By Ingrid Harvold Kvangraven, , and

In moments of great uncertainty there is refuge to be found in the work of intellectual titans like Samir Amin. After the sad news of his passing in August 2018 in Paris, aged 86, we began thinking about how best to explore the enduring relevance of his analysis and concepts to make sense of contemporary crises.

The pertinence and analytical heft of Amin鈥檚 work is particularly important in the contemporary period marked by the interconnected crises related to COVID-19, Black Lives Matter, the climate emergency, and looming debt crises across the periphery. In the years ahead, confronting these multiple and intertwined crises will require the kind of commitment to combining research with political engagement that Amin demonstrated.

Amin鈥檚 ability to weave together thorough analysis of the polarising effects of capitalism with concrete political projects for an international radical left makes his work particularly relevant in our quest to understand capitalism, its particularities across the world, and oppositions to it. There is a younger generation of scholars, of which we are a part, that is particularly hungry for Amin鈥檚 perspectives, one that came of age in a time where the universities have been thoroughly marketised and moulded by neoliberal processes, and where intellectual production and debates are not necessarily embedded within social struggles.

What is Samir Amin鈥檚 approach to Political Economy?

Amin pushes us to think creatively in structural, temporal, and political ways that often defy disciplinary boundaries. The combination of truly global perspectives with analysis that is finely contextualised within particular geographical locations, and mindful of the complex nature of political conflicts and different class interests, makes his contributions to dependency theory especially rich.

While Amin developed many concrete concepts and shed light on many concrete issues, it is his approach to political economy that is the most inspiring for us and that we believe holds the most promise for driving radical political economy in his spirit forward. His approach entails thinking structurally, thinking temporally, thinking politically, and thinking creatively.  to the Special Issue draw on these concepts in various ways (read our full editorial to the ROAPE Special Issue on Samir Amin ).

Thinking structurally

At a time when much of social science has come to be centred around either methodological individualism or methodological nationalism 鈥� the notions that individuals and nation states, respectfully, are the most relevant units of analysis  鈥� Amin鈥檚 attention to global structures, that underpin an international system of exploitation, is a much needed contrast. In Amin鈥檚 work, both the structure of the global economy and the structural prejudice of eurocentrism, are key.

Taking the structure of the global economy as a starting point led Amin to explore concepts such as core-periphery relations, imperialism and unequal exchange. He recognised that the global capitalist system is polarising and that the polarisation between the centre and the periphery was a key part of this. Note that Amin went beyond thinking only in core-periphery terms 鈥� which dependency theorists are often critiqued for 鈥� as he identified a range of classes of importance across both the core and periphery (see  in the Special Issue). It is also worth noting that thinking structurally does not mean thinking deterministically. While Amin was 鈥榗apable of a very high level of abstraction鈥�, as Ghosh has written, and some could see his characterisations as sweeping, he was always ready to adapt his categories and understandings as the world changed, and his understanding of how outcomes were shaped was first and foremost dialectical 鈥� which led him to critique World Systems Theory for being static and for prioritising global relations over domestic.

In this issue,  and  articles apply a structural way of thinking about financial and monetary dependencies. Mushtaq explores how Amin鈥檚 work on imperialist rent can be extended to understand financial dependencies and hierarchies in a financialised global economy, while Sylla explores Amin鈥檚 approach to the monetary mechanisms and functioning of the banking sectors in peripheral countries which contribute to keeping them underdeveloped, with a specific focus on the CFA Zone. Similarly,  into how China was able to integrate itself into the global economy without abandoning its strategy of delinking from imperialism opens up space for further research and theorising about how different strategies for national development can be anti-imperialist.

What鈥檚 more, identifying eurocentrism as a structural prejudice allowed Amin to show how social theories disguise the imperialist and racist foundations of the capitalist system. This allows us to see that the Enlightenment values and promise of rationality and universality are actually heavily biased and founded on a colonial and racist project. This is key for understanding why societies cannot develop by imitating the West. Generally, eurocentrism has been taken as an important starting point for scholars who build further on Amin as well as critics.  in the Special Issue, for example, revisits Marxism and decolonisation via the legacy of Amin to re-evaluate Amin鈥檚 critical Marxist political economy in the context of epistemology, to unmask racism and the trans-historic expansion of colonial domination.

Thinking temporally

Thinking temporally was key for Samir Amin鈥檚 understanding of the world, and more specifically, thinking in longue dur茅e terms. This is an important entry point for exploring contemporary problems, because it opens the door for analysing how imperialist relations have historically and contemporarily shaped the possibilities for development in the Global South. In this issue,  how Amin鈥檚 approach to imperialism remains relevant across key axes such as technology, finance, and the search for and effort to control new markets, despite changing global configurations such as the 鈥榬ise鈥� of the BRICS.

Francisco 笔茅谤别锄鈥檚 and Ndongo Samba Sylla鈥檚 articles are also particularly good illustrations of how a historical perspective is important for understanding contemporary problems. For example, 笔茅谤别锄鈥檚 explanation of the East Asian 鈥榤iracle鈥� starts from how those countries developed historically and geopolitically. P茅rez also demonstrates how China鈥檚 contemporary delinking must be understood by starting from their attempt at socialist delinking in 1949, and the complex battle between statist, capitalist, and socialist forces that played out since then. Similarly, Sylla鈥檚 article shows how the colonial origins of the CFA is key for understanding how it operates today. Tracing the history of the CFA also makes it painfully clear why defending the monetary status quo for Amin amounts to defending the perpetuation of the old colonial order.

Thinking politically

In line with Marx鈥檚 famous phrase, interpreting the world is important, but 鈥榯he point, however, is to change it,鈥� Amin never shied away from admitting that his work was driven by . Indeed, Amin was a socialist from an early age and was concerned with responding to and building emancipatory social movements throughout his life. This was reflected in his life-long organising efforts and activism, across a wide range of platforms and organisations, including the establishment of the Third World Forum in Dakar, where he helped set practical and intellectual agendas for socialist transformation on the continent, the establishment of the  (CODESRIA), which became an important vehicle of radical social science research and analysis in Africa, and his active engagement in the .

We find such explicit acknowledgement of political commitment especially inspiring and necessary at a time when the economics field in particular likes to cloak itself in deceitfully 鈥榦bjective鈥� language, even though knowledge production in the social sciences is necessarily ideological.

In Amin鈥檚 book on Delinking, he provides a tangible and critical assessment of ways to promote autonomous development in the periphery. Far from any call for autarky, delinking entails 鈥溾�� and the promotion of popular and auto-centred development rather than unilaterally adjusting to the demands of the global economic system. Both  and  articles in this issue, which centre on delinking strategies, demonstrate how social science research is often used for political ends given how Chinese and East Asian delinking strategies are often misunderstood (or miscommunicated) in mainstream narratives about their 鈥榮uccess鈥�.

Thinking creatively

Finally, it is important to be creative in the way we apply Amin鈥檚 method to understand social phenomena. Amin called himself a 鈥榗reative Marxist鈥�, by which he meant he would start from, rather than to stop at Marx. We find this approach from Amin to be particularly relevant to understand contemporary problems and especially from a Global South perspective. Starting from Marx allows for an understanding of class struggle, exploitation, and the polarising tendencies of capitalism, while going deeper into structural inequalities associated with imperialism, sexism and racism. Amin started this work, but we believe it is relevant to go beyond Amin. Indeed, we find it relevant to start from Amin, not to stop at Amin.

Beyond Samir Amin

Several contributions to this special issue take Amin as a starting point for further exploration and theoretical development. Some also point in the direction of key critiques that have been levelled at Amin鈥檚 work, notwithstanding his powerful and incisive theoretical and analytical interventions on how developing economies relate with the North.

For example, although Amin himself did not include gender in his analysis 鈥� indeed, his analysis had glaring blind spots related to gender 鈥� his analysis can be enriched and extended to include gender hierarchies and a fuller recognition of gender鈥檚 place in the mode of production.  is crucial for opening this door to understanding both the limitations to Amin and how gender can be approached from within his framework of analysis.  She asks, for example, how gender may be included in analyses of delinking and the importance of discussions about relations in the households when considering how a revolution may occur.

Furthermore, in a historical moment where we cannot speak about autonomous industrialisation without considering ecological destruction, the need to explore how the two are interrelated and both shaped by imperialism is more important than ever.  starts from Amin鈥檚 theories of ecology to make broader analyses of the currents of ecological dependency that developed out of North African dependency analysis. He shows how Amin鈥檚 theoretical framework can be connected to that of Mohamed Dowidar, Fawzy Mansour and  and their advancement of the case for smallholder-centred national development. Given the urgent need to tackle climate change, its imperial characteristics, and the uneven geographical impacts of the destruction it causes, Amin鈥檚 framework serves as a useful starting point for thinking about ecological unequal exchange. As Ajl writes, 鈥業f Amin could not see the entirety of the necessary developmental path, he still illuminated its borders with a brilliant radiance鈥︹��.

What鈥檚 more, given the partial retreat and limited autonomy of the peripheral state in the context of the increasing power of international finance,  Amin鈥檚 view of the state鈥檚 power to delink and stimulate auto-centric industrialisation must be scrutinised. We appreciate  here, as he takes Amin as a point of departure while also somewhat diverging from Amin鈥檚 political orientation towards the nation state. He points to Amin鈥檚 commitment to a polycentric world as a departure point towards de-imperialisation, deracialisation, depatriarchisation, decorporatisation, detribalisation and democratisation, where the core is the internationalism of people, not of states. This is important in light of  of delinking as a process that holds the state as the locus of change.

Meanwhile,  Amin鈥檚 categories to a financialised global economy, as she explores how imperialist rent is not limited to labour arbitrage but also includes financial arbitrage. Her article thus provides 鈥渁n updated understanding of dependency in the context of financialisation,鈥� as she centres financial factors to demonstrate how they contribute to reproducing global inequalities and the periphery鈥檚 subordinate position. This is of particular relevance given the important role that capital flows, interest rates, and exchange rates play in reproducing subordinate relations today.

What鈥檚 more, Ndlovu-Gatsheni鈥檚 work on decoloniality shows the need for decolonial knowledge production in order to break with eurocentric approaches, which is especially important given that Amin鈥檚 work on Eurocentrism has itself been criticised for demonstrating economic reductionism. This is yet another area where we believe Amin opens the door for important reflections and debates about how racism, eurocentrism, and capitalism are intertwined, but that we must move beyond his initial reflections to broaden the debates about how racism and imperialism shape society.

We hope this Special Issue will inspire more scholars and activists to engage with Amin鈥檚 ideas and also explore their relevance for emerging social and political problems. Amin鈥檚 methods of inquiry provide avenues towards doing research that transverses disciplinary boundaries and that aims to interrogate the social world as a whole. Notwithstanding important critiques of Amin鈥檚 work, the articles in this issue engage with his core concepts and demonstrate both their potency and how they can be creatively expanded and built upon. Amin鈥檚 legacy provides a lighthouse for those who not only want to understand the world, but fundamentally change it, by combining rigorous scholarship with political commitment and action.

The full Special Issue can be accessed听.

References

 Amin, Samir.1974. Accumulation on a World Scale. Sussex: Harvester Press.

 Kvangraven, Ingrid Harvold. 2017. 鈥淪amir Amin 鈥� A Dependency Pioneer.鈥� In Dialogues on Development Volume 1 鈥� On Dependency, edited by Ushehwedu Kufakurinani, Ingrid Harvold Kvangraven, Frutuoso Santanta and Maria Dyveke Styve, 12鈥�17. New York: Institute for New Economic Thinking.

 Amin, Samir. 1988/2009. Eurocentrism (2nd Edition). New York: Monthly Review Press.

 Kvangraven, Ingrid Harvold. 2020. 鈥淪amir Amin: A Pioneering Marxist and Third World Activist.鈥� Development and Change 51(2): 631-649.

 Amin, Samir. 1990. Delinking: Towards a Polycentric World. London: Zed Books.

听See for example Mazama, Ama.1995. 鈥淩eview of Eurocentrism.鈥�Journal of Black Studies, 25 (6):760-764.

Ingrid Harvold Kvangraven听is a Lecturer in International Development at the听University of York鈥檚听Department of Politics.听

 is a Research Fellow at the European University Institute in Italy 

 is an Economic Historian based at the University of Warwick. 

 is Professor of African Studies and Development Politics at the University of Leeds. 

This article was first published on the Review of African Political Economy . Photo: Samir Amin by .

This summer, we take stock of the most interesting economics-related books that have been released over the past year. Every year, Martin Wolf of the Financial Times makes a similar list. However, by his听

To complement Wolf鈥檚 list, we have put together an Alternative Economics Summer Reading list with authors from across the world, with more varied backgrounds 鈥� and writing about more wide-ranging topics, and from a wider variety of critical perspectives. Our alternative list also reflects our belief that issues such as structural racism, imperialism, ideology and the philosophy of science are central to understanding economics.听

It is not that we think that Martin Wolf is in particular responsible for the lack of diversity and monism in our reading decisions: other curators such as the Economist (for example,听) also perpetuate the myth that the books worth reading about economics are mostly those written about the US and Europe, by white men trained trained in mainstream economics.听

Due to institutional and language barriers we were unable to include as many scholars based outside the West as we would have liked. For example, we would love to read the new book听听by Fanny Pigeaud and Ndongo Samba Sylla, but we are still waiting for the English translation.听

We hope you enjoy it and welcome more suggestions in the comments section. Here are our recommendations:

By Ingrid Harvold Kvangraven and Carolina Alves

鈥淓conomics is unique among the social sciences in having a single monolithic mainstream, which is either unaware of or actively hostile to alternative approaches.鈥� (: 17)

What does heterodox economics mean? Is the label helpful or harmful? Being outside of the mainstream of the Economics discipline, the way we position ourselves may be particularly important. For this reason, many around us shun the use of the term 鈥渉eterodox鈥� and advise against using it. However, we believe the reluctance to use the term stems in part from misunderstandings of (and sometimes disagreement over) what the term means and perhaps disagreements over strategies for how to change the discipline.

In other words, this is an important debate about both identification and strategy. In this blog, we wish to raise the issue in heterodox and mainstream circles, by busting a few common myths about Heterodox Economics – mostly stemming from the orthodoxy. This is a small part of a larger project on defining heterodox economics.

Myth 1: Heterodox Economics is Anything that is Not 鈥淢ainstream鈥�
While it is true that many people do see the heterodox as defined in the negative – especially people observing from the mainstream and from outside the discipline – many scholars in the heterodox community also see the term as something positive and proactive, defined by a set of principles (see of definitions). The term dates back to the 1930s (e.g. ), but more recently definitions have been developed by Lee (), Vernengo (), Lawson (), and Dymski ().

Lee (: 8-9) – an important figure in building a heterodox economics community, particularly in the 2000s – saw heterodox economic theory as an 鈥渆mpirically grounded theoretical explanation of the historical process of social provisioning within the context of a capitalist economy鈥�. For Lawson (, ch. 3), heterodox economics is best characterized by pluralism at the level of method, coupled with a declared ontology of openness, relationality process, and totalities, in contrast to mainstream economics which is characterised in terms of its enduring reliance upon methods of mathematical modelling, expressed in the mathematical deductivism and its 鈥榣aws鈥� or 鈥榰niformities,鈥� interpreted as correlations or regularities.

Vernengo () argues that heterodox economics is centrally about understanding reproduction of society, that the production and distribution of the social surplus is central for their theories, and that effective demand is valid in the long run (which means that the limits to accumulation are mostly political). Going back to classical political economy, distribution is determined exogenously by social and institutional conditions (e.g. the wage is determined by the bargaining position of labor and the rate of profit is influenced by the interest rate, which is influenced by the central bank).

Lee always to do Economics in a pluralistic and integrative manner and to be responsible and open-minded economists. Openness to alternative methods also gives a much larger space for classes, gender, institutions, instability, uncertainty, exploitation, power asymmetries, distributional conflicts and ecological issues. In a similar manner, Mearman and Guizzo () see heterodox economics as a pluralist community with a diversity of origins, purposes, and standards for economic reasoning, ranging amongst others from history and philosophy of economics, to modelling, community organising, and policymaking.

We see heterodox economics as a study of production and distribution of economic surplus, including the role of power relations in determining economic relationships, a study of economic systems, and tendencies associated with it, and the employment of theories that have these issues at their core, such as Classical Political Economy, Marxian Economics, Feminist Economics, Institutional Economics, and Keynesian Economics. As reality is not static, we deem it as crucial to constantly think and rethink the nature and appropriateness of these theories and methods.

Now, you may think these definitions are too complex, that defining it in the negative is just easier, more practical? Well, it turns out that is not straightforward either, as defining the boundaries for 鈥榤ainstream鈥� Economics is not simple (see ).The defines the field as the study of scarcity, the study of how people use resources to respond to incentives, or the study of decision-making. Others yet define the mainstream by its method (see e.g. or Bandiera ), which can in turn be distinguished from the open systems approach of the heterodoxy.

Recognizing that heterodox economists may be united in their critique of orthodox economics does not mean they are defined by this common position (in fact, scholars in many other disciplines also reject orthodox economics, but this does not mean they are automatically heterodox economists).

So is Austrian Economics heterodox? This is obviously up for debate, and many Austrian economists will indeed identify as heterodox solely on the basis that many of them are excluded from the mainstream or have a different understanding of categories such as equilibrium and uncertainty. However, many heterodox communities would not include Austrians on either epistemological (Austrians tend to adhere to marginalism, see e.g. ) or sociological bases (they are not a part of our research communities, which includes academic institutions, journals, and conferences).

Table 1: Schools of Economic Thought

Source: Marc Lavoie鈥檚 .

Myth 2: It is 鈥渉ip鈥� to be Heterodox

The Economist once ran a story 鈥�鈥� (similar claims have been made elsewhere too, for example in ). Well, yes, it is true that the use of the term has been on the rise in the 1990s and the 2000s (as documented by , see figure below). There are lots of books popping up using 鈥渉eterodox鈥� in their book titles. (2014: 6) writes that 鈥渟ince the 1990s, but even more so since the mid-2000s, the term 鈥渉eterodox鈥� has become increasingly popular to designate the set of economists who view themselves as belonging to a community of economists distinct from the dominant paradigm鈥�.

Figure 1: Google Ngram for 鈥淗eterodox Economics,鈥� 1870-2008

But an increased use of the term does not mean that heterodox work has been accepted in the core of the Economics field. There has not been substantial change in the field since the global financial crisis (see , and ) let alone more inclusivity or openess (e.g. in top journals, hiring practices, prizes or teaching). While there has been some self-critique within the mainstream (e.g. critique of DSGE by and ), this does not mean that alternative theories, such as Post-Keynesian theory or Marxian theory, are now considered to be valid economic theories by top Economics institutions. As observes, the financial crisis had little impact on how the academic orthodoxy in Economics is constructed and reproduced.

Meanwhile, since the crisis, it seems that many concepts developed within a heterodox framework have been incorporated and appropriated by mainstream scholars, adapting them to mainstream frameworks, without any acknowledgment of those concepts鈥� heterodox origin (as highlighted by , among others).

Heterodox Economics is getting traction outside of Economics, though. We can publish in top journals of other fields (e.g. Politics, Geography, Sociology, Philosophy, Development), we can get media coverage in The Financial Times (e.g. prominent heterodox scholars such as , and ), and we can get jobs at top universities, such as University of Cambridge, LSE and Columbia University – but outside of Economics departments (you tend to find heterodox economists at institutes, centers, management schools, and non-Economics social science departments). In the US, many heterodox economists end up teaching at liberal arts colleges. (Note that in some non-Western countries, heterodox economists may get jobs in top Economics departments as they are not as marginalized – this is for example the case in Brazil, see ).

It is true that Heterodox Economics is popular among students (e.g. ), the public, and non-economists, but claiming that it is 鈥渉ip鈥� to be heterodox can be offensive to heterodox economists, as it suggests complete oblivion to the exclusion from our own field that we as heterodox economists historically have faced and continue to face. How many times has it not happened to us that someone within the dominant paradigm says: 鈥淲ell, you鈥檙e not really doing Economics 迟丑辞耻驳丑鈥︹赌�?

Myth 3: The Mainstream Is Already Heterodox

Some claim that the mainstream is already heterodox (e.g. Diane Coyle 2007, David Colander 2009, and Colander et al. 2010). These scholars argue that the inclusion of endogenous growth theory, behavioral and experimental economics, complexity economics and other theoretical innovations have reduced the dominance of neoclassical economics (for comprehensive responses to this claim, see , and ). While these developments may give a perception of diversity within the mainstream, as Stilwell () points out, the core still relies on neoclassical ideas such as methodological individualism and systemic stability produced through market forces. There may be a 鈥榗utting edge鈥� which breaks with some orthodox assumptions, as Vernengo () puts it, but it is this part of the mainstream that allows the mainstream to sound reasonable when talking about reality and is therefore plays an important role in maintaining its dominance.

It is evident that there is some extent of pluralism in mainstream Economics, especially with regards to models and different forms of minor deviations from neoclassical economics (e.g. New Keynesian Economics, New Classical Economics, New Institutional Economics, Behavioral Economics). Nevertheless, it must also be acknowledged that there continues to be monism in terms of theoretical starting points, methodological approach, and in attitude to methodological alternatives (see also ).

Critique of the field being met with the defense of the field鈥檚 already existing pluralism thus ignores the actual wide plethora of theories and methodologies that exist in Economics outside the mainstream. Furthermore, these theoretical innovations have not in any shape or form replaced neoclassical economics as the cornerstone of Economics curricula across the world, even if they may be taken as electives down the line in the course of an Economics degree. In short, the developments are neither radical nor transformative.

Myth 4: Heterodox economists are Just Lefties Upset with Neoliberalism

Often, the mainstream of the field is described as neutral, while the heterodoxy is described as ideological. Those believing in such a statement would be surprised to learn from Myrdal (1953) that the development of economic thought has always and everywhere been political, as politics and economics are closely intertwined. There鈥檚 a recognition within all heterodox schools of thought that Economics is inherently political. This does not mean all heterodox economists will agree on politics, but they will usually agree that market solutions do not lead to 鈥渘atural鈥� or 鈥渙ptimal鈥� outcomes.
Dismissing heterodox Economics as a political project is common, which completely covers up the politicalness of mainstream Economics, and it assumes motivations among heterodox economists that they cannot prove or validate.This assumption leads journalists to conclude that heterodox economics is more of a 鈥渢antrum鈥� than an actual rigorous intellectual alternative to the mainstream.

However, much of the heterodox critique of the strong bias towards market-based theory and policy runs deeper than a tantrum against neoliberalism or mainstream economic. It boils down to challenging the idea that the market can always lead to the best outcome. Why is the market solution to economic problems the only game in town and everything deviating from it about market failure? This question relates to the long-standing debate on whether or not economics is value free and how it is possible to best promote positive analysis over normative. While economists often attempt to disguise normative conclusions behind positive analysis, subjective factors are inevitably involved in the development of scientific ideas, and these are theory-laden because they are identified from the perspective of a paradigm. Furthermore, for many heterodox economist, this discussion is also about acknowledging pluralism. That is, there are different ways to investigate an economic phenomenon, and competing approaches, methods and theories lead to different policy implications.

Although mainstream economics and neoliberalism should not be seen as synonymous (see , 2019), the assumption that economic decisions reflect free choice and individual preference tends to support conservative economic policy, which – combined with a focus on markets, incentives and market failures – ends up promoting and supporting market fundamentalism. In this process, core aspects of heterodox economics, ranging from power and conflict between labour and capital, to inequality and the role of institutions have been systematically neglected. It is, therefore, not a surprise to see the heterodox critique of neoliberalism overlapping with critique of mainstream economics.

With the above considerations in mind, it becomes clear not only that choosing one theoretical framework and excluding others is political, but also that every theoretical framework is political, including neoclassical economics. Since class conflict is a core element of much of heterodox economic theory, you will find heterodox economists being more explicitly political, as they are more likely to challenge the ethics of distribution within the system of social provisioning. However, as pointed out by , most heterodox economists do not actually practice politics.

Myth 5: Heterodox Economists Will Take Over Once They Are Able to Construct Convincing Enough Models (aka 鈥業t Takes a Model to Beat a Model鈥�)

This is perhaps one of the most ridiculous myths about Heterodox Economics, as it completely shies away from the political nature of our discipline. Several big names in the mainstream perpetuate this idea that Heterodox Economics is kept outside of the mainstream of the discipline because it is simply not rigorous or scientific enough (e.g. in with the Financial Times Pontus Rendahl at University of Cambridge likens Heterodox Economics to creationists and alternative medicine). Angus Deaton has made a similar point, arguing that Economics must 鈥�,鈥� as if work done by Heterodox Economics is excluded based on its lack of rigor.

This myth is not only problematic because of its positivist and linear view of scientific progress, but we are also concerned with what 鈥榗onvincing modelling鈥� means. There is a vast range of models associated with heterodox economics. See for example, classical-Marxian models, such as , , , , ; Kaleckian models, such as, , ; Kaldorian, Harrodian and Post Keynesian models, such as , , , ; Thirlwall’s models, such as , , ; Stock-flow Consistent models, such as , , , , , and ; and Agent-Based Models, such as , 鈥� to mention a few!

Thus, putting aside the critique of modelling in economics, two questions come to our mind: first, which kind of rigour is claimed within [mainstream] economics? Second: why aren鈥檛 heterodox models accepted as sufficiently rigorous? The battle between the mainstream and heterodox is by no means straightforward. The rules of the games are contested and there is no impartial measure by which success is judged. Contesting the dominant measures of excellence are indeed among the core demands of many heterodox economists.

Following Myrdal鈥檚 (1953) insight that the development of Economics has always been political, it is clear that it is not simply a matter of constructing 鈥榖etter鈥� economic models. The political process is central. As observed in their review of the Cambridge Capital Controversy, for example, while Cambridge, Massachusetts lost the theoretical debate, they won the hegemony (this was even recognized by the Cambridge, Massachusetts side, see e.g. ). Consequently, scholars working in the tradition of Cambridge, England are now excluded from the field (e.g. Post-Keynesians, Kaleckians, Sraffians, Marxians).

Furthermore, the official university research evaluation processes (e.g. the Research Excellence Framework (REF) in the UK) marginalize non-mainstream approaches, thereby operating to compound many of the problems mentioned so far (Lee et al. , Stilwell ). As research evaluation programs favor mainstream Economics approaches over heterodox ones, teaching also suffers as lecturers hired by Economics departments seeking to maximize their REF score will likely hire only mainstream economists who are likely to publish in top journals (incidentally, have found that teaching has changed little with respect to pluralism since the financial crisis, despite some claims to the contrary). Furthermore, monism in the mainstream makes it less likely that heterodox theories may be picked up by students or policy-makers, thus further compounding the already unfortunate situation. Finally, there have been several studies of the Economics field that show that it is among the most hierarchical academic fields () and that to editors are also important in determining whether a study is published, thus suggesting that success even within the mainstream is not based solely on their internal measure of rigor.

Myth 6: Heterodox Economics Is Not Really Economics Though

If Heterodox Economics abandons neoclassical assumptions and formal modeling, why should it be called Economics at all? Couldn鈥檛 it be a part of sociology? This was the argument made by . This view of Economics is ahistorical as it does not recognize that what is heterodox economics today was considered a part of Economics in the past. When Smith, Ricardo, Marx and Keynes did their economic work, they were acknowledged as being a part of the profession. They criticized each others鈥� arguments, assumptions, and theories, but they did not dismiss each other for not being economists. But their ideas have been excluded through a political process.

Ironically, the narrowing of mainstream economics and squeezing of heterodox economists into other departments has come with a push for increased interdisciplinarity. This has led to the odd situation where economists look for collaborators in sociology or politics departments, while maintaining strict definitions of who can be considered an economist. More often than not, economists will collaborate with other social scientists that work within similar traditions (e.g. rational choice theorists in politics or sociology), leading to a narrow form of interdisciplinarity. Further, adding political context or history to mainstream economic analysis does not make it heterodox. Rather than adding interdisciplinarity to social phenomena, we believe it is the nature of social phenomena that bear on the disciplinary or interdisciplinary methods and approaches that are required for their analysis.

Myth #7: Heterodox is too Confrontational. Can鈥檛 we Strive for Pluralism Instead?

Pluralism and heterodox economics aren鈥檛 synonyms. Pluralism is a methodological position that implies that competing theories should be taught alongside each other, be it heterodox or mainstream. Pluralism is not in direct opposition with the mainstream, but rather it tries to broaden the field of Economics.

鈥楶luralism is an 鈥榠n principle鈥� position, based on ontological, epistemological and ethical propositions (as discussed by ), whereas heterodox economics is an alternative way of approaching economic questions that stands as alternatives to the mainstream. Heterodox economists may well be pluralists in principle, as creating space for heterodox economics might in practice result in pluralism. However, fighting for pluralism may not be strategic if our goal is a paradigmatic shift within Economics (a point made on a few months ago).

The Difficulty of a Definition

Defining a whole field, such as Heterodox Economics is not easy, especially not in the social realm (see also ). As with other fields in social science, there will be some disagreement of the precise way to define it, and what kind of scholarship should be included.

Defining heterodox economics needs to be both practically relevant and historically grounded. Practically, it is broadly about seeking to render economics a relevant and inclusive discipline. Here, we don鈥檛 deny the issues raised by related to the need and motives for classification, and its consequences. That is, definitions of heterodox economics usually leads to 鈥渦nwarranted dualism鈥� where scholars create unjustifiably strict and fixed distinctions between the categories. While this might be a useful path to take due to the complexity of the object we are trying to define, it leads us to underplay its complexity for the sake for a simple and clear definition (see also ).

Historically, the concept has been discussed, theorised and applied by a broad and diverse group, starting with Ayers (), and since then there have been contributions from economic methodologists, historians of economic thought, macroeconomists, microeconomists , and philosophers . This is important to understand, as while some might find the definition of the term 鈥榗onfusing,鈥� the source of the confusion might have less to do with the clarity and coherence of any single definition, and more to do with the multiple angles through which the term has been theorised.

With our definition mentioned above, we aim to identify the broader level of principles crossing the diverse discussions on what heterodox economics is. We believe it is important to have a positive definition of heterodox economics to distinguish the field from other social sciences, as well as from the mainstream of the field. Heterodox economists are not sociologists or political scientists, although we are outside of the mainstream of Economics and some heterodox economists may find themselves being employed by such departments. This leads us to our final point…

Why We Should Call Ourselves Heterodox

鈥楤ut we are all economists!鈥� some heterodox economists argue. Why signal that somehow we are different from them? However, we are not sure the 鈥榳e are a big family of economists鈥� strategy is helpful – especially given that the majority of 鈥渙ur family鈥� is excluding us from mainstream arenas. Such a claim indirectly assumes that there are not steep institutional barriers that negatively affect heterodox economists鈥� employment opportunities, funding chances, and their chances to impact the policy making process. The pejorative and dismissive tone towards heterodox scholarship exists, and the question that follows is what we are going to do about it. To avoid acknowledging both the fundamental differences and exclusion is to close door for the progress of the discipline and for young scholars, who are forced to reinvent themselves and find jobs in departments other than economics, contributing to the monolithic character of the discipline.

On a last year, many pros and cons of using the term heterodox came up. We do believe that so far, the pros outweigh the cons. As Stillwell (2016) puts it bluntly: 鈥楲abels matter […]. They construct imagery and signal strategic choices鈥�. To us the label signals a strategic choice: Do we try to blend in and pretend that all is fine or do we speak up about the marginalization that is taking place in our field? Self-identifying as heterodox signals to the world that alternative analyses of economic relationships exist – if anything it reinforces the idea that there are different ways to do economics, a point that rests at the core of the argument for pluralism (a big [happy] family after all!). And importantly, it also helps to raise awareness about the fact that these perspectives have been actively excluded from the mainstream over a period of four decades or more.

Does accepting the term heterodox economics mean we accept our marginal disciplinary status? No. On the contrary, we use the term in order to challenge this marginalization. If people find the heterodox label confusing, we should be able to clarify where we are coming from. This is key if we want to change the current state of our profession. If the label is problematic, perhaps it鈥檚 time to de-mystify, clarify and de-problematize it. We understand our colleagues that are scared for their career, or have other strategic reasons, to not speak up, as that is a consequence of the nature of our field. But yet, we encourage more allies to speak up and say we are heterodox – to show the strength and diversity of heterodox economics. The more scholars identity with the term, the more status and acknowledgement heterodox scholarship will get. If we stand together we can show the world what Economics is missing. Come join us outside of the heterodox closet

We are grateful to Cleo Chassonnery-Za茂gouche, Danielle Guizzo and Mat铆as Vernengo for helpful comments on an earlier draft.

Ingrid Harvold Kvangraven is a Lecturer in International Development at the University of York.

Carolina Alves is a Joan Robinson Research Fellow in Heterodox Economics at University of Cambridge, the U.K.

Read the article in Spanish .

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By Ushehwedu听Kufakurinani, Ingrid Harvold听Kvangraven and Maria听Dyveke听Styve

鈥淔inancial inclusion is a key enabler to reducing poverty and boosting prosperity.鈥�

–

鈥淸Policies of financial inclusion] serve to legitimize, normalize, and consolidate the claims of powerful, transnational capital interests that benefit from finance-led capitalism.鈥�

– 听.

Financial inclusion has been high on the agenda for policy-makers over the past decade, including the G20, international financial institutions, national governments and philanthropic foundations. According to Bateman and Chang (), it鈥檚 the international development community鈥檚 most generously funded poverty reduction policy. But what lies behind the buzzword? How can the two quotes above portray such starkly opposing views?

Why is Financial Inclusion Controversial?

Financial inclusion 鈥� or access to credit and financial services for non-banked communities 鈥� appears benign and straightforward at first sight, but there is much that needs to be unpacked. While 鈥檚 information page on financial inclusion presents the promotion of financial services for the poor as a technical and efficient solution to poverty, sceptics have pointed to a growing body of evidence that financial inclusion initiatives have, at best, failed to live up to their promises and diverted attention from more effective and comprehensive poverty reduction strategies, and at worst, resulted in dramatic explosions in predatory lending to low-income households, and in significant reductions in the welfare of borrowers and their communities (see for a summary of the debate). Susanne Soederberg has gone so far as to argue that there are 鈥渆xploitative relations and speculative tendencies involved in financial inclusion strategies鈥�.

In an overview piece, Phil Mader () has found that the case for financial inclusion as a pro-poor private-sector led development intervention lacks sufficient evidence and justification 鈥� and that the concept should be recognized as a contested and contestable enterprise. In that spirit, this blog series aims to unpack what policies lie behind the concept, what effects such policies have had on the ground, and how the concept relates to other socio-economic issues such as inequality, poverty, financial citizenship, financial education, and other income flows such as remittances. The series includes cases from Ethiopia, Ghana, India, Kenya, Malaysia, Senegal and and the US. It also includes wider perspectives on the context in which financial inclusion initiatives take place, such as an examination of the international financial architecture and Islamic finance.

These next couple of months, we鈥檒l publish a new perspective on financial inclusion as part of our # series. As a whole, the series will approach the concept from a variety of angles and disciplines.

Overview of the series:

1. 1. Inclusive Finance, Shadow Banking, and the Need for Financial Citizenship (Juvaria Jafri, Department of International Politics, City University, London)听
   2. Financial Education in Malaysia: A Driver of Nation-Building or Inequality? (, Alliance Manchester Business School, University of Manchester).
   3. Demonetisation in India 鈥� From Financial Inclusion to Digital Financialisation (Sudeep Jain, Bristol Business School, University of the West of England, Bristol)听
   4. To Be Poor in Times of the Current Financial Architecture (Anne L枚scher, Department of Economics, University of Siegen)听
   5. Make Microfinance Great Again: A Shift Towards Flexibility (, Business School, Durham University)
   6. Does one size fit all when it comes to financial inclusion? Scrutinising effects of race and gender听(, Department of Economics, Open University)听
   7. Financialising migration? Remittances, algorithms and digital finance听(, School of Geography, Queen Mary, University of London)听
   8. Harvesting data: Who benefits from platformization of agricultural finance in Kenya?听(Gianluca Iazzolino and , Department of International Development, London School of Economics and Political Science)
   9. Islamic Finance and Financial Inclusion (, Politics and International Studies, University of Warwick)听
   10. The Curious Case of M-Pesa鈥檚 Miraculous Poverty Reduction Powers (, Juraj Dobrila University of Pula, , Centre for Development Impact, and , Lund University).

The idea for this blog series came at at the Interdisciplinary Global Development Centre (IGDC) at the University of York, where scholars gathered from many institutions and disciplines to discuss various aspects of financial inclusion. The event was co-funded by the 鈥檚 Impact Acceleration Account and the .

This month, four prominent Marxists met at The New School in New York to debate the relevance of imperialism. The debate was related to the publication of (Jawaharlal Nehru University) new book (written with Utsa Patnaik). With him in the panel were geographer (CUNY), political scientist (The New School), and economist (The New School). Economics Professor (The New School) moderated the debate. The main question for the panelists was: Is 鈥業mperialism’ a relevant concept today? A fruitful debate followed, suggesting that contemporary imperialism is crying out for analysis and critique.

Patnaik鈥檚 answer to the question was unsurprisingly a yes, qualified by the fact that his answer obviously depends on what one means by 鈥榠mperialism鈥�. He himself sees imperialism as a relationship that underlies capitalism. He argues that the Northern demand for primary commodities from the South has perpetuated and solidified an imperialist relationship. In his view, the capitalist system itself requires commodities that cannot be produced at adequate quantities in the core and that are subject to increasing supply price. The key here is that capitalism relies on commodities that are outside of its frontiers.

For Patnaik, the imperialist relationship depends on openness to trade and finance, as well as income deflation in the periphery countries to suppress local demand. Under colonialism this can be done by dispossessing petty producers and imposing colonial taxes, directly contributing to the drain of surplus from the periphery. Immediately after the end of colonialism in India, Patnaik argues, land-augmenting investments were made to increase peasant incomes, thereby halting income deflation. However, since the 1980s with the rise of neoliberalism, one can again identify neo-colonial structures that impose income deflation on the periphery countries. The consequences of this contemporary capitalist imperialism has been brutal in India, Patnaik notes, as 300 000 peasants have committed suicide so far.

From a Northern perspective, Duncan Foley observes that the imperialist wars have been necessary for the political stability of the metropolitan countries. He approves of Patnaik鈥檚 analysis of imperialism, particularly as it is presented in his book . He concurs that the clothes may have changed, but that the wolf [imperialism] is still there. In other words, the division of labor where the periphery provides primary commodities for the core capitalist economies is still observable and it is still necessary to sustain the value of money. Although Foley is impressed by Patnaik鈥檚 analysis and evidence, he urges him to give a little more complete analysis of what changes took place in the 1980s. He cautions that globalization has been like a 鈥榳eapon of mass destruction鈥� for many developing countries, and that 鈥榳e as Marxists must take this into account’.

Nancy Fraser agrees with Foley and Patnaik on the continued relevance of imperialism. She argues that contemporary financial globalization is siphoning resources from the South to the North, and that this movement of resources is grounded in geography. However, she also points out that it is important to keep in mind that there are different phases of imperialism, as well as different dimensions. Furthermore, the various dimensions play different roles in the different phases. The dimensions she identifies are the economic (the concentration of wealth is related to impoverishment elsewhere), the political (freedom in one region is related to subjection in another), the ecological, and social reproduction (efforts to supply care in one region is related to care deficits and 鈥榗are drains鈥� elsewhere). Neither of these processes can be understood fully without understanding all of them and how they relate to each other.

A particularly important distinction Fraser makes is between expropriative versus exploitative transfers, which illustrates a mix of political and economic mechanisms. She stresses the entwinement of the political and economic dimensions of imperialism, and contends that the distinction is often blurry, although on the surface it might appear to be straightforward.

As for the phases of imperialism, Fraser identifies mercantilism (where the main method was conquest), 19^th century liberal industrial capitalism (where we saw a combination of coercion and free trade), decolonized states and managed capitalism of the 20^th century (political coercion decreased in this period, but unequal exchange was still prevalent and still not purely economic), and financial capitalism of the 21^st century (in this period the economic dimensions are more salient but the political is still there, for example through financial and institutional arrangements orchestrated by the IMF and the World Bank). Fraser also points to the new and intensified round of land grabbing in many parts of the world, that make it clear that political as well as economic means of imperialism are still relevant.

A critique Fraser has for the Patnaiks is their description of 鈥榗apitalism鈥檚 spontaneous behavior鈥�. She considers the only truly spontaneous element in capitalism to be the endless drive for accumulation and therefore that imperialism itself cannot be understood by only focusing on this economic aspect. Rather, political control must also be taken into account. She argues that expropriation may be necessary for profitable exploitation in capitalism. This begs the question: is imperialism necessary for capitalism?

The debate only gets heated once it鈥檚 David Harvey鈥檚 turn to speak. He disagrees fundamentally with Patnaik (and thus also with the rest of the panel), as he has also expressed in his foreword to the book A Theory of Imperialism. Harvey鈥檚 disagreement partly stems from the fact that he is a geographer, he admits. He considers the Patnaiks鈥� book to be too crude and argues that it is not asking specific enough questions about where things are produced. E.g. one of the biggest producers of food grain is the USA and part of the USA is in the tropics. Latin American countries are producing soybeans 鈥� not for the US (who is a net exporter of soy beans) 鈥� but to China.

Harvey points out that Marx did speak of spatial transfers (from labor-intensive to capital intensive areas) and considered that this would happen between nations. However, Harvey argues that an important element in Marx is that redistribution tends to benefit the capitalist class and that it is not a transfer between workers. For example, the Trans-Pacific Partnership has not been in US working class鈥� interest, but it is definitely in the capitalist class鈥� interest. Similarly, German workers did not benefit from being a part of the European Union, but German capitalists did.

As Marx once said we have to be prepared to adjust our categories according to changing circumstances, Harvey argues that circumstances have changed so much that although imperialism once was a relevant concept, it is simply not useful anymore. Unquestionably there is a redistribution of value going on and it is geographical, but it is more complicated than reducing everything to imperialism.

Finally, the chair of the discussion, Sanjay Reddy, gets the opportunity to add his two cents. His primary concern with the Patnaiks’ analysis is with the identification of the mechanisms. He asks: Is it adequate to say that a system has a certain need? While Patnaik insists that capitalism has a certain need to maintain the value of money, this is not capitalism’s only imperative (as Patnaik himself also recognizes). Reddy therefore considers the mechanisms in the Patnaiks’ work to be under-specified. Systems can have imperatives that are not adequately realized and there can be competing imperatives. Reddy therefore argues that it is not clear in Patnaik’s argument what the degrees of freedom are for developing countries and why some are able to take advantage of globalization, while others are not.

This week we saw lots of praise of Ricardo, by the likes of , , and . Mainstream economists today tend to see the rejection of free trade implicit in Trump and Brexit as populist nonsense by people who don鈥檛 understand the complicated theory of comparative advantage (鈥溾��, as Paul Krugman once called it in his explanation of why non-economists seem to not understand comparative advantage). However, there are fundamental problems with the assumptions embedded in Ricardo’s theory and there’s little evidence, if any, to back up the Ricardian claim that free trade leads to balanced trade. On this bicentenary, I therefore think it鈥檚 timely to听revisit some of the fundamental assumptions behind Ricardo鈥檚 theory of comparative advantage, that should have led us to consider alternative trade theories a long time ago.

The Essence of Neoclassical Trade Theory
Before we delve into the assumptions, let’s quickly consider the basic elements of Ricardo’s trade theory (see ). The well-known conclusion from the theory is that all countries will benefit from opening up to free trade (or at least that no one will lose), regardless of each country鈥檚 absolute advantage. The reason it is possible for everyone to benefit is because in a free market, the exchange rate will move to ensure that all countries will eventually become equally competitive (alternatively the equilibration will happen through the price mechanism, which is the case in Ricardo’s original example). This means that a country with no absolute advantage (England, in Ricardo鈥檚 example) will initially have a deficit, but then its currency will depreciate until it gains an advantage in what they are comparatively best at. Meanwhile, a country with an absolute advantage in everything (Portugal, in Ricardo鈥檚 example) will initially have a surplus of trade, but then its currency will appreciate until it loses some of its advantages. Through this equilibrating mechanism, trade will balance in the long run. The example also works with fixed exchange rates, as is assumed so that prices will rise in the surplus countries and fall in the deficit countries, until countries are equally competitive and trade is balanced. It’s beyond the scope of this blog post to pick all the assumptions of the theory apart, but let’s go through some of the most problematic ones.

Assumption 1: Automatic Terms of Trade Adjustment
Perhaps the most fundamental assumption behind Ricardo鈥檚 theory is that a country鈥檚 terms of trade adjust to ensure balanced trade. This assumption is problematic on several accounts. First of all, a change in the terms of trade can have conflicting effects. Relatively low export prices means that each unit of export contributes less to the trade balance. At the same time, a lower price can lead to higher export volumes. In other words, the total value of exports can fall, remain the same, or rise, depending on the strengths of these conflicting effects. It is not given what will happen as the result of a change in the terms of trade, as it will depend on the price elasticity of the exports and imports. This 鈥榚lasticities problem鈥� has long been known among economists, and was explained in detail by .

A related problem is the fact that changes in relative international prices can also affect the relative costs of these same products. This is related to point that costs and prices are intricately connected since the costs of production depend to a large degree on the price of inputs. Therefore relative costs do not necessarily change at all as a result of changes in the real exchange rate. For example, if England鈥檚 real exchange rate depreciates this means it will be cheaper for other countries to buy English goods, but it will be more expensive for English producers to import inputs to production. While within Ricardian theory it may seem as if it鈥檚 possible to fix the trade imbalance through the exchange rate, a depreciation does not necessarily benefit exporters who are dependent on inputs from abroad. In today鈥檚 global economy, this is of great importance.

Finally, the assumption that the exchange rate鈥檚 role in the economy is to balance trade is on its own problematic. One issue is that empirically we see that terms of trade tend to move against primary commodity exporters (as first observed by ). Another issue is that there could be completely different forces driving exchange rate movements and that there is little evidence of the exchange rate actually adjusting to ensure balanced trade. On the contrary, persistent trade imbalances have been observed throughout the history of global capitalism (see by Michael Bordo). The assumption of exchange rates adjusting in order to guarantee equal competitiveness among nations was first identified as a theoretical fallacy by and later , and Anwar Shaikh ().

Assumption 2: The Principle of Comparative Costs
The assumption of comparative costs is presented as a fact in Economics textbooks and classrooms around the world (Milberg 1994), despite the problematic issues inherent to it. points out that a serious flaw in the way it is presented in neoclassical theory, is that comparative costs include both production costs and a normal profit rate in the production price. Smith and Marx argued that in reality there is no reason to believe that a firm is guaranteed a normal profit rate. Furthermore, Shaikh argues that in the real world, it is the firm with the lowest unit costs that decides the price, and the distinction between prices and costs therefore becomes crucial. If the international price of a good falls, the high-cost producers of this good will not be guaranteed a normal profit rate. On the contrary, the firms that are the most competitive and that are able to produce at the lowest costs will be those that survive, while the less competitive firms will be out-competed.

Other Neoclassical Assumptions
There is a range of other unrealistic assumptions underpinning Ricardian trade theory that are common to neoclassical economic theories. For example free mobility of capital and labor, perfect competition, and full utilization of domestic resources (see also by Steve Keen). The assumption of full employment is important for the argument that free trade will听 benefit everyone, as this argument cannot be made if it鈥檚 the case that free trade leaves large parts of the global population unemployed. While neoclassical economists often argue that temporary losses of jobs can occur in the face of trade liberalization, this raises the question of how long we are meant to passively wait before we get to full employment. Full employment is yet to be observed as a general rule, and in 2015 over 197 million people were unemployed globally, .

Furthermore, the assumption that labor is mobile between sectors (but not between countries) makes little sense in the real world. If we recognize that labor cannot costlessly and effortlessly move from one sector to another (e.g. to get to what the country has a comparative advantage in), the effects of trade liberalization become much less obvious. Moving from wine to cloth production, for example, actually requires investing in new capital and re-training the labor force, and does not happen automatically. This is a point also made by economist Ha-Joon Chang in a debate with former World Bank chief economist Justin Lin, as Chang is arguing for a comparative-advantage defying approach for developing countries ().

Saving the Theory: Introducing Imperfections
In defense of neoclassical trade theory, neoclassical economists tend to argue that the reason we are not observing balanced trade is because of too much government intervention impeding the free market as well as a host of 鈥榠mperfections鈥� that impede the perfect workings of the market. For example, attempted to explain observed outcomes by adjusting the assumptions of free capital mobility and returns to scale, while is well known for adjusting the assumptions of perfect information by introducing information asymmetries as imperfections in developing economies鈥� markets that explain why markets do not function perfectly. These insights have been incorporated into a 鈥楴ew Trade Theory鈥� (here鈥檚 ).

The same is done to explain why we do not see exchange rates equilibrating over time to balance trade. Rather than accept that there is something wrong with the exchange rate theory itself, empirical discrepancies are explained by measurement problems and/or imperfections in the market because of currency 鈥榤anipulation鈥� (see for example or ). Many economists cannot imagine any reason for China鈥檚 trade surplus with the US other than the Chinese manipulating their exchange rate in order to stimulate their exports. If we were to consider a classical theory of exchange rate determination 脿 la Shaikh, however, the Chinese surplus and US deficit could be explained by China鈥檚 lower costs of production in the tradables sector, compared with the US. Within that framework, the real exchange rate is not free to adjust to eliminate trade imbalances, and therefore the trade imbalance will persist as long as the real conditions remain the same.

So How Is This Still A Thing?
As with the issues brought up by John Oliver on Last Week Tonight in his How is this still a thing? segment, it can be difficult to understand why so many people are still staunch supporters of Ricardian trade theory, when it has seemingly been disproved. To understand it, we must first consider the obvious global dominance of neoclassical economics in classrooms, textbooks, academic journals and universities. It is not that difficult to understand why the basic tenets of Ricardo鈥檚 trade theory are still so widely respected, when we consider that alternative explanations are excluded from mainstream textbooks, journals and syllabi.

We must also take into account the political economy of trade policies, as there are strong private and public interests involved. is well-known for his observation that it is once a country 鈥�has attainted the summit of greatness鈥� that it tends to start advocating free trade policies internationally. In List鈥檚 time he was referring to Germany鈥檚 need to develop its own competitive firms while the United Kingdom was advocating free trade after having already built up a competitive export industry. Firms that are able to compete on the international market are likely to advocate for free trade policies (as are the countries hosting these firms), because this will enable them to gain larger market shares globally. For low-income countries that are unlikely to have many, if any, absolute advantages, free trade can be detrimental, as it can lead to the collapse of the little industry that they have and put them in a situation where they have to run persistent trade deficits and borrow externally to cover the deficit. Unfortunately, however, the observation of persistent imbalances (and recurring debt crises in the deficit countries) appears to have little impact on the popularity of Ricardo’s theory.

Footnotes:

[1] Hat tip to John Oliver of Last Week Tonight who started the How is this still a thing? segment to question the strange things we still do and believe despite them being seemingly outdated, and often times also offensive (e.g. , , , and ).

The photo is taken from .

The election of Donald Trump last year and Britain voting to leave the EU (鈥楤rexit鈥�) left a lot of people angry and confused. While there was a lot of in-depth media coverage trying to make sense of the phenomenon immediately after the fact, the academic analysis is as usual late to the game because of the lag associated with academic publishing

Only these past couple of months have academic articles dealing with the issue started appearing. Real World Economics Review, for example, published an excellent special issue on Trumponomics in March. Although the analysis tends to be Western-centric, there have been a few notable pieces that take a more global perspective and/or deal with economic consequences for the developing world.

Here is an overview of the best I鈥檝e seen so far:

• Gills, Barry K . & Heikki Patom盲ki. 2017. 鈥�Trumponomics and the 鈥減ost – hegemonic鈥� world,鈥� Real World Economics Review (79, pt. 2): 91-107.
• Ghosh, Jayati. 2017. 鈥�Trumponomics and the developing world,鈥� Real World Economics Review (79, pt. 2): 29-34.
• Hozi膰, Aida A. & Jacqui True. 2017. 鈥�,鈥� Review of International Political Economy 24 (2): 270-287.
• Jacques Sapir, 2017. 鈥�President Trump and free-trade鈥� Real World Economics Review (79, pt. 2): 64-73.
• Mendez-Parra, Maximiliano, te Velde, Dirk Willem and Winters, L Alan, eds. (2016) . Overseas Development Institute / UK Trade Policy Observatory.
• N枚lke, Andreas. 2017. 鈥樷�� Competition and Change, April-07-2017.
• Wade, Robert H. 2017. 鈥�Is Trump wrong on trade? A partial defense based on production and employment,鈥� Real World Economics Review (79, pt. 2): 43-63.

On a related note, the Young Scholars Initiative of the Institute for New Economic Thinking is organizing a workshop on听this topic in Italy in June. You can (deadline April 19th).

Feel free to leave additional recommendations on the topic in the comments section below.

Photo: Gage Skidmore

As people across the world are struggling to understand the rise of Trumpism, anti-establishment and anti-free trade movements, (Tallinn University of Technology), (Jawaharlal Nehru University) and (Tallinn University of Technology) have put together an impressive that can help make sense of what’s going on. As the field of Economics has become increasingly narrow since the 1970s, many important scholars and theories have been excluded from the field, and since forgotten. This Handbook presents rich historical accounts and ideas that can help explain economic and social development, and is a much needed attempt to correct for the existing biases in the field of Economics.

The Biases in Economics
In addition to the strong bias towards Neoclassical Economics, the editors also identify Eurocentric and Anglophone biases in the field. The linguistic bias can also be found in the history of thought, as scholars who did not originally write in English tend to be squeezed out of historical accounts of economic ideas. For example, while only 18 out of 62 (29%) influential economic development books (books that reached more than 10 editions) in 1850 were written by scholars from the United Kingdom, in the history of economic thought chapter of the (1988) published by two World Bank economists, all the references are to works originally written in English by people living in the UK, with the exception of Irish born Richard Cantillion, who wrote in French.

The linguistic and geographic dominance that economists wrongly attribute to the past is unfortunately very much the case today. According to Google Scholar, the top ten most cited economists are based in just a handful of US schools, with the exception of Jean Tirole at Toulouse, France. Paradoxically, the Economics field has become more geographically and linguistically concentrated, despite globalization. The chapters in the Handbook address this bias by including authors from across the world, as well as chapters dedicated to schools of thought with non-Western origins, including China, India, Latin America and Africa.

Putting Development Back Into Development Economics
While in the 1970s, in the 1980s there was a related shift from the study of development processes to the study of poverty (see figure 1). Unfortunately, even the focus on poverty alleviation takes a very limited view of poverty and how it is generated, as it abstracts from basic economic processes and systemic features that determine poverty. For example, class is usually absent from the discussion, except for in the form of 鈥渟ocial discrimination鈥� (with the economic content of class removed). Furthermore, the symptoms of poverty are addressed, such as lack of income, poor nutrition, bad housing, lack of access to basic services, etc, rather than the structural causes of poverty. Finally, the role of the rich in society is not usually considered in the analysis of the poor, as if they are not interconnected. The editors call the current discourse that promises free trade and measures against the poverty that results from free trade a form of 鈥渨elfare colonialism鈥� (see e.g. and ).

Figure 1: The Decline of Development in Development Economics

The editors also emphasize the increasing focus on methods in the field of development economics, rather than theory and history (in line with my own observation). The editors argue that the field has developed into a tool-driven profession, where the tools determine the types of questions that are possible to ask as well as the type of analysis possible to carry out. For example, as pointed out by , increasing returns was removed from international trade theory because it was not compatible with equilibrium. As puts it: Economics came to 鈥渇ollow the line of least mathematical resistance鈥�.

The editors also find that the basic fact of uneven development tends to be reduced to models of 鈥渄ualism,鈥� which implies less attention to the differentiation internal to sectors, and patterns of interaction of different groups of classes within and across sectors. Furthermore, when it is discovered that certain institutions are different from 鈥渢he norm鈥� in developing countries, they are highlighted and explained using the same basic analytical tools developed for the norm. This type of Economics is what the editors call a National Geographic view of the broader process of development, as only snapshots of particular institutions or economic activities are separated for the analysis.

This handbook is an effort to reverse these trends by putting development back into development economics and by not letting a limited mathematical toolkit dictate which theoretical frameworks are acceptable.

What can we learn from alternative theories?
So, what can we actually learn from these theories? Perhaps the most important lesson to draw is the importance of considering historical and political context when analyzing development issues. The book is rich with examples and historical studies of development processes that we can learn from. For example, alternative ways of viewing the role of rent-seeking in development are discussed. While mainstream development economists tend to present rent-seeking as a drain on wealth and economic efficiency (see e.g. ), chapters in this Handbook suggest that rent-seeking historically has gone hand in hand with economic development.

Furthermore, the alternative theories acknowledge that development is related to structural transformation, rather than just poverty alleviation. Many chapters discuss how moving into higher value-added activities has been a core element in successful development experiences, often through targeted policies aimed at stimulating innovation and technological development.

You can also learn a lot about specific issues from the chapters in the Handbook, such as effective demand, development planning, competitiveness, late development, the developmental state, knowledge governance, legal structures, deindustrialization, terrorism, technological retrogression, and more. The volume also takes historical development processes seriously and has devoted the first part of the book to the study of historical development, including Chinese, Indian, Muslim, Ottoman, Nordic, and African perspectives. Finally, seminal development economists such as Giovanni Botero, Friedrich List, Karl Marx, Albert Hirchman and Michal Kalecki are discussed in depth, as well as broader traditions such as feminist approaches, Schumpeterian and Keynesian approaches, the dependency school, regulation theory, classical economists, and evolutionary economists. This book will be interesting for anyone seeking to expand and deepen their understanding of economic development beyond what is taught in mainstream courses.

Cyclicality in Economic Thinking: A Reason for Optimism?
The editors also study the development of economic theory and argue that there is a cyclical pattern in the level of economic abstraction: When things go well in the core economies of the world where economic theory is generally produced, economic theory tends to become very abstract. As a result of this high level of abstraction, the role of policy is minimized.

You find many highly abstract assumptions in neoclassical economic theory, such as the assumption that economic activities are qualitatively equal (see for a longer discussion on this and on the equality assumption). However, to take the example presented by the editors: a shoe-shining business of a child in Lima and Bill Gates鈥� business in the US are qualitatively different, and that difference is crucial for understanding development processes. To understand why Microsoft鈥檚 profits are higher than that of the shoe-shiner, real-world 鈥渋mperfect鈥� issues such as barriers to entry, technological change, and oligopoly power become key. Consequentially, the editors argue that neoclassical economics operates at a level of abstraction that is too high to grasp the relevant variables for development. Equality and harmony in the models produce equality and harmony in the results. However, anyone observing the real world can see that it isn鈥檛 harmonious, let alone equal.

Interestingly, the editors argue that we are currently witnessing a new cycle of economic fashion in the form of a new revolt against formalism. As there has been a recent revolt against mainstream macroeconomics from within (e.g. and ) and a growing student movement , we can only hope that some room is opening up for alternative economic theories.

A Presentation of the Book
I recently had the pleasure of chairing a debate with the editors in Oslo, Norway. You can see the Power Point presentation here and listen to recordings of the event here:
1) My introduction and Jayati Ghosh

2) Erik Reinert

3) Rainer Kattel

4) Q&A

Ingrid Harvold Kvangraven is a PhD student in Economics at The New School.

The word philanthropy dates back to the Greek word 蠁喂位伪谓胃蚁蝇蟺委伪, . Today the private philanthropy as non-official development assistance (ODA) to developing countries. Such assistance can be through large philanthropic foundations such as the Rockefeller or Clinton Foundation, or through 鈥榙irect giving鈥� platforms such as or . But does what we call philanthropy today deserve its name? Rather than focusing on the actions of specific philanthropic organizations, this piece听will assess the impact the rise of philanthropy has on global governance and democracy.

Figure 1: Grants by private agencies and NGOs
Source: OECD data

As Figure 1 illustrates, there has been a drastic increase in private funding for development over the past four decades, with the growth really picking up in the 2000s. However, these numbers from the OECD are incomplete in many ways, as much philanthropic funding is not reported as such. The Center for Global Prosperity has done more in-depth data collection on philanthropic funding for global development projects, and found that while OECD estimated private grants to be at $31.5 billion in 2011, the amount to be $58.9 billion. In the same year, OECD ODA was approximately $134 billion. Thus, according to the CGP estimates, philanthropy is now equivalent to 44% of ODA.

What is the effect of this rise? While some see as a way for , it for being a way for corporations and rich individuals to divert attention from the unequal outcomes that the current global economic system generates. Before assessing the effects of philanthropy on global democracy and development discourse, let me briefly touch on some of the main issues philanthropic foundations deal with in practice.

What do Philanthropic Foundations do?

While activities of philanthropic foundations with a global orientation vary, the main areas of focus have been on . I criticize the philanthropic and corporate funding of microfinance , essentially for providing a way for the poor to live more comfortably in poverty, rather than addressing root causes of underdevelopment. Moreover, while financing the development of medicines is much needed, the philanthropic focus on specific diseases and medicines tends to set up that compete for health workers and administrative talent, rather than strengthening underfunded national health systems in developing countries.

Furthermore, recently 鈥榲enture philanthropy鈥� has been on the rise, which is a way to apply private financial resources and business principles to development problems. As the has observed, philanthropists have largely moved from being grant-makers to increasingly becoming real investors, expecting a financial return alongside social impact (for example by investing in ). In addition to their own projects, philanthropic foundations tend to fund NGOs in both the Global North and South, and there has been a recent (so-called 鈥榗orporate philanthropy鈥�).

As many have , charitable giving comes at a cost to the taxpayer. This is because philanthropists from donating to their own or others鈥� foundations. In fact, the US Treasury loses at least from tax breaks on donations. Related is the unfortunate tendency of philanthropists to dodge taxes. For example, while Facebook CEO Mark Zuckerberg and his wife donated 99% of their Facebook stock to philanthropy, Facebook is being sued for its transfer of assets abroad to ; and while positions himself as the savior of Africa, he is in Ireland. Thereby, the philanthropists pick which developmental projects to fund while reducing the government鈥檚 ability to fund such projects with taxpayer money.

Global Democracy and the Shaping of the Development Agenda

Although philanthropic foundations tend to position themselves as apolitical, offering technical solutions to poverty reduction, their investments are undeniably political in nature. For example, the Gates Foundation and Mark Zuckerberg have in the US and , and Michael Bloomberg鈥檚 reform initiative explicitly advocates for stricter gun control. While the public debate on education, health care and gun laws is ongoing, these philanthropists are using their financial resources to push their own agenda.

Furthermore, the , which was officially created by Kofi Annan in 2000, is an example of a platform that has given corporations and their associated foundations power to influence the international development agenda. Through Global Compact and other platforms, philanthropic foundations were, for example, able to of the Sustainable Development Goals.

Another example of corporate influence on international institutions is the the Gates Foundation has on the World Health Organization (WHO), as the organization鈥檚 biggest donor. The Gates Foundation has been criticized for , such as strengthening primary health care systems, emphasizing the role of the state in providing adequate health care, and working to achieve universal health care coverage. Rather than following the priorities of the UN members that negotiated the 1978 declaration, the work of the WHO is heavily influenced by the priorities of just a handful of philanthropists.

In addition to their influence on agendas of public international organizations, foundations also influence development discourse. As point out with reference to the UN Global Compact, framing philanthropy and voluntarism among corporations as an essential element of development, transforms political conflicts into moral frameworks and conflictual relationships increasingly into consensual ones.听 By creating a narrative of everyone benefiting from the current system, these partnerships are masking the fact that while corporations may be profiting from the current system; the poor around the world are not. The focus on consensus and win-win solutions for all in society thereby conceals conflicts of interests that are inherent to global development ( calls this 鈥渆xcess of consensus鈥�). Therefore, Garsen and Jacobsson argue that ethics and moralities are replacing politics, and as a consequence that global democracy is under threat.

The language of philanthrocapitalism is largely , particularly the practices of venture capital investing. The interventions tend to be results-oriented, where results are defined in terms of short-term, measureable material outcomes. impact investing, venture, and strategic philanthropy abound, while ideas such as global power imbalances, unfair trade rules, and legacies of colonialism are brushed aside. Furthermore, the language of philanthropy tends to focus exclusively on poverty, thus dropping the rich from the equation. Although philanthropists tend to focus on scaling-up their interventions, their perspectives are limited by not seeing poverty as a global, political, and systemic phenomenon.

Still Depoliticizing Development

This is not the first time we see such depoliticization of global development on a large scale. Arguably, Western support for NGOs in the 1990s had a similar effect on international development discourse. At this time, the state was seen as an inefficient service provider, and in many countries the state had indeed been severely weakened by the structural adjustment programs of the 1980s. During the 1990s the number of NGOs therefore grew quickly to respond to donors鈥� desires to fund development projects through . Western agencies and governments wanted to bypass the inefficient developing country governments by funding 鈥渢he people鈥� directly, not realizing that an entity such as the people does not actually exist (as pointed out by a Cape Verdean interviewee in ). Arundhati Roy has called this movement in development , as potential activists are turned into bureaucratic NGO-workers that fight for funding to deliver services to the people. The language and operations of NGOs, such as , also serve to further depoliticize the development process. Just as NGOs are accountable to their funders and not to the people they work among, philanthropy initiatives are accountable to their investors, and not to the poor.

However, directing aid towards NGOs, foundations, and corporations rather than to public institutions is already a highly political decision as it originates from the desire to bypass the government. As pointed out in a , philanthropic foundations are thought to 鈥渂e more efficient providers of services,鈥� because a larger share of funding can be channeled directly to poverty-reducing projects since the government is bypassed.

Philanthropic foundations using their financial power to sway political debates, to contribute to a shrinking public tax base, and to depoliticize highly political topics such as poverty, is not in accordance with the original meaning of the word philanthropy. On the contrary, reducing global issues such as poverty to a technical problem tends to come at a human cost (see for example ). Bypassing democracy, which after all means the rule of the people, serves not only to undermine the state as a service provider, but also the people鈥檚 influence on national and global policy. As Roy points out, positioning oneself as apolitical is actually extremely political.

This post was originally published on the .