Heterodox economics

Heterodox Economics describes the approaches and schools of economic theory, which lie outside the economic mainstream, thus will not be described as orthodox economics. Heterodox economics is an umbrella term that encompasses the unorthodox approaches, schools and traditions. This includes institutional, post-Keynesian, socialist, Marxist, feminist, Austrian, environmental and other socio-economic approaches These views are mostly in contrast to the system, which is used by the majority of economists, commonly known by his followers as " mainstream" and his critics called "conventional " as " orthodox " and. This system includes the neoclassical synthesis, which follows the neoclassical approach of microeconomics and Keynesian approach to macroeconomics, with varying degrees of emphasis.

It is difficult to define heterodox economics. The " International Confederation of Associations for Pluralism in Economics" ( ICAPE ) to avoid the special definition of the term over and tries instead to describe the task as " promotion of pluralism in economics ." One of the main challenges of " heterodoxy " is its own definition in areas that are more effective than those of the " neoclassical " economics. In the development of a common basis with the help of a critical opinion some heterodox economists identified the following three things as essential

History

At the beginning of the neoclassical revolution after 1870 posed a number of heterodox schools, the dominance of neoclassical theory in question. Following the socialist critique of capitalism, included heterodox schools of this period, different representatives of mercantilism, such as the American School, the demarcated from the neoclassical methodology as well as the historical school with the followers of unorthodox monetary theory of " Social Credit ". Other heterodox schools before and during the Great Depression included technocrats and Georgisten. In the case of technocrats theory consisted of a non- market -based economic system based on the question of the power management. In the following years, attention has focused more on people like Frederick Soddy who in the book " Wealth, Virtual Wealth and Debt ," was devoted to the importance of energy in economic systems. He criticized the focus on monetary flows in economics, arguing that real wealth can be derived from the use of energy for the transformation of materials into physical goods and services. Soddy's economic writings were during his time largely ignored, but later taken into account for the development of biophysical economics, as well as from ecological economics and the bio-economy during the 20th century

Some physicists and biologists were the first individuals who used the energy use as an explanation of social and economic problems. Joseph Henry, an American physicist and Secretary of the Smithsonian Institute, noted that the "fundamental principle of political economy is that the physical labor of man can only be further developed ... by the transformation of an unfinished stage to an artificial condition ... due to the expansion of the capacity and energy. "

The rise of heterodox approaches and the integration of knowledge in traditional areas of Keynesian theory, which gave the impression to provide a better political context relating to the unemployment, as the heterodox monetary and trade policies, led in subsequent years to a declining interest in these areas heterodox economics.

After 1945, ended the neoclassical synthesis of Keynesian and neoclassical economics in a clearly defined mainstream position based in the split in the microeconomic field (for the most part neoclassical but including the theory of market failure ) and macroeconomics ( distinction between Keynesian and monetarist views on issues such as the role of monetary policy ). Followers of the Austrian school and the Postkeynesianismus who rejected this synthesis developed to clearly identifiable heterodox school. In this respect, also the currents of Marxist and institutionalist economists remained independent.

Until 1980, the most to be observed themes of heterodox economics in its various forms were characterized by:

Based on these findings took place from 1980 to notable developments in the economy; a number of new research programs began to be perceived in different ways by the neoclassical mainstream. This includes the behavioral economics, complexity economics, evolutionary economics, experimental economics, neuroeconomics, and others. As a consequence demanded economists such as John B. Davis, that the definition of heterodox economics must be adapted to the requirements of the new complex reality.

Summing up the heterodox economics after 1990 as a complex structure describing consisting of a merger of two different kinds of heterodox research, each itself has different areas with a variety of research programs with different historical origins and orientations: the larger the area of ​​traditionally politically oriented heterodox economics and the "new heterodox economics " resulting from the integration of influences from other fields of science.

Critique of neoclassical theory

The core of heterodox economics consists in the rejection of an all-encompassing approach to economic theory, instead it represents the principle of a variety of equivalent areas of theory and research directions. The commonality of their currents can be found in the rejection of neoclassical theory, with the view of an overarching economic approach and the development of methods and techniques for a joint analysis of real economic and social issues. Although many of the approaches differ in principle, this does not necessarily preclude like in the traditional theory of economics.

The main points of criticism of the neoclassical economic theory can be summarized wiefolgt:

Criticism of the neoclassical model of behavior

One of the most widely accepted principles of traditional economic theory is the assumption of " rationality of economic agents". In fact, for a variety of economists, the concept of economic rationality of profit-maximizing and self- interested behavior, a synonym for an economic behavioral approach, summarized in the model of homo economicus. The economic theories outside of the addressed rationality principle be regarded as approaches beyond the limits of neoclassical theory. The Neoclassical theory begins with a restrictive a priori summary of the economic agents as rational and profit-maximizing subject only to his individual utility maximum in its environment following. These assumptions describe the basics of the theory of rational decision.

The Heterodox Economics now has the right to exceed the limits of this model of behavior of a limited economic man image and to devote himself rather than fictitious models, the question of realistic economic problems.

Many different research areas criticize the standard model of Homo economicus. An Exemplary opinion is Suchanek and Kerscher:

First, it should be noted that also can support this criticism on experimental results. Thus, for example, showed in the context of scientific inquiry among students, that those who were familiar with the model of the rational, self- interested actors, interactions in a lower cooperation rate had than others who did not know the model. However, further studies also showed that such a result can not be reproduced in any case. Partly were observed higher cooperation rates at business students than for others. The ... Homo economicus is at the same time an instrument for analyzing incentive- compatible investment. This context, it does not spoil the morale but also promotes the social skills of individuals because it forwards the ( ultimately always normatively motivated ) Search Kooperationsarrengements that are of mutual interest. In particular ... the " self-interest " of economics should not be confused with the egoism of moral philosophy and the model with the philosophy of man.

Criticism of the neoclassical model of market equilibrium

Based on the given market rationality of the traditional model of behavior lead many economists from the famous market equilibrium, which is considered efficient under certain conditions, leading to a predetermined marketbereinigendem equilibrium and under certain conditions as Pareto.

Heterodox economics rejects this fundamental summary, which is based on the neoclassical theory from. The concept of market equilibrium has already been criticized by the Austrian School, Postkeynesianismus and others. The idea of an absolute market equilibrium is assumed realtitätsfremd and thus rather than to be the rule rather the exception in economic theory.

While neoclassical economics can be described as " rational - individualistic - equal -weight " relationship, the heterodox economics can be summarized as an " institutional- historical and socio-structural " Nexus. It should be noted that this is an economic difference lies in the distinction between the neoclassical and heterodox economics in the mentioned approach, contrary to the comparison in the discussion of closed and open economic systems ( Lawson, 1997); It is often assumed that the neoclassical theory can be made under certain conditions to be relevant if it is "perfect" or " almost perfect " states is markets. This justifies the neoclassical analysis of " imperfect competition ", which questions the relevance of alternative approaches in question, but the shortcomings of the classical economic theory can not be eliminated.

Criticism of the neoclassical model of the labor market

The problems of the restrictive assumptions of the neoclassical model are valid in this context, for the area of the labor market and can be summarized under the criticism of the heterodox approaches with the following points:

In particular, the problems of the themes of unemployment and its causes are questionable, with only voluntary unemployment so far could be described by the neoclassical theory.

Voluntary unemployment is interpreted in the neoclassical theory as an expression of bad investments in human capital and thus self-inflicted.

In recent approaches, reference is made to the concept of structural unemployment and the importance of structural differences in relation to the conflict of the interdependence of industry and services within regional economic structures instead.

Research areas of heterodox economics

  • Bioeconomy
  • Evolutionary Economics
  • Experimental Economics
  • Feminist Economics
  • Institutional Economics
  • Economics of Innovation
  • Complexity Economics
  • Marxist Economic Theory
  • Mutualism ( economics)
  • Neuroeconomics
  • Neoricardianische school
  • Neo - Schumpeterianische economy
  • Ecological Economics
  • Econophysics
  • Austrian School
  • Participatory economics
  • Political Economy
  • Post -autistic economics
  • Postkeynesianismus
  • Socialist economics
  • Technocratic movement
  • Behavioural Economics

Institutions

  • Association for Heterodox Economics
  • Association d' Économie Politique
  • The Association for Economic and Social Analysis
  • The Association for Evolutionary Economics
  • Association for Institutional Thought
  • The Association for Social Economics
  • Association pour le Développement of the Études Keynésiennes
  • Association for Research and Regulation
  • Belgian - Dutch Association for Institutional and Political Economy
  • Conference of Socialist Economists
  • European Association for Evolutionary Political Economy
  • German Association for Political Economy - GAPE
  • Association for Heterodox Economics
  • International Association for Feminist Economics
  • The International Confederation of Associations for Pluralism in Economics
  • Japan Association for Evolutionary Economics
  • Japan Society of Political Economy
  • The Japanese Society for Post Keynesian Economics
  • Korean Social adn Economic Studies Association
  • Latin American Society for political Economy and Critical Thinking
  • The Progressive Economics Forum
  • Society for the Advancement of Behavioral Economics
  • Society for the Advancement of Socio- Economics
  • The Society for the Development of Austrian Economics
  • Society of Heterodox Economists
  • The Japanese Society for Post Keynesian Economics
  • Sociedade Brasileira de Economia Politica
  • Union for Radical Political Economics
  • United Society for Ecological Economics

Swell

  • Economics
Neo-Ricardianism Technocracy movement
390438
de