The Myth of Dominant Thinking in Economics and Finance
Institutional Communication Service
18 January 2020
The financial crisis of 2008 severely undermined people’s trust in many institutions, including academia. As a result, neo-experts claim that the economics and finance academia suffers from a monopoly of thought exercised by the "Chicago School" and its efficient market theory. A monopoly such that, according to this accusation, any attempt to challenge it would lead to ostracization. François Degeorge, Full professor of Finance at USI and Managing Director of the Swiss Finance Institute (SFI), refuted this position in an op-ed recently published in the Swiss daily Le Temps, underscoring the important role played by the scientific debate on this matter.
In his article, Prof. Degeorge describes the academic process, based on research and theories published by researchers in journals and subsequently discussed by others, often challenging or even debunking them, often with empirical evidence. For Degeorge, the academic world is perfectly capable of developing and adopting new ideas through competition, openly challenging established knowledge and dogmas.
To prevent this system from closing itself to new ideas, the best academic journals engage with large numbers of experts from all over the world. They participate in the process of selecting and reviewing articles – the so-called peer review – thus ensuring higher levels of objectivity. In addition, at academic conferences, each presentation of a study is followed by a discussion. In some cases heated debates between researchers have become legendary. For Prof. Degeorge, this process shows that the academic world is not closed to open debate. Contrary to the claims of neo-experts, academics have not remained silent or inactive on the subject of the financial crisis. There is not a single academic conference or journal that has not discussed the issue of financial stability. Long before the crisis, in fact, researchers exposed practices that eventually turned out to be harmful. Unfortunately, their warnings were not heeded.
In general, according to Degeorge, "economic phenomena must first of all be investigated without bias, and explained in objective terms, far from the ideological divisions that poison the debates. University professors must convey to students a fundamental value: the respect for reason. They must train their students to think for themselves, without fear of going against current trends or dominant thinking. This often requires courage, which students can only find within themselves. What professors can provide are analytical tools and examples of their applications".