1.1 What is ‘heterodox economics’?
‘Heterodox economics’ is a problematic term, which is continually debated (cf. Mearman, 2012). It can mean simply ‘non-orthodox’ but that definition is problematic in two ways. Principally, it begs the further question of whether there is an identifiable orthodoxy; and if so, what that is. For some economists, ‘orthodox’ remains associated with the neo-classical economics. Arnsperger and Varoufakis (2006) define that in terms of three methodological meta-axioms: individualism, instrumentalism, and equilibriation. Lawson (2013) defines neo-classical economics in terms of an adherence to a particular technical apparatus.
However, others hold that equating neo-classical and mainstream economics is incorrect. First, the term ‘neo-classical economics’ can mean a set of meta-theoretical principles or methods – as is the case in this chapter; however, it can also refer to a specific historical period in economics. Second, to equate neoclassical and mainstream ignores many recent developments in economic research (Colander, Holt and Rosser, 2004). Unfortunately, despite CORE, many of these theoretical developments still have not filtered into undergraduate teaching. As a result, ‘orthodox’ teaching still largely reflects neo-classical economics. Hence, in this chapter, the term ‘orthodox’ refers to the essentially neo-classical material present in the vast majority of undergraduate economics curricula. The term ‘mainstream’ refers to research.
The second problem of defining heterodox economics as ‘non-orthodox’ is that it downplays both the heritage and current potency of heterodox theories: they are both a) based in a tradition of alternative theoretical systems, such as those constructed by Marx, Keynes, Veblen, Hayek and Schumpeter and b) living traditions practised in research and other communities, with findings published in journals. Heterodox theories are considerably more than reactions to orthodox theories. For the purpose of this chapter, heterodox means neither simply ‘non-orthodox’ nor ‘non-neoclassical’. Nor is it defined merely in terms of new versus old, i.e. new economic research versus old textbook theory. Rather, it constitutes a set of key characteristics found in the writings of heterodox economists. A summary of these is presented in Figure 2.
Figure 2: A non-exhaustive series of heterodox principles
- Methodology (rather than just method) is important to understanding economics.
- Human actors are social and less than perfectly rational, driven by habits, routines, culture and tradition.
- While theories of the individual are useful, so are theories of aggregate or collective outcomes. Further, neither the individual nor the aggregate can be understood in isolation from the other. The micro/macro distinction may be invalid.
- Economic systems are complex, evolving and unpredictable – and consequently equilibrium models should be viewed sceptically.
- History and time are important (reflecting (4)).
- All economic theories are fallible and, reflecting (4), there is contemporary relevance of the history of thought to understanding economics.
- Pluralism, i.e. multiple perspectives, is advocated (following on from (4) and (6)).
- Formal mathematical and statistical methods should not be presumed to be superior. Other methods and data types are valuable.
- Facts and values are inseparable.
- Power is an important determinant of economic outcomes (cf. Ozanne, 2016).
Not every example of heterodox economics exemplifies every one of these characteristics. Austrian economics, for example, is weak on principle 10. Whilst some economists treat heterodox as a single body of theory (or try to create a single theory: Lavoie, 1992; Arestis, 1992; Shaikh, 2016), others treat it as a collection of theories (Garnett, 2005). Some argue for a coherence of heterodoxy at a methodological level or even in terms of the nature of reality as involving structures of deep causal mechanisms (Lawson, 1997, 2003) or complex adaptive systems (Potts, 2000). Figure 2 includes assumptions with epistemological and ontological standpoints that are widespread in heterodox literature (and therefore tending towards a potentially unifiable body of theory). Given the scale of these principles, students will only have very limited opportunities to understand the implications within the context of a single module. A more thoroughgoing approach would require a review of the experiences offered to students across a whole degree programme.
1.1.1 Method and history
Some points in Figure 2 merit further elaboration. Attention to methodology (1) and to the history of economic thought (5) are hallmarks of a heterodox approach. However, heterodox economists have argued that these two (arguably key) areas are neglected in standard treatments of economics.
As discussed below, the question of what a model is, how it is to be used, how it is to be evaluated, etc. are crucial for anyone wanting to understand economics; and indeed, are useful questions for anyone required to think abstractly. Accordingly, abstraction is a central activity in economics: what does it mean? How are we to think of ceteris paribus? In contrast to many standard treatments, a heterodox module would spend longer discussing those methodological issues and would not set them aside. Rather, they would be revisited repeatedly.
As Hodgson (2001) claims, ‘economics forgot history’. This could be true in two senses. It is too bold to claim that orthodox economics ignores methodology and history. However, history of thought is often confined to an optional specialist module. Even newer curricula, such as CORE, themselves only give cursory attention to history of thought (Morgan, et al, 2014). And yet, it has been recognised that understanding history is important (James, 2012). Thus, Hodgson could be correct in a second sense too: economic models removed historical time from analysis. It is significant that the new Skidelsky MOOC will be on the history and philosophy of economics.
Heterodox approaches tend to take history very seriously. Partly this is self-serving. By pointing to the fact that neo-classical economics was not always the only game in town and by examining critically how economics got to its current state, it creates space for heterodox economics. Nonetheless heterodox economics is not merely history of thought. Rather, it rests on the belief that theories cannot be understood outside their wider socio-historical context. The rise of the General Theory is a good example: it reflected past intellectual currents but also the background of economic instability and high unemployment. The struggle between Monetarists and Keynesians is inexplicable outside of its economic context of what was actually happening to inflation. Heterodox economics precludes an ahistorical approach to theorising and asserts that students should be introduced to this way of thinking.
1.1.2 Heterodox pedagogy?
Not surprisingly, there is no single heterodox approach to teaching and learning. However, heterodox economists have made several interventions in pedagogy; and identified several benefits of teaching heterodox economics. It would be inaccurate to say mainstream economists have not shown any concern for pedagogy. For example, Siegfried et al (1991) avow a Socratic approach aimed at independent learning. Forsythe (2010) advocates problem-based learning. However, orthodox pedagogy tends to be instrumental, i.e. directed at more effective learning of and/or training students in conventional economics. For example, Coyle and Wren-Lewis (2015) assert that economics is a vocational subject. In many cases, though, this instrumental orientation is often only implicit: this partly reflects that there are few institutional incentives for engaging in deep reflection about teaching.
Contributions from heterodox economics have more often been explicitly informed by other pedagogical principles. Another element of that is to problematize education per se. Bowles and Gintis (1976) analyse education in terms of its role within capitalism. Bridges and Hartmann (1975) note the hierarchal nature of teaching but also stress the problems facing women teachers in establishing their credibility in a masculinist system. They draw on feminist literature and on the radical pedagogy of Freire (1970). A radical or critical pedagogy is student-centred, focusing on emancipation of students via conscientisation, i.e. self-awareness of their own circumstances on their own terms. From the same tradition, Rose (2005) discusses various methods by which they encouraged the co-production of knowledge on their course, for instance via collaborative exercises, a contract grading system, group projects, and simulations. She cites hooks (1994) as an influence. Rose contrasts her approach with the ‘banking model’ of education, in which students are empty vessels to be filled by instructors. Similarly, Kramer (2007) advocates participatory learning: in this case, students were asked to construct an ideal US economy. Ford et al (2007), who also cite Vygotsky and Dewey as influences, provide another example of a constructivist approach, in which learning occurs through students’ constructing their own meanings, ‘scaffolded’ by their own experience, rather than simply reproducing others’ meanings.
These are just some examples of how heterodox economists have explicitly engaged with educational philosophy to design and evaluate their courses. Barone (1991) for example explicitly recognises the heterogeneity of students. Peterson and McGoldrick (2009) link service learning methods to the achievement of their educational goals. Several authors utilise educational psychology of Perry (1970) in their discussion: inter alia, Lapidus (2011), Earl (2000), and Barone (2011). Another strand of this work is around liberal pedagogy, which envisages education as a process of allowing students to develop into analytical, critical, autonomous thinkers. Several authors argue that teaching heterodox economics has clear educational benefits (see Figure 3 below). Many of these overlap with claims for the benefits of pluralism.
 It should be noted that, technically, CORE is just one module: nothing per se precludes teaching history of thought alongside it.