History of Economic Thought, Methodology, and Heterodox Approaches
The history of economic thought and methodology studies the development of economic ideas over time and the philosophical foundations and methods of economics as a science.
Scope
JEL category B covers the history of economic doctrines from the classical economists onward, schools of thought (classical, Marxian, neoclassical, Keynesian, Austrian, institutional), heterodox approaches, and the methodology and philosophy of economics.
Sub-topics
Core questions
- How have economic ideas developed and competed over time?
- What are the main schools of economic thought?
- What is the proper method of economics?
- How do economic ideas relate to their historical context?
- What distinguishes orthodox from heterodox economics?
Key concepts
- Classical political economy
- Labour theory of value
- Marginalism
- Keynesian revolution
- Positive vs normative economics
- Falsifiability and prediction
- Heterodox economics
Key theories
- Classical political economy
- Smith and Ricardo founded systematic economics around the division of labour, value, distribution, and the self-regulating market.
- Marxian critique
- Marx developed a critique of classical political economy centred on labour value, exploitation, and the dynamics and crises of capitalism.
- The Keynesian revolution
- Keynes broke with classical orthodoxy on the self-adjustment of the macroeconomy, reshaping both theory and the scope of policy.
- Positive economics and methodology
- Friedman's methodological essay argued theories should be judged by predictive success rather than the realism of assumptions, a touchstone of economic methodology.
History
Economic thought runs from mercantilism and the physiocrats through classical political economy (Smith, Ricardo), the Marxian critique, the marginal revolution and neoclassical synthesis, the Keynesian revolution, and the monetarist and rational-expectations counter-revolutions. Methodology, drawing on philosophy of science (Popper, Kuhn, Lakatos), examines how these ideas are justified.
Debates
- How should economic theories be judged?
- Friedman's predictivism contends with views demanding realistic assumptions and with broader debates over the scientific status of economics.
- Orthodoxy versus heterodoxy
- The dominance of neoclassical economics is contested by Marxian, Austrian, post-Keynesian, and institutional traditions.
Key figures
- Adam Smith
- David Ricardo
- Karl Marx
- John Maynard Keynes
- Milton Friedman
Related topics
Seminal works
- smith-1776
- ricardo-1817
- marx-1867
- keynes-1936
- friedman-1953
Frequently asked questions
- What is heterodox economics?
- Schools of economic thought outside the neoclassical mainstream — including Marxian, post-Keynesian, Austrian, and institutional economics.
- What is positive versus normative economics?
- Positive economics describes and predicts what is; normative economics prescribes what ought to be. Friedman emphasized the positive, predictive role of economic theory.