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What is heterodox economics? Some clarifications

Summary:
Long ago I wrote on the meaning of heterodox economics. I suggested that it should be defined in its own terms, not as a reaction to the mainstream or orthodox approach, and as a unified set of propositions.[1] In other words, heterodox economics would be a set of principles that would be backed by a certain community. Of course, the sociology of that community would lead to some degree of debate and dissent within heterodoxy, as it is in fact the case within the mainstream. There is, one might add, significant confusion about the meaning of marginalist and neoclassical economics, and also there is no monolithic and consensual approach within the orthodoxy. The mainstream is somewhat fragmented, and there are more than a few neoclassical or marginalist schools. Some, like the Austrians,

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Long ago I wrote on the meaning of heterodox economics. I suggested that it should be defined in its own terms, not as a reaction to the mainstream or orthodox approach, and as a unified set of propositions.[1] In other words, heterodox economics would be a set of principles that would be backed by a certain community. Of course, the sociology of that community would lead to some degree of debate and dissent within heterodoxy, as it is in fact the case within the mainstream. There is, one might add, significant confusion about the meaning of marginalist and neoclassical economics, and also there is no monolithic and consensual approach within the orthodoxy. The mainstream is somewhat fragmented, and there are more than a few neoclassical or marginalist schools. Some, like the Austrians, tend to think of themselves as heterodox, and evident confusion.

My preoccupation when I first wrote about this topic had been related to the argument by Colander, Holt and Rosser that heterodox economics should be abandoned, or that the labels orthodox/heterodox themselves meant little or nothing. For them, the mainstream itself was moving on, and that the best within the mainstream, the cutting edge as they called them, were breaking away with traditional neoclassical views. In my reply to them, I suggested that the mainstream was doing fine, and that it was not being abandoned by the best and the brightest. I argued that the mainstream had for a while a dual strategy. It maintained certain principles that purported to show that markets produce efficient outcomes, even if a significant part of the profession does not believe it is true in practice, and then proceeded to discuss a series of imperfections that are better suited for the complexities of the real world.

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Matias Vernengo
Econ Prof at @BucknellU Co-editor of ROKE & Co-Editor in Chief of the New Palgrave Dictionary of Economics

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