Economists for Future DE

"The real difference is methods. Heterodox economics is an avowedly political project not a social scientific effort to better understand the world. And I have nothing against political projects just shouldn't confuse the two." In fact, it is quite the opposite. Heterodox economics is largely concerned with institutional economics. As such, institutions — like money — are described and analyzed. Unlike orthodox economics, there is no bias towards state-led solutions, but rather a market bias. Reality is explained as an 'equilibrium' brought about by individuals. The 'capital market', the 'labour market', the 'goods market' — the 'holy cross' of supply and demand — is invoked, although it is built on sand due to problems of aggregation (just google the Cambridge Capital Controversy). Hence, policy advice is neoliberal, focusing on finding the right 'incentives' for private investment (de-risking), pollution (trading certificates) and employment (pushing down wages). Fallacies of composition (not everyone can save, for example) are ignored. Any empirical reality that goes against a model's processes or data is ignored. New Keynesians, for example, create an abstract model based on assumptions that can be empirically tested. This did not stop them. They neither saw the financial crisis coming nor could they explain it. No time for worry. The fact that there is no 'Nobel', as mentioned by Jason Furman? Ignored. Free trade theory was "applied" in the 2000s, with the US losing almost one in three manufacturing jobs. Did that trigger a return to industrial policy in the orthodox academic journals? Nope. Have orthodox economists learned anything from MMT? It does not seem so. You still claim that taxpayers finance the government, despite there being not a single paper that explains the details, whereas there are literally dozens of papers describing balance sheets and accounting mechanics published by MMT economists. Have any orthodox economists learned that showing only public debt means omitting the private and external sectors, and that there is a bigger picture? So, the orthodox paradigm is centred on a pro-market and anti-government core, which is highly ideological. People are assumed to be rational, and society is dismissed as an irrelevant concept. This paradigm cannot be touched. It is a political programme enabled by those who saw the fall of the Soviet Empire as meaning that the 'end of history' was near. Orthodox economists have enabled policies that have rolled back the state (thus diminishing democracy) and brought in finance. The policies it has supported over the last forty years — financialisation, privatisation, etc. — have created many problems, including climate change, inequality, mass unemployment and inflation. These problems cannot be solved by the same theories that created them. If there is any hope of solving the problems of the 21st century, it lies in rethinking them from a heterodox perspective.