David F. Ruccio — Imperialism, the highest stage of neoclassical economics

The basic idea (as presented on Wikipedia, by Edward P. Lazear [pdf], and in this interview with Becker himself) is that economics imperialism refers to an “economic analysis of seemingly non-economic aspects of life,” such as crime, law, the family, racial discrimination, tastes, religion, and war.*

Actually, that’s wrong. Economics imperialism is not the economic analysis of supposedly noneconomic behaviors and institutions; it’s the extension of neoclassical economics to those domains. Economics imperialism is, in this sense, the highest stage of neoclassical economics.

There are lots of different ways of making sense of the economic dimensions of our individual and social lives. What Becker and his followers set out to do was to analyze various aspects of individual decisionmaking and social institutions through the lens of neoclassical theory. This has meant reducing those decisions and institutions to individual, rational, self-interested calculations of costs and benefits, under conditions of scarcity, such as to arrive at efficient, equilibrium solutions.

Occasional Links & Commentary
Imperialism, the highest stage of neoclassical economics
David F. Ruccio | Professor of Economics University of Notre Dame Notre Dame

This relates directly to C. P. Snow's critique of modernism in The Two Cultures, the two cultures being numerate and literate, the former emphasizing quantity and the later quality. Snow's point was that Western education had over-incentivized literacy over numeracy to the degree that educated people, many considered learned, had little grasp of science. On the other hand, a similar argument can be mounted from the other side, arguing for many of the issues of the day resulting from an overemphasis of quantity over quality.

This is the a fundamental area of contention between economic liberalism and social liberalism. neoclassical economics is based on economics liberalism. Conversely, much heterodox economics is based on social liberalism. The political theory associated with neoclassical economics is neoliberalism. (Austrian economics can be considered a subset of neoclassical economics and neoliberalism.) The aim is a market society in which outcomes are assumed to be the result of the play of natural forces, hence, most efficient.

The political theory underlying heterodox economics is participatory democracy whose aim is social liberalism and distributed prosperity. The aim is a welfare society oriented to the common good, hence, most effective socially.

The real challenge to economics imperialism—inside and outside the discipline of economics—is, as Louis Althusser put it, the idea of a process without a subject.