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Critiques of Neoclassical Economics: My Homepage website has overlapping material organized differently.
There are many different fronts on which critiques can be made. There are negative and positive aspects -- On the one hand a critique says that existing theories on the issue are wrong (negative). At the same time, we have the responsibility to provide an alternative; especially an Islamic alternative. This is what I am hoping to accomplish in the research projects being outlined. However, alternatives may not be immediately obvious, and a destructive activity of clearing the ground may be needed first, before the job of rebuiliding can be undertaken.
An Islamic Critique of Neoclassical Economics: This gives a list of areas where the teachings of Islam are diametrically opposed to neoclassical ones. Again each such area provides us a research topic.
Capitalism in Crisis: Causes & Consequences: This shows the root cause of the current crisis in capitalism is the promotion of Greed. see also relatec topic: Decline of Morality in the West.
Naomi Klein's book The Shock Doctrine: Rise of Disaster Capitalism, is the best historical analysis of how capitalism has functioned in the late twentieth century.It can be viewed as a continuation of the analysis of Karl Polanyi in The Great Transformation (summary and review) which document the rise of the Self-Regulating Market
a central myth of capitalism
The Empirical Evidence Against Utility Theory
Heterodox Economics: There is a large number of alternative schools of thought to conventional. These are lumped together under the title Heterodox, even though many have nothing in common with each other.
Value-Laden Economics: Economics Claims to be Value Free, but is actually full of values. The values embedded in neoclassical theories are pretty ugly, and so need to be exposed and contrasted with Islamic values. see also the Positive/Normative Distinction, in Open Research Projects.
Keynes also presented a critique of capitalism as an inherently unstable system. His true message has been forgotten, and his writings re-interpreted. Skidelsey gives an interesting account.
Growth is Harmful: One of the central ideas of economists is to pursue growth as a means of solving the central problem of economics: "scarcity". There are many lines of research which lead to the conclusion that pursuing growth of income/wealth does not help, or else is actually harmful. The Islamic preference for simple lifestyles is a useful antidote to conventional emphasis on ever increasing standard-of-living.
Happiness research shows that money does not buy happiness and therefore is not worth pursuing.
No Trickle Down Effect, shows that growth does not lead to elimination of poverty.
For example, six winners
of the Bank of Sweden Prize for Economics,
alias “Nobel Prize for Economics”,
have written as follows.
". . . economics has become increasingly an arcane branch of mathematics rather than dealing with real economic problems"
“[Economics as taught] in America's graduate schools... bears testimony to a triumph of ideology over science.”
"Existing economics is a theoretical [meaning mathematical] system which floats in the air and which bears little relation to what happens in the real world"
“We live in an uncertain and ever-changing world that is continually evolving in new and novel ways. Standard theories are of little help in this context. Attempting to understand economic, political and social change requires a fundamental recasting of the way we think”
“Page after page of professional economic journals are filled with mathematical formulas […] Year after year economic theorists continue to produce scores of mathematical models and to explore in great detail their formal properties; and the econometricians fit algebraic functions of all possible shapes to essentially the same sets of data”
Wassily Leontief JE
“Today if you ask a mainstream economist a question about almost any aspect of economic life, the response will be: suppose we model that situation and see what happens…modern mainstream economics consists of little else but examples of this process”
Post-Autistic Economics is about changing this state of affairs.
"Economics is supposed to be social science, i.e. an intellectual discipline resting upon empirically-observed facts, in which mathematics and conceptual frameworks are tools for understanding.
But in contemporary mainstream economics, the tools are often in the driver's seat, declaring evident facts impossible and reducing the subtleties of the real world to whatever clockwork economists best know how to build.
Post-Autistic economics is the attempt to escape the tyranny of these tools and build new ones that will work properly."
“Modern economics is sick. Economics has increasingly become an intellectual game played for its own sake and not for its practical consequences for understanding the economic world.
Economists have converted the subject into a sort of social mathematics in which analytical rigour is everything and practical relevance is nothing.”
Mark Blaug About P JE http://www.chimes.nl/staff/blaug/
Challenge, May-June, 1998 by Mark Blaug
And the Scientific American headlined in March 2008: “The economist has no clothes” – an article by R. Nadeau explaining the overall “absurd” physical analogies of neoclassicism states that “this theory can no longer be regarded as useful … because it fails to meet what must now be viewed as a fundamental requirement of any economic theory-the extent to which this theory allows economic activities to be coordinated in environmentally responsible ways on a worldwide scale … neoclassical economics … constitutes one of the greatest barriers to combating climate change and other threats to the planet.”
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