Wendy Carlin (3:27)

My name's Wendy Carlin. I'm a professor of economics at University College London and I direct the CORE project, which you can go to. Everyone can go there. Www.core-econecon.org and. And everything you find there is free and accessible wherever you are in the world.

Suresh Naidu (3:47)

My name is Suresh Naidu. I'm a professor of economics at Columbia University. I guess I'm here to plug core. So you should also go to the CORE website and look at everything that is free and awesome.

Goldie (3:59)

And of course, we will provide a link in the show notes.

Nick Hanauer (4:02)

So let's start with the backstory. Tell us a little bit about, first of all, what is CORE and why did you do it and what led you to this effort? Wendy, why don't you start?

Wendy Carlin (4:15)

So the thing to remember is what happened in 2008, 2009, which is the financial crisis. I was in the classroom, like many others, teaching our students, and they were asking lots of questions about what was going on, why was the world blowing up? Like many others, I felt pretty hopeless about giving them a good explanation. So this really led people, I think, to reflect on how economics was doing under the current circumstances. And the answer was not well. So what we did was to pull a group of people together, and this was in about 2012, 2013, and try and find out whether, among some top researchers in the world and people who are interested in economics education, there was a sense that there really was something wrong and there was a need to rethink the way that we teach economics. So that was kind of the starting point. And you could say that what we were reflecting was when this had happened before, and the big occasion on which there was a complete rewrite of the way economics is taught was after the crisis of the Great Depression. So that's when new economics, new economic theory, the economics of Keynes, could be brought to bear to explain the phenomenon which was the persistence of mass unemployment. And what happened then was that in 1948, a new textbook arrived in the world by Samuelson called Economics. And it pushed right to the front of the book how to address this very problem of the persistence of mass unemployment. It explained in a way that people could then relate to others, to their friends, to their relatives, things like that. Well paid workers, sustained demand that savings prudent for family, but not for a government when the economy is in recession. So it really changed the language, the vernacular of economics. And we took that as a lesson that changing what happens in the classroom can really also change what happens in the world.

Nick Hanauer (6:32)

And so how many people came together? I'm interested. Like, how big is your group that guides core?

Wendy Carlin (6:39)

So at the beginning it was a dozen people or just a small group, but now there's kind of biggish group of about 20 or 30 people who've been serious contributors as authors. And then there's a kind of penumbra of maybe now up to 500 who've contributed data or research results in one way or another. And that doesn't count the teachers who are out there in classrooms teaching it. So it's being taught in more than 500 classrooms around the world, 71 countries, and we have about 17,000 registered instructors who are using the website. So that gives you a bit of a sense of how we've managed to create something that's grabbed attention and much more importantly, is actually being used in the classroom.

Nick Hanauer (7:28)

Just, I'm sad to say, I have no idea about how much penetration that represents.

Suresh Naidu (7:33)

Right.

Goldie (7:34)

500 classrooms out of how many worldwide?

Nick Hanauer (7:39)

Like, yeah, like, how are we doing?

Wendy Carlin (7:42)

That's a very good question. So. So in fact, I. I asked my friend Claude to address this problem this morning. The way I just got Claude to focus on the U.S. yeah. Where we have about 122 institutions using poor. And the way it sorted this out was that penetration was highest in the elite research universities, where it's about 30%. And then similar kind of numbers for major public research universities, bit less in highly selective liberal arts colleges. And then where we really. And that's what we're really focusing on as our next kind of big push is on the community colleges. And there we've got everything to play for because there's like a thousand of them, something like that, according to Claude. And we're in less than a dozen.

Nick Hanauer (8:33)

Oh, okay.

Wendy Carlin (8:33)

Tiny, tiny penetration. That's the sort of landscape in which we're working by comparison.

Goldie (8:41)

I just asked Grok, and it just said something anti Semitic about George Soros. So that's the difference between the two AIs.

Wendy Carlin (8:50)

Yeah, well, exactly why you got what you asked for, I guess.

Suresh Naidu (8:54)

Yeah.

Nick Hanauer (8:55)

So listeners of this podcast definitely know that our view is that economics has not delivered the goods, broadly speaking, certainly for Americans, for a very long time. Suresh, can you explain a little bit about what the differences are? The big differences are between the core approach and the more traditional approach.

Suresh Naidu (9:19)

Yeah. So it's useful to sort of start like, you know, I got my first job in 2010 at Columbia and was teaching micro as one does, and basically I remember three weeks into my first semester of teaching, I basically get a question from the students, like, are you a Republican? And. And it was true, right? Because, like, the way it's set up is like, you're just kind of, like, setting up supply and demand curves, and then you're kind of encouraged to, like, teach every tax as a distortion. Every price ceiling is a distortion.

Nick Hanauer (9:53)

Yes, yes, yes, yes.

Suresh Naidu (9:55)

And then it's only, like, towards the end where you're, like, willing to, like, tack on the imperfections. And so I was coming into this as just like, oh, my God, this is absurd. And it's also. I am like an applied microeconomist. And nothing of what you do in terms of, like, data and just looking out at the world and trying to, like, measure it and operationalize it. None of that is really prioritized in intro teaching. It's a fun fact that all the textbooks are called Economics and not the economy, because the idea that the job of an economics textbook is to teach you this way of thinking about the world, if it's not actually about the world, doesn't matter. So that's kind of like how I got. It's what intrigued me about CORE was just kind of trying to both make economics look different from what was taught, but also make it look more up to date as to the kind of things that were happening at the research frontier and that the textbook hadn't kind of been updated with. You know, they can add more, like, little boxes and policy issues and stuff, but the core focus, in some ways of economics had moved away from simple supply and demand and towards this, like, more granular and complicated view of the economy was just not captured in the intro.

Goldie (11:14)

And how do the students respond? What's the difference in terms of the students when they get core versus, like, Mankiw's principles? I don't know what you were using at Columbia.

Suresh Naidu (11:26)

It's twofold. One was that this was, like, very early on. And I think core is, you know, in some ways, like, the regular Mankiw thing. There's just so many other. There were so many other resources and just, like, metaphors and YouTube videos and things. And so it's harder. I think CORE is just harder. Any kind of new way of teaching, like, this is just going to. It's going to take a while for, like, the analogies and metaphors and even jokes in the classroom to, like, develop and. But I think we're much further along now. But I think it's also that this was just more interesting and gave you Kind of more tools to think with.

Nick Hanauer (12:01)

Can I say, clarifying question thresh. By harder, do you mean that the material itself is harder or the transition is difficult from this orthodox way of teaching to a more nuanced. I mean, because CORE definitely is. It respects the complexities in a way that the orthodoxy doesn't, which may make it harder.

Suresh Naidu (12:22)

No, no. I think it's also, in some ways it's like. I think partly because it was developed in a. In a UK context where students have a little bit more of a background. So I actually think the writing level is. Is like. It's like manky. Everything's in big fonts and simple short sentences, and so the chapters are longer and. But I think, like, it paid off. It's. That it's more interesting. And I think particularly because we were offering it for free and online with this kind of way of interacting with it purely digitally, and did I mention that it's free, that that kind of like, went a long way in making it very popular among the students. And we got really great reviews. Like, I was a version that CORE developed of, like, Economics for Public Policy students. I piloted that in SIPA here, and the students loved it and gave amazing feedback on it. And it was just kind of a great trial run for this new product that's oriented towards teaching students in, like, public policy programs.

Nick Hanauer (13:20)

And isn't it true that CORE much more starts with the problems society faces and uses economics as a way to sort of address those problems rather than this sort of, here's this theoretical framework.

Goldie (13:35)

And, yeah, here's the law of supply and demand. So nothing we can do about this problem because, you know, if you wait, if you raise wages, people will, you know, lay off people. They'll purchase less labor.

Suresh Naidu (13:48)

Sorry.

Wendy Carlin (13:49)

Yeah, that's exactly right. That's a good example. So we get the students to look out the window and think about what are the big problems out there that they want to understand? And we. We've asked this year after year, what do they think are the most pressing problems that economists should be addressing? And we've had teachers ask this before they've started teaching at all, before the students have seen any material. The answer to that question, overwhelmingly, wherever it is asked around the world, is inequality. So these are students about to start their first class in economics, and they are saying inequality, poverty, and similar terms that relate both to within country, inequality and differences across the world. So they're really concerned about that, and they would learn almost nothing about that in their standard course. That's number one. The second big issue that they tend to mention is to do with sustainability and climate change. And we know that people of that age are very concerned about these issues. They mention artificial intelligence or the future of work. So that's what they want to know. And we're going to equip them in the course with the tools to think about that. And the supply and demand approach, the markets usually work approach or usually work well approach is fine on a very limited canvas, but it really keeps them confined in most of the work they do to a very narrow set of questions, which were never the questions they wanted to find the answers out to from the beginning. The way as you set it up at the beginning, if you're told that the way to think about problems in the labor market, just like in the market for corn or for apples, is to use a supply and demand diagram, then you get pretty stuck when you think about the minimum wage, because the only thing that can happen is something bad. But if you think in a much more realistic way and think about how firms set wages, then your next question is, okay, yeah, I know it's the HR department of a firm that sets the wages. So what gives them the power to do this? Isn't the case that workers could just not take the job if the pay is too low? Well, that really pushes you to ask the next question, which is, what's the worker's alternative to taking this job? And you're immediately led to think that the situations where firms are really powerful relative to workers is where the alternatives for workers are very limited, where they have really bad, what we would call outside options. So if they don't take this job with a low wage, what are they going to do? And if you think about it like that, and you think of, say, you know, a single mother juggling kids, two jobs, they've got not much time to commute for work, then she's in a really weak position, her alternative jobs are few, and she's going to have to accept a low wage.

Nick Hanauer (16:55)

Yeah.

Wendy Carlin (16:56)

And if that's the situation, if that's how you've kind of set up your way of thinking how the world works, then it's very easy to see why minimum wage can improve the situation. Because you force firms to pay more so they can't pick off workers with poor outside options and pay them low wages. And as long as they're making a profit on every person they employ, then enforcing a minimum wage is not only going to make that worker better off, but it's also going to increase total Employment. You take away the temptation of the employer to restrict employment. If you impose a minimum wage. And as long as you don't push that minimum wage too high, so it means firms are not making profits, you can have this good outcome of higher wages and more employment. But that logic is just not to be found in the standard supply demand diagram.

Nick Hanauer (17:55)

Yeah.

Goldie (17:56)

And it's not a new idea. I mean, Adam Smith talked about the power imbalance between capital and labor.

Wendy Carlin (18:03)

Yeah. Yes. Yes, he did.

Nick Hanauer (18:06)

Pretty obvious.

Wendy Carlin (18:07)

Pretty obvious, but a bit too obvious to have in the sort of standard diet. The standard diet, yeah.

Nick Hanauer (18:15)

Interesting. What was the biggest challenge in creating this curriculum? What was the hardest bit?

Wendy Carlin (18:21)

That's a very good question. So in some ways you could ask the question, where do you start? We make learning economics very actor centered. So we really focus on who the main actors are in the economy. So that's households making decisions about jobs, for example, about their spending, about their saving. It's about firms making decisions about what wages to set, what prices to set, whether to take a risky decision to invest or to innovate. And then we have governments and the Federal Reserve making decisions. So we think of all of these actors and really help the students to understand what these different actors are trying to do, what resources they've got and what are the constraints that they face. So that gives students a kind of starting point for many of the problems that they really want to focus on.

Nick Hanauer (19:17)

So what has been the reaction from the textbook industrial complex?

Goldie (19:23)

Like, have you talked to Greg Menkiw about this? Has he had any feedback?

Wendy Carlin (19:28)

I've talked most directly with Paul Krugman, who's written the sort of second ranking textbook. And that was rather disappointing to me. When I debated with him in a conference in Chicago. He said that if you write a textbook, then you have to put things in the textbook that you know are wrong. And the reason you have to do that.

Goldie (19:55)

Yeah, he made this argument to us, Nick, when we had him on, he defended his useful fictions.

Nick Hanauer (20:01)

Yeah.

Wendy Carlin (20:02)

He said that you have to say things that are wrong because that's necessary in order to sell the most textbooks. And that what publishers put constraints. If you want to maximize your sales, maximize your profits, then you go along with. You go with the flow. Or what's sometimes referred to as the 15% rule, which is that you only ever change 15% of the content. We've just taken such a radically different approach, which is we want to teach what is right. What we've got really good evidence for what helps build up a coherent understanding of how the world works and we are not constrained by publishers. So it's a completely liberating experience. And I think that's why we've managed to get so many of our economist colleagues on board to be part of this big global project.

Goldie (20:55)

So you're telling me that a not for profit project that gives the text away for free somehow has more academic freedom than a textbook published by a giant publishing corporation?

Wendy Carlin (21:08)

Without any doubt.

Goldie (21:10)

You know, some of the pushback we've had from economists over the years has been that, well, of course nobody believes this, like real economists don't operate in the real world as if the stuff in the introductory textbooks are true. But yet most people don't get past their introductory economics course either because they don't never wanted to be economists, it was just an introductory course, or because they're completely turned off by economics after their introductory course. Nick and I feel very strongly that introductory economics that has poisoned the world because most of the people out there making policy never get beyond the introductory level. I wonder if you've seen, I guess, a pushback on the economists that say this is unimportant because it's just introductory, and B, whether you think maybe you've excited more people to go on and into further economic study given this more realistic and appealing core econ curriculum.

Wendy Carlin (22:18)

So they're really good questions. You know, one of the reasons that we are so passionate about this and why we've got so many other colleagues to get involved in it is because people do know that students carry out from even a single economics course what the imprint of what they've learned there. And they carry these very simple notions of markets mainly work well, for example. So I think there's a sense that we can change things, we can change what's imprinted on the typical student, and we can also hopefully change the pipeline into further study in economics and then into the profession and all the places where economists are employed, which is a lot of places these days.

Nick Hanauer (23:04)

Yeah.

Wendy Carlin (23:04)

So we're sort of bringing together the payoff from economics research over the last few decades, which has really made giant strides in answering many of the questions we're interested in. You just have to look at this week's Nobel Prize or last week, or whenever it was about innovation, for example, is just one example.

Nick Hanauer (23:24)

Right.

Goldie (23:25)

Which is totally, by the way, innovation is entirely missing from Manku's textbook. It's just not there. The word is used a couple times, but it's totally missing from the book.

Wendy Carlin (23:40)

And we begin with innovation. So we begin by drawing Students attention to this amazing fact about the world, which is for hundreds of years, nothing happened to living standards. Just flat, flat, flat everywhere, wherever you wandered around the world. And then suddenly in northern Europe, living standards began to increase consistently. And so the big question, and that's what we call the hockey stick, the big question is, why did it happen there? Why did it happen then? And why have some other countries managed to create sustained growth and move up to higher income levels where other countries have not? So that takes you immediately to the question of innovation and the Industrial revolution and what the incentives were to introduce better methods of production, new products. Who was getting those profits from being the first to innovate? What was the incentive to catch up, to follow on? So the whole process of creative destruction is at the heart of understanding how the world came to look the way it does. And that you won't find that in typical introductory textbooks, but it's a fascinating question for students.

Nick Hanauer (24:52)

Are you working on more curriculum? Will there be advanced courses or are you just going to stick with what you've got and work on penetration?

Wendy Carlin (25:00)

What we've done is we've stuck with the economy, that's our flagship, which is used at introductory level, but it's also used much later on in the curriculum, depending on countries and what kind of degree programs that students are doing. So it stretches beyond a very first one semester course. We've also got other free online textbooks for the next stage of microeconomics and macroeconomics, so they're available. We have a whole bunch of empirical projects for students to do, which can happen early or late in their training. Students really want to know how to get hold of data and use it to answer the questions that they want to know about. And so we teach them how to do that starting from scratch, and they go and get really existing data about, for example, management, the quality of management practices in firms, different firms around the world. Or there's a data from the Ethiopian Social Survey and they can figure out how to clean up that data and use it to answer questions about which families, which households face credit constraints, you know, face problems with borrowing. So all of that stuff we've already got on the website. And then the big new project is this community college oriented book which is called Understanding Our Economy. And you should look out for that because that will be appearing in every good website in the spring. In the spring, yeah.

Nick Hanauer (26:31)

That's fantastic.

Goldie (26:33)

I've got a definitional question. Is core just another way of teaching neoclassical economics or is it not neoclassical? Is it something different?

Wendy Carlin (26:48)

It's not neoclassical. Our attitude is that the way to teach economics is to take the best ideas, the best models and the best evidence wherever they come from. So I've already given you the example of Schumpeter's insights about innovation. If you want to understand about what goes on inside firms, then you learn a lot from Karl Marx and from Coase, the Chicago Economist. These are strange bedfellows, but they both had the same idea about the importance of power within the firm and the ability of the boss to tell people what to do. Another example, Hayek. Hayek's view of the market as a kind of way of discovering what's going on in the economy, guiding resource allocation. That's a kind of Austrian idea from Austrian economics. You shouldn't just decide you're going to use ideas from one particular so called school of thought or another. The best way of making progress in economics and in science more generally is to keep an open mind and look for where the good ideas and the evidence comes from.

Goldie (28:05)

And that's actually how innovation works. It's combinatorial. You're pulling ideas from a lot of different places, whether it's in economics or in building a new technology.

Wendy Carlin (28:17)

Yeah, you wouldn't want to sort of decide to begin with that you're only going to take ideas from Amazon or whatever. Right.

Goldie (28:25)

Is there a label like do you consider. I mean some people use the term heterodox or new heterodox. We have our own ideas and what we want to call it. But I mean, how do you describe your school of economics?

Wendy Carlin (28:40)

When we came up with the name core. Okay. It's a kind of boring acronym curriculum, Open access resources in economics. But the point of it is that we're going for the core of economics, not just some sideline. So we don't want to be called some brand or other. We're just economics.

Goldie (28:59)

That makes sense in the sense that physics is physics. I mean there's different areas of it. There's quantum physics and there's astrophysics and. But it's physics. Nobody says it's neoclassical physics.

Nick Hanauer (29:13)

Well, we used to have classical physics.

Goldie (29:15)

Well, we have classical physics, but that describes a certain, you know, you can.

Nick Hanauer (29:21)

Newtonian physics.

Goldie (29:22)

Yeah, you've got Newtonian physics. And that works in its own. For its own purposes.

Nick Hanauer (29:28)

Yeah, yeah, yeah. Okay, so if you could wave your magic wand and redesign how society learns economics, not just in universities, but in media, politics, et cetera, what would it look like? And what would you change? How would you change how we talk about the Economy every day.

Wendy Carlin (29:48)

Well, I'd encourage anyone who's interested to just open up unit one of CORE and dig into it and see if you find things in your first 5, 10 minutes of reading that you want to tell someone about. And I think that's a very good test. So you'll find things about innovation, about inequality, about how the world has changed, and you'll begin to start assembling a kind of coherent framework that you can then take forward into further questions. I think the thing is to start with your question, what is it that you want to understand? And then you can dip in and begin to use the tools, as I said, figuring out who the key actors are, who they're interacting with, what are their constraints, and what kind of power do they have. And that will give you a good way of approaching many of the problems that you want to think about.

Nick Hanauer (30:49)

That's great. And one final question, Wendy. Why do you do this work?

Wendy Carlin (30:53)

Because it's such fun. And many of the people have told us who've worked on this, this is the hardest research project I've ever worked on. But then they usually also say, and it's been a lot of fun. So the fact is, we just find out something new all the time. Every time we try to write one of these units for core, which is about making things accessible to a very wide audience, we learned such a lot that we didn't know before we started. So that's why we do it. That's why, you know, it pulls you in.

Nick Hanauer (31:32)

That's great. Well, Wendy, thank you so much for being with us.

Wendy Carlin (31:36)

Pleasure. Thank you for the opportunity.

Nick Hanauer (31:43)

Well, Goldie, it's always super fun to talk to those guys. You know, I had coffee with Wendy a couple of weeks ago in London. Such a smart woman and is working so hard on this curriculum, which is just. She's really doing God's work. And I would just encourage our listeners to take a quick look at the. We're going to include a link in the show notes to the curriculum. I think, you know, just people should go check it out. Super cool. And Right. Anything we can do to spread the word about a better way to think about economic processes and a better economic curriculum. All to the good.

Goldie (32:20)

I think if I learned anything from this conversation, and it's obvious when you think about it, but it hadn't really occurred to me, is one of the big economic problems that CORE addresses is the economics of textbook publishing.

Nick Hanauer (32:37)

I know, I know. That was unbelievable, right?

Goldie (32:40)

Because you have the thing about economics, and we've said this repeatedly. Economics is a story about who gets what and why. It's a story that's used to try to explain the world, but also to justify it. So the fact that you're a billionaire and somebody else is struggling to get by on a minimum wage job as their costs are rising, economics explains that. And because the market is efficient, it always pays you what you're worth, you know, et cetera. That is a way of justifying social arrangements. And when there are just a handful of textbook publishers, and these large publishing companies are controlled by a handful of, of billionaires in whose interest it is to justify the current social, economic and political arrangements. Well, there's going to be some limit on, you know, they're going to have some influence on what can be published.

Nick Hanauer (33:52)

Yeah.

Goldie (33:53)

And therefore what can be taught. And, you know, also controlling what can be taught. You see what Trump is now trying to do with his compact, which will give Trump, Trump's government the right to veto certain curricula for whatever reason. You can see, you know, the battle that we have here, that here's this free curriculum. And to be clear, those textbooks are really expensive. If you have a student has to go out and buy, or is often the case, rent one of these textbooks, that's a big part of your cost. Alternatively, the university can say, no, we're going to use this free online curricula. You don't have to spend anything above the outrageous amount that you're already spending on your tuition. You would think it would have a much wider use than it already does, but of course, you know, people are slow to change. Yeah. You know, there's power. There's power in the economy.

Nick Hanauer (35:00)

There's also friction, too.

Goldie (35:02)

Yeah, inertia.

Nick Hanauer (35:03)

Yeah, inertia.

Goldie (35:04)

Yeah, there's a lot of inertia. We do it this way. And the other thing that appeals to me and, and I think it's a problem because you need a brand. But the idea that Core just picks and chooses from various schools of economic thoughts and thought and that, yeah, that makes a lot of sense because we do that ourselves. We, you know, there's, there's stuff in Hayek. Hayek was a pioneer of thinking of the economy from an evolutionary perspective. There is stuff in Hayek, the economist that is useful as opposed to Hayek as the polemicist that he has largely used. There's stuff in there that informs us and that makes a lot of sense. I think, unfortunately, that it's hard to sell something without a brand. And that is a struggle when you're trying to change the way people think about something as important and consequential as economics, for sure. Links in the show notes and seriously, try going through it. Teach yourself economics. It'll be more fun than you think.

Podcast Producer (36:17)

Pitchfork Economics is produced by Civic Ventures. If you like the show, make sure to follow, rate and review us. Wherever you get your podcasts, find us on other platforms like Twitter, Facebook, Instagram and Threads. Itchforceconomics Nick's on Twitter and Facebook as well. Ickhanhauer for more content from us, you can subscribe to our weekly newsletter, the Pitch over on Substack. And for links to everything we just mentioned, plus transcripts and more, visit our website, Pitchfork economics.com as always from our team at CivicVentures, thanks for listening. See you next week.