What is heterodox economics?

(Mostly what is mainstream economics, as this post turned out).

The field of economics is overwhelmingly dominated by a single school of thought – known as Neoclassical Economics. Almost all economists are neoclassical economists.

Note: I am incorrectly blending together Neoclassical Economists with New Keynesians (not actually Keynesians – he would be turning in his grave). I know this is wrong, but it is close enough to the truth for the purposes of this article. I might have simply said “Mainstream Economists”, capturing these two schools and a few others besides. This is the limit of my knowledge regarding the nuance of different schools that make up Mainstream Economics.

Neoclassical is fiercely opposed to other schools of thought. Economics, compared with other fields of academic inquiry, is quite unusual in this regard, being dominated by a single school of thought (the Neoclassical school) that is agressively opposed to others (the various Heterodox schools).

John T Harvey is a great place to start with exploring heterodox economics and MMT specifically. He is an expert in exchange rates, his training included neoclassical economics and his book “Contending Perspectives in Economics” is a summary of the major schools of thought that exist in the field of economics. He is also an entertaining speaker and presenter, and bonus he has an alter-ego – the Cowboy Economist – whose YouTube videos are worth a look.

Here is John T Harvey discussing his book “Contending Perspectives in Economics” on The MMT Podcast:

Episode 57 – John T Harvey: Contending Perspectives In Economics (Part 1)

Episode 58 – John T Harvey: Contending Perspectives In Economics (Part 2)

Here is Bill Mitchell, one of the co-founders of MMT, giving his thoughts on why neoclassical economics persists as the dominant theory even in the face of evidence it fails to accurately describe key aspect of the economy.

Macro N Cheese episode 1 (podcast)

It is worth listening to the whole episode, but the key hightlights are:

  • 23 minutes: Bll speaks about the “micro” foundations and the reinstatement of classical ideas in economics.
  • 37 minutes: Bill explains his foray into social psychology to try to understand why these seemingly intelligent people are hanging on to ideas that clearly don’t stack up, and why they remain closed to emerging thoughts from outside their school.

That is about all I have on this. Here is a tantalising article for further exploration of these topics – Neoclassical Synthesis (Wikipedia)