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Neoclassical economics is not a science but an ideology, and only one of many in economics.  Its success has never been achieved in an open playing field in which all ideologies are taught and students select the most appropriate. Instead no alternatives are presented, or if so they are usually disparaged and delegitimized. Its success has been achieved and perpetuated by  monopoly status- by establishing and maintaining significant entry barriers that prevent democratic dialogue among competing visions. Dissidents using a different methodology or ideology, are ‘not one of us’ as Diane Coyle writes,

“We in the profession count [Paul] Krugman as a bona fide economist. By contrast many of us spurn Galbraith because he wasn’t a modeler . . . so we modelers can read The Affluent Society and even agree with it, without finding it persuasive. . . economics isn’t defined by its subject matter, but by its way of thinking” (Coyle 2007: 231-232). More…

The strength of neoclassical economics is built on several pillars:

For years, if not decades, it was promoted against the dominating paradigm of Keynesianism by political interest groups and economic think tanks and achieved a dominant role in the discourse.

Neoclassical economic argumentation is based on three pillars which are the common ground of all its variants:

  • methodological individualism (socio-economic phenomena are to be analysed by focusing on the individuals whose actions brought it about; understanding fully their ‘workings’ at the individual level; it imposes axiomatically a strict separation of structure from agency, insisting that socio-economic explanation, at any point in time, must move from agency to structure, with the latter being understood as the crystallisation of agents’ past acts), More…

In this brief discussion I would firstly like to thank Peter Söderbaum for his thoughtful contributions in providing valuable material in  this discussion on the complex concept of Sustainability Economics. I especially would like to note the well developed Powerpoint outline we received, as it develops clearly the challenging steps in this process.

In my comments I will try to stay as close as possible to the outline points that Peter Söderbaum has made , and especially of course the complex road towards Sustainability Economics.

1. Initial step:  It appears, based on Peter’s work as well as the interesting blogs received, that most participants  appear to agree that  conventional neoliberal economics no longer works, and we will have to find an alternative path. More…

The book “Understanding Sustainability Economics” by Peter Söderbaum is offering a synthesis of major themes in ecological economics and sustainable development, which have been prominent in the policy and theoretical debates of the 1960s-2010s. Embracing the Scandinavian tradition of institutionalism, Peter Söderbaum is emphasizing the approaches to the economic analysis he has been developing over the course of his long and productive career.

Starting with Positional Analysis, and stakeholder approach to decision making, Peter devoted considerable attention to the development of the questions of values and ideological orientations of economic and political actors, pluralism in economic analysis and democracy both in day-to-day environmental problem solving and in the economic science per se. In the “Understanding Sustainability Economics” Prof. Söderbaum pays particular attention to the themes, which by the will of fate, became the central themes of my work too. More…

1. What makes neoclassical economics attractive?
I think neoclassical economics is attractive to mainstream accountants (academics and practitioners) because it lends a misplaced “aura of objectivity” to their work – helping to rationalise their focus on shareholder wealth maximization and capital markets.  Broader economic, social and environmental impacts are construed as “externalities” that lie “outside” accounting’s boundaries.  A large part of the strength of neoclassical economics arguably comes from its hegemonic position in university business schools and economics departments more generally.  Students are taught that both NCE and mainstream accounting are “neutral” and “objective”– and are rarely exposed to alternative perspectives.  It is thus hardly surprising that accountants are often very unreflective about the way business-oriented frames affect what they see and report, and have difficulty including viewpoints that contradict or go beyond their assumptions.  All of this is very corrosive of democracy – contributing to a “there is no alternative” (TINA) technocratic mentality evident in much political decision-making.  I am also currently trying to think about neoclassical economics “grip” on accounting through Jason Glynos and David Howarth’s work on “fantasmatic logics” – see Logics of Critical More…

I first came across Peter Söderbaum’s work when I was writing my master thesis. The topic was entrepreneurs who did not act according to the mainstream interpretation of entrepreneurship. By doing in-depth interviews with a number of companies I learned about the logic of running a business not for the sole purpose of making profit but for reasons such as self-fullfillment, producing critical design, asking questions about social development and contributing to a more environmentally sustainable direction for society, among other things. All this was accomplished through traditional company forms, and the entrepreneurs did not at alla think of themselves as ’social entrepreneurs’; although profit making was not their primary objective, they did not in any way reject possibilities to earn money. While working with ’my’ companies and at the same time discussing with academics in my department I came to realize that they represented a phenomenon that had not previously been noted in the mainstream academic discourse on entrepreneurship. More…

I emphasize three core issues of Söderbaum’s book: monetary valuation of the environment, institutional change and pluralism. I specify some questions that they raise both from the theoretical and policy-making viewpoints.

1. Monetary valuation of the environment as an ideology

–          What are the attributes of this ideology or what are the philosophical presuppositions that underlie the economic approach of environmental values ?

Beyond the NEM, a core idea is that money is the objectivation of the utility of things. While lamenting the widespread perception that money and market relations are the natural way of valuing things, this critique provides no account as to why they appear so natural. More…

The first part of this essay’s title is from a Chubby Checker’s mega-hit single from 1961. I have chosen it because twisting is in my mind partly the explanation for the second part of the heading. I will give some examples that support my statement. But first.

Prof. Söderbaum describes ideology as a subjective mental construct of what could be seen as good means to reach a desirable end. Maybe the same model could be used to answer the question raised in the invitation – what shall we do to have pluralism, at least in academia. Pluralism is our end. By using historical sociology as a research model, perhaps the past can teach us partly what the means could be. More…

The Euro-Memo Group[1] has played an important positive role – and is continuing to do so – in the following contexts:

–          In the critical debate to be developed against the de facto monopoly of neoclassical economic theory on the institutional level,

–          In the struggles for achieving a democratic renewal of research and teaching in the field of the economic, political and social sciences,

–          In the critique of the neoliberal paradigm in contemporary politics,

–          In the public debate on economic and societal problems,

–          In the elaboration of democratic alternatives to the present development of the EU,

–          In the articulation of left wing European thinking and of a left wing EU policy. More…

PowerPointPresentation: http://ifg.rosalux.de/files/2011/09/Soederbaum2011.pdf

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