Why Orthodox Economics Is Not Useful

By "orthodox economics," we refer to the neoclassical economics taught in virtually every college, university, and business school worldwide. It is the most widely used conceptual language in business and government to discuss the economy.

Orthodox economics treats capitalism as though it is a machine completely separate, walled off, from the society in which it is embedded. The simplest response to this silly formulation is to note that the rich and corporations know that this is not so. They know that capitalism is governed by laws and regulations set and enforced by the government. That is why they spend many billions of dollars each year lobbying and influencing Congress and branches of government. This means that they can rig the game of capitalism to fill their pockets.

In the fantasy world of orthodox economics, markets are a self-regulating system that automatically adjusts prices and production to a perfectly balanced "equilibrium" point. This is carried out by buyers and sellers who are rational "utility-maximising" agents. They have all of the facts required to make decisions and always seek to gain the most benefit possible for themselves in each venture into a market. If the markets of orthodox economics are such marvels of logic and utility, how do we account for the numerous market failures we all have experienced? Booms, bubbles, recessions, great recessions, inflation, depressions...?? If these utility-maximising agents are so rational, how do we explain the success of marketing manipulation to shape and drive consumption?

In the search for the same status of respect and utility as the physical "hard" sciences – physics, chemistry, biology, mathematics – orthodox economics employs fancy mathematics in its doings—the appearance of science, but not a science.

The word “capitalism” appears only once in the 690 pages of the textbook by Paul Krugman and Robin Wells. Macroeconomics. 4th revised edition. New York, NY: Worth Publishers, 2015. Even then, it is only in a quote from a NY Times journalist. In another widely used text, Campbell McConnell, Stanley Brue, and Sean Flynn, Economics: Principles, Problems, and Policies, 18th ed. (McGraw-Hill Irwin, 2009), the word “capitalism” appears only six times in 917 pages.

The orthodox economics discussed above is neoclassical economics. It is not necessary here to delve into the history of the field of economics to explain the etymology of this term. That is a game for academics, not us.