1. Schools of economic thought Flashcards
What is the orthodox mainstream view of economics based on?
The work of neoclassical economists
What are alternatives to orthodoxy often known as?
Heterodox economics
How did the orthodox school develop?
A linear progression from classical to neoclassical to mainstream
What is theoretical monism?
Later schools of thought replacing earlier ones. A unified framework with methodological consistency whcih is reductionist regarding complex ideas into basic
What is the heterodox view of
What is the heterodox view of the progression of economic thought?
That schools of thought can coexist
What is the heterodox perspective known as with regards to the progression of economic thought?
Theoretical pluralism
What are the two main schools that emerged from classical economics?
- Marxian economics
- Neocassical economics
List the main heterodox schools of thought
Institutional economics
Neo-Ricardian economics
Radical economics
Post-Keynesian economics
Austrian economics
What was the prime interest of classical economics
prime focus was of interest is economic growth and development
what did development depend on in the classical economic model
development depends on investment by profit recipients, surplus generates growth through investment
what do profits depend on in classical economics
the factor distribution of income between profit rent and wages
what ensures regular profits and investment in classical economics
a permanent surplus is present [implying market power], ensuring regular profits and investment
Who are some of the key classical economists?
Smith, Ricardo, Mill
What are some of the fundamental ideas of neoclassical economics?
Based on rational choice, market learning, utility functions and is individualistic
What is the main concern of neoclassical economics?
Main concern is with resource allocation rather than economic growth or development
How does neoclassical economics compare to other schools?
Theory begins with rational economic agents, not economics classes and relates agents to each other through market clearing equilibria. The stress is on micro rather than macro issues and it claims to have universal relevance
How is mainstream economics charachterised?
Rests on neoclassical foundations (individualism, instrumental rationality, market clearing equilibrium) but adds various elaborations often taking the form of market imperfections and failures
What is Marxian economics based on?
Classical foundations through Ricardo’s factor shares model, he sees this as a form of exploitation by capitalists. it adopts a historical and dialectical approach founded on class conflicts
Who are the main proponents of Marxian economics?
Marx, Engels
How are growth and development viewed by Marxian economics?
They are emphasised but subject to chronic instability and crises
What is radical economics based on?
Mainly on modern developments of Marxian economics
What are some examples of radical economics approaches?
Prominent examples are the monopoly capital approach, regulation theory and the social structures of accumulation model
How does Post Keynesian economics differ from Keynesian economics?
It rejects the mainstream interpretations of Keynes namely New Keynesian economics
Who are some of the most important proponents of Post Keynesian economics>
Robinson, Kaldor and Davidson
What is neoricardian economics also often known as?
Serafina economics
What is the main objective of Serafina(neo-Ricardian) economics?
To revive classical economics as an alternative to the neoclassical mainstream. Critical of many Marxian doctrines notably the labour theory of value
What are the key ideas of institutional economics?
The importance of culture and institutions, the endogénesis y of preferences and the principle of cumulative causation. Suspicious of mathematical formalism in economics
Summarise (neo)Austrian economics?
Individualistic, pro-markets, critical of mathematical utility, for more subjective such as the entrepreneurial spirit. Rebounded in the 20s and 40s to be more heterodox. They are the strongest critics of mathematical approaches as they argue it is far too mechanical
What is the emphasis on in Austrian econom ics?
Sees entrepreneurship as the driving force behind economic growth and sees human subjectivity as the driving force behind economic growth. It argues that econometrics and the static mainstream focus on resource allocation is wrong