January 19, 2015

Lost and found

Comment on 'Brad DeLong and the true nature of neoclassical economics'

Blog-Reference and parallel Blog-Reference

You write: “But instead of just criticism, how about educating us on who you think is doing the kind of analysis that is useful and what their theories are. It would be more helpful to point in the right direction than just declaring how lost we are.”

With their critique, heterodox economists are one big step ahead of Orthodoxy and it is an enigma, to be solved by the historians of economic thought, how it could happen that a scientific stillbirth like neoclassical theory has been accepted for so long by so many.

On the other hand, the weakness of Heterodoxy has always been this:
“As will become evident, there is more agreement on the defects of orthodox theory than there is on what theory is to replace it: but all agreed that the point of the criticism is to clear the ground for construction.” (Nell, 1980, p. 1)

The methodological essentials of theory construction were never well understood by Heterodoxy (2012). Because of this, it cannot be expected from some heterodox manifesto 'to point in the right direction.' Heterodoxy, too, is lost in the wood.

Vis-à-vis the endemic green cheese assumptionism of the neoclassical approach the common sense of Heterodoxy often appears as progress. Keynes is a case in point. However, common sense is simply not enough for a paradigm shift. Debunking, too, is necessary but insufficient.

“The problem is not just to say that something might be wrong, but to replace it by something – and that is not so easy.” (Feynman, 1992, p. 161)

It is the task of Constructive Heterodoxy to work out the replacement for the failed neoclassical approach (e.g. 2015; 2014).

Economists have but one choice: to break new ground or to defend the scientifically indefensible – like Brad DeLong and others of the lost generation.

Egmont Kakarot-Handtke

Feynman, R. P. (1992). The Character of Physical Law. London: Penguin.
Kakarot-Handtke, E. (2012). Crisis and Methodology: Some Heterodox Misunderstandings.
SSRN Working Paper Series, 2083519: 1–22. URL
Kakarot-Handtke, E. (2014). The Three Fatal Mistakes of Yesterday Economics:
Profit, I=S, Employment. SSRN Working Paper Series, 2489792: 1–13. URL
Kakarot-Handtke, E. (2015). Essentials of Constructive Heterodoxy: The Market.
SSRN Working Paper Series, 2547098: 1–10. URL
Nell, E. J. (1980). Growth, Profits, and Property, chapter Cracks in the Neoclassical
Mirror: On the Break-Up of a Vision, pages 1–16. Cambridge, New York, NY,
Melbourne: Cambridge University Press.