Heterodox theories of economics

From Diversifying Economic Quality: A Wiki for Instructors and Departments

Jump to: navigation, search


Incorporate heterodox theories of economics into curricula.

The term “heterodox” refers to any idea that critiques or stands in contrast to conventional, generally-accepted canon – that is, the status quo. As such, heterodox views are always unorthodox, frequently interdisciplinary, and, more often than not, dissident. Heterodox theories of economics can depart from mainstream or neoclassical economics in a multitude of ways. Most take issue with narrow focus of economics today, which is primarily concerned with the rational agent and the distribution of material wealth. Heterodox theories seek to redefine and expand classical economics, often criticizing and deconstructing the key dogmatic assumptions and techniques underlying “the invisible hand”.

Despite the diversity of “outside views” on economics, heterodox frameworks are very rarely taught at the university level. What follows is a brief review of feminist, queer theory, and post-colonial perspectives on economics. These reviews rely heavily on one or two central texts in the field and are meant as suggestions for instructors who would like to make course content more representative and inclusive of less well-known but equally valid approaches to economics.

Feminist Theory

Ferber and Nelson’s 1992 Beyond Economic Man was the first text of its kind to put forth a very radical notion -- that the ideal of impartiality in economic study is itself androcentric. For many, it is at first difficult to acknowledge that objectivity is a cultural construct, let alone a masculine one. The feminist critique of this scientific methodology seems like outside interests intruding and undercutting the pristine, neutral study of natural phenomena. What all the essays within this anthology make immediately and overwhelmingly clear, however, is that economics as a field already has inherent “inside interests”. Historically, economics was constructed by men in the image of man. Beyond asserts that not only is the field and its objects of inquiry intrinsically male-skewed as a result of this history, but also that the “objective” practice, methodology, and models of economics are themselves partial and, frequently, incomplete.

Objectivity is often heralded as the greatest strength within the scientific practice of economics. Yet gender (or lack of it) is deeply embedded within this practice. This last idea is rarely recognized or acknowledged; in fact, men and women inside and outside the field have become accustomed to regarding subjective, emotional, and/or holistic approaches to the study of economics – characteristics that are largely ascribed as “feminine” – as inferior. For this reason, the simple inclusion of women in economics alone is not sufficient to shift the androcentric paradigms of economic practice. The preface to the collection provides a great introduction to this sort of basic feminist critique of science. Ferber and Nelson briefly document the prevalent gender imbalance in economics (in terms of history, participation, etc) and then move on to describe the spectrum of feminist perspectives on the issue. In so doing, they explain complex concepts like essentialism and feminist epistemology in a very direct and easy-to-understand way. The intro carefully builds up to the notion that objectivity or the separation from the object of study is a loaded, cultural construct. Both editors – indeed, all of the writers included in the collection – repeatedly and loudly disclaim that these essays are not a dismissal of objectivity but rather a call for inclusion of a wide range of economic practices. This characteristic of the book is itself a commentary on how firmly entrenched and highly pedestaled objectivity is. Regardless, the book remains a radical critique not only of the way economic tools are being applied, but of the tools themselves.

The first few essays tackle the basic models of neoclassical economics; the field, it seems, has come to focus on a very narrow and biased definition of exchange -- how economic man goes about allocating scarce resources. Implicit within this definition is the idea that Nature (always a her) is a withholding entity to be conquered by economic man. Furthermore, most neoclassical models assume rational choice. Studying how individuals respond to their environments inherently assumes a degree of empowerment, than an individual can respond, a prerequisite that could not be fulfilled by women around the world at the time theories of rational choice were being developed. Would women behave in the same selfish, self-interested manner as economic man? Paula England’s piece, “The Separative Self: Androcentric Bias in Neoclassical Assumptions,” exposes the masculine (and Western nature) of this independent decision-making in a way that could be informative to students of economics. She dissects three main assumptions of the field in a considered and technical way that highlights how economics can sweep aside issues of gendered difference. England makes the case for centering economic study on a more connected, empathetic self. Beyond thus expresses dissatisfaction with the field but not in lieu of searching for a solution to the problems.

McCloskey’s essay, “Some Consequences of a Conjective Economics,” is similarly rife with examples of how one can change the endemic dismissal of undetached inquiry. The author introduces the idea of a “conjective economics”, which is (roughly) an economics created for the community using diverse methods of inquiry. This idea serves as a more practical foil to other ideas described more abstractly in the book . McCloskey posits that economics’ reliance on “hard” mathematics and quantification has diverted attention from its more metaphoric and literary dimensions, which are described as “soft” or “gynocentric” ways of knowing. I do not believe that it is in the essence of woman to be holistic or subjective, but rather that economics can be enriched by diversifying. I think McCloskey believes the same but more specifically: bring back storytelling, bring in storytellers. Yes, the writing is a little kitschy -- and carries the overused metaphor of feminine circle/masculine square throughout the essay -- but engaging to read and, again, rich with examples, a notable absence in the book.

The collection does, however, uniquely include separate critical reviews that remind readers of some of the flaws of feminist thinking; for one, viewing economics solely through narrow lens of gender leaves out important questions of class and race. One standout example of this was discussed by Strassman in her critique of the portrayal of non-market work – do we have inclusive frameworks that consider the impact of allocation of labor in homes where women are often primary heads of household, a trend in many black communities? Furthermore, the collection is unabashedly provincial, largely considering problems only of women in the United States. There is always difference to tackle, and economics must be complicated from all angles. Every critique urged an understanding of economics in its broader social context, a pitfall encountered even when using gender as an organizing principle.

Ultimately, it was easy to see the need for reconstruction of economics’ assumptions of objectivity because its ultimate unit of analysis – man or more rightly human – is a self-aware being who functions in a world affected by such huge amorphous forces as culture, history, and society (unlike the ahistorical molecule in chemistry for example). There is influence of the masculine within economics as with all science, and economics has differentially served people according to sex. The smart researcher recognizes these limitations of the discipline as is. The ultimate conclusion of every single essay in the book (including the critiques) is that economics would be improved by accepting a broader range of theoretical and methodological approaches as valid forms of inquiry.

A complete reading of this trailblazing text is required to understand the full scope and implications of this thought (I didn’t even mention work by, say, Nancy Folbre who showed that even the utopist society Marx and Engels envisioned perpetuated sexism, especially in trivializing non-market labor). But, individual readings of the introduction and works by England and McCloskey are accessible teaching resources and should provide a sufficient taste of feminist critiques of economics. In the years since Beyond was published, there have been more books, journals, articles, and collections written on the subject of feminist economics. Please see select examples in appended Works Cited.

Instructors might also find Ferber and Nelson’s 2003 follow-up, Feminist Economics Today: Beyond Economic Man, particularly informative as it includes updated articles from England and Folbre as well as new work on models of non-market work and post-colonial thought in economics (Figart, 2005). The sequel Feminist Economics Today (FET) begins with an apt documentation of the progress (or lack thereof) made in the fledgling field over a decade after the publication of their pioneering collection Beyond Economic Man. The 90s have seen the rise of many feminist-friendly organizations including CSWEP and the IAFFE as well as the associated birth of Feminist Economics, a national journal. Yet, examples of the feminist movement’s visible impact on the mainstream study of economics are lacking. At the most basic level, the demographics of the discipline remain unchanged with the share of women receiving advanced degrees in economics and securing tenure stagnating and even decreasing between 1992 and 2001 (2,3). More insidiously, development and propagation of the theory in an academic sense has met resistance. An informal survey of AEA economics department chairs, conducted by Ferber and Nelson in 2001, asked respondents to describe the value of feminist theory in economics. Responses ranged from curious but skeptical to dismissive and disheartening with one respondent simply proclaiming, “it’s silly” (22). Pedagogically, introductory texts are “impregnable bastions” with little mention of any alternatives to neoclassical models let alone full-fledged chapters.

The preface to the collection gives a sense of how feminist theory has not achieved a groundswell of support in mainstream economics. Fully aware of the fact, Ferber and Nelson nonetheless forge ahead in FET in hopes (as always) of broadening the scope of the field. The book offers an excellent variety of essays, a few of which I summarize below, that depart from the explicative nature of its predecessor. The first few pieces harken back to Beyond, including a revised essay by Paula England that further expands on her notion of the false dichotomy between the separative and soluble rational agent. England and Folbre then go on to apply these primary critiques in an economic analysis of the market for home care (of children, of elders). The theory proves useful in locating problems of monitoring and enforcement as well as imperfect information in the market for care. England and Folbre reason that the econometric obsession with quantifiable data under the assumption of entirely self-motivated (and thus “rational” choice) breaks down when considering the private sphere of the US home and family. Nelson continues the separative vs. soluble thread in her essay addressing the larger model of the paradigmatic firm. This piece left me slightly puzzled as to where exactly gender enters the analysis but is interesting nonetheless.

Out of the comprehensive review of topics in FET, I would like to devote particular attention to two specific pieces that apply feminist theory to economics in innovative and informative ways. Lisa Saunders and William Darity Jr., for example, incorporate feminist thinking into analyses of racial economic disparity. Economics can be a powerful tool in targeting the causes of inefficient, unequal discrimination in the market; neoclassical economics, however, often tends to construct narratives that render sexism and racism insignificant and rationalizable. Saunders and Darity list “premarket events, exogenous preferences (unchecked by labor market competition), [and/or] employers having inadequate information about the qualifications of potential employees” (105) as contributors to wage and hiring gaps between genders and races. These factors are immutable and discrimination on the basis of sex and race is rendered near justifiable. After briefly discussing antiracist struggles in economics, the authors focus in on specific empirics and how feminist thought can add to antiracist work. In many labor market discrimination studies, little disparity is found between black and white women, yet qualitative audit studies show considerable evidence of increased prejudice against black women Throughout the hiring process, for example, black women are less likely to be offered an interview, interview, or receive equal wages as equally qualified white women. How can rigorous, quantitative econometric studies be reconciled with the real world observations?

In this case of missing discrimination, Saunders and Darity posit that differences in familial and community responsibilities may create greater motivation to work in black women than in similarly qualified white women. Difficult-to-measure motivation serves as the omitted variable. But, things are not quite so simple. In studying this case, Saunders and Darity repeatedly emphasize that racism and sexism can operate similarly or differently from one another, but both work in tandem in each case. Furthermore, discriminatory effects of race and gender are not simply additive or straightforward as quantitative studies often force. Economists study what they see or perceive to be a problem individually (objective and reductionist – like a science). The problem with this step-like variable-by-variable approach, however, is that it takes the variable itself – here, race or gender -- completely out of context. The interaction between sexism and racism is lost. Employers do not make hiring decisions in vacuums swayed by individual variables. Applying the same methods to different forms of oppression is problematic in that it assumes that these forms of exclusion and discrimination work the same way. Here, feminist study can inform antiracist economics and vice versa by considering one group’s impact on the other. As such, Saunders and Darity bring up a host of interesting interdisciplinary questions that would serve as great jumping-off points for any introductory economics or econometrics class at the end of their piece . In sum, the essay concretely shows how the confounding and compounding of race and gender “lenses” can leave research studies unbearably myopic.

Myra Strober’s similarly analyzes the mis-application of neoclassical economic constructs – this time in the field of education. Her discussion questions economics’ narrow characterization of Adam Smith’s rational homo economicus -- this man is motivated solely by self-interest and competitive utility maximization, notions that are, in Strober’s opinion, incongruent with the goals of the education sector. Mainstream economics, for example, puts utmost value on productivity and wage in the market; thus, education is only valuable in its propagation of wage-making skills. Consequently, in times of budget cuts, funding in education is re-distributed to those areas that earn the student the greatest living (but not necessarily the greatest utility or value). One of the most overt and familiar examples of neoclassical models impinging on the classroom is the scarcity of good grades. Strober suggests that, “educators have grafted the notions of scarcity and competition onto the educational system. There is no inherent scarcity of good grades…by creating a scarcity of good grades and therefore competition for those grades, consciously or unconsciously educators emulated the reward system of the competitive model” rather than promoting excellence in an area or the love of learning as teachers should. Strober also comments on issues apart from what is taught conventionally but how material is conveyed. In contrast to neoclassical methods, collaboration and inclusiveness of varying learning styles are central to feminist pedagogical methods. Strober concludes her piece by articulating the ways in which feminist pedagogy differs from neoclassical economic constructs in that it focuses on the process of education rather than its end goals.

Ferber and Nelson’s ultimate emphasis in FET is again that economics should be more open to alternative perspectives that depart from mainstream models. The collection includes several (frustratingly-still-nascent) feminist perspectives on economics from the social construction of firms in the market to patterns of globalization. Paula England’s expanded piece on the separative self explores the lack of true altruism, taste formation, and empathy in mainstream economic models; her next piece studies care work from a feminist standpoint that incorporates models of bargaining in the family and endogenous tastes. Saunders and Darity discuss the relationship between feminism and antiracism in research on discriminatory trends. This piece makes the point that without attention to complexity of the interactions being studied, any research conclusions are suspect or moot. Myra Strober discusses the place of neoclassical wellbeing and value, efficiency, and choice in the classroom, arguing that a more feminist pedagogical approach provides better overall outcomes for students. Economics instructors should take note of the upswing in the use of feminist theory in the decade since Beyond was published and use FET as a contemporary guide to heteredox theories attempting to become a part of the “impregnable bastion” that is neoclassical economics.

Queer Theory

At times, Amy Gluckman and Betsy Reed’s 1997 collection of essays, Homo Economics: Capitalism, Community, and Lesbian and Gay Life (HE) , reads more like an activist handbook than a purely academic text. Indeed, a few of the included articles are described explicitly as primers for citizens interested in contested LGBTQ political and economic issues. Homo Economics specifically traces economic issues faced by US gay population today and how economics relates to systematic discrimination as well as the response and backlash to oppression in general. Some of the primary goals of the collection included offering economics-related advice to LGBTQ activists as well as empirically illuminating, qualitatively and quantitatively, the economic profile of the gay community. Some examples of pieces that deal with the general economic status of LGBTQ individuals include Knopp’s urban econ article on gentrification and gay neighborhood formation specifically in New Orleans (45), Gluckman and Reed’s focus on advertisement targeting gay markets (1), and Badgett’s piece on skewed income statistics. Like most of the essays in the book, each of these articles has a very political bent. The myth of universal gay affluence (with biased data from magazine surveys), for example, is falsely being used to motivate marketing campaigns, invisibilize class differences within the gay community, and, worst of all, fuel anti-gay rhetoric. The collection also has several varied pieces highlighting the fight for domestic partner benefits, HIV/AIDS stigmatization, right-wing anti-gay movements, and class representation in LGBTQ protest groups.

Another consistent theme through all of HE is the inherent paradox where, “open homosexuals face occupational segregation and discrimination, but they also owe much of their newfound freedom to economic trends” (xiii). This struggle is very much akin to the entry of females into the workforce. For women, jobs brought increased economic opportunity and freedom but also saw the emergence of the glass ceiling and the maintenance of unequal distribution of labor in the home. This similarity, however, does not immediately lead to coalition building between feminist and anti-gay movements. In his piece, “Do Gay Men Have a Stake in Male Privilege? The Political Economy of Gay Men’s Contradictory Relationship to Feminism”, Jacobs offers a nuanced characterization of the tenuous relationship between the two movements. Here, he explains how the patriarchal heterosexual relationship is both politically and economically privileged; as such, Jacobs reasons that the chance to build a life outside of the nuclear family has been key to liberation movements of both women and the gay community. In public spheres outside the family, however, gay men benefit from the undervaluation of women’s work and general subordination of females. While on of the more engaging and interdisciplinary essays in the collection, Jacobs has few suggestions as to how gay men may become better natural and active allies or feminists.

The most theoretical economics-related essay in the book is by far an essay by Cornwall entitled “Queer Political Economy: the Social Articulation of Desire.” This shortened (but not short!) piece presents a model for how individual preferences (the underlying basis for invisible hand markets) are formed, particularly for gay individuals. Cornwall then goes on to examine how this model can result in a Pareto inefficient outcome observed across queer communities: “how a substantial fraction of the [gay] population can continue to deny to themselves as well as to others their “true” tastes despite repeated social interaction that includes visible queers” (90). Cornwall gives a wide array of examples from sociolinguistics to cognitive science to back his theory that personal desires or tastes are shaped primarily by immediate social networks. Here, he flouts the neoclassical idea that individuals confront markets alone with a clear idea of what maximizes their utility. Cornwall emphasizes that desire and taste formation is not an unbiased, arbitrary independent event. Instead, group dynamics often lead to “the making of false illusory correlations” (98) that influence social identity and often keep homosexuals closeted. Cornwall’s essay offers up a very plain examination and critique of one of the fundamental assumptions of neoclassical economics and resulting unexplainable phenomena.

There are concluding worries that both works intonate for the larger study of economics. In Homo Economics, Gluckman and Reed note how quickly the activist saying of “we’re here, we’re queer, get used to it” changed to “we’re here, we’re just like you, don’t worry about it” (10) once more affluent gays gained a stronger visible foothold in society. Here, the pursuit of social change weakened once the gay community was effectively “legitimized” in the public eye, and invited into the fold of the status quo. Reaping the benefits of acceptance often involves ceding the opposing viewpoint, which fights to stretch the concept of what’s right and what’s “normal”.

Post-Colonial Theory

On the opposite extreme, Eiman O. Zein-Elabdin and S. Charusheela’s Postcolonialism Meets Economics (PME) offers a terminology-heavy theoretical look at economics’ resistance to colonization by post-colonial theory, a popular framework sweeping other social sciences and the humanities. The following essay will analyze select recommended pieces from these anthologies in turn, concentrating specifically on how they do or do not connect or overlap with personal understandings of philosophy of science and feminist perspectives on economics.

Zein-Elabdin and Charusheela’s PME is different from HE in that it focuses on the amorphous broad global community as opposed to individuals identifying in a particular way. As such, PME serves as a refreshing departure from narrower works like HE and Beyond Economic Man which are unabashedly provincial, focusing solely on Western problems and concerns from the standpoint of sexual orientation or gender. Readers must be forewarned however: the language in this collection is not entirely accessible, including abstruse terminology that is often left largely unexplained. Nevertheless, the book’s introduction attacks economics as a prime candidate for postcolonial scholars simply because it is so influential in determining the distribution of global wealth and adjoining fate of “post-colonial” countries. Neoclassical development economics is also distinctly “orientalist” in that it privileges industrial societies – that is, any country exhibiting patterns deviating Western industrialist are to be corrected by development policy. But development economics is not the only target of postcolonial critique. Economics as a whole was created on a culture of European modernity and superiority and thus economic knowledge is culturally bound. This critique is reminiscent of feminist philosopher Sandra Harding’s multicultural evaluations of the natural sciences; only those technological advances put forth (or appropriated by) Westerners have been heralded. Further connections to feminist thinking come in Jennifer Olmsted’s “Orientals and Economic Methods: Rereading Feminist Economic Discussions of Islam” which shows how Western feminists construct an image of the oppressed 3rd world Muslim female that is inherently patronizing (165) and disconnected from the true wants of these women. In this intersection of feminism and postcolonial study, Omsted demonstrates how, “even as we challenge certain perviosuly unproblematized assumptions in economics, feminists may reify other dualisms” (166), here Western versus Oriental.

One last interesting article I will mention is Cecilia Conrad’s critique of race as a category in econometric OLS regression techniques. Here, the assumption that race is a fixed variable from sample to sample does not capture the inherent fluidity of this socially constructed category that is reinvented time and time again. Race is an unstable category. Lack of attention to historical understandings of race can lead to false conclusions in studies on, say, longitudinal differences in wage. Conrad offers some clues as to how a more fluid representation of race can be incorporated into econometric models (endogenous variables with simultaneous equations) but does not suggest any kind of firm answer.

In conclusion, Nitasha Kaul writes of this positivist problem: “it is only to be expected that a dominant scientific discourse wishes its own history away and strives to be seen as a positivist, scientific (formalized and mathematical) rational, obvious method untainted by ideology and unlocated in its historical moment” (183) In economics, queer theory, feminist, and postcolonial approaches are bent on exposing the inherent inaccuracies behind Eurocentric, androcentric assumptions like utility-maximizing behavior and stable preferences – and traditional economics will resist the change. This problem is apparent in all heterodox approaches – be it women in a male-dominated workplace or a postcolonial approaches to development policy. Ultimate lesson from all the works reviewed here is to persevere regardless.


See which readings on feminist economics show up in course syllabuses.

Contributor: --Ncheray1 17:01, 17 May 2011 (EDT)

Additional suggestions for course content