Heterodox Approaches Research Articles

Zombies and IR: A Critical Reading

The zombie genre is quickly becoming a feature of International Relations (IR) classrooms and pedagogical toolkits as scholars enthusiastically embrace the undead as a vehicle for teaching the discipline. This article offers a cautionary note on a generally positive move to embrace the use of zombieism in IR. It shows how an uncritical use of a zombie apocalypse as a vehicle for teaching IR can reinforce existing divisions in the field, essentialise country positions, crowd out heterodox approaches, reinforce gender stereotypes and dehumanise people. To guard against these problems, the article shows how Zombie IR can be better used to think critically and normatively about world politics.

The Future of Economics in a Lakatos–Bourdieu Framework

:The global financial crisis has clearly been a matter of great consternation for the business-as-usual faction of mainstream economics. Will the World Financial Crisis turn out to be that experimentum crucis that triggered a scientific revolution? In this article, we seek to assess the likelihood of a paradigm shift toward heterodox approaches and a more pluralist setting in economics emerging from the academic establishment in the United States—that is, from the dominant center of knowledge production in the economic discipline. This will be done by building the analysis on a combined Lakatosian framework of “battle of research programs” and a Bourdieuian framework of “power struggle” within the academic field and highlighting the likelihood of two main proponents of the mainstream elite to become the promulgator of change.

Austrian Economics Today

The recent financial and economic crisis has raised doubts about mainstream economics which, according to many observers, were not able to predict this event and had considerable difficulties in providing convincing explanations and policy prescriptions to deal with its consequences. This has led to a revival of heterodox alternatives to neoclassical economic theories, including Post-Keynesian, institutionalist, and even Marxist alternatives to the accumulated wisdom of general equilibrium economics. Most of these heterodox approaches lead to policy recommendations more to the “left” of neoclassical ones, implying a more active role of government in regulation and stabilization policies. On the other hand, for a long time public choice theorists have pointed towards the danger of government failure under such “paternalistic” schemes of public policy design. In any case, now the door seems to be open for a re-evaluation of alternative approaches to economics and for recognizing the requirement of dealing with critiques of the neoclassical paradigm. Austrian Economics, or more precisely the Austrian School of Economics, is unique in providing a theoretical framework which, although distinctly different from Walrasian general equilibrium, rests on methodological individualism and the assumption of rationality of economic agents, two pillars of neoclassical economics, and leads to policy conclusions that are located to the “right” of the mainstream in pleading for unfettered markets, free trade and minimal government. Even if some of the Austrians’ propositions are deemed provocative and unrealistic by many economists, it is worthwhile examining this alternative framework which has a long and distinguished career hearkening back to the time of the neoclassical revolution in the 1870s (Menger 1871). A reconsideration of the Austrian contribution may provide insights which help explain economic phenomena of today and enrich the corpus of economic theory in various ways. The Austrian School of Economics was founded by Carl Menger, continued in the “second generation” by Eugen von Bohm-Bawerk and Friedrich von Wieser, in the “third generation” by Ludwig von Mises, and later by such eminent economists as Oskar Morgenstern and Nobel laureate Friedrich August von Hayek. While all these economists came from the Austrian part of the Habsburg monarchy and later from Atl Econ J (2014) 42:121–122 DOI 10.1007/s11293-014-9408-4

History of Economic Thought, Methodology, and Heterodox Approaches: Worldly Philosopher: The Odyssey of Albert O. Hirschman

Michael McPherson of The Spencer Foundation reviews, “Worldly Philosopher: The Odyssey of Albert O. Hirschman” by Jeremy Adelman. The Econlit abstract of this book begins: “Explores the life and economic work of Albert O. Hirschman. Discusses Hirschman's early life in the Weimar Republic; Hirschman's education and early relationship with politics; Hirschman's journey to Paris; Hirschman's move to the London School of Economics and involvement in the Spanish Civil War; Hirschman's return to France and the outbreak of World War II; Hirschman's emigration to the United States; Hirschman's involvement in the U.S. Army; the aftermath of World War II; the Cold War and Red Scare; Hirschman's years in Colombia; Hirschman's Yale University years and The Strategy of Economic Development; the RAND Corporation; travel and research; the upheaval of the late 1960s; crisis and hope in Latin America; Hirschman and the Institute for Advanced Study; Hirschman's relationship with the human body; Hirschman during the late 1970s and early 1980s; Hirschman's study of the ethics of social science; Hirschman's work in retirement; and Hirschman's final years. Adelman is Walter Samuel Carpenter III Professor of Spanish Civilization and Culture and Director of the Council for International Teaching and Research at Princeton University.”

Book review: Alternatives to Neoliberal Globalisation: Studies in the Political Economy of Institutions and Late Development, by Dic Lo

Alternatives to Neoliberal Globalisation: Studies in the Political Economy of Institutions and Late Development, Palgrave: London, 2012; 197 pp: 9780230347182, 60 [pounds sterling] (hbk) Globalisation and development are vital issues that affect lives of millions of people, and they have always been among the primary problems that have demonstrated the bankruptcy of mainstream perspectives in the social sciences, and the power of critical and radical political economy. Alternatives to Neoliberal Globalisation, by Dic Lo, is a welcome contribution to this field. In the first half of the book, Lo provides a solid critique of a number of mainstream economic perspectives on global development ('new institutional economics', 'new political economy', etc.) as well as an assessment of some heterodox approaches ('new international division of labour', the variety of dependency theory, regulation theory, etc.). Lo's intention is to reconcile technological and institutional dimensions of development. Building on the regulation approach to dynamics of capitalist development and the Schumpeterian approach that considers the technological underpinning of long-term change, he develops a techno-economic paradigm. It is the main notion of this book, and is defined as a combination of 'a generic technology that affects a major part of the economy' with 'the particular form of industrial (intra- and interfirm) organisation plus the demand regime that matches the comparative efficiency attributes of particular organisational form' (p. 67). Developing the taxonomy of what he describes as three main theoretical paradigms of explanation of the market system (Walrasian, neo-Hobbesian and Marxian), as well as Marxian and Smithian notions of the division of labour, he provides a description of three stylised techno-economic paradigms. These are Paradigm I (based on the social division of labour, markets and steady-state growth path), Paradigm II (based on the detailed division of labour, hierarchies and transitory multiple growth path), and Paradigm III (based on the social division of labour, networks and non-converging multiple growth paths). These distinctions and the very notion of techno-economic paradigms sound quite abstract, but fortunately, the second half of the book provides some clarifications for these notions and taxonomies. This consists of applications of the theory developed, and a discussion of conceptual perspectives on selected important developments in the global economy. The chapter on East Asia provides a balanced synthesis of theoretical explanations for the rise and decline of the 'East Asian miracle' with Lo's own discussion of a region-wide regime of accumulation and its mediated relation to the dynamics of the world market. The chapter on post-Soviet transition is again centred on economic theories, and is based on the apparent contradiction of 'Big Bang' and 'gradualist' theoretical and policy approaches to economic reforms. Lo shows that both of these approaches 'place emphasis on market formation, the creation of private ownership, and the total integration of transition economies in the world market', and thus have 'serious conceptual flaws in explaining the nexus of transition and development' (p. 141). While this is certainly true, the absence of any real-world assessments of post-Soviet capitalist transition make this chapter absolutely outdated, since it remains stuck in the conceptual debates of the early 1990s. Two chapters in particular have a special relevance, perhaps, for readers of Capital & Class, because of their topics. In Chapter 6, Lo discusses the economic performance of Chinese development in the post-Maoist era and its contradictions with neoliberal prescriptions. The most interesting aspect of this chapter is its confrontation with the standard left-wing critiques of economic and developmental policies of the Peoples' Republic of China, which relate growth performance to the super-exploitation of Chinese labour and export dependence on the world market (for example, see Harvey 2005; Li 2009). …

Electronic Resources and Heterodox Economics

The idea of measuring scientific relevance by counting citations is gaining influence among economists, and thanks to the electronic bibliographic resources now available the procedure has become relatively simple and fast. However, when it comes to putting the idea into practice many problems emerge. This paper uses four of the principal bibliographic electronic resources (EconLit, JSTOR, Web of Science and Scopus) to test the practical applicability of this method to the case of the five theoretical schools classified as ‘Current Heterodox Approaches’ in JEL code B5.

Early marginalist ideas on money: some neglected exceptions to the quantity theory

The quantity theory of money (QTM) is an important building block of neoclassical economics. This has led scholars to believe that all monetary accounts proposed by marginalist economists are inherently based on the QTM. However, within the bimetallic controversy of the last quarter of the 19th century, there were some neoclassical proposals which departed from the framework of the QTM. In this article, I analyse three of these accounts: Alfred Marshall's symmetallism, Irving Fisher's compensated dollar plan, and Knut Wicksell's inconvertible paper standard. These monetary arrangements—especially the first two of them—have rarely been studied in the literature. Still, their relevance should not be neglected in current times in which the economics profession—both orthodox and heterodox approaches—has moved towards an endogenous money view. The proposals studied also show that the neutrality of money does not necessarily imply the QTM, as it is often suggested.

Connecting social provisioning and functional finance in a post-Keynesian–Institutional analysis of the public sector

This paper establishes connections between the frameworks of social provisioning and functional finance, and discusses a post-Keynesian–Institutionalist theory of the public sector that emerges out of these linkages. The concept of social provisioning has emerged out of Institutional economics, and has been further developed by institutional and other heterodox economists. Its potential as a methodological foundation that connects various heterodox approaches has received some growing attention. Such discussions have not referred in an analytical manner to functional finance. On the other hand, the principles of functional finance have been elaborated and developed outside an explicit grounding in a social provisioning framework. The article specifies further the concept of social provisioning and discusses functional finance within such a framework. The framework of functional finance gains a structural and institutional grounding which enables a deeper and more critical conceptualization of the public sector.

Connecting Social Provisioning and Functional Finance in a Post-Keynesian Institutional Analysis of the Public Sector

This paper establishes connections between the frameworks of social provisioning and functional finance, and discusses a post-Keynesian – Institutionalist theory of the public sector that emerges out of these linkages. The concept of social provisioning has emerged out of Institutional economics, and has been further developed by institutional and other heterodox economists. Its potential as a methodological foundation that connects various heterodox approaches has received some growing attention. Such discussions have not referred in an analytical manner to functional finance. On the other hand, the principles of functional finance have been elaborated and developed outside an explicit grounding in a social provisioning framework. The article specifies further the concept of social provisioning and discusses functional finance within such a framework. The framework of functional finance gains a structural and institutional grounding which enables a deeper and more critical conceptualization of the public sector.

Teaching popular economics to less‐educated adults: principles and examples for teaching heterodox and critical economics

PurposeThis paper aims to describe how to teach economics to adult learners, many of whom are women, immigrants and do not hold college degrees, but who feel the effects of mainstream economics — and the brunt of economic policies and the ensuing lack of services that are provided — in their everyday lives.Design/methodology/approachThe article reviews popular education pedagogy and discusses and illustrates these in teaching lay audiences economics. Because they are lower‐educated adult learners, different pedagogy and curriculum are needed, which involve participatory methods that clearly illustrate how different economic policies affect different economic players and how these have and can affect their lives. Many examples of these principles are discussed. Discussing alternative policies is key, and these are also illustrated. Because they discuss alternative policies, this pedagogy naturally encompasses heterodox approaches, which is also illustrated. Impediments to teaching popular economics and how this differs from traditional classroom teaching are also discussed.FindingsWhen taught in the manner described, adult learners, even those with low levels of education, can learn about any economic issue or concept, including the intricacies of tax policy, the international economy, the recent financial crisis, and complex financial derivatives. With their new knowledge, participants feel empowered to take action in their communities and advocate for economic change.Originality/valueThis paper reflects on popular education pedagogy in applying and discussing issues and problems in teaching lay learners. The paper draws on the author's 20 years of experience in teaching economics to lay learners.

Brands of Economics and the Trojan Horse of Pluralism

This paper examines the current status and prospects of heterodox approaches to economics in relation to the problem of marketing ideas to groups of potential users who see the world in very different ways. It draws lessons from the changing status of behavioural economics and highlights the marketing problems that arise between heterodox economists whose perspectives overlap only partially. Its principal message is that the best hope for heterodox economics may lie in taking a less openly combative approach than hitherto when trying to win over mainstream economists and instead using strategies of stealth based on the empirical advantages of pluralistic applied research methods.

Experience and pluralist pedagogy: service learning as a means and an end

Economics teaching relies overwhelmingly on faculty lecturing, which is generally seen as a significant pedagogical problem. But this paper argues that didactic instruction is actually well-suited to the neoclassical economics that is usually taught. This approach – especially its textbook version – is typically sceptical of individual perception and inductive reasoning, relying instead on parsimonious models and deduction. Experiential learning has very limited usefulness in learning such theories. In contrast, heterodox approaches in economics typically employ both inductive and deductive reasoning. Since induction is integral to experiential learning, a pluralist curriculum offers important pedagogical advantages. Service learning exposes students to economic phenomena in their communities and challenges them to learn from that experience. This can call the instrumentalism of the textbook neoclassical approach into question and open up the classroom discussion to alternative approaches.

From Heterodoxy to Orthodoxy and Vice Versa: Economics and Social Sciences in the Division of Academic Work

The term “heterodox economics” has been in existence for several decades. Recent revival of heterodox economics can be regarded as a growing criticism of economists within the own profession of economics. Modern economics is designed as a one-world-capitalism without history and without regional specifications, without institutions, and without real human agents. Heterodox approaches have the aim to underline that different institutions matter, including religion, language, family structures and networks, systems of education, and industrial relations. Taking the discussion within a broader framework of the history of science acknowledges divergencies and convergencies between different approaches in economics that are also in permanent decomposition. The discussion comes up with the interpretation that recent academic developments provide chances for new modes of intellectual reintegration of formerly disparate areas.

The CAPITAL in Social Capital: An Austrian Perspective

Introduction Given the boom of literature on in recent decades, it almost seems as if was the solution to almost any problem imaginable. But as it has been said in a similar context, [t]his almost perfect generality should sound an alert (Liebowitz and Margolis 1994: 134), if a concept starts to explain too much, it might not really explain anything. Indeed, blurred or fuzzy are some of the adjectives often associated with the concept of (Ostrom and Ahn 2003). Its methodological and conceptual ambiguity became one of the main sources of criticism among sociologists (Sobel 2002). However, even perhaps its most widely quoted critics admit that there is something about capital, once the content of this term becomes clearer, that gives it the potential to be a very useful tool even in economic analysis (Arrow 1999; Solow 1999). Our current situation seems to be very similar to that of 1950s and 1960s, when human was starting to make its way into economics and had to face similar objections (Schultz 1961). Furthermore, as noted by Theodore W. Schultz, one of the pioneers of human capital, without taking human into account public policies tend to be suboptimal, or in his words far from the mark (Schultz 1961: 7). Similarly, today's discussions about the nature of have similar importance not only for academia, but also for policymakers. Nathan Glazer, one of the co-authors of American policy in the second half of the 20th century, among others, claimed that the breakdown of traditional ways of handling ... located in the family primarily, but also in the ethnic group, the neighborhood, the church (Glazer 1988: 3), meaning in the structures that are usually associated with the existence of capital. That is one of the main reasons for active state policy. But the active role of the state to the disappointment of many seemed to be creating as many problems as we were solving (1988: 2) and efforts to deal with are themselves increasing distress (1988: 3; see also Murray 1984). Important attempts to introduce into economics have already been made. Most famously, Gary S. Becker (1996) used the term social capital to provide an explanation of relations, mainly within a family. Some more recent contributions include works by Peter T. Leeson (2005, 2007) and Carilli et al. (2008), who provide original insights mainly regarding various public policies, but do not deal with in depth. They rather accept ready-made definitions from sociology with all their lack of clarity, so they put their conclusions at risk because of this ambiguity. The problem of simply transferring concepts from sociology to economics is related to the different methodological foundations of the two disciplines. While most sociologists have no problem with approaching from the perspective of methodological collectivism, leading to what became known as the oversocialized view of sociology (Granovetter 1985), for most economists this approach is unacceptable. This article argues that the concept of has been present in economics for quite some time, though not under its current label, and that it was mainly the overly simplified Homo oeconomicus view of neoclassical economics that led to undersocialization of the discipline (Granovetter 1985) by pushing the individuals' environment into the background. This article looks at the often neglected works of the so-called Austrian school of economics thatflourished in the first half of the 20th century, and is apparently still gaining more importance in economics recently, together with other heterodox approaches. (1) It is interesting to note that this tradition achieved its greatest recognition for its theory and monetary theory of business cycles. …

Una perspectiva heterodoxa sugerida para el estudio de las empresas familiares en colombia

This paper identifies some orthodox trends in national research on this subject and a set of heterodox approaches used by Anglo-Saxon researchers based on the review of secondary sources such as books, articles, and graduation projects for the purpose of encouraging a reflection and an assessment. The results of this review allowed determining that orthodox theories have had a significant dissemination among Colombian researchers and students. Heterodox approaches, on the contrary, are less well-known and less frequently used. It proposes conducting an in-depth review of this set of recent theories and constructs and evaluating their applicability to achieve an understanding of the idiosyncrasy of family-owned businesses in Colombia as an alternative current of national research.

Geographies of circulation and exchange: constructions of markets

Although markets are at centre stage in capitalist processes of circulation and exchange, they have rarely been made an object of study. In this paper we distinguish three heterodox approaches. (1) Socioeconomics points out that concrete markets cannot be separated from their social context. Markets are dissolved in social networks and socialized. (2) Political economy investigates how the market model is confused for real markets by market participants. The market is represented as a destructive force. (3) Cultural economists point to the practical self-realization of economic knowledge and argue that the abstract market model is performative.

Valor ambiental em uma perspectiva heterodoxa institucional-ecológica: an institutional-ecological heterodox perspective

O presente trabalho discute a perspectiva de valoração ambiental a partir de fundamentos heterodoxos, numa abordagem aqui denominada institucional-ecológica. Inicia-se pela identificação das principais limitações da abordagem neoclássica e suas correspondentes proposições de valoração, particularmente tendo-se em vista o desafio posto pelo critério de Desenvolvimento Sustentável. Em seguida, busca resgatar princípios propositivos de abordagens heterodoxas, particularmente nas formulações do campo teórico institucionalista e do campo teórico da economia ecológica, como elementos de potencial integração analítica para a constituição de uma conceituação heterodoxa de valores ambientais. Por fim, o trabalho propõe, a partir de uma discussão sobre o processo de formação e internalização dos valores ambientais e desse potencial de integração analítica, bases de constituição de uma abordagem institucional-ecológica para interpretação da valoração ambiental e, dentro dessa perspectiva, discute ao final qual o escopo de aplicação dos métodos de valoração correntemente utilizados pela Economia Ambiental Neoclássica.

Uncertainty, Rationality and the Study of Social Institutions

The insight that both ontological and epistemological perspectives are intertwined is certainly correct, but at the same time insufficient to differentiate mainstream from heterodox approaches to economic institutions. As this paper argues, it is important whether one starts from ontological or epistemological considerations first. The paper suggests that the difference can be described in terms of function versus rules and demonstrates that an intersubjective ontology for institutions requires also an intersubjective epistemology. Otherwise, ontological precepts contradict the epistemological ones with important repercussions for understanding knowledge, rationality and institutions.

Monetary Policy Challenges in Emerging Markets: Sudden Stop, Liability Dollarization, and Lender of Last Resort

The paper argues that Emerging Market economies (EMs) face financial vulnerabilities that weaken the effectiveness of a domestic Lender of Last Resort (LOLR). As a result, monetary policy is inextricably linked to the state of the credit market. In particular, the central bank should be ready to operate as LOLR during Sudden Stop (of capital inflows) by releasing international reserves in an effective manner. These conditions also impact on optimal monetary policy in normal but high-volatility periods. The paper further argues that during those periods interest rate rules may engender excessive volatility of exchange rates and, thus, that it may be advisable to temporarily supplement those rules by foreign exchange market intervention or outright exchange rate pegging. At a fundamental level, the analysis suggests that the state-of-the-art literature summarized by Woodford (2003) or even more heterodox approaches exemplified by Stiglitz and Greenwald (2003) are likely fall short of providing a satisfactory guide for monetary policy in EMs.

Contrasting perspectives on globalization and labour in South Africa

The academic analysis of the labour market impacts of globalization has been dominated by neoclassical approaches both in the extensive work on developed countries and the more limited, but growing literature on developing countries. However, in many developing countries the positive impacts predicted for workers in (unskilled) labour-abundant economies have not been observed. This suggests that heterodox approaches may have an important contribution to make in analysing labour market outcomes. The paper contrasts the neoclassical and heterodox interpretations, reviews previous empirical studies of South Africa, and presents new data and analysis of the South African manufacturing sector.