David F. Ruccio — Mainstream economics, heterodox economics, and the Left

So, what distinguishes liberal mainstream economists from left-wing heterodox economists? To my mind, it comes down to focusing on market imperfections (which can, at least in principle, be fixed within capitalism) versus focusing on the problems with capitalism as a system (which require, for a solution, the creation of noncapitalist practices and institutions). 

Here’s the definition of heterodox economics I gave back in 2010:

Heterodox economics comprises all those theories that academic economists and others use to criticize and develop alternatives to mainstream (neoclassical and Keynesian) approaches. Heterodox and mainstream theories differ in terms of their starting points, methodologies, and conclusions. Thus, for example, Marxian economists start with class and use Marxian value theory to criticize capitalism, whereas neoclassical economists start with a set of given preferences, technology, and resource endowments and use a framework of supply and demand to celebrate capitalism. The problems of capitalism and mainstream economic theories, now as throughout their history, create the space for and interest in heterodox approaches.

To practice that kind of left-wing heterodox economics means one does have to know something about Marx, Kalecki, Sraffa, and Minsky—because their work (and that of many others) constitutes the foundations (or at least some of the foundations) of nonmainstream, heterodox analysis. 

Heterodox economists reject economic orthodoxy not, as Dillow believes, because they’re ignorant of what the orthodoxy is or because of some kind of halo effect, but because, when they look at the world through the lens of Marx, Kalecki, Sraffa, and Minsky, they see an economic and social system that continues to discipline and punish the vast majority of people in order to benefit a tiny minority at the top. They see, in other words, an economy that is inherently unstable, fundamentally unequal, and profoundly unjust. 

Hence, heterodox economists see that another economics—another economic theory as well as another economic system—is both necessary and possible. Mainstream economists, for their part, don’t.

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Mainstream economics, heterodox economics, and the Left
David F. Ruccio | Professor of Economics University of Notre Dame Notre Dame