Heterodox Economics Research Articles

'We need to offer something better to the scholars of the future.' Which way forward for heterodox economics?

After the global financial crisis, hopes were high that there would be a pluralisation of the economics discipline and a boost for heterodox economics that challenged dominant economic models. However, mainstream economics once again proved its enormous resilience and the future of alternatives to this mainstream is anything but certain. Geoffrey Hodgson's new book on this issue has sparked fresh discussions about the stunted development of heterodox economics and proposals for possible ways forward. This article will argue that the crucial factor for the future of heterodox economics is not converging on a single unified paradigm or raising the quality of research, but rather gaining access to different kinds of capital, first and foremost professorial positions at universities. Such access is severely restricted under present conditions as a result of epistemological and ontological discrimination. Heterodox economics can only flourish if the epistemic community of economists embraces paradigmatic pluralism as part of their academic culture, or if regulations are put in place to secure access to such capital and so to academic freedom.

Heterodoxy Needs Institutional Backing

A general aversion to new ideas, psychological factors, and foremost, institutional conditions shape the challenging position of heterodox economics. This institutional framework is coined by a strong orientation towards publication metrics and influences young scholars to conformity. We propose two ideas to improve the conditions for heterodox research. First, to introduce competition between journals for the scientific papers they want to have the most. Second, to establish a qualified random selection of papers to equalize the chances of publishing.

The Hybrid Vigor of Heterodox Economics: A Feminist Perspective

This case study in the evolution of heterodox economics describes the emergence of feminist perspectives on care provision and their implications for a larger theory of bargaining over the distribution of gains from cooperation. It testifies to the hybrid vigor of diverse and ongoing efforts to challenge the narrow focus of the neoclassical paradigm.

Economics for an uncertain world

Uncertainty, where we do not know the likelihood of future events, dominates our world. This article examines how economics as a profession and discipline can address uncertainty. From Frank Knight to John Maynard Keynes to Friedrich von Hayek to George Shackle, economics has highlighted the importance of uncertain knowledge and distinguished this from calculable risk. In this article we show how such insights were lost through the rise of narrow neoclassical thinking and were excluded through the emergence of a dominant economics of control that rose to prominence during the twentieth century and especially in the neoliberal era. However, through a range of perspectives in economics that emphasise the importance of complexity, informality, positionality and narratives, uncertainty is once again being embraced within an increasingly heterodox economics. In many ways, this chimes with the work of Albert Hirschman who, starting from the mid-1960s, emphasised the importance of addressing uncertainty in development theory and practice. Through two examples on pastoral development and global financial governance, we highlight the continued relevance of Hirschman’s thinking on the importance of adaptation, flexibility and learning-by-doing as responses to uncertainty and for the development of reliable, robust approaches to development policy and practice. In conclusion, we argue that economics theory, methodologies, professional practice and training need to change, recovering some of the insights from previous generations of economic thinkers and practitioners, in order to reinvent an economics appropriate for our uncertain world.

What is Heterodox Economics? Insights from Interviews with Leading Thinkers

This article investigates heterodox economics, drawing on data from interviews we conducted with leading economists, using thematic analysis to identify three core concerns of our respondents: realism, power, and pluralism. Heterodox economists appear to value realism (as a philosophical position) and realisticness (as a property of theories and models). They share a concern for power in the world and in the economics profession and recognize the need to get it, for their own agency. They value pluralism of theory and method and insist that this must include heterodox approaches. Moreover, power and pluralism to some extent serve their pursuit of realisticness and truth.

Academic Snobbery and the Prospects for Heterodox Economics

How healthy is heterodox economics? As contributions to an answer, this article provides bibliometric evidence about its current status in universities of varying ranks. It also offers Veblenian insights into publishing by professors. On these bases, it suggests plausible ways for heterodox economics to improve upon its standing, based on its topical and ethical advantages.

Heterodox modeling: practicing well-tuned provisioning or commoning with networked multi-agent environments

Market-driven, profit-oriented, mainstream neoclassical economics is increasingly being challenged by alternative approaches such as heterodox economics. This article contributes to broader discussions in this field, especially of social provisioning, and suggests that integrating perspectives from the overlapping fields of media history and history of economy could not only provide valuable insights and attract more supporters, but even initiate a bottom-up transformation process. Historical knowledge regarding how neoclassical economics gained mainstream status in the early postwar decades provides hints on how to popularize non-profit-driven, well-designed approaches to social provisioning, often referred to as commoning. More specifically, the article firstly addresses the necessity of a large-scale appropriation of computational methods, procedures, tools, media, and models to experiment with economic issues, which are usually applied mostly by mainstream profit-driven approaches. Secondly, it presents the implications of such a practice, which I tentatively refer to as heterodox modeling, while remembering the 1960s North American context of business simulation games and their role within the large-scale effort to educate and train the newly-defined class of “business managers.” The article, thirdly, theorizes heterodox modeling as being based on a still imaginary, not-yet implemented, networked multi-agent online environment, which would integrate the modular programming of agent-based models, group exercises, role-playing, gaming, and testing of operations and processes within large-scale socio-ecological networks of commoning. Finally, the article argues not only to model heterodox economic theories, but at the same time to model in heterodox ways and highlight associated implications.

Envisioning post-capitalist utopias via simulation: Theory, critique and models

We discuss the role of heterodox economics in opening new perspectives, the question of scalability of socio-economic order, the heritage of the “socialist calculation debate” and its ongoing relevance for discussions on “post-capitalism” today and finally the potentials of computational simulation and agent-based modelling for the exploration of alternative socio-economic approaches. The contributions to our special issue address these aspects and topics in different ways and therefore underline the fruitfulness of these discussions, especially in regard to the development of more just and sustainable socio-economic structures. Faced with the contemporary polycrisis, we can no longer afford “capitalist realism”.

Victoria Chick (1936-2023): an eminent post-Keynesian scholar – some retrospective remarks

For most heterodox economists Victoria Chick stands out as one of the most respected and knowledgeable Post-Keynesian scholars. As such, she has for decades been writing on the economics and methodology of Keynes, on trying to take inspiration from him when analysing important macroeconomic problems of modern times and on the importance of adopting an open system approach when analysing such matters. In this short article, the focus is primarily on Victoria Chick´s work on economic methodology. She argued that methodology should be taken seriously - You cannot simple just do economics. You must consider how to do economics.
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Mainstream economics’ war with the environment: counter-critiques from heterodox economics and Islamic economics

PurposeThis study aims to present the perspectives of heterodox economics and Islamic economics on environmental economics, as an alternative to mainstream economics, which takes economic growth as its main objective and argues that environmental problems will largely disappear when economic growth is achieved.Design/methodology/approachIn this study, there was no intention to conduct a detailed analysis of heterodox economic models and Islamic economics. Instead, the approaches to the “environment,” which can be considered as an urgent need of the planet, were evaluated, and the inadequate proposals of the mainstream economics’ environmental approach were theoretically criticized and heterodox economics and Islamic economics were proposed as an alternative model.FindingsHeterodox and Islamic economics offer alternative models of development prioritizing social and ecological justice to address environmental problems, which is in contrast to mainstream economics’ narrow focus on market mechanisms and individual rationality. Thus, engaging in more dialogue in the context of the environment is inevitable for both schools, considering the vast geography inhabited by Muslims and the proposed heterodox economic policies, and moreover, these approaches are modeled for the first time.Originality/valueThis article presents a synthesis of Islamic economics and heterodox thinking in contrast to mainstream economic policy, highlighting their similarities and differences and providing a more comprehensive understanding of the complexities and potential solutions of environmental problems. To the best of the authors’ knowledge, this approach has not been previously explored, making it an original contribution to the literature.

Human dignity in organisations: the cooperative ideal

Abstract This paper critically evaluates the liberal-humanist critique of neoclassical microeconomics and shareholder-driven corporate governance to articulate a more realistic cooperativist–humanist organisational philosophy of practice. Through an engagement with pluralist heterodox economics, it attempts to reconcile with contemporary concerns and philosophical developments around social ecology and care ethics. Our specific contribution is to develop a microfoundational complement to the macro-relational analysis of leading radical philosophical and political-economic thinkers on the Latin American left. In particular, the worker-inclusive multistakeholder cooperative (MSC) form is arrived at as the ideal firm-level organisation through which to promote diverse human (and non-human) dignity, understood through the lens of an affective-relational ethics of care.

The economics of the wellbeing economy: Understanding heterodox economics for health-in-all-policies and co-benefits.

The "wellbeing economy" represents a significant departure from the orthodox, neoclassical economic model of rational, utility-maximising individuals embedded in a growth economy. Emerging approaches to the wellbeing economy draw heavily upon insights from a range of heterodox schools of economic thought; these schools differ in many respects, but all share the central common insight that the economy is best conceived as a social provisioning system for humanity's needs. This narrative review introduces and summarises key dimensions of a number of these heterodox economic approaches, all of which have had or are likely to have significant implications for wellbeing economics. Their relationship with wellbeing and their resulting approaches to public policy and the Health-in-All Policies (HiAP) approach is described and explored. The schools of heterodox economic thought which have had the most impact on the development of approaches to the "wellbeing economy" include ecological economics (including both post-growth and degrowth economics), feminist economics, and modern monetary theory. Recent developments in the economics of inequality and institutional economics have also been of significance. Yet HiAP approaches represent an attempt to incorporate consideration of health consequences within public policy processes inside the neoclassical economics paradigm, reflecting the reality that social and economic forces are typically the most important determinants of health. WHO's new Health For All approach draws much more directly on the heterodox economics that underpins wellbeing economy thinking. Wellbeing economics offers many attractive features for HiAP-but may not achieve its full potential within conventional economic policy paradigms. Calls to replace cost-benefit analysis with "co-benefit" analysis are attractive, but face strong practical obstacles. Meanwhile, strong countervailing forces and interests might still thwart achieving the broader goals of wellbeing economics. SO WHAT?: Operationalising "wellbeing economy" thinking requires a clear understanding of heterodox economics, and how they can be incorporated into more formal economic analysis. It remains to be seen if HiAP is the right tool by which to implement the new Health For All approach.

Taking the spatialization of heterodox economics to the next level. States, cities and money

In this note, I argue that the search for a better articulation between financial geography and heterodox economics can benefit from an explicit focus on the relations between states, cities and money. After illustrating some important insights derived from the cross-fertilization between financial geography and monetary heterodox economics, I discuss how the specific inclusion of cities in midlevel theories, which articulate broader economic and geographical thinking on money and space with empirical work on urban restructuring, allows this research agenda to both gain conceptual strength and potential political impact.

Post-Keynesian essays from down under: Theory and policy in an historical context

Abstract‘Post-Keynesian’ became an umbrella term for those heterodox economists wanting to move away from the dominant neo-classical paradigm but not comfortable with another umbrella term of ‘political economy’. This review is about the contributions to understanding societal and economic change from an established and internationally recognised group of post-Keynesian economists. Many of the features which differentiate them from other, and sometimes fluid, subsets of post-Keynesian economists derive from their Kaleckian inspiration.

Comportamiento cooperativo y motivación en las organizaciones reales. Los argumentos de Barnard y Simón

The approaches of Chester Barnard (1938) and Herbert Simon (1991) have been fundamental in the understanding of organizations and for the theory of the firm from heterodox economics. His proposals are based on keeping in mind facts intrinsic to the nature and subsistence of the human being and his own work experience in different organizations. These seminal works are recapitulated here, with the aim of contributing to the dimensioning: the reason and the effects of visualizing the organization as a cooperative behavior coordination system and, motivation as a critical element for it the achieve the willingness to contribute. of those who participate in it and with it. From this perspective, the survival and long life of organizations is feasible because it helps them achieve their goals and adapt more easily to changes in the environment. The motivation for cooperative behavior is located at the center and goes beyond system of material incentives. They are essential: non-material incentives; the adequacy of the authority mechanism and the success of its communication system (formal lines of authority and communication). Factors in which failures are still common. Particularly because it has not been fully understood, the way in which, in an integrated and continuous way, they affect the organization and its results.

The good, the bad or the ugly: financialization through heterodox and mainstream lenses

Since the late 1970s, heterodox economists have paid increasing attention to the phenomenon of financialization. However, the process, identified with the growing role of finance in the economy, as well as with its impact on the social, cultural and environmental aspects of society, was rather neglected in the mainstream economics. Despite its growing importance in the subsequent years – mainly due to the global financial crisis 2007–2009 – financialization still eludes unambiguous interpretation. The aim of the article is to identify and explain the differences in the perception of financialization between heterodox and mainstream economics. We add to the existing literature by making a clear distinction between the ways in which heterodox and mainstream economists understand and interpret financialization. We find that the main source of the different approaches to financialization are oversimplifications in the understanding and modelling of monetary and financial spheres in the mainstream analyses.

Expanding the possible: exploring the role for heterodox economics in integrated climate-economy modeling

This paper explores the degree to which heterodox economics can contribute to the development and use of climate-economy integrated assessment models. To do so, it introduces the field of integrated assessment modeling, with a focus on the core economic methodology used by various types of models. It then summarizes some of the literature critiquing these models and how they inform policy. The paper then provides an extended classification of ways in which heterodox economics could be applied to climate-economy models and presents a number of storylines, or pathways, which could be created using insights and methods from heterodox schools. The paper concludes with an assessment of the scope for heterodox economics to answer the criticisms of climate-economy models, finding that despite not resolving all issues, the heterodoxy has a substantial role to play.

Post-Keynesian Economics: New Foundations by Marc LavoieChapter 2: Theory of Choice

ABSTRACT This work presents and discusses chapter two of Marc Lavoie’s book Post-Keynesian Economics: New Foundations. It begins by analysing the concepts of uncertainty and rationality which are extremely important for the post Keynesian approach, and for economic theorizing in general. The notions of fundamental uncertainty and the closely related concept of procedural rationality, are employed in order to build the foundations of a theory of household choice. It proceeds by investigating the repercussions of the theory in a lexicographic/hierarchical analytical framework. In this framework, groups consume different goods depending on their respective needs, income effects are more important than substitution effects, and price competition has a secondary role. It is also shown that Lavoie’s approach does not only draw from the work of Keynes and other major post-Keynesian theorists, but also utilizes contributions from other strands of heterodox economics, thus providing an agenda for a possible theoretical synthesis.

POST-KEYNESIAN INSTITUTIONALISM: CONTOURS AND FRONTIERS

Post-Keynesian institutionalism (PKI)—a branch of the (original) institutionalist school that builds on common ground with post-Keynesianism—constitutes a robust tradition with secure foundations and broad methodological, analytical, and policy contours. Since its emergence in the 1980s, that tradition has consistently been ahead of the economic mainstream in shedding light on real-world problems. Drawing on the work of various heterodox economists—including John Kenneth Galbraith, Joan Robinson, Alfred Eichner, and Hyman Minsky—this article sketches the contours of today’s PKI, including its attention to institutional characteristics of labor and product markets, features of industrial organization, interrelations of finance and macroeconomics, and long-term trends in capitalist development. The article also discusses how PKI relates to the post-Keynesian economics of Fernando Cardim de Carvalho and surveys the frontiers of PKI. The discussion of frontiers and the article’s brief conclusion underscore post-Keynesian institutionalists’ commitment to an ever-evolving body of theory and policy research.

Economic integration in the face of new challenges for the European economy

Recent events in the world economy, such as the pandemic and the war in Ukraine, have special implications for the countries that are part of the most advanced integration group in the world – the European Union (EU). In order to face new challenges, the EU must constantly evolve, because leaving the structure unchanged could mean stagnation and collapse. The paper aims to assess the functioning of the European Union in the conditions of the new ‘post-pandemic’ reality and the consequences of the war in Ukraine, and to review the prospects for further integration. The paper uses a diagnostic approach that involves establishing the actual state of affairs, assessing it, and considering the possibility of its improvement. As a result of the considerations undertaken, it can be assumed that the stability (and even the survival) of the EU seem to be favoured more by integration initiatives referring to the neo-functional theory and federal approach rather than the confederal approach. It is justified to increase the role of the political spill-over effect and the assumptions of heterodox economics. Historical experience leads to the conclusion that failure to take appropriate initiatives may trigger the disintegration mechanism and, consequently, the collapse of the European integration project.