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Economics beyond neoliberalism

from Lars Syll

We welcome Naidu, Rodrik, and Zucman’s contribution and the debate it has inspired. We share much of their agenda for an economics “beyond neoliberalism” …

imagesNonetheless, we believe that Naidu, Rodrik, and Zucman do not go far enough in their calls for reform. The vision they paint is still focused on the discipline of economics and anchored in the core ideas of neoclassical theory that dominated the field in the twentieth century …

The behavioral economics critique of the rational actor model has become mainstream. Yet despite this, much economic modeling, including much policy modeling, continues to use rational choice assumptions. There remains a perception that rational choice is a “good enough approximation” and that there is no acceptable alternative model … But if economists widened their view to include neuroscience, cognitive science, anthropology, social psychology, evolutionary biology, computer science, and philosophy, they would see that, over the last few decades, there has been a revolution in behavioral science that should have a major impact on economics.

Instead of asocial, transactional, self-regarding utility maximizers, real humans are intensely social, highly cooperative, and other-regarding creatures who make decisions inductively, heuristically, mimetically, and through group reasoning … Economics needs to embrace what other fields have learned about behavior, networks, institutions, culture, evolution, and non-equilibrium systems …

Our point is to encourage the field to go further, faster. Economics needs to embrace what other fields have learned about behavior, networks, institutions, culture, evolution, and non-equilibrium systems. To date the infrastructure of the economics profession—journals, funding bodies, hiring and tenure committees— has been largely closed to these ideas and approaches. If economics is to reform and move beyond neoliberalism, this needs to change.

Brian Arthur, David Colander, Alan Kirman, et al.

  1. March 22, 2020 at 10:00 pm

    I fully support this. Most of us are hoping for a best case scenario outcome to the current crisis, but it’s important also to imagine the worst case scenario, with so many people becoming sick that major systems start collapsing – supply chains, etc. Each day that the crisis gets worse, people’s awareness that we need a completely new approach to the way we run our world and our economy will increase. We need to be planning NOW how we will rebuilt the economy along the approach described here, as soon as recovery begins, which could be in six months, or more likely in two or five years time.

  2. Helge Nome
    March 23, 2020 at 1:46 am

    I think we are about to learn the difference between what is a need and what is a want

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