Heterodox economics ^[1] refers to approaches or schools of economic thought that do not conform to mainstream economics, which has largely developed from neoclassical economics in the late 19th century. While mainstream economics may be defined in terms of the "rationality-individualism-equilibrium nexus", heterodox economics may be defined in terms of a "institutions-history-social structure nexus". Note that there is a different emphasis in distinguishing mainstream and heterodox economics in this way than is involved in distinguishing them as closed-system and an open-system approaches respectively (Lawson,1997 ^[1]; Dow, 2000) ^[2] It is recognised that heterodoxy as an umbrella term to cover the coming together of, sometimes long-standing, separate heterodox projects or traditions. The latter include post Keynesianism, (old) institutionalism, feminist, social, Marxian and Austrian economics, among others ^[1]. One problem with a common resource for heterodox economists is that it is difficult to define heterodox economics. The International Confederation of Associations for Pluralism in Economics (ICAPE) has prudently avoided defining its umbrella too specifically, choosing instead to define its mission as "promoting pluralism in economics". All strands of socialism are heterodox, but not all heterodox schools are necessarily socialist, such as the Austrian School. A key challenge for "heterodoxy" is to define itself in ways that move beyond the rubric of "non-neoclassical" economics. In defining a common ground in the "critical commentary" some heterodox economists, such as Steve Cohn (Knox College, USA), have tried to do three things: (1) identify shared ideas that generate a pattern of heterodox critique across topics and chapters of introductory macro texts; (2) give special attention to ideas that link methodological differences to policy differences; and (3) characterize the common ground in ways that permit distinct paradigms to develop common differences with textbook economics in different ways. It has been suggested that this article or section be merged into History of economics. ... Mainstream economics is the term used to distinguish the economics profession in general from advocates of various heterodox schools, including Austrian economics and Marxian economics. ... Neoclassical economics refers to a general approach (a metatheory) to economics based on supply and demand which depends on individuals (or any economic agent) operating rationally, each seeking to maximize their individual utility or profit by making choices based on available information. ... Mainstream economics is the term used to distinguish the economics profession in general from advocates of various heterodox schools, including Austrian economics and Marxian economics. ... Socialism refers to a broad array of doctrines or political movements that envisage a socio-economic system in which property and the distribution of wealth are subject to control by the community. ... The Austrian School, also known as the Vienna School or the Psychological School, is a school of economic thought that advocates adherence to strict methodological individualism. ... Knox College is a four-year coeducational private liberal arts college located in Galesburg, Illinois. ...

Rationality

One of the most broadly accepted principles of neoclassical economics is the assumption of the "rationality of economic agents". Indeed, for a number of economists, the notion of rational maximizing behavior is taken to be synonymous with economic behavior (Becker 1976, Hirshleifer 1984). When some economists' studies do not embrace the rationality assumption, they are seen as placing the analyses outside the boundaries of the Neoclassical economics discipline (Landsberg 1989, 596). Neoclassical economics begins with the a priori assumption that agents are "rational" and that they "maximize their utility" (or profits) subject to environmental constraints. From this assumption neoclassical economists derive the familiar supply and demand functions which, under certain conditions, will lead to a determinate market clearing equilibrium. Under even stricter conditions this equilibrium will be efficient in the sense of Pareto. Neoclassical economics refers to a general approach (a metatheory) to economics based on supply and demand which depends on individuals (or any economic agent) operating rationally, each seeking to maximize their individual utility or profit by making choices based on available information. ... Neoclassical economics refers to a general approach (a metatheory) to economics based on supply and demand which depends on individuals (or any economic agent) operating rationally, each seeking to maximize their individual utility or profit by making choices based on available information. ... Neoclassical economics refers to a general approach (a metatheory) to economics based on supply and demand which depends on individuals (or any economic agent) operating rationally, each seeking to maximize their individual utility or profit by making choices based on available information. ... The supply and demand model describes how prices vary as a result of a balance between product availability at each price (supply) and the desires of those with purchasing power at each price (demand). ... In economics, market clearing refers to either a simplifying assumption made by the new classical school that markets always go to where the quantity supplied equals the quantity demanded; or the process of getting there via price adjustment. ... Price of market balance In economics, economic equilibrium is simply a state of the world where economic forces are balanced and in the abscence of external shocks the (equilibrium) values of economic variables will not change. ... Price of market balance In economics, economic equilibrium is simply a state of the world where economic forces are balanced and in the abscence of external shocks the (equilibrium) values of economic variables will not change. ... Pareto efficiency, or Pareto optimality, is an important notion in neoclassical economics with broad applications in game theory, engineering and the social sciences. ...

Heterodox economics reject these fundamental assumptions on which most of neoclassical economics theory has been built. Up to 1980 heterodox economics could be defined as: Neoclassical economics refers to a general approach (a metatheory) to economics based on supply and demand which depends on individuals (or any economic agent) operating rationally, each seeking to maximize their individual utility or profit by making choices based on available information. ...

• 1. rejection of the atomistic individual conception in favor of a socially embedded individual conception;

• 2. emphasis on time as an irreversible historical process;

• 3. reasoning in terms of mutual influences between individuals and social structures.

On 1980 (or thereabouts) significant changes begin to occur in economics; a number of new research programs began, in various ways, to be recognized by the mainstream economics. These include game theory, behavioral economics, complexity economics evolutionary economics, experimental economics, information economics, neuroeconomics, and others. As a consequence, some heterodox economists, such as John B. Davis, proposed that the definition of heterodox economics has to be adapted to this new, more complex reality. ^[3] Mainstream economics is the term used to distinguish the economics profession in general from advocates of various heterodox schools, including Austrian economics and Marxian economics. ... Game theory is often described as a branch of applied mathematics and economics that studies situations where multiple players make decisions in an attempt to maximize their returns. ... Nobel Prize in Economics winner Daniel Kahneman, was an important figure in the development of behavioral finance and economics and continues to write extensively in the field. ... Complexity Economics is a new school of thoughts in modern economics. ... Evolutionary economics is a relatively new economic methodology that is modeled on biology. ... Experimental economics is the use of experimental methods to evaluate theoretical predictions of economic behaviour. ... Information economics is a branch of Economics that studies how information affects economic decisions. ... Neuroeconomics combines neuroscience, economics, and psychology to study how we make choices. ...

The argument of the previous section is that heterodox economics post-1980 is a complex structure, being composed out of two broadly different kinds of heterodox work, each internally differentiated with a number of research programs having different historical origins and orientations: the traditional left heterodoxy familiar to most and the 'new heterodoxy' resulting from other science imports. ^[3]

Heterodox "economic theory"

It is agreed that there is no single "heterodox economic theory" as such; there are various different strands of "heterodox theories" coexisting.

What they all share, however, is a rejection of the neoclassical orthodoxy as representing the appropriate tool for understanding the workings of economic and social life. The reasons for this rejection may vary. ^[4] GABRIEL, Satya J. Introduction to Heterodox Economic Theory. , June 4, 2003, quoted from the author's website. Copyright © 1996-2007, Satyananda J. Gabriel, Mount Holyoke College.

Neoclassical economics refers to a general approach (a metatheory) to economics based on supply and demand which depends on individuals (or any economic agent) operating rationally, each seeking to maximize their individual utility or profit by making choices based on available information. ... Mount Holyoke College is a liberal arts womens college in South Hadley, Massachusetts. ...

Reasons for the rejection of neoclassical orthodoxy among heterodox theorists:

• Some argue that neoclassical theory is appropriate as a tool under certain limited conditions, such as when there is "perfect" or "near-perfect" competition;

• Some reject neoclassical economic theory altogether, arguing that it is useless as a tool for understanding economic and social life.

• A small number argue that all theories are valid so long as they are internally consistent.

• Others, also small in number and which are less liberal in their conception of theoretical validity, argue that neoclassical theory is a form of ideology or religion, which is grounded in unscientific concepts. GABRIEL, Satya J. Introduction to Heterodox Economic Theory. , June 4, 2003, Based on lecture's notes at the author's website. Copyright © 1996-2007, Satyananda J. Gabriel, Mount Holyoke College.

Neoclassical economics refers to a general approach (a metatheory) to economics based on supply and demand which depends on individuals (or any economic agent) operating rationally, each seeking to maximize their individual utility or profit by making choices based on available information. ... Neoclassical economics refers to a general approach (a metatheory) to economics based on supply and demand which depends on individuals (or any economic agent) operating rationally, each seeking to maximize their individual utility or profit by making choices based on available information. ... An ideology is an organized collection of ideas. ... Mount Holyoke College is a liberal arts womens college in South Hadley, Massachusetts. ...

Most recent developments

Over the past two decades, the intellectual agendas of heterodox economists have taken a decidedly pluralist turn. Leading heterodox thinkers have moved beyond the established paradigms of Austrian, Feminist, Institutional-Evolutionary, Marxian, Post Keynesian, Radical, Social, and Sraffian economics—opening up new lines of analysis, criticism, and dialogue among dissenting schools of thought. This cross-fertilization of ideas is creating a new generation of scholarship in which novel combinations of heterodox ideas are being brought to bear on important contemporary and historical problems, such as socially-grounded reconstructions of the individual in economic theory; the goals and tools of economic measurement and professional ethics; the complexities of policymaking in today's global political economy; and innovative connections among formerly separate theoretical traditions (Marxian, Austrian, feminist, ecological, Sraffian, institutionalist, and post-Keynesian).

Fields or schools of heterodox economics

# Listed in Journal of Economic Literature codes scrolled to at JEL: B5 - Current Heterodox Approaches. Institutional political economy refers to a body of political economic thought stemming from the works of Thorstein Veblen, John Commons, Wesley Mitchell, John Dewey and more recent political economists such as Geoffrey Hodgson, Jonathan Nitzan and Shimshon Bichler. ... The Austrian School is a school of economic thought which rejects opposing economists reliance on methods used in natural science for the study of human action, and instead bases its formalism of economics on relationships through logic or introspection called praxeology. ... Feminist economics broadly refers to a developing branch of economics that applies feminist insights and critiques to mainstream economics. ... Information economics is a branch of Economics that studies how information affects economic decisions. ... Political economy was the original term for the study of production, the acts of buying and selling, and their relationships to laws, customs and government. ... Post-Keynesian economics is a school of thought which is based on the ideas of John Maynard Keynes. ... Piero Sraffa. ... Note: Marxian is not restricted to Marxian economics, as it includes those inspired by Marxs works who do not identify with Marxism as a political ideology. ... Socialist economics is a broad, and sometimes controversial, term. ... Nobel Prize in Economics winner Daniel Kahneman, was an important figure in the development of behavioral finance and economics and continues to write extensively in the field. ... Mainstream economics is the term used to distinguish the economics profession in general from advocates of various heterodox schools, including Austrian economics and Marxian economics. ... Bioeconomics is a field of resource economics including the dynamics of living resources in economical modelling. ... Complexity Economics is a new school of thoughts in modern economics. ... Evolutionary economics is a relatively new economic methodology that is modeled on biology. ... Mainstream economics is the term used to distinguish the economics profession in general from advocates of various heterodox schools, including Austrian economics and Marxian economics. ... Green economics is an approach to economics in which the economy is considered to be a component of, and dependent upon, the natural world within which it resides and of which is it considered a part. ... Neuroeconomics combines neuroscience, economics, and psychology to study how we make choices. ... Supply-side economics is a school of macroeconomic thought which argues that economic growth can be most effectively managed using incentives for people to produce (supply) goods and services, such as adjusting income tax and capital gains tax rates. ... The Journal of Economic Literature (JEL) is a leading economic journal published by the American Economic Association. ... Articles in economics journals are usually classified according to the system used by the Journal of Economic Literature (JEL). ...

§ Scrolled to at JEL: C73 - Stochastic and Dynamic games; Evolutionary games. Articles in economics journals are usually classified according to the system used by the Journal of Economic Literature (JEL). ...

Research is also being done in the multidisciplinary field of cognitive science on individual decision making, information as a general phenomena, distributed cognition and their implications on economic dynamicity. Cognitive science is usually defined as the scientific study either of mind or of intelligence (e. ... The ASCII codes for the word Wikipedia represented in binary, the numeral system most commonly used for encoding computer information. ... History Distributed cognition is a school of psychology developed in the 1990s by Edwin Hutchins. ...

Some schools in the social sciences aim to promote certain perspectives: classical and modern political economy; economic history; economic sociology and anthropology; gender and racial issues in economics; economic ethics and social justice; development studies; and so on. Political economy was the original term for the study of production, the acts of buying and selling, and their relationships to laws, customs and government. ... Economic history is the study of economic change, and of economic phenomena in the past. ... Economic sociology may be defined as the sociological analysis of economic phenomena. ... Economic anthropology is an approach to the central questions of anthropology through the lens of economics. ... Ethics (from the Ancient Greek Ä“thikos, the adjective of Ä“thos custom, habit), a major branch of philosophy, including genetics is the study of values and customs of a person or group. ... This article or section does not adequately cite its references or sources. ... Development studies is the multi-disciplinary branch of social science which addresses issues of concern to developing nations. ...

References

1. ^ ^{a b c} LAWSON, Tony. The nature of heterodox economics. Published by Oxford University Press on behalf of the Cambridge Political Economy Society, 2005, in: Cambridge Journal of Economics 2006 30(4):483-505; doi:10.1093/cje/bei093
2. ^ DOW, S. C. Prospects for the Progress in Heterodox Economics. Journal of the History of Economic Thought 22 (2): 157-170., 2000.
3. ^ ^{a b} DAVIS, John B. The Nature of Heterodox Economics. post-autistic economics review, issue no. 40, 1 December 2006, article 3, pp.23-30.
4. ^ GABRIEL, Satya J. Introduction to Heterodox Economic Theory. , June 4, 2003 Satya J. Gabriel is a Professor of Economics at Mount Holyoke College
5. ^ A Companion to the History of Economic Thought (2003). Blackwell Publishing. ISBN 0631225730 p. 452

Face-to-face trading interactions on the New York Stock Exchange trading floor. ... Mount Holyoke College is a liberal arts womens college in South Hadley, Massachusetts. ...

See also

Institutional economics focuses on understanding the role of human-made institutions in shaping economic behavior. ... Post-Keynesian economics is a school of thought which is based on the ideas of John Maynard Keynes. ... Note: Marxian is not restricted to Marxian economics, as it includes those inspired by Marxs works who do not identify with Marxism as a political ideology. ... Socialism refers to a broad array of doctrines or political movements that envisage a socio-economic system in which property and the distribution of wealth are subject to control by the community. ... Socialist economics is a broad, and sometimes controversial, term. ... Piero Sraffa. ...

External links

Publications on heterodox economics

Books

• COHN, Steven Mark. Reintroducing Macroeconomics: A Critical Approach. M. E. Sharpe, Inc, December 2006 ISBN 978-0-7656-1450-6 ISBN 978-0-7656-1451-3

• DAVIS, John, editor. The Theory of the Individual in Economics: Identity and Value. Routledge, 2003 ISBN 0415202191

• FULLBROOK, Edward, editor. A Guide to What’s Wrong with Economics. London: Anthem Press, November 2004 ISBN 1843311488

• HARVEY, John T. and GARNETT JR., Robert F. Garnett, Editors. Future Directions for Heterodox Economics, Series Advances in Heterodox Economics, The University of Michigan Press, 2007. ISBN 978-0-472-03247-1

• McDERMOTT, John. Economics in Real Time: A Theoretical Reconstruction, Series Advances in Heterodox Economics, The University of Michigan Press, 2003 ISBN 978-0-472-11357-6

• ROCHON, Louis-Philippe and ROSSI, Sergio, editors. Modern Theories of Money: The Nature and Role of Money in Capitalist Economies. Edward Elgar Publishing, 2003 ISBN 1840647892

Articles, conferences, papers

• COHN, Steve. Common Ground Critiques of Neoclassical Principles Texts., 2003. Knox College (Illinois).

• COLANDER, D. The Death Of Neoclassical Economics. Journal of the History of Economic Thought, 2002, 22 (3), pp. 127-43. Online readable, free link - Copyright JHET, All rights reserved

• LAVOIE, Marc. Do Heterodox Theories Have Anything in Common? A Post-Keynesian Point of View.

• LAWSON, Catherine & LAWSON, Larry (1990). Financial system restructuring: lessons from Veblen, Keynes, and Kalecki. Journal of Economic Issues 24 (1): 115-31.

• LAWSON, Tony. The nature of heterodox economics. Published by Oxford University Press on behalf of the Cambridge Political Economy Society, 2005, in: Cambridge Journal of Economics 2006 30(4):483-505; doi:10.1093/cje/bei093

• MINSKY, Hyman (1996). Uncertainty and the institutional structure of capitalist economies. Journal of Economic Issues 30(2):357-68.

• [http://www.accessmylibrary.com/coms2/summary_0286-29687573_ITM RANSON, Baldwin Heterodox theoretical convergence: possibility or pipe dream? (Notes and Communications)(Report). Journal of Economic Issues, 01-MAR-07

• SECCARECCIA, M. Early Twentieth-Century Heterodox Monetary Thought», Money, Financial Institutions, and Macroeconomics, ed. by A.J. Cohen, H. Hagemann and J.N. Smithin, Boston: Kluwer Academic Publishers, 1997, pp. 125-39