Current Economic Thought

Today's economic thinking is dominated by a discipline that is referred to in ENL as standard economics. Also called "neoclassical economics", this theory includes concepts and tools that both justify and implement the economic logic of capitalism.

Standard economics is the theory that reflects the interests of the capitalist class, and it therefore has a virtual monopoly on economics instruction at universities around the world.

The main alternative to standard economics is heterodox economics. This is a broad category that includes numerous schools of thought, including the institutional, social, evolutionary, historical, feminist, and behavioral.

What binds these schools together is their opposition to the narrow mathematical approach and — in most cases — the ideologically conservative stance of the standard discipline.1

Although heterodox economics is similar to standard thought in its commitment to capitalist logic, many of its adherents share ENL's ethical orientation and its goal of sustainable well-being.

Heterodox economists have also developed alternative analyses of economic behavior, focusing more on group interactions and less on the isolated individualism of standard economics.

Ecological economics is generally considered to be part of heterodox economics, but it is treated separately here due to its unique relevance for the contractionary project.

The field has extensive experience in analyzing resource and waste flows, and in formulating policies that are conducive to their minimization. It also understands the need to rapidly increase ecological efficiencies, and it has done considerable work in placing monetary values on natural assets.

These tools and policy guidelines could be highly useful in a progressive contractionary economy, and could form the foundation of a guiding logic that conservative contractionists will prefer to ENL.

The last major alternative to standard economics is Marxian economics. This field is distinguished by its rejection of the capitalist system and its acceptance of the labor theory of value. The latter is the proposition that under capitalism the exchange-value of a commodity is regulated by the socially necessary labor-time required to produce it.

This theory, which I believe is broadly correct, makes Marxian economics an indispensable tool for analyzing the systemic nature of capitalist economies. For example, Marx's ideas can readily prove that such economies are compelled to grow, something that cannot be done with standard and heterodox concepts.

The problem with Marxian economics for present purposes is that it relates exclusively to capitalism. Because the aim of a contractionary revolution is to supersede capitalism historically, these concepts will become increasingly irrelevant as the contractionary movement succeeds in attaining its goals.

To summarize, current economic thought falls into four categories: standard, heterodox, ecological, and Marxian.

Standard economics is an unlikely source of ideas for contractionary economics because it is aligned, ideologically and ethically, with the logic of capitalism.

Marxian economics is also an unlikely source because the subject of its analysis is slated for disappearance from the historical stage.

Heterodox and ecological economics, on the other hand, are promising sources because they largely share ENL's ethical stance, and because they analyze many of the topics that must be addressed in supporting a society's economic transformation. We need to determine how they might contribute to the functional and guiding frameworks within contractionary economics.

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