Heterodoxy is a term that may be used in contrast with orthodoxy in
schools of economic thought or methodologies, that may be beyond
neoclassical economics. Heterodoxy is an
umbrella term that can cover various schools of thought or theories.
These might for example include institutional, evolutionary, Georgist,
Austrian, feminist, social, post-Keynesian (not to be
confused with New Keynesian), ecological, Marxian,
socialist and anarchist economics, among others.
1 History 2 Rejection of neoclassical economics
2.1 Criticism of the neoclassical model of individual behavior 2.2 Criticism of the neoclassical model of market equilibrium
3 Most recent developments 4 Fields of heterodox economic thought
4.1 Notable heterodox economists
5 See also 6 References 7 Further reading
7.1 Articles 7.2 Books 7.3 Articles, conferences, papers 7.4 Journals
8 External links
A number of heterodox schools of economic thought challenged the
dominance of neoclassical economics after the neoclassical revolution
of the 1870s. In addition to socialist critics of capitalism,
heterodox schools in this period included advocates of various forms
of mercantilism, such as the American School dissenters from
neoclassical methodology such as the historical school, and advocates
of unorthodox monetary theories such as Social credit. Other heterodox
schools active before and during the
rejection of the atomistic individual conception in favor of a socially embedded individual conception; emphasis on time as an irreversible historical process; reasoning in terms of mutual influences between individuals and social structures. From approximately 1980 mainstream economics has been significantly influenced by a number of new research programs, including behavioral economics, complexity economics, evolutionary economics, experimental economics, and neuroeconomics. 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:
...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. Rejection of neoclassical economics There is no single "heterodox economic theory"; there are many different "heterodox theories" in existence. 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. Some of the elements commonly found in heterodox critiques are listed below.
Criticism of the neoclassical model of individual behavior 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 assumptions that agents are rational and that they seek to maximize their individual utility (or profits) subject to environmental constraints. These assumptions provide the backbone for rational choice theory. Many heterodox schools are critical of the homo economicus model of human behavior used in standard neoclassical model. A typical version of the critique is that of Satya Gabriel:
Neoclassical economic theory is grounded in a particular conception of human psychology, agency or decision-making. It is assumed that all human beings make economic decisions so as to maximize pleasure or utility. Some heterodox theories reject this basic assumption of neoclassical theory, arguing for alternative understandings of how economic decisions are made and/or how human psychology works. It is possible to accept the notion that humans are pleasure seeking machines, yet reject the idea that economic decisions are governed by such pleasure seeking. Human beings may, for example, be unable to make choices consistent with pleasure maximization due to social constraints and/or coercion. Humans may also be unable to correctly assess the choice points that are most likely to lead to maximum pleasure, even if they are unconstrained (except in budgetary terms) in making such choices. And it is also possible that the notion of pleasure seeking is itself a meaningless assumption because it is either impossible to test or too general to refute. Economic theories that reject the basic assumption of economic decisions as the outcome of pleasure maximization are heterodox. Shiozawa emphasizes that economic agents act in a complex world and therefore impossible for them to attain maximal utility point. They instead behave as if there are a repertories of many ready made rules, one of which they chose according to relevant situation.
Criticism of the neoclassical model of market equilibrium
In microeconomic theory, cost-minimization by consumers and by firms
implies the existence of supply and demand correspondences for which
market clearing equilibrium prices exist, if there are large numbers
of consumers and producers. Under convexity assumptions or under some
marginal-cost pricing rules, each equilibrium will be Pareto
efficient: In large economies, non-convexity also leads to
quasi-equilibria that are nearly efficient.
However, the concept of market equilibrium has been criticized by
Austrians, post-Keynesians and others, who object to applications of
microeconomic theory to real-world markets, when such markets are not
usefully approximated by microeconomic models. Heterodox economists
assert that micro-economic models rarely capture reality.
Mainstream microeconomics may be defined in terms of optimization and
equilibrium, following the approaches of
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) (for a
review of post-Keynesian economics, see Lavoie (1992); Rochon (1999)).
David Colander, an advocate of complexity economics, argues that the
ideas of heterodox economists are now being discussed in the
mainstream without mention of the heterodox economists, because the
tools to analyze institutions, uncertainty, and other factors have now
been developed by the mainstream. He suggests that heterodox
economists should embrace rigorous mathematics and attempt to work
from within the mainstream, rather than treating it as an
Some schools of heterodox economic thought have also taken a
Fields of heterodox economic thought
American Institutionalist School
# Listed in
Journal of Economic Literature
Notable heterodox economists
Michael Albert Jack Amariglio Rania Antonopoulos Ha-Joon Chang Paul Cockshott Herman Daly Alfred S. Eichner Mason Gaffney Henry George Nicholas Georgescu-Roegen Robin Hahnel Michael Hudson Michał Kalecki Mushtaq Khan John Komlos Lyndon Larouche Tony Lawson Frederic S. Lee Karl Marx Hyman Minsky Bill Mitchell Peter Navarro Michael Perelman Carlota Perez Stephen Resnick Jeremy Rifkin Joan Violet Robinson Dani Rodrik Murray Rothbard E. F. Schumacher Joseph Schumpeter Piero Sraffa Frank Stilwell Nicolaus Tideman Yanis Varoufakis Thorstein Veblen Richard D. Wolff Simon Zadek
Association for Evolutionary Economics EAEPE Humanistic economics Kinetic exchange models of markets Pluralism in economics Post-autistic economics Real-world economics Real-world economics review Degrowth
^ Fred E. Foldvary, ed., 1996. Beyond Neoclassical Economics: Heterodox Approaches to Economic Theory, Edward Elgar. Description and contents B&N.com links.
^ a b c Frederic S. Lee, 2008. "heterodox economics," The New Palgrave Dictionary of Economics, 2nd Edition, v. 4, pp. 2–65. Abstract.
^ In the order listed at JEL classification codes § B. History of Economic Thought, Methodology, and Heterodox Approaches, JEL: B5 – Current Heterodox Approaches.
^ a b Lawson, T. (2005). "The nature of heterodox economics" (PDF). Cambridge Journal of Economics. 30 (4): 483–505. doi:10.1093/cje/bei093..mw-parser-output cite.citation font-style:inherit .mw-parser-output .citation q quotes:"""""""'""'" .mw-parser-output .citation .cs1-lock-free a background:url("//upload.wikimedia.org/wikipedia/commons/thumb/6/65/Lock-green.svg/9px-Lock-green.svg.png")no-repeat;background-position:right .1em center .mw-parser-output .citation .cs1-lock-limited a,.mw-parser-output .citation .cs1-lock-registration a background:url("//upload.wikimedia.org/wikipedia/commons/thumb/d/d6/Lock-gray-alt-2.svg/9px-Lock-gray-alt-2.svg.png")no-repeat;background-position:right .1em center .mw-parser-output .citation .cs1-lock-subscription a background:url("//upload.wikimedia.org/wikipedia/commons/thumb/a/aa/Lock-red-alt-2.svg/9px-Lock-red-alt-2.svg.png")no-repeat;background-position:right .1em center .mw-parser-output .cs1-subscription,.mw-parser-output .cs1-registration color:#555 .mw-parser-output .cs1-subscription span,.mw-parser-output .cs1-registration span border-bottom:1px dotted;cursor:help .mw-parser-output .cs1-ws-icon a background:url("//upload.wikimedia.org/wikipedia/commons/thumb/4/4c/Wikisource-logo.svg/12px-Wikisource-logo.svg.png")no-repeat;background-position:right .1em center .mw-parser-output code.cs1-code color:inherit;background:inherit;border:inherit;padding:inherit .mw-parser-output .cs1-hidden-error display:none;font-size:100% .mw-parser-output .cs1-visible-error font-size:100% .mw-parser-output .cs1-maint display:none;color:#33aa33;margin-left:0.3em .mw-parser-output .cs1-subscription,.mw-parser-output .cs1-registration,.mw-parser-output .cs1-format font-size:95% .mw-parser-output .cs1-kern-left,.mw-parser-output .cs1-kern-wl-left padding-left:0.2em .mw-parser-output .cs1-kern-right,.mw-parser-output .cs1-kern-wl-right padding-right:0.2em
^ C. Barry, 1998. Political-economy: A comparative approach. Westport, CT: Praeger.[page needed]
^ John B. Davis (2006). "Heterodox Economics, the Fragmentation of the Mainstream, and Embedded Individual Analysis", in Future Directions in Heterodox Economics, p. 57. Ann Arbor: University of Michigan Press.
^ Among these economists,
Robert M. Solow
^ Cohn, Steve (2003). "Common Ground Critiques of Neoclassical
Principles Texts". Post-Autistic
^ Mearman, Andrew (2011). "Who Do Heterodox Economists Think They
Are?" American Journal of
^ Cutler J. Cleveland, "Biophysical economics", Encyclopedia of Earth, Last updated: September 14, 2006.
^ Eric Zencey, 2009. "Mr. Soddy’s Ecological Economy",] The New York Times, April 12, p. WK 9.
^ a b Davis, John B. (2006). "The Nature of Heterodox Economics"
^ Lee, Frederic (September 16, 2011). A History of Heterodox Economics: Challenging Mainstream Views in the 21st Century (Reprint ed.). Routledge. pp. 7–9. ISBN 978-0415681971.
^ Satya J. Gabriel 2003. "Introduction to Heterodox Economic Theory."
(blog), June 4,  Satya J. Gabriel is a Professor of
^ Dow, S. C. (2000). "Prospects for the Progress in Heterodox Economics". Journal of the History of Economic Thought. 22 (2): 157–70. doi:10.1080/10427710050025367. hdl:1893/24906.
^ David Colander, 2007. Pluralism and Heterodox Economics: Suggestions for an “Inside the Mainstream” Heterodoxy
^ Corning, Peter A.; Kline, Stephen J. (1998). "Thermodynamics, information and life revisited, Part II: 'Thermoeconomics' and 'Control information'". Systems Research and Behavioral Science. 15 (6): 453–82. doi:10.1002/(SICI)1099-1743(199811/12)15:6<453::AID-SRES201>3.0.CO;2-U.
^ Peter A. Corning. 2002. “
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