Lars Syll — Neoclassical economics — immunized against reality

Hans Albert: "It is not by chance that the attempts of some proponents of pure economics to achieve autonomous theory formation tend to be translated methodologically into model Platonism: the immunization from the influence of non-economic factors leads to the immunization from experience in general. It appears that the diagnosis of the fundamental methodological weakness of the neoclassical way of thinking must lead to an aversion to sociology. By contrast, regardless of all methodological differences, all heterodox currents in economics characteristically share one element: the accentuation of the significance of social factors for economic relationships and the consciousness of the fact that the social domain analyzed by pure economics is embedded in a more comprehensive social complex that cannot be abstracted away from with no further ado if useful explanations are being sought."

 This is the crux of the neoclassical, market fundamentalists methodological approach that erroneously assumes methodological individualism and rationality in terms of maximizing utility economically. In one sweep it erases from the board both the relevance of social system as whole comprised of elements in relationship and all experience and behaviors that are non-economic in the neoclassical presumption of homo economicus.

HA: "If one gains clarity about these relationships, then one can begin to understand why the models constructed with the help of simple behavioral assumptions by neoclassical oriented theoreticians must be immunized against experience in one way or another if their failure is to be avoided."

Conventional economists have chosen to tilt the playing field in their direction through their initial assumptions that are based on unacknowledged presumptions. Neoclassical economists are unwilling to discuss these presumptions, which are chiefly philosophical and sociological rather than primarily economic, arguing that methodological debate has been closed in their favor, taking their own consensus to be definitive. This is pure dogmatism rather than science. Why argue with a priesthood in terms of their own dogmas."Orthodox" and "heterodox" are theological terms historically.

Neoclassical economics — immunized against realityLars P. Syll | Professor, Malmo University