Research

The Future of  Heterodox  Economics Working Paper

June 7, 2021

Working Paper—A group of professors, graduate students, and fellows at The New School for Social Research's Department of Economics assess economic research and teaching in the United States and identify three major barriers to the successful adoption of alternative economic theories in academia and the public discourse.

Authors: Teresa Ghilarducci, Zachary Knauss, Richard McGahey, William Milberg, Drew Landes, and Edward Nilaj

In the midst of the pandemic recession and the economic devastation it has wrought from families to cities, policy makers turned to economists for solutions. But mainstream economics failed to identify the warning signs of the financial crisis of 2007-2008 and the subsequent Great Recession. In fact, the dominance of the current paradigm in the education and practice of economics over the last 40 years has coincided with a historic rise in inequality and stagnant wages and ongoing racial injustice and climate change.

Clearly mainstream economics is not equipped to generate more just and secure economic outcomes. But in spite of its failure, little has changed in the way economists think about markets and states or how economics is taught in the majority of academic institutions. Alternatives exist in the teaching and practice of “heterodox” economics — a diverse set of schools of thought including feminist economics, post-Keynesianism, and neo-Marxism built on insights from economist such as Marx, Keynes, Robinson, and Sen.  Yet, these traditions have been sidelined in most university economics departments and often receive little attention from policy makers. Teresa Ghilarducci, Zachary Knauss, Richard McGahey, William Milberg, Drew Landes, and Edward Nilaj at The New School for Social Research's Department of Economics attempt to discover why in a working paper funded by the Economy and Society Initiative at the William and Flora Hewlett Foundation.

In the paper, "The Future of Heterodox Economics" the authors "assess economics research and teaching frameworks in the United States by examining how knowledge is produced and ranked, the flaws and strengths of heterodox economic theory; and how students are trained, especially for careers in economic policy. We challenge the meaning of established terminology such as ‘heterodoxy’ and ‘mainstream’ by investigating their utility as a marker and to illuminate major barriers to the successful adoption of alternative economic theories in academia and the public discourse. Based on interviews with experienced economists working with heterodox paradigms in both mainstream and heterodox institutions, we identify three barriers 1) Neoclassical hegemony, 2) Weakness of heterodox theory, and 3) Pedagogy and training in economics."

 

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