The true diversity of economics

Last week Tony Emerson argued that economics has many blind spots as a discipline, and that economists do not deserve their role as ‘high priests’ in government decision making. I would argue that not all economists are created equal, and that some are more worth listening to than others!

To demonstrate, here is a list of economic perspectives. Some of them are formal schools, others branches or traditions. Some are radical, some obscure. The point is not to identify the ‘correct’ one, but to show that wisdom often comes from consulting broadly, and by considering different voices. No single voice will have all of the truth.

On the understanding that a two sentence summary won’t do justice to these schools of thought, here are twelve different perspectives:

  1. Austrian – known for its radical individualism, this school of free-market economics 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 – what used to be known as the ‘political economy’, 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 – emerging in the last fifty years or so, ecological economics sees the economy as inseparably connected to the environment. It 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. Georgist: named after reformer Henry George, this movement puts 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. Land value taxation is the key policy intervention for Georgists.
  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.

The problem we have today is not so much that economics is misguided, but that it has been captured by narrow interests. Mainstream economics is focused on privately owned wealth, generated in free markets. This serves those who gain the most from the markets, at the risk of leaving out other claims – those of the poorest, and of the natural environment, for example.

This is where there is a role for Christians, who are called to be a voice for the voiceless. The church can play a role in speaking up for those routinely excluded from economic decision making, and we should not be afraid to draw on economics to redress the balance. Schools of thought such as feminist economics can help to highlight overlooked carers for example, who work without pay and are therefore invisible to mainstream economics. Or we can use ecological economics to reinforce good stewardship of the earth and its resources.

At its heart, economics is about how we live together. The first step towards a fairer and more humane economics would be to listen to each other.

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