Heterodox Economics

Heterodox economics provides an alternative approach to mainstream economics that may help to explain economic phenomenon that may have not received widespread credence. In addition, heterodox economies seek to embed social and historical factors into analysis, as well as evaluate the way in which the behavior of both individuals and societies alters the development of market equilibriums.

The analysis and study of economic principles is considered to be outside of mainstream or orthodox schools of economic thought. Schools of heterodox economics include socialism, Marxism, post- Keynesian and Austrian schools of thought, which often combine the macroeconomic outlook found in Keynesian economics with approaches critical of neoclassical economics.

Heterodox economics is an umbrella term used to cover various approaches, schools and traditions. The views may be contrasted in the framework used by the majority of economists. It is commonly referred to as mainstream by its supporters and as orthodox or conventional by critics.

The International Confederation of Associations for Pluralism in Economics (ICAPE) does not define heterodox economics and has avoided defining its scope.

In defining a common ground in the critical commentary, a writer described fellow heterodox economists as trying to do three things: identify shared ideas that generate a pattern of heterodox critique across topics and chapters of introductory macro texts, give special attention to ideas that link methodological differences to policy differences and characterize the common ground in many ways that permit the distinct paradigms to develop common differences with textbook economics in different ways.

History

A number of heterodox schools of economic thought challenged the dominance of neoclassical economics after the neoclassical revolution of the 1870’s. After 1945 the neoclassical synthesis economics resulted in a clearly defined mainstream position based on a division of the field into macroeconomics. Up to 1980 the most notable themes of heterodox economics in its various forms included the rejection of the atomistic individual conception in favor of a socially embedded individual conception, emphasis on time as an irreversible historical process and reasoning in terms of mutual influences between individuals and social structures.

Rejection of Neoclassical Economics

There are many heterodox economics theories in existence. What they all share in common, is a rejection of the neoclassical orthodoxy as representing the appropriate tool for understanding the workings of economic and social life.

The criticism includes 3 main principles of the neoclassical model theory. This includes the neoclassical model of individual behavior, the neoclassical model of market equilibrium and the neoclassical model of labor markets. The reasons for this rejection may vary, but there are some commonly found elements in the heterodox critiques.

Questions:

• What is Heterodox Economics?
• What is the history of Heterodox Economics?