Economics Alternatives

From Critiques Of Libertarianism
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Mainstream economics has numerous problems. There are many different well-respected branches of economics that offer solutions but libertarians ignore because they conflict with libertarian ideology. These also provide much needed economic theory for opposing libertarian claims.


12 Alternative Principles [More...]
Thomas Sargent gave a speech with 12 supposed principles of economics. Here's an alternative set.
After Neoliberalism [More...]
"The neoliberal experiment – lower taxes on the rich, deregulation of labor and product markets, financialization, and globalization – has been a spectacular failure. Growth is lower than it was in the quarter-century after World War II, and most of it has accrued to the very top of the income scale."
Books used as sources during the writing of Economix [More...]
An excellent reading list for understanding how politics and economics interact. From the graphic-novel style Economix.
Economic Ideas You Should Forget (book, online)
By discussing problematic theoretical assumptions and drawing on the latest empirical research, 71 authors question specific hypotheses and reject major economic ideas from the “Coase Theorem” to “Say’s Law” and “Bayesianism.”
Economics After Neoliberalism [More...]
Many of the dominant policy ideas of the last few decades are supported neither by sound economics nor by good evidence. Neoliberalism—or market fundamentalism, market fetishism, etc.—is not the consistent application of modern economics, but its primitive, simplistic perversion.
Economists Are Warming to Government Intervention [More...]
Based on recent surveys, "... on many issues, economists are actually more likely than the general public to summon the guiding hand of the state."
Economists Dissing Economics [More...]
A list of 20 or so quotes, mostly from well known economists, criticising mainstream economics.
Economix: How Our Economy Works (and Doesn't Work), in Words and Pictures (book, online) (3 links)
"Economix is a graphic novel by Michael Goodwin, illustrated by Dan E. Burr, that explains the economy. More than a cartoon version of a textbook, Economix gives the whole story of the economy, from the rise of capitalism to Occupy Wall Street."
From Pleasure Machines to Moral Communities: An Evolutionary Economics without Homo economicus (book, online)
"Are humans at their core seekers of their own pleasure or cooperative members of society? Paradoxically, they are both. Pleasure-seeking can take place only within the context of what works within a defined community, and central to any community are the evolved codes and principles guiding appropriate behavior, or morality." "The picture of utility-maximizing agents—in both self-regarding and other-regarding versions—should also be replaced by a richer, multidimensional, and developmental version of the individ- ual, which includes biologically grounded and culturally enhanced moral motivations. The importance of deep-rooted ethical motivations and values—including sympathy and respect for authority—are illustrated in several contexts. The individual is not taken as given, but situated within an interactive social context that enables her education and development."
Greening Economics: It is time [More...]
"The concept of environmental capital is throughly entrenched in policy dicussions but largely missing from mainstream economic curriculums. [...] The teaching of economics, especially growth economics, should stop ignoring them."
History of Economic Thought, 3rd Edition: A Critical Perspective (book, online)
A readable textbook that will clarify your understanding of the pitfalls of different economic ideas, starting with the "invisible foot of the market".
Homo economicus on the Grand Tour, or, When Is a Lizard a Good Enough Dragon for Government Work? [More...]
A review of a neo-instititional economics textbook. "By the end of the book, while the modeling style hasn't changed at all, the original laissez-faire economy with a night-watchman state has been left completely behind, and we are contemplating competing forms of property rights in stateless societies..."
How to Get It Wrong [More...]
Paul Krugman says: "Mammon knows that economics needs rethinking in the wake of a disastrous crisis, a crisis that was neither predicted nor prevented. It seems to me, however, that it’s important to realize that the enormous intellectual failure of recent years took place at several levels."
Institutional Economics (2 links)
The idea that institutions play an import role in explaining the economic behavior of buyers and sellers, bosses and workers, investors and managers, public officials, and citizens. A leading heterodox approach.
Karl Polanyi (4 links)
Karl Polanyi's critique of Ludwig von Mises and Market Fundamentalism in 1934 still outlines the great fallacies and propaganda that have been foisted on us.
Karl Polanyi Explains It All [More...]
Robert Kuttner explains how Polanyi's The Great Transformation: The Political and Economic Origins of Our Time is more relevant now than ever. "Contrary to libertarian economists from Adam Smith to Hayek, Polanyi argued, there was nothing “natural” about the free market."
Keynesian and Post-Keynesian Economics (13 links)
Most libertarians oppose Keynesian arguments (such as insufficient demand causing recessions) because they conflict with their ideology (see Austerity.)
Market Design (4 links)
Markets don't just spontaneously happen in their final (or current) form. They evolve or are designed by government and participants. Without such design or evolution, markets are rife with failures. Government must be involved to shape the laws and regulations that give order to the market.
Middle-out economics (2 links)
Emphasizes that growth comes from promotion of a strong middle class, rather than by addressing the top 1% (as in Supply-side economics.)
New Microeconomics: How Evolution Explains Resource Distribution [More...]
"Through years of schooling, mainstream economists are trained to ignore the obvious facts about human nature. The theories that economists learn make it impossible for them to understand human sociality."
Public Goods And Club Goods (17 links)
Libertarians often refuse to recognize public goods and club goods, or that governments have a role in their provision. The list of important goods with substantial public or club goods components is very long, and includes education, law, safety, health, transportation, research and much more. (Club goods are like public goods but excludable and only rivalrous with congestion.) Markets are unwilling to provide them in economically efficient quantities, since companies can't capture all of the returns from public goods.
Social Capital (5 links)
"Social capital is a form of economic and cultural capital in which social networks are central, transactions are marked by reciprocity, trust, and cooperation, and market agents produce goods and services not mainly for themselves, but for a common good." (Wikipedia) The answer to Margaret Thatcher's rhetorical "There's no such thing as society… only individuals and families."
The Great Transformation: The Political and Economic Origins of Our Time (book, online) (1 link)
Explains the socially constructed nature of "free markets", as opposed to "spontaneous order". A major work of economic history.
The mainstream economics curriculum needs an overhaul [More...]
Undergraduate economics education is not properly training tomorrow’s policymakers. At the minimum they need some economic history, the diversity of economic viewpoints and training in skepticism of all economic claims.
What Every Economics Student Needs to Know and Doesn't Get in the Usual Principles Text (book, online)
John Komlos shows how misleading it can be to mechanically apply the perfect competition model in an oligopolistic environment where only an insignificant share of economic activity takes place in perfectly competitive conditions.
What is wrong (and right) in economics? [More...]
"... anything that has turned into conventional wisdom is almost by definition wrong, or at least, overstated." Examples of dismissal of market failure, rejection of other social sciences, and benefits of globalization.


If there were any methodological justice in the world, neo-classical economics should have been relegated to the scrap-yard of theories long ago. True, the Arrow-Debreu model is, as Stephen Maturin would say, the elegant mathematical theory of the world, but as a description of how economies work it is incredible in the worst sense. The most telling criticisms, all valid, fall into three clusters. The first, and to my mind the most compelling, has been urged with great force by Herbert Simon (among others): people simply are not perfectly rational, perfectly prescient utility maximizers, and they couldn't be even if they wanted to. Second, the kind of economy assumed by neo-classical theory is a very special and recent phenomenon, originating in particular countries in particular epochs, and while it has since spread from there and seems likely to conquer the globe, the neo-classical theory is restricted to the places where economic life is conducted in markets with unrestricted, alienable private property, so it is not a general theory of economic behavior, something deeply desirable. Third, even in the countries with the appropriate legal-institutional framework, perfect competition is exceedingly rare, very important parts of the economy are manifestly oligopolies, and certain kinds of competition are even legally prohibited by e.g. intellectual property laws.
Cosma Shalizi, "Homo economicus on the Grand Tour, or, When Is a Lizard a Good Enough Dragon for Government Work?"
The conditions under which equilibrium prices really are all a decision-maker needs to know, and really are sufficient for coordination, are so extreme as to be absurd... Even if they hold, the market only lets people "serve notice of their needs and of their relative strength" up to a limit set by how much money they have. This is why careful economists talk about balancing supply and "effective" demand, demand backed by money.
Cosma Shalizi, "In Soviet Union, Optimization Problem Solves You"
Both neo-classical and Austrian economists make a fetish (in several senses) of markets and market prices. That this is crazy is reflected in the fact that even under capitalism, immense areas of the economy are not coordinated through the market.
Cosma Shalizi, "In Soviet Union, Optimization Problem Solves You"
Those values [expressed by markets] are not pretty. They are that the whims of the rich matter more than the needs of the poor; that it is more important to keep bond traders in strippers and cocaine than to feed hungry children. At the extreme, the market literally starves people to death, because feeding them is a less "efficient" use of food than helping rich people eat more.
Cosma Shalizi, "In Soviet Union, Optimization Problem Solves You"
We live in capitalism. Its power seems inescapable. So did the divine right of kings.
Ursula K. Le Guin at the 65th National Book Awards on November 19, 2014.