Heterodox Economics

Orthodox school of economics themselves think that they are dominant than the others.

So the dominance of orthodox schools to the main stream economics make the school of blind make
the followers to quite blind to arguments and concepts in other school of analysis especially the
heterodox school of thought.

They give little significance of heterodox economics or marginalized the others schools of thought.

What is a paradigms?

It is a distinct set of concepts or thought pattern, including theories, research methods, postulates
standards for what constitute legitimated contribution to a field.

It is a way of looking and examine something.

Generally accepted perspective of particular discipline during a given time…changes may happen in
the future.

Paradigm Blindness is an idea first discussed by Thomas Kuhn in “The structure of Scientific
Revolutions”. But he did not use the term explicitly but discussed the concept by emphasizing the
problems of such a blindness consequent to the sway of the dominant paradigm.

Scholars who explored it argued that

The concept of paradigm blindness advocates that individuals, groups and perhaps even
organizations find themselves either unwilling or unable to comprehend, accept, or act upon
challenges made towards their conceptualization and understanding of the ways in which their
system operates. Put another way, they are blind to the challenges that are presented to them from
perspectives that exist outside of their own worldviews. Early uses of the term paradigm blindness
conceptualized it in a manner that related to the processes that prevented experts from seeing and
accepting challenges made to their core values about how a system functioned.

In short, the dominance of orthodox school or the mainstream approach (neo classical school)
makes it followers quite blind to the arguments and conceptions of other schools of economic
analysis.

How it work in heterodox economics

If there is a particular dominant –will occur the situation of paradigms of blindness.

Neo classical –believes that they are dominant, the main streams of economics and others are the
fringes.

They are become blind to see the other approaches especially the contrary approaches .

What is heterodox economics?

Heterodox Economics is a problematic term, which is continually debated (cf. Mearman, 2012[1]). It
can mean simply ‘non-orthodox’ but that definition is problematic in two ways. Principally, it begs
the further question of whether there is an identifiable orthodoxy, and if so, what that is. For some
economists, ‘orthodox’ remains associated with the neo-classical economics. Arnsperger and
Varoufakis (2006) defines that in terms of three methodological meta-axioms: individualism,
instrumentalism, and equilibriation. Lawson (2013) defines neo-classical economics in terms of an
adherence to a particular technical apparatus.

However. Others hold that equating neo-classical and mainstream economics is incorrect. First, the
term ‘neo-classical economics’ can mean a set of meta-theoretical principles or methods – as is the
case in this chapter; however, it can also refer to a specific historical period in economics. Second, to
equate neoclassical and mainstream ignores many recent developments in economic research
(Colander, Holt and Rosser, 2004). Unfortunately, despite CORE, many of these theoretical
developments still have not filtered into undergraduate teaching. As a result, ‘orthodox’ teaching
still largely reflects neo-classical economics. Hence, in this chapter, the term ‘orthodox’ refers to the
essentially neo-classical material present in the vast majority of undergraduate economics curricula.
The term ‘mainstream’ refers to research.

The second problem of defining heterodox economics as ‘non-orthodox’ is that it downplays both
the heritage and current potency of heterodox theories: they are both a) based in a tradition of
alternative theoretical systems, such as those constructed by Marx, Keynes, Veblen, Hayek and
Schumpeter and b) living traditions practiced in research and other communities, with findings
published in journals. Heterodox theories are considerably more than reactions to orthodox
theories. For the purpose of this chapter, heterodox means neither simply ‘non-orthodox’ nor ‘non-
neoclassical’. Nor is it defined merely in terms of new versus old, i.e. new economic research versus
old textbook theory. Rather, it constitutes a set of key characteristics found in the writings of
heterodox economists. A summary of these is presented in Figure 2.

Figure 2: A non-exhaustive series of heterodox principles

1. Methodology (rather than just method) is important to understanding economics.

2. Human actors are social and less than perfectly rational, driven by habits, routines, culture
and tradition.
3. While theories of the individual are useful, so are theories of aggregate or collective
outcomes. Further, neither the individual nor the aggregate can be understood in isolation
from the other. The micro/macro distinction may be invalid.
4. Economic systems are complex, evolving and unpredictable – and consequently equilibrium
models should be viewed skeptically.
5. History and time are important (reflecting (4)).
6. All economic theories are fallible and reflecting (4), there is contemporary relevance of the
history of thought to understanding economics.
7. Pluralism, i.e. multiple perspectives, is advocated (following on from (4) and (6).
8. Formal mathematical and statistical methods should not be presumed to be superior. Other
methods and data types are valuable.
9. Facts and values are inseparable.
10. Power is an important determinant of economic outcomes (cf. Ozanne, 2016).
Not every example of heterodox economics exemplifies every one of these characteristics. Austrian
economics, for example, is weak on principle 10. Whilst some economists treat heterodox as a single
body of theory (or try to create a single theory: Lavoie, 1992; Arestis, 1992; Shaikh, 2016), others
treat it as a collection of theories (Garnett, 2005). Some argue for a coherence of heterodoxy at a
methodological level or even in terms of the nature of reality as involving structures of deep casual
mechanisms (Lawson, 1997, 2003) or complex adaptive systems (Potts, 2000). Figure 2 includes
assumptions with epistemological and ontological standpoints that are widespread in heterodox
literature (and therefore tending towards a potentially unifiable body of theory). Given the scale of
these principles, students will only have very limited opportunities to understand the implications
within the context of a single module. A more thoroughgoing approach would require a review of
the experiences offered to students across a whole degree programme.

Method and History

Some points in Figure 2 merit further elaboration. Attention to methodology (1) and to the history of
economic thought (5) are hallmarks of a heterodox approach. However, heterodox economists have
argued that these two (arguably key) areas are neglected in standard treatments of economics.

As discussed below, the question of what a model is, how it is to be used, how it is to be evaluated,
etc. are crucial for anyone wanting to understand economics; are indeed, are useful question for
anyone required to think abstractly. Accordingly, abstraction is a central activity in economics: what
does it mean? How are we to think of ceteris paribus? In contrast to many standard treatments, a
heterodox module would spend longer discussing those methodological issues and would not set
them aside. Rather, they would be revisited repeatedly.

As Hodgson (2001) claims, ‘economics forgot history’. This could be true in two senses. It is too bold
to claim that orthodox economics ignores methodology and history. However, history of thought is
often confined to an optional specialist module. Even newer curricula, such as CORE, themselves
only give cursory attention to history of thought (Morgan, et al, 2014)[2]. And yet, it has been
recognized that understanding history is important (James, 2012). Thus, Hodgson could be correct in
a second sense too: economic models removed historical time from analysis. It is significant that the
new Skidelsky MOOC will be on the history and philosophy of economics.

Heterodox approaches tend to take history very seriously. Partly this is self-serving. By pointing to
the fact that neo-classical economics was not always the only game in town and by examining
critically how economics got to its current state, it creates space for heterodox economics.
Nonetheless heterodox economics is not merely history of thought. Rather, it rests on the belief that
theories cannot be understood outside their wider socio-historical context. The rise of the General
theory is a good example: it reflected past intellectual currents but also the background of economic
instability and high unemployment. The struggle between Monetarists and Keynesians is inexplicable
outside of its economic context of what was actually happening to inflation. Heterodox economics
precludes an historical approach to theorising and asserts that students should be introduced to this
way of thinking.
Heterodox pedagogy?

Not surprisingly, there is no single heterodox approach to teaching and learning. However,
heterodox economists have made several interventions in pedagogy; and identified several benefits
of teaching heterodox economics. It would be inaccurate to say mainstream economists have not
shown any concern for pedagogy. For example, Siegfried et al (1991) avow a Socratic approach
aimed at independent learning. Forsythe (2010) advocates problem-based learning. However,
orthodox pedagogy tends to be instrumental, i.e. directed at more effective learning of and/or
training students in conventional economics. For example, Coyle and Wren-Lewis (2015) assert that
economics is a vocational subject. In many cases, though, this instrumental orientation is often only
implicit: this partly reflects that there are few institutional incentives for engaging in deep reflection
about teaching.

Contributions from heterodox economics have more often been explicitly informed by other
pedagogical principles. Another element of that is to problematize education per se. Bowles and
Gintis (1976) analyse education in terms of its role within capitalism. Bridges and Hartmann (1975)
note the hierarchal nature of teaching but also stress the problems facing women teachers in
establishing their credibility in a masculinist system. They draw on feminist literature and on the
radical pedagogy of Freire (1970). A radical or critical pedagogy is student-centred, focusing on
emancipation of students via conscientisation, i.e. self-awareness of their own circumstances on
their own terms. From the same tradition, Rose (2005) discusses various methods by which they
encouraged the co-production of knowledge on their course, for instance via collaborative exercises,
a contract grading system, group projects, and simulations. She cites hooks (1994) as an influence.
Rose contrasts her approach with the ‘banking model’ of education, in which students are empty
vessels to be filled by instructors. Similarly, Kramer (2007) advocates participatory learning: in this
case, students were asked to construct an ideal US economy. Ford et al (2007), who also cite
Vygotsky and Dewey as influences, provide another example of a constructivist approach, in which
learning occurs through students’ constructing their own meanings, ‘scaffolded’ by their own
experience, rather than simply reproducing others’ meanings.

These are just some examples of how heterodox economists have explicitly engaged with
educational philosophy to design and evaluate their courses. Barone (1991) for example explicitly
recognizes the heretogeneity of students. Peterson and McGoldrick (2009) link service learning
methods to the achievement of their educational goals. Several authors utilize educational
psychology of Perry (1970) in their discussion: inter alia, Lapidus (2011), Earl (2000), and Barone
(2011). Another stand of this work is around liberal pedagogy, which envisages education as a
process of allowing students to develop into analytical, critical, autonomous thinkers. Several
authors argue that teaching heterodox economics has clear educational benefits (see Figure 3
below). Many of these overlap with claims for the benefits of pluralism.

[1] The diversity of understanding of heterodox economics even within the heterodox community is
demonstrated by these assorted brief portraits of it by leading exponents.

[2] It should be noted that, technically, CORE is just one module: nothing per se precludes teaching
history of thought alongside it.