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For a Different Economics

Economists are criticized everywhere for their onesidedness, their focus on markets and their inability to deal with the burning problems of our time... From the neoclassical assumptions "more is better" or markets on principle lead to an efficient distribution, a perspective on the world results that sets efficiency above justice and maximization of profits above environment.

By Jakob Hafele

Business as usual or the status quo is impossible in economics. The problems of humanity demand solutions, not ideology

[This article published on November 13, 2014 is translated from the German on the Internet,  http://www.capital.de. Discussion on the state of economics enters the next round. The German Plural Economics network decries the "one-sidedness of theory."]

A state of emergency prevails in economics. Professors are divided on the basics. Students protest and partly organize their lectures themselves. A discussion breaks out around economic truth and academic honesty. In this discussion, Axel Dreher, professor at the University of Heidelberg, defends the status quo of economics. Criticism is outdated. There has long been variety. We thank you Professor Dreher for entering this long overdue discussion.

Economists are criticized everywhere for their one-sidedness, their focus on markets and their inability to deal with the burning problems of our time. Youth unemployment in Spain recently reached a new all-time high at 44 percent. Environmental problems are becoming ecological catastrophes. More and more people are malnourished and starving worldwide. At the same time an enormous wealth is accumulating while the unequal distribution soars. The recommendations of economists seem irrelevant. This is not a situation where economists should say: "All is good; let us simply continue as in the past."


The state of economics is very alarming - marked by a shocking one-sidedness that is hardly recognized. So-called neoclassicism that could be described as today's mainstream economics dominates research and teaching. Only the themes of this school and its deductions are regarded as economic foundations while other approaches are marginalized. The alleged variety mentioned by Professor Dreher only exists within this neoclassical system of thought. Different themes are investigated with the same assumptions and methods. That is not diversity.

This one-sidedness is very explosive since it is not academically neutral as often claimed. Normative assumptions about the world underlie every economic school including neoclassicism. "More is better" or the assumption that markets on principle lead to an efficient distribution are only two examples. From these assumptions, a perspective on the world results that sets efficiency above justice and maximization of material prosperity above protection of the environment.

Not only have the assumptions prevented neutrality. The decisions which questions are investigated and what instruments are used are normative. Thus mainstream economics is not a value-neutral instrument for analyzing the real economy. On the contrary, it is loaded with ideology through the one-sided choice of the assumptions, methods and investigated subjects.


The continuing complaints from the real economy on the inadequate training of economists show clearly how little students of economics learn about the economy.

Human interaction is very complex. From other sciences, we could learn no theory about human conduct is always and absolutely true. A situation can often only be explained from many different perspectives. Some perspectives are very good at explaining certain aspects. Other theories explain other aspects better.

Neoclassicism asks how scarce goods can be distributed as efficiently as possible and therefore has its legitimate existence in economics. On the other hand, ecological economics sets the preservation of our foundations of life as a goal above efficiency; post-Keynesian economics sees low wages as a central problem and money as a powerful factor in economic cycles. There is more sense for power relations in the political-economic system. We need many perspectives to do justice to the complex world. This is also true for economics.


People are involved and not only knowledge and scientific logic! Economists are occupied with the development and distribution of resources. For a long while, all people on the planet have not been supplied with the vital necessities. The Euro crisis made thousands in Europe homeless and the resource-hungry economies of our time strain our environment at the expense of future generations. Mr. Dreher's description of an economics in a good condition contrasts with a world economy that cannot solve the enormous problems and must force economists to find solutions for these problems. However they lean back satisfied on their neoclassical easy chairs instead of seeking new answers to these vexing challenges with the intellectual riches of all the economic theories and methods.

We demand plurality to dissolve this narrowed and one-sided perspective of economics, a plurality that sees the economy from different perspectives with fundamentally different assumptions and themes.

Students bringing projects into the curriculum is not enough. Universities must be a driving force of change. The foundation must be renewed in the current state of economics! Students filling a gap cannot be the solution.


By Jakob Hafele, Frederick Heussner and Janina Urban

[This article published on November 23, 2014 is translated from the German on the Internet,  http://www.sueddeutsche.de.]

[Hans-Werner Sinn, one of the best-known German economists and president of the ifo-Institute for Economic Research, thinks critics of the dominant theory do not understand economics. Critics counter the professor from Munich is misguided. He oversimplifies many things.]

Stimulated by the debate in the Sueddeutschen Zeitung newspaper, a public discussion has finally broken out on the state and future of economics. The essay by the ifo president Hans-Werner Sinn titled "The Great Error" in which he vehemently defends current teaching and research has provoked passionate reactions.

Economic theories greatly influence politics and society and therefore are fought for. The American Nobel Prize winner Paul Samuelson once said: "I don't care who makes the laws of a country - as long as I can write the economics textbooks." Therefore it is problematic that economics only knows one single approach. The focus on the market and efficiency dominates a discipline that could make important contributions to the acute problems of our world.


Sinn is one of the best-known German economists. What he says finds an enthusiastic response in the general public. Now he reproaches critics of the dominant theory for not understanding economics. Economists should admit their mistakes and not believe in perfect markets. However that is the problem of current economics. It is constantly oriented in the ideal of the market and only looks at the economy from one perspective.

This begins with the first lectures in the study of economics. Students learn that the welfare of all people increases when they act selfishly on markets. That is the core of the neoclassical theory that has deeply influenced our understanding of the economy. "The price affects supply and demand" and "as much market as possible and as much state as necessary" are only two of the many platitudes we owe to neoclassicism.

The current situation in economics is like a non-functioning convertible sofa that does not pull out any more. If one only looks at this couch from the front, one would nev3er notice a rusty screw in the back blocks the pullout. The couch must be examined from the other side. Translated this means: important discoveries about our economy are simply lost through the one-sided approach of economics focused on the market.


The one-sided and problematic ideal of the market is clear when Hans-Werner Sinn compares economists with physicians. This comparison pains a positive picture. Crises are equated with sicknesses and are the exception, not the norm. Their causes are clear and undisputed. The economist as physician appears as a friend in need who knows what is good for the patient.

However this picture if very problematic. That the economy is equated with the market and understood as a basically healthy organism and ideal of social health is hidden. Complex economic realities like the financial crisis when a teamwork of the most different factors nearly led to the collapse of the organism are reduced to individual partial aspects like capital holding rates. A more comprehensive treatment that explains sicknesses by referring to diverse causes and their interplay disappears from view.

A more fundamental criticism that understands the crisis as a symptom of a much more far-reaching sickness of the whole organism is not undertaken. The causes and solutions of crises are much contested. The one truth about the financial crisis does not exist. When economists like physicians only "prescribe" a single kind of solution as without alternative, the problematic and one-sided nature of current economics is obvious.

This is clear in the case of austerity in south Europe where human suffering is described as a side-effect of a bitter pill that must be given to the patient even against his will if necessary.


Critics reproach the economist Hans-Werner Sinn for a one-sided picture of the economy that is incompatible with the complex reality. Instead of helping solve the acute problems of the world, the focus is on the market and efficiency. Is this criticism justified?


Economists are not neutral observers, even if Hans-Werner Sinn wants to persuade us of that with the physician comparison. Economic analyses and political recommendations are always normative since certain assumptions about human conduct and our world underlie the applied methods. When it is assumed as a general statement that a market leads to an optimal distribution, that is not a value-neutral assumption. In neoclassical theory, the goal is attaining an efficient distribution.

Whether such a distribution is just cannot be settled. Efficiency is set above justice. In other words, that all products on the market find their purchaser and the ever greater gulf between poor and rich is only of marginal interest.

With that, mainstream economics has become the representative of a certain worldview. This is highly explosive since it sells itself as an objective science. It does not openly reveal its normative elements in the classroom, research or political consultation. Thus the influence of economic norms on our economic reality occurs under the mantle of objectivity.


The theories of the economic mainstream are normative and one-sided and have a great influence on politics. Our criticism is by no means refuted when Hans-Werner Sinn in his apology admits that modern mainstream economics knows cases of market failure or understands environmental problems as cost-factors.

On the contrary, all these objections are only varieties of the abstract basic idea that markets automatically lead to the greatest possible prosperity. Many other schools of thought exist alongside neoclassical mainstream economics - like complexity economics, the Austrian school, post-Keynesianism or Marxian economics.

These schools choose other perspectives and focus for example on complex system dynamics, system dynamics, distribution justice or the role of power in a society. They mostly come to completely different conclusions than neoclassicism.

All these perspectives could help us understand the complex reality in which we live and find appropriate answers to economic problems. Therefore we need a pluralist turn in economics. A diversity of methods and theories and an interdisciplinary approach are needed to reasonably counter the economic crises and challenges of the present time, not one theory that can explain everything.

Problems like high unemployment, the Euro-crisis or climate change must be considered from different perspectives. Only in that way can we come to a picture that does justice to the complex phenomenon "economy."

Jakob Hafele, 26, Frederick Heussner, 26 and Janina Urban, 25 are members of the Network for Plural Economics (www.plurale-oekonomik.de).


The study of economics runs on well-trodden paths. Diversity of theories and methods is lacking

By Benedikt Weihmayr

[This article published on July 22, 2014 is translated from the German on the Internet,  http://www.capital.de.]

[The financial crisis has shaken economics. Its models are too unrealistic or out of touch with reality according to the current reproach. This conflict has long reached the German lecture halls. In May 2014, 40 student groups from different countries launched a call in which they denounced the "one-sidedness of theory." The German network Plural Economics was one of the groups. Its activist Benedikt Weihmayr explains its criticism.]

Economic theories are themes in the first semester in the study of economics. What did Smith, Ricardo and Marx, Jevens, Walras and Marshall, Schumpeter, Hayek and Mises, Keynes, Samuelson and Minsky, Friedman, Lucas and Mankiw say and think? Regarding academic work, how do I do research in the academic literature? How do I structure homework? What is a model and what is a theory? On methodology, how do I gather data, evaluate statistics and conduct an interview with an expert? On economic foundations, how does a bank function, who makes the political-economic decisions and how large are the sectors? Two classes are seminars; a lecture is given in one and the other is completed with homework and an exam. This is a rather intuitive approach. Students are introduced to the breadth and beauty of economics this way.

However reality looks different. Many themes do not occur in most courses of study whether Bachelor or Master. Whoever wants to focus on theories outside the mainstream must do this on his or her own initiative. Even the partly stirring debates within neoclassical research are not discussed in the courses of study. Methodology is limited to quantitative approaches and models and their validity is not critically examined. Instead of working out one's questions in homework or discussing in seminars with fellow students, the subjects are presented in lectures and parroted on examinations. In this way, students get into shape and regurgitate one-sided conclusions instead of developing solutions.

The demand for diversity is not revolutionary but a foregone conclusion or matter of course.


Together with student initiatives from 30 other countries, the Network for Plural Economics champions plurality in economics. In our International Call of May 5, 2014, we urge three forms of pluralism: variety of theories, different methods and inter-disciplinarity.

Theoretical diversity means adopting other perspectives in study alongside the dominant neoclassical approach. In some courses of study, behavioral economics is explored. However, from our perspective, Schumpeter's or Hayek's theories should be discussed in every introductory course as well as Keynes, Marx and Minsky.

Each of these theories has its area of application and its strengths. One theory explains innovation very well, another the importance of information on markets, another power and distribution and still another economic and financial crises. If this diversity existed in teaching and research, there would be a competition for the best ideas and solutions.


Methodological pluralism makes a considerable contribution. The neoclassical tradition presents the uses of different goods and consumer articles in graphs and expresses this in functions. This is often a good approach for understanding the general functioning of markets. However these quantitative methods are much less helpful in investigating culture, identities or the genesis of markets. For that, the researcher must know how to conduct an interview or grapple with archival data. If one wants to explore the collapse of a bank like Lehman Brothers - an obvious economic research theme - one should also tackle Ben Bernanke's academic background, Henry Paulson's professional career and the influence of laws and agreements on the conduct of financial markets along with econometric models.

The example of the financial market crisis makes clear economic phenomena are insufficiently understood when they are torn out of their sociological, political, legal or historical contexts. Therefore we need inter-disciplinarity. Inter-disciplinarity gives increased knowledge and sensitizes students to understand the social effects and ethical implications of economic decisions.

Economic themes penetrate our daily routine. Pluralism is a social question. Diversity in economics is more than an academic necessity.

Therefore we revolt out of academic passion and social consciousness and turn against intellectual monotony. We urge the defenders of the mainstream, the silent critics of neoclassicism, students, politicians and corporate leaders to enter in the discussion. The crisis of economics is a social affair and must be tackled socially.

homepage: homepage: http://www.freembtranslations.net
address: address: http://www.alternativetrademandate.org

can you make it? 15.Dec.2014 07:24


Study after study shows that successful people have one common trait. They are able to postpone instant gratification for a better reward at a later date.

People float ashore in America with nothing constantly and become more successful than Americans who have been in this country in generations.

The lack is within you, not the system.

Euphemism 15.Dec.2014 13:37


Gee m<, that's a nice way of saying that some people deserve to die because that's how the system works. Thanks!

matt 15.Dec.2014 14:17


Its always easier on the old ego to blame someone else rather than fix your own faults. We all will die by the way, deserved or otherwise.
There was this ugly little misfit corporal in Germany years ago who made a career out of convincing Germans that all their problems were some ethnic minorities fault. Maybe you heard of him?

The ego can be a very fragile thing, and an enormously expensive thing as well if its not handled correctly.

" We all will die by the way, deserved or otherwise. " 15.Dec.2014 18:31


to just kill yourself, get it over with and save the system any further trouble.

Someone'll pop one out to replace you in mechanism, soon enough.

m< is right - there is NO substitute for hard work 15.Dec.2014 20:20


At some time in the future some people will realize this; although some people believe this to be a conservative canard (look it up).

I can point to dozens of people I know personally who choose the path of gratification now - a poor choice. This sometimes comes in the form of ill-gotten entitlements and such, which is ultimately tragic. As we all know, people tend to gravitate toward opinion with which they already agree - I assure you, if you are poor, following this advice will ensure your continued poverty.

Blaming Faux News, White People, Corporations, Koch Bros., Cops, Chemtrails, Bush/Cheney, Vaccinations, Wall Street, Military Recruiters and the like will get you no where. Turn off your TV, read books, study, exercise, UTILIZE COMPOUND INTEREST and work hard and you will succeed (Yes, I'm an idealist).

RE: "canard (look it up)" 15.Dec.2014 21:36


Did you just write that, you want us plebes to look up the definition of the word 'canard' ?

hey whoever/whatever was behind the posting authored "anon":

scurry back pronto to the un-sunshiney place you crawled out from.

The only reason (given the purported life circumstance self-described in post) you could possibly have for showing up at a place like this is if you were paid to be here.

srsly 16.Dec.2014 11:45


There is an entire industry out there designed to separate you and your money by selling you the idea that some vast conspiracy is at work and fucking you. I'm reasonably sure you have helped pay for the McMansions of those who sold your their goods. Just Google images of the homes of your favorite purveyors of truth on Comedy Central, or HBO, or whose books you have bought and films you have paid good money to watch and own the DVD of.

In my opinion even if I disagree with their message they deserve every cent because they have exploited a niche in our free market and harvested your $$$.

Again, an ego can be the most expensive purchase you make in your entire life if you let be.

There Is No "American Dream" 16.Dec.2014 16:05


"Study after study shows that successful people have one common trait. They are able to postpone instant gratification for a better reward at a later date." Another silly myth promoted by the people who own the system.

99% of the notion of "success" is make-believe. Between about 1950 and 2000 it was possible to attain very limited success by going to school. But nowadays most of what is attained is just debt.

What we really have is just the rich and the non-rich. And just about everybody who's rich was born rich. There are maybe 100 rich Americans who were born non-rich, and we keep hearing about those same ones over and over. Among a U.S. population of 300+ million, only about 100,000 gain much of anything at all. but they're not actually rich (rich to me means having $100,000,000 in READILY DISPOSABLE assets).

Over my long life, all the folks I grew up with are pretty much at the financial level that their parents were at, with one minor exception.

Read about the study described here:

'There is no American Dream': Why one US professor believes the national ethos is an illusion and the country has the same level of social mobility as medieval England
 link to www.dailymail.co.uk

blues 16.Dec.2014 17:16


That will come as a complete disappointment to those who only have $90,000,000 of disposable income.

I will admit there is a system in place that taxes the shit out people trying to get there, but not the people who are already there.

Your income is taxed in most states about 50 percent or more if you are pulling in $1,000,0000 a year. The people who already have made their millions, about 28 percent maximum and that's if they have a shitty accountant.

Remember the bullshit a few years about about Warren Buffet paying less of a percentage than his Secretary? The little secret you didn't hear was his Secretary makes about $450,000 a year. Its not the $25,000 secretaries we are use to is it?

That being said, It is possible and I would say more possible to be successful in America than at any time in history.

An Education is very helpful, if you study in right field. If you get a BS in Woman's Studies or African American Studies, or Art History, etc. you will end up if you are lucky with the $25,000 secretary job at the local community collage records office and be in $75,000 of student debt. Unlucky? Making Espresso for $9 an hour and $75,000 in debt.

So, if you wish to believe you have no hope, then I suspect you are correct. You have no hope. Successful people don't generally listen to negativity from losers.

I Believe there can Be An American Dream 16.Dec.2014 17:56

Tracy Mapes

It's quite the opposite of what We live with now.

It has to do with a lot of things but in particular?

1. Re-Instituting a Parent's Right to Corporal Punishment with out all the Namby Pamby Dr. Spock Crap.
I got spanked maybe 5 times, as a Child, and that was enough to Instill Values that last a Lifetime. Particularly
Respect for Diversity and Respect for Property. (Minus the Current State of Country and Media Affairs).

2. Rebuilding of the Consumer. The Consumerism of America is America's only real playing card except for Warfare, and is
the only bankable solution back to something that resembled the American Dream. This means leveraging foreign labor to
create enough wealth to Level the Playing Field for the Average Citizen. This means the Savings and Profit Margins created
by the use of foreign labor must be passed on to the Consumer despite the tradition of fucking everyone for every dollar
they can get. While "Most" on this board would find the Ideas of the exploitation of Labor Market Differentials and also
a disdain for the Walmart Model, Walmart, while troubled by woes of Vendor problems, has in fact, in spite of the loss of
the So Called Mom and Pop Stores done 1 thing very well. Passing the Savings onto the Consumer so that they can make their
way through Life, sustaining many of the minor luxuries of Living and Tools to go to work for the Masses. This Business Model
is a Requirement by All Companies Large and Small to help Rebuild the Consumer, and enable as many able bodied People as possible
to maintain their families, remain actively engaged and employed so they can help offset a Market in which the Competitive Nature
of Capitalism has destroyed.

3. The Government has to be Rebuilt with Major Modifications to its relationships with Private Industry, Lobbying, and Religious
Affiliations. My First Recommendations include:

Federalization of All Electrical Power Supplies and the National Grid. This does not mean less employment for the People who work
in these vocations, just a new boss. The Power Generated by the Government will be sustained through the Tax base, the Only Difference
between what is delivered to the Consumer and Industry Today is that the Government's Responsibility to maintain and provide Power Services to both Individuals and Industry at no additional cost is required. This Idea is to create a sustainable working relationship between the People and the Government in which both receive mutual benefit.

All current Billing would be suspended for both the Individual and Industry in the use of Electrical Power. These Savings will serve to
invigorate the entire Nation's Economic Standing and Ability to sustains Families and Business alike. The Idea that Energy will not be
wasted, as only the People utilizing great amounts of Power will also be responsible for the greatest ability to create and maintain venues of employment.

The dramatic injection No-Interest Money into the economy will help Rebuild the Consumer, Business and Industry. It will be the First
Cooperative achievement in which Government is directly responsible for the sustenance and welfare of its People and Industry is in a
Positive Manner.

4. Next, the Military must be utilized to Develop what I term the Medical Military. This means the Budgets for National Health Care and the Military will be combined to create the Greatest Free Health Care System in the World. This means Free Health Care, sustained through existing Budgets for all Americans. Further the Military will be charged with the Developments of Medical Missions in foreign Countries to help facilitate American Export, Relationship Ties, and Places to conduct cooperative Trade to reduce the threats posed by internal competition for American Dollars withing the borders of the United States.

5. While taking advantage of the Disparity in Foreign Labor Markets to provide new revenues where no option exist today to stimulate the American Economy, America's overall Health Benefit by transferring Industrialized Production to the other side of the World, in Pollution Reduction, Reduced cost of Resource Procurement, and Reduced Labor for the Tools, essential to the Infrastructure Rebuild of America, we will also improve the Nation's long term environmental outlook. This Plan along with the Military creating an atmosphere of
a Non-Threatening Posture toward Nations with which we do Trade, will also Reduce it's National Security Threat, and Reduce the U.S. Responsibility for Security Missions around the World. Saving Billions of Dollars letting China Patrol Ocean Areas the U.S. does not actively utilize, and providing the cooperative means to Freely Travel those waters when necessary by Treaty with those newly found friendly trade relationships.

More Some Other Day.


"More Possible To Be Successful In America Than At Any Time In History" 16.Dec.2014 18:23


Tell that to the masses. It's not about "hope." It's about reality. Which you dismiss helter-skelter.

It will not be any "success story." It will be a survival story.

If we survive nuclear winter. (Most unlikely.)

Another Sawmill Freeway capitalist tool jerk.

blues 16.Dec.2014 23:07


I can't help you with your outlook on life.

The old Chinese saying "He who says it cannot be done, is interrupted by he who is already doing it."

The lack is within you.

This Antagonist Knows Nothing About Me 17.Dec.2014 03:34


I have been blessed with a goodly number of fair accomplishments. I do not live in competition with my fellow creatures. Evolution is directed by the universal Spirit, not by "survival of the fittest." Freewill is spiritual also; it is not a rational notion.

To survive and grow in comfort is the righteous goal. Any additional accomplishments are the workings of the Spirit through an individual. The righteous person does not greedily seek to achieve success, which is mere superiority over others. She or he simply strives to live decently.

Our societal obsession with superiority will lead to nuclear Armageddon, and it is our duty to work in our various small ways to avoid that, so that we may live to survive and grow.

I do not live in competition with my fellow creatures 17.Dec.2014 06:09


Actually you do. We all do, you are just unaware of it, even if successful people are aware they are in competition with you.
Your obsession with winning this argument is an example of how you are in competition with me. However, I'll concede this to you, that my point was not aimed at you, because like in the film the Matrix, one cannot free a mind that is too old, too set in its ways. You have chosen religion as the opiate of the masses approach. Glad it works for you, I just hope its not being used as a crutch or an excuse for failure.

As to everyone else. There are many famous and rich people selling you on the idea of you are fucked because of somebody else. That's their racket. But look at the really successful, and see if they are buying that argument? I can tell you they are not.

This Antagonist Makes Up Stuff, Then Argues With It, Not With Me 17.Dec.2014 14:28


I'm tired of the nonsense. Ordinary people should avoid living in competition, unless they're baseball players or army soldiers, etc. Everyone should be able to compete, but not all the time, not live in it. This is not an argument; this is me trying to say things to people.

Following the Spirit is not any religion; those are very different things. the notion that I am somehow religious is just another empty assumption to try to argue about.

Success is a very overrated concept. It is only a minor achievement. Richesse is generally a vast inheritance.

And nobody's made a dime off of me for selling me the idea that I am being suppressed. Enough of these pointless pseudo-arguments, presumably based on wacky books written by narcissists.

Like the Guy with the Chinese Proverb Said ... 17.Dec.2014 14:38

Tracy Mapes

If You Believe You can't Change the World? You've Already Defeated Your Own Purpose.

I helped design the currently accepted method of Nuclear Bomb Construction when I was 9 years old.

I kept a Bunch of Soldiers from getting their Legs blown off with IED's in Iraq and Afghanistan.

I help solve the BP Disaster with nothing more than Ideas.

When I was Jobless and had no apparent options I sold bottled water in Parks for a $1 a bottle, So
I wouldn't have to take money out of the pockets of the Homeless Collecting Bottles and Cans. Then
let them have the Opportunity to Collect Them.

Living Life while trying to not impact others with your own Life's Troubles is a very lonely business.

But it doesn't mean You can't change the World as long as You Think Bigger then Yourself or What Someone
Tells You, You can be.

If don't believe in Yourself ...No One Else Will.

Take Care,

-Tracy Mapes

P.S.- There hasn't been a Nuclear War since I designed my Idea of a Nuclear Weapon. The difference in destructive power make its use impractical. So take from that what you will. I either Killed You already? ...Or Save your fucking life.