Twelve economic perspectives

Last week I made a brief case for pluralism in economics, for students to be introduced to a variety of perspectives. By way of follow-up, I thought I might list some of those perspectives. Some of them are formal schools, others branches or traditions.

Some of the groups below are more radical than others, some big and some small. My aim is not to assess them and say which one is correct. The whole point of a pluralist approach is to be open to insights from a variety of sources, to assume that no single voice has all of the truth.

It’s almost impossible to sum up some of these in a couple of sentences, but with that caveat, here are twelve different perspectives within economics:

  1. Austrian – a radically individualist school of free-market economics, it has often been cited in connection with Tea Party opposition to big government in recent years. It remains controversial, but many ideas and observations from Austrian school economists have become mainstream and influential.
  2. Classical – the world of political economy, as it used to be known. This is the foundations of economics. Writers such as Adam Smith, David Ricardo or Robert Malthus first articulated the theories of markets and comparative advantage.
  3. Developmental – though you could trace aspects of development economics back to the late medieval era, it is most readily associated with developing countries from the 1950s. It’s a branch of economics rather than a formal school, and deals specifically with raising productivity and growth.
  4. Distributist – inspired by Catholic teaching, Distributists argue for a middle way between capitalism and socialism. They believe in private property shared widely, in guilds and co-ops, and the family as the key unit in society.
  5. Ecological – emerged in the last fifty years or so and sees the economy as inseparably connected to the environment. Ecological economics puts a new importance on energy and resources, and argues for environmental accounting and sustainable development.
  6. Feminist – attempts to redress imbalances by addressing blind spots in economics, including gender inequality. Ideas around care and unpaid work, work time, or measuring wellbeing are increasingly influential.
  7. Islamic – A tradition that stretches back over a thousand years, Islamic economics is a distinct philosophy within the discipline. It is broadly pro-poor, arguing for taxes on wealth rather than trade, a ban on interest, and full reserve banking.
  8. Institutionalist – suggests that institutions play a larger role – whether that is formal structures or customs and traditions. Institutionalists rgues that economics is part of evolving culture rather than strictly rational individuals.
  9. Keynesian – rising to prominence during the Great Depression, Keynes looked at demand rather than supply, and argued for government intervention to moderate the business cycle and recession, inventing macroeconomics in the process.
  10. Neoclassical – drawing on the fathers of economics, the neo-classicists distilled market principles around the idea of self-interested individuals, and take individuals and their exchanges as the foundation of economics. Neo-classsical thought emerged in the Victorian era, but remains strong today on both left and right.
  11. Marxist – focuses on the means of production, and who controls it and benefits from it. For Marx, and the many thinkers who have elaborated on his initial work, society is primarily about class rather than individuals and their choices.
  12. Schumpeterian – Building on German historical traditions and Marx, Joseph Schumpeter’s influential idea was to outline a much bigger role for innovation and technological advance as a driver of change.

That’s by no means an exhaustive list, and there are lots of other things that could be included – and indeed, plenty of things in my list that others would leave out. I mention them because I don’t think we can solve today’s problems without listening to a broad range of voices. The insights of some of the minority perspectives will be vital to dealing with the challenges of climate change, poverty or persistent inequality.

10 Comments on “Twelve economic perspectives”

  1. imarunner2012 June 9, 2014 at 4:29 pm #

    Great list, I had no idea. When I took Micro and Macro Econ we talked about missles vs milkshakes, the marginal utility of ears of corn. These were more nuts and bolts basics of what business students needed to understand.
    Many in my classes were hopelessly lost which kept me at the top of the scaled grades. I did not deserve those As!
    It’s too bad that in those two semesters we could not have looked at some of these schools of thought. What made communism tick, or not tick as the case may be. What is socialism? We talked about some of this in sociology and philosophy class, but these are economic schools of thought. A Professor of economics would have been a more appropriate person to give us the basics and help us contrast and understand the philosophies behind these movements.

    • Jeremy June 10, 2014 at 10:27 am #

      I did some economics modules at university as part of my International Relations course, and it was a similar experience. It was very much about explaining the status quo, particularly the role and workings of its institutions. An important grounding I suppose, but it was almost completely uncritical. It was only because I was doing other modules looking at poverty and development that I gained any sense that the economic system wasn’t flawless and could be different.

      • imarunner2012 June 10, 2014 at 1:30 pm #

        From the grades of my collegues it was apparent that either no one cared about economics or they were clueless.
        Like so many general degrees, you can only survey all of these topics. I took a few philosophy classes, I wish I had taken a comparative econ class.
        A buddy was an econ major and we had some great conversations. He was a Reaganite. I was a mis-fit in the business college. 😉

  2. henry1941 June 9, 2014 at 9:15 pm #

    Georgist?

    • Jeremy June 10, 2014 at 10:16 am #

      Yes, the Georgists have vital insights too. I haven’t included it in the list as I’d see it as an alternative approach to taxation rather than a fully articulated economic theory, though I realise that risks underplaying how transformative its big central idea actually is.

      For the benefit of comment readers though, here’s a bonus point:

      Georgism: named after reformer Henry George, this movement put land at the heart of the economy. There should be an open market for the things we create ourselves, they argue, but that which we didn’t create belongs to everyone. Georgists advocate a land value tax that replaces all other forms of taxation.

  3. Tegan Tallullah June 10, 2014 at 6:06 pm #

    Interesting list. What would UK neoliberalism come under? Neoclassical?

    • Jeremy June 11, 2014 at 9:04 am #

      Yes, Neoliberalism would sit as a narrower sub-section of Neoclassical. Neoclassical is pretty much the mainstream, but there’s a variety of opinions within in.

Trackbacks/Pingbacks

  1. Economics: The User’s Guide, by Ha-Joon Chang | Make Wealth History - June 16, 2014

    […] It starts with a history, from the medieval era through the industrial revolution to our current day, explaining the emergence of economics as a discipline. Having explained the origins of capitalism, Chang then outlines the predominant schools of economic thinking, their strengths and weaknesses, what their main insights are and where they fall down. Whatever you do, don’t pledge your allegiance to just one, he insists. If economics is a tool, it is a Swiss army knife, with different perspectives to apply to different problems. […]

  2. Twelve economic perspectives | Alienated World - August 31, 2014

    […] — source makewealthhistory.org […]

  3. Economics is for everyone | Make Wealth History - September 8, 2016

    […] for this is that he’s a pluralist. He points out that there are at least nine different schools of economic thought, and none of them can claim to be absolutely right about everything. We need those multiple […]

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