What is Heterodox Economics
Alternative Critical Theory to the Status Quo
What is heterodox economics? As most economic experts know, it is the opposite of mainstream economic theory. It differs in several ways from the current theory, however.
For example, it is an economic system that advocates the values of a liberal free-enterprise system. It was developed by a group of individuals who came to very different political and social views in their youth. However, since their views are not completely changed, they started to think that they are just two sides of the same coin. These are heterodox economists.
One way they came to these two entirely different conclusions is by developing the principles of three-tier theory. This theory is applied to the major economic questions like the role of government, the efficiency of markets, as well as the existence of constraints on economic growth. Since these principles cannot be applied to everything, they are applied to major concepts that create problems for traditional theories.
The next part of the application is to use the principles of theories to show the existing barriers and controversies in economics. The controversy is where the barriers are. It is the area that holds the theoretical debates. The theoretical debates are held on how to change the free-market system. The theory is applied to show how, if a change is made, the barriers will be removed.
In addition, the theory is applied to examine the failures of the free market system. How can the barriers be removed? It works on the understanding that the traditional free-market system is flawed and the government has failed to properly promote free enterprise. In this case, the theory has been applied to see if the government can or cannot replace the present free-market system with socialism.
It is important to note that there are two parts to the application. First, it examines the existing barriers to the success of the free market system. Second, it shows the shortcomings of the system through applying the principles of free enterprise theory. Although the theory has been applied before, the application is more general and often more detailed.
The application of the principles of three-tier theory is four distinct steps. The first step is identifying the limitations of free-market theory. The second step is to look at the opportunities that may be missed due to these limitations. The third step is to apply the theories to real world examples.
The first step is by studying the framework theory of behavior. It examines the manner in which individual behavior is affected by the set of economic variables. The model of behavior will then show how certain behaviors become manifest.
The second step is to study the factors that affect environmental systems. It shows how the decisions made by people in the free market system, such as production, will impact the environment and vice versa.
The third step is to apply the strategy theorists. It works to show how the various economic theories fail to show the facts correctly. It also shows how other variables can be used to show the true facts.
The final step is to review the theory. It shows how the economic theories have been proven to be incomplete and untrustworthy. It also shows how the flaws and faults in the theories have been caused by human activity.
Many economists have created the applications to show how liberal free enterprise is flawed. It is an attempt to show how human beings create problems for the success of economic theory. It is very difficult to correct the errors in free-market theory.