeed to establish answers acceptable to all. Rather they focus on the aspects of the economic system identified as most important according to the relevant perspective.
But how can interaction occur on the basis of differing perspectives? Thomas Kuhn highlighted the incommensurability associated with differing perspectives, where the economy is understood differently, concepts are used differently, words are used differently, and so on. But in fact, this is the great strength of pluralism. If there is no universally accepted outside authority to tell us how to judge theories then knowledge is only going to progress by means of debate, where there is an awareness of the difference of perspective and its consequences. Debate between pluralist schools of thought can indeed be intense, a reflection of a plurality of values as well as the importance of persuasion that one effort at approaching the truth is better than another. Not only do we learn from debate across perspectives but we also strengthen our own arguments in the process. Everybody wins.
If openness to debate between perspectives can strengthen positions and/or change minds then it can have real consequences for theory and policy. Some central banks have therefore displayed awareness of the importance of addressing different perspectives. For example, the Bank of England has in the past advocated pluralism and openness in its approach to modeling under uncertainty. It has also challenged the textbook exogenous-money-supply framework with an account of endogenous monetary theory which draws partly on Post-Keynesian economics.
Beyond its aim of promoting social justice, the diversity agenda contributes to the pluralism agenda by drawing attention to the importance of the difference of perspective between social groupings and historical experience. In turn, the focus on diversity can be seen to promote benefits similar to pluralism. Where there is an understanding of the nature and significance of different perspectives there is scope for constructive exchange of ideas and argument. Such interaction promotes mutual learning and at the same time strengthens arguments from each perspective.
In economics, as in daily life, different participants bring different perspectives to the discussion of important issues. There is no escaping this fact. Rather, the question is how to deal with it. In economics, as in daily life, the answer surely lies in mutual respect and an open-minded, informed engagement in debate.
Sheila Dow, University of Stirling and University of Victoria, January 2025