ending the monopoly of neoclassical economics

Real World Economics Review | Climate change is perhaps the most threatening aspect of the ecological crisis but not the only one. Reduced biological diversity, reduced water availability and deteriorating water quality in some regions exemplify other relevant dimensions. On the financial side, the ‘market mechanism’ has been unable to come up to expectations.

How can these problems be understood? Many factors have certainly contributed but in my judgment neoclassical economics as disciplinary paradigm and neo-liberalism as ideology are among the most important. If actors in society have failed, this can largely be attributed to the mental maps they have used for guidance and these mental maps are largely connected with dominant ideas about economics (as conceptual framework and ideology) and neo-liberalism as a dominant ideology in many circles. Thousands of students, now in professional positions, have learnt neoclassical micro- and macroeconomics over the years and have supported each other and been supported by their professors to further strengthen the neoclassical perspective.

Studying neoclassical economics would have been less of a problem if also alternative theoretical perspectives had been taught at university departments of economics. But the strategy has instead been to strengthen the neoclassical monopoly. It is up to the reader to judge whether neoclassical economics by itself and in combination with neo-liberalism explains some parts of the ecological and financial crisis that we now experience. Since neoclassical economics emphasizes the monetary dimension, one might expect that at least monetary issues are well considered in the paradigm but these days we even doubt if this is the case. Something may be missing in terms of interdisciplinary openings, including social psychology and also ethical considerations.

In any case, neoclassical economists in leading positions should be held responsible and accountable for limiting research and education to one paradigm. As I have argued previously, each paradigm is specific not only in scientific terms (with respect to conceptual framework and theory) but also in ideological terms. Limiting education in economics to one paradigm means that university departments of economics are degraded to political propaganda centres.