An article this week in The Nation has been provoking more than the usual activity in the blogosphere. Chris Hayes describes an underworld at the AEA conference of out of the mainstream economists struggling for acceptance. My attitude to this, like many others, has been to wonder if there really is a whole alternative economics out there. Now the answer is, yes there is and what is more is that it has been around for decades. But it is very different from the economics I know practice. Put simply, it doesn’t appear to deal with the same questions. It finds issues of incentives and markets less interesting than the questions of whether markets or, for that matter, individuals should be the starting point for approaching economic questions.
Obtaining an education in Queensland, most of the economics I learnt was what was called “heterodox.” I’ll claim this — and feel free to dispute it if you want — but I believe that I have read the most out of mainstream economic thinking of any economist under 40 (and perhaps beyond) in Australia today and so am in a position to actually evaluate all of this. Galbraith, Shackle, and, now apparently heterodox, Keynes, grace my shelves. And these (and more) are the books I have actually read. The technical stuff is only read if I need it. And while I can claim that having an upbringing that took me across economics and economic thought with a wide brush and so made me more sensitive to the assumptions made by economists, what I found eventually useful in understanding the world was the drier and technical stuff that “heterodox” economists claim is the root of the problem. Part of the reason I wanted to pursue my PhD at Stanford many years back was precisely to be exposed to the drier stuff because I figured that it was tough to criticise it without learning about it. I didn’t want the usual criticism laid at “heterodox” economists that the reason they argue what they argue is that they can’t do the harder stuff.
As it turned out, when you got to know it, the harder stuff was worth it and I have never looked back. But for the undergraduate pursuing economics, seek out the “heterodox” courses and readings. It is provocative and you should judge for yourself its usefulness. What is more is that the academics practising it have the same opportunity in the marketplace for ideas as any drier, technical work. If the most highly regarded economics journals don’t accept it, then it should be possible to find an outlet that does. (When I have more time, I’ll try and illustrate this all with a specific example; although this experience comes close).