Orthodox Economic Theory: A Defense

Abstract

T JO WRITE in defense of economic theory is distinctly embarrassing two reasons. First, I don't like the idea of orthodoxy; it implies dogma and eternal verities and other absolutes that I do not conceive are to be found in any field of knowledge, least of all in a social science. And, second, I have found it increasingly difficult to define exactly what it is that I am supposed to be defending. I am not even sure I am as well off as the man who said he could not define an elephant but he knew one when he saw one. Nor am I helped by the learned contributions to the subject. Palgrave's Dictionary dislikes the term orthodox and wants it abolished. The Encyclopaedia of Social Sciences lists ten schools or systems of economics eight of them since the classical school-but not one of them is denominated as orthodox. Mitchell in his review of Commons' Institutional Economics contrasts institutional economics with what for lack of a better term is called and perhaps this is the clue. At any rate, it may serve present purposes if I start with the proposition that there are three types of economic thinking, and only three, of any widespread importance in the United States today. These are: (i) economics, (2) institutional economics, and (3) Marxian economics. And if I have to define economics I might define it as that economics which is neither institutionalist nor Marxian. For positive definition one might say that economics is the analysis of economic behavior under existing institutions, whereas institutional economics is the study of economic institutions in evolution, hoping thereby to get some knowledge of where we are going; and Marxian economics is a dogmatic brand of institutional economics which claims to