Heterodox economics

Nowadays, our current forms of economy are increasingly being criticised, especially among young people. However, there are approaches and ideas that lie outside the economic mainstream and can be summarised under the term „heterodox economics“. They offer an alternative to the prevailing economic sciences.

The term „heterodox economics“ refers to various schools of thought and scientific approaches, including socialist, Marxist, feminist and ecological approaches. It forms a counterpart to conventional economics, such as neoclassical theory. Although many of the approaches differ in some aspects, they are not mutually exclusive.
The main thing they have in common is that they all reject and strongly criticise the neoclassical theory.
The neoclassical theory is a school of economic thought that emerged in the late 19th century.

Some of its basic principles:
> Assumption of rational expectation: people have perfect information                                                       >Utility maximisation: utility for individuals, both material and immaterial, should be maximised
> Marginal utility (additional benefit that an additional good or service brings): Resources should be used in such a way that marginal utility is maximised
> Maximisation of profit for companies
>Market mechanism: free markets should lead to a balance between supply and demand
> Property rights: private property-based economic systems should be more efficient

what’s criticised by representatives of heterodox economics:
„market equilibrium“ presupposes markets with perfect conditions and is therefore unrealistic          >People often have limited information and are therefore unable to form „perfect“ and realistic expectations
> Reality is characterised by diverse individual preferences, different levels of knowledge and power relations. It is simply not the case that everyone has similar preferences and levels of knowledge, as is assumed in neoclassical theory.
> the neoclassical theory would neglect the importance of institutions and historical context, which can have a significant impact on economic outcomes.

a selection of heterodox schools and approaches:
>Post Keynesianism: also considers the role of uncertainty, liquidity and real market conditions.
>Feminist economics: economics is analysed from a gender perspective, looking at the impact of gender inequality on economic outcomes. Criticises traditional models for neglecting gender aspects.
>Marxist economics: based on the ideas of Karl Marx. Analyses the role of class conflict, capitalism and historical developments in the economy

Heterodox economics attempts to capture aspects of reality that may have been neglected in neoclassical models. There is more focus on the diversity of human behaviour, the role of power and social structures, and the limitations of human ratinoality.
What are your thoughts on heterodox economics?