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An example of how heterodox criticisms can be valuable in the process of critical teaching involves consumer theory. This may be studied at either introductory or intermediate level. Particularly in the latter case, the treatment often involves noting the assumptions underpinning indifference curve analysis, including rationality, transitivity and completeness. The assumptions are covered in most textbooks. A lot can be gained by critically examining the assumptions. Heterodox texts can be crucial in this regard. For example, Dorman (2014a) discusses whether the assumptions hold in reality. Significantly, they examine experimental evidence that throws doubt on the assumptions (Becker (2004) also notes this example). In so doing, the authors introduce students to a body of work of growing importance in economics. This is an easy innovation to make given the welter of theoretical and empirical literature now available on behavioural economics.

On that theme, another piece of heterodox work which is accessible to lower-level undergraduate students is Tomer’s (2001) critique of ‘economic man’. Tomer examines ‘economic man’ from a particular psychological perspective. Economic man is self-interested, rational, separate from his environment, unchanging and unreflective. Tomer argues that economic man applies to only a minority of humans, for a small portion of their lives. Again, the orthodox concepts are interrogated – and understood – and an alternative body of theory is introduced.

Consumer theory is a particularly rich area for drawing on heterodox critiques and enriching the teaching of orthodox material. Veblen’s concept of conspicuous consumption allows the assumption of independence of preferences and prices made in orthodox consumer theory to be questioned. Galbraith’s thoughts on advertising (1958, 1967), which echo some contemporary mainstream work by, for example, McCloskey (1994) on rhetoric, and Mullainathan and Shleifer (2005) on finance, are an engaging and accessible source for evaluating advertisements. The new literature on behavioural economics allows for a much richer consideration of consumer behaviour than was typically delivered. A similar approach can be taken throughout the module.

Tables 1a and 1b show suggested content and key questions for introductory and intermediate level microeconomics modules.

Table 1a: Introductory Micro module (‘orthodox-plus’)


Heterodox angle

What is economics?

Question positive/normative distinction; note variety of definitions of economics

S&D and markets

Note: markets as institutions

Demand curves

Note: up-sloping demand; question law of demand; Veblen; Figure 6: biscuit experiment


How do firms calculate elasticities? Can they? Do demand curves exist?

Production and costs

Does the law of diminishing returns hold? Question shape of average cost curve; Figure 4: paper aeroplanes

Profit maximisation

Goals of the firm? (See Mallin, 2009). Mark-up pricing

Factor markets

Workers getting their marginal product? Marx


Stress barriers to entry. Austrian school

Market failure

Question distributional fairness

Government intervention

Political arguments for intervention; distribution; Figure 3: Kemp/Wunder market game

Table 1b: Intermediate Micro module (orthodox-plus)


Heterodox angle

Consumer theory

Tomer on economic man; Galbraith on advertising; Figure 8: media watching exercise; persuasion; experimental evidence

Household choice theory

Critique of Becker; altruism; cooperative and non-cooperative equilibria (Himmelweit et al.)

Analysis of choice under risk

Problem of non-probabilistic uncertainty? Question the value of the expected utility hypothesis under uncertainty

Analysis of long-term decision making

Assumptions made? Discounting and the environment?

Decision-making and asymmetric information

Power structures and information flow: to whom?

Isoquant theory

Figure 2: Brokken and Bywater (1982)

Labour markets

Query about exploitation; labour market discrimination

Market structure and efficiency

Austrian critique; contestability; monopoly capital

Game theory

Limitations of? Implications of game theory for conventional theory?

Price discrimination

Question informational assumptions

General equilibrium analysis

Institutional analysis of markets; question assumptions; social markets (Himmelweit et al. 2001). Figure 3: Kemp/Wunder game

Both the introductory (Table 1a) and intermediate (Table 1b) modules look standard in their list of topics, except, perhaps, for the addition of household choice theory. The emphasis remains on communicating the key orthodox concepts, but this is assisted by employing the heterodox angle. Of course, given time constraints and the abilities of the students, the content will vary, as will the extent to which one can engage with the critical literature. However, note that in many cases, the critical literature will assist in learning the key concepts. Two examples of this are shown in Figures 2 and 3.

Figure 2: The Brokken and Bywater (1982) article on cattle feed

The authors ask whether in the case of cattle feed isoquants are convex. The instructor can choose the extent and depth to which this is explored. For example, in a one- lecture/one-seminar model, it is quite feasible to devote half a seminar to the article. The students are asked to read it beforehand and therefore should have some understanding of it but, in the seminar, points of confusion can briefly be clarified. Most of the time is taken drawing out the implications of the article for economic theory. For instance, discussion focuses on the value of the convexity assumption. This assumption resonates with students from studying indifference curves, and it is useful when the students consider general equilibrium analysis later in the module.

The author has found that by reading the article, students deepen their understanding of isoquants, learn about a practical case, and are exposed to empirical analysis and techniques. The article also provides the opportunity to discuss the nature of assumptions, models and theory more broadly.


Figure 3: Kemp and Wunder (2007) market game

A simulation developed by Kemp and Wunder demonstrates how an apparently conventional classroom experiment can enhance knowledge of orthodox concepts whilst being enriched by a heterodox perspective. The game essentially runs as follows: scarce factors of production (including, importantly, entrepreneurship) are allocated equally amongst individual students, except that land is allocated on a first come, first served basis. No capital is distributed, because it must be produced through labour. Students must trade their labour and land (if they have any) in order to (get capital and) produce enough for material subsistence. Any surplus can be spent on luxury goods. The winner of the game is the one who accumulates the most commodities (goods). Money is introduced through the State (played by the instructor) purchasing privately owned factors of production.

Like the majority of these market experiments, this one attempts to demonstrate the functioning of competitive markets and their outcomes. However, there are some differences from the ordinary. For example, entrepreneurial units are introduced to the game, allowing inventions to enter the market and either succeed or fail. This introduces a dynamic element to the game. This can be interpreted as a heterodox augmentation of the game: dynamics and entrepreneurialism are key tenets of Austrian economics. All production involves capital, but capital must be developed, showing that it does not merely exist as if on trees.

The game attempts to demonstrate several important concepts. First, it shows how resources, market interaction and politics work to produce and distribute resources throughout the community. The role of the State in allocation decisions is significant in this regard. The first two of these notions are conventional, and the third a little more controversial but in principle can lead to a treatment of market failure in terms of, for instance, rent seeking. Further, it could prelude a discussion of the role of legal systems in conditioning economic activity. That could be said to reflect a Commonsian tradition within institutionalism, as well as the recent literature by, for example, Posner.

Second, the game aims to demonstrate the role of innovation on economic development and performance. Again, this is something of a departure from a standard microeconomics module and suggests an Austrian influence. The game can also be used in a macroeconomics module.

Third, the game demonstrates how initial allocations affect final allocations. As Kemp and Wunder report, a crucial element of the game is that students are required to discuss their feelings about it. In particular, they are encouraged to give their opinions about:

  1. the workability of the economic system;
  2. what they considered to be their important learning experience;
  3. whether they felt that the system was just;
  4. whether the simulation changed any of their attitudes about economy and society.

This process of reflection is a significant element of the educational process.

In the cases of Tables 1a and 1b a few comments can be made on omissions. For example, in Table 1a, possibly some of the time normally allocated to deriving long-term cost curves, repeatedly calculating elasticities or practising the perfect competition diagram will be sacrificed. However, the concepts and key implications of those topics would be retained.

To make space for the inclusion of heterodox perspectives in an orthodox module, something must be omitted, but what? This is significant precisely because an objection to the above proposal is that key concepts are omitted. There is no single model for an introductory or intermediate microeconomics module, so it impossible to state categorically whether the modules in Tables 1a and 1b match such a standard. However, the author would argue that in terms of topics and concepts covered, they do. Comparing the module structures to the Economics Benchmarking Statement reveals no relevant omissions.

The examples here have been focused on microeconomics. This is because macroeconomics has typically always been taught more comparatively, e.g. by examining debates between Keynesians and classical economists. With the dominance of the new consensus model, this is changing, though. Nonetheless, Section 3 of this booklet discusses an introductory macroeconomics module at the University of the West of England which attempts to teach according to contending perspectives. Similarly, that section presents an introductory survey module at Leicester University, which presents contending perspectives via engagement with a series of real-world problems. Insights from these modules can easily be applied to the examples above.

A module which attempts to enrich an orthodox module with heterodox content is presented in Figure 4.

Figure 4: An ‘orthodox-plus’ module

A second year module in banking and finance at the University of Greenwich enriches a fairly standard module with the targeted introduction of non-standard material. The module begins with an overview of the financial system, moving on to financial intermediaries. It then takes a slight departure by investigating shadow banking and some key concepts such as repurchasing agreements. It offers orthodox-plus material in three key ways. One is through variation in content: in the discussion of money creation, the topic is taught as a debate between exogenous and endogenous money views. Further, and perhaps more controversially, the module’s treatment of financial crises explicitly contrasts mainstream explanations of financial crises with Minsky’s financial instability hypothesis.

Second, the module deploys a variety of readings. It uses a foundation text, Mishkin (2013), throughout the module. Thus we can denote the module as essentially orthodox. However, at key points, different readings are used. Crucially, as well as using interlocutors of Minsky, these readings include an original Minsky work (1992). This reflects the desire to encourage students to read the original unadulterated text, thereby enhancing students’ understanding of the history of economic thought. Third, the module explicitly aims at achieving wider educational skills such as critical thinking.

More specialist modules can offer further opportunities for ‘orthodox-plus’ formulations. Often this is necessary given a lack of orthodox material in certain areas, and/or significant heterodox contributions there. For example, a module on economic growth would look rather bare if it comprised only classical models, such as the Harrod-Domar, plus the neoclassical Solow model. An adequate module must also include so-called ‘endogenous growth theory’, which some regard as being post-neoclassical. Indeed, arguably the theory of cumulative causation – and therefore of Veblen (the originator of the term) and the family of Kaldorian growth models – ought be included in any growth module, given that it is in many ways a precursor to endogenous growth theory. Drawing on the heterodox theories does not reduce the module’s content or technical level.

Other examples include:

  • A module on banking and finance formerly taught at Stirling University draws on neoclassical theory but, because of the nature of the literature and the relative paucity of orthodox treatments, necessarily draws on heterodox theories of banking and (other) financial institutions.
  • Dayal (2013) discusses a course on public economics taught at the Institute for Economic Growth in Delhi, India. The module innovates in three ways. First it separates the module content into unconventional sections. Second, it includes an explicitly institutionalist slant, partly via an introductory section. Third, it has an empirical section, which encourages students to interrogate the theoretical content, which remains predominantly orthodox.
  • Lee (2010) describes a graduate microeconomics module taught at University of Missouri-Kansas City. The module employs a strategy for teaching orthodox microeconomics, but critically. The core orthodox material is delivered, but always this material is also problematized. Lee reflects the heterodox focus on history of thought by delivering the standard content via an historical narrative.

Section 2 of the handbook chapter considers the strengths of the orthodox-plus approach.

Association for Heterodox Economics

Teaching Resources for Undergraduate Economics