Economics Department

 

Date of this Version

May 1970

Comments

Published by American Economic Review 60:2 (May 1970), pp. 352-363. Copyright © 1970 American Economic Association. Used by permission.

Abstract

The purpose of this paper is to outline a radical approach to economics and to suggest how several important social problems might be dealt with in that framework. Our effort to develop a new curriculum is motivated by the conviction that the orthodox approach to economics cannot deal with the important problems of modern society.

Orthodox economic analysis as presented from the elementary course through the graduate seminar is based upon an acceptance of the status quo in social relations. Microanalysis presupposes the individualistic ownership and decision-making systems typical of capitalist societies, and in this narrow context the pecuniary behavior of firms and individuals is examined. In macro-analysis, when the aggregate operations of these individual units are the subject matter, attention is focused on the fiscal and monetary adjustments necessary to keep the system smoothly functioning. All in all, the curriculum of modem economics is one of philosophic marginalism: existing social relations are taken as a datum and the problem is one of administering the system by adjustments around the edges.

The marginalist approach is useful only if, accepting the basic institutions of capitalism, one is concerned with its administration. If one questions the virtue of capitalism as a system, then the basic social relations and the institutions of the system themselves must be subjected to analysis. A new approach is necessary.

The old approach-that which accepts capitalism and is in general the basis of present economics curricula-cannot deal with the problems of modern society. All that the curricula say about the war in Vietnam is how it can be financed more efficiently. The very existence of imperialism is denied. Racism, it is taught, has its origins in personal preferences, and the poverty of blacks and others is "explained" in terms of their low productivity. The destruction of the environment enters the curricula only as an aside when the existence of "externalities" is pointed out as limiting the theory. The subjugation of women, the meaninglessness of work activities, and the alienation of workers are topics which do not enter the curricula at all. Socialist alternatives and the process of revolution are examined only in terms of the value system of a capitalist environment.

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