The Hindu Business Line : Economics for `regular folks'

The US-based Centre for Popular Economics is a non-profit collective of nearly 70 economists that attempts to demystify the subject and help lay people in their fight for social and economic justice.

A lot of Americans are reading Steven Levitt's book, Freakonomics: A Rogue Economist Explores the Hidden Side of Everything. Dubbed a "curious explorer" by his co-author, Stephen Dubner, Levitt wants to understand what he calls "the stuff and riddles of everyday life".

An award-winning economics professor at the University of Chicago, he attempts to answer questions that explain how the world works: Why did crime rates drop in the US in the 1990s? (His answer: Legalised abortion meant fewer kids grew up in dysfunctional families that spawn crime.) Why do drug dealers still live with their moms? (They can't afford not to.) Do experts put their own interests first? (Yes.)

Levitt is part of a growing tradition among young economists who believe that much of what we think of as conventional wisdom is wrong. They believe that intuition can lead to important research, and knowing what to measure and how to measure it can explain a lot in the world.

At the Centre for Popular Economics (CPE) in Amherst, Massachusetts, Levitt's questions make sense. CPE is a non-profit collective of nearly 70 economists founded in 1978 to "demystify the economy" and "put useful economic tools in the hands of people fighting for social and economic justice". According to its Web site, CPE "examines the root causes of economic inequality and injustice, including systems of oppression based on race, class, gender, nation and ethnicity".

In its programmes, workshops and annual Summer Institute (a week long intensive training programme in economics; this year is their 26th), the CPE strives to make connections between such phenomena as poverty wages and welfare reform, financial markets and homelessness, or racism and environmental degradation.

Economic literacy for women

Economic literacy is especially important for women, says Emily Kawano, economist and Director of CPE. "Women tend to shy away from the so-called hard science of economics," she says, "but when it comes to understanding how the economy works, women's groups are out in front." Despite the under-representation of women in economics departments in universities, women are playing a key role on the activist front. She cites international organisations, like the Self-Employed Women's Association in India, which are making a big difference to women's economic security. Women are also making their way into the world of economics through micro-credit programmes and peer loans.

Much of the popular economics work being done is with women's groups globally, especially in the southern countries. "Women are trying to hold together their families and they are taking the biggest hit when it comes to the neo-conservative agenda. When women find themselves in the path of that great big swath carved out by big business, they ask questions — What's going on here? What's forcing me into an unfavourable labour market? What can I get for my labour? In countries like the US, women are asking why there are cutbacks in social services that will hurt them."

Demystifying economics

Members of the CPE believe it is important for "regular folks" and activists to have the tools to undertake a critique of economic policies foisted upon them by the government; to combat the jargon and emphasis on mathematical models that economists shroud themselves in to mystify their profession and get the label of `experts'. Kawano worries that this leads people to "cede power to the so-called experts. But if those models are not serving us well, we need to do something about them."

Thousands of people involved in women's groups, prison reform, global justice, economic development, environmental protection, etc have attended CPE workshops or a summer institute, where they learn how to undertake a systemic analysis of economic theory and policy. "We start with the basics," Kawano says. "Who does what work? Who creates and controls surpluses? What is the logic of capitalism? We provide overarching and historical frameworks. We're all trained economists with a depth of knowledge, but we are very user-friendly."

CPE programmes emphasise the power of economic ideology in our daily lives. Since the era of Ronald Reagan, there has been a profound shift in economic ideology with impacts on people's lives that sometimes are "life and death".

Kawano cites the recession of the early 1980s. "That recession was created by the Federal Reserve. It did have the intended effect of taming inflation but also achieved a less public agenda of undercutting labour, strengthening the hand of business, and ushering in the rise of free market, individualistic, cut-throat capitalism. Since then, we've seen rising inequality, greater corporate concentration of power, slow or no growth in real wages, an explosion of poverty wage jobs, and cutbacks in social programmes and regulations to protect the public or the environment."

The CPE has worked with groups like the AFL-CIO (American Federation of Labour-Congress of Industrial Organisations, the largest affiliation of unions in the US) to educate people on issues relating to workers, communities and economics. In 1997, the CPE wrote Common Sense Economics for the union, a study guide and curriculum that has been used to train more than 500 AFL-CIO workshop leaders.

CPE's Childcare Project began in 1999 to look at turnover factors among childcare workers. The centre has also collaborated with groups in South Africa and Senegal. "Economics is a social creation, not a hard science," Kawano says. "To the extent that it is not serving the greatest number of people we can and should change it. But I'm optimistic and hopeful," she concludes. "Exciting things are happening throughout the world." No doubt Steven Levitt would agree.

Women's Feature Service

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