Current situation >> Theoretical approaches
One theory has a near monopoly; 86.5% of the weighted ECTSs of economics theory courses is devoted to teaching neoclassical economics.
No other approach is seriously treated; each alternative receives less than 4% of the weighted ECTSs.
Besides economics, Business Studies is the only discipline to receive substantial attention.
The history of economic thought is an obligatory part in 7 of the 9 programs.
There is a general lack of exposure to other theoretical approaches to the economy. Business studies is the only other discipline, besides economics, that is given serious consideration. All the other disciplines, like sociology, psychology and human geography are treated in less than 2.6% of theory courses.
Within the discipline of economics, one particular approach enjoys a near-monopoly: neoclassical economics. Especially in the critical first year, this field shapes students' ideas about ‘the economy’, neoclassical economics is dominant (86% of weighted ECTSs).
See Classification of economic approaches for descriptions and key figures for each approach.
Why does this matter?
On its own, any single theoretical perspective is limited in its ability to illuminate all sides and aspects of economic phenomena. Every theoretical perspective has its strengths and weaknesses. Economics curricula should benefit from this plurality, by making us as students familiar with a broad set of theoretical approaches.
Certainly, neoclassical theory accommodates a large variety of ideas and points of view. However, it does contain certain axiomatic assumptions about the role of agency within market structures, the establishment of the rules of the economic game, and the relationship between markets and governments. These are all assumptions that provide us as students with fundamental ideas about how society functions or should function (Zuidhof, 2014). Other approaches and disciplines, having completely different ontologies and axioms, could challenge these if they were taught.
The economy is a hugely complex system, consisting of many subsystems. Take for instance the market for smartphones. That market does not only consists of dynamics competing suppliers and consumer preferences, but also of issues regarding vertical integration, global value chains, technological innovation, legal structures and rules of the game, intersections with other markets, and the politics of international trade and competition. This goes for many economic phenomena: they are best understood as being composed of different dimensions and elements.
With regard to these different dimensions, every single theoretical approach has its strengths and weaknesses. The neoclassical economics approach is based on the assumption of methodological individualism, focusing on the ways in which markets work and fail (Shaikh, 2016). This approach is particularly strong in making the beneficial workings of the invisible hand visible. Other approaches in turn deal more effectively with other aspects of economic life. The bigger picture has varying elements (competition, organization, politics, legality, et cetera) and each of them requires different approaches and assumption to be understood properly. Hence, the student must be provided with different theoretical ways to study economic phenomena.
For instance, institutional and political economists study how economic actors influence the so-called rules of the game, with some having more power to shape these than others. How much competition is optimal in certain sectors of the smartphone market? That depends on where you stand. These rules of the game in turn affect how and with what players the economic game is played, of course again with some benefitting more than others. Austrian and Marxist economics provide students with insights on opposing views on the issue of structure vs. agency (with the former focusing more on agency and the latter on structure; Dopfer, 2004). Post-Keynesians emphasize the uncertain nature of the economic systems, and relate this specifically with the endogeneity of money in the financial sector (Shaikh, 2016).
In sum, one size does not fit all. Of course, it is true that any single theory can be stretched quite far. It is certainly possible to study a wide range of economic phenomena with one basic set of assumptions or one theoretical approach. However, that does not promote a student’s understanding of these economic phenomena. It is, in that light, a big handicap to be bound to one single paradigm. In a good curriculum, we should be enabled to make use of different approaches in our analysis, and not just encounter all other theoretical frameworks presented as out-dated fossils, bunched together in a single class on ´History of economic thought´.
For a proper understanding of the various dimensions that come together within economic phenomena, it is moreover needed that we as s of the economy gain familiarity with related approaches, as political science, psychology and sociology. Disciplines like economic sociology, economic anthropology and international political economy have much to offer in terms of concepts, theories and methods. These insights, built on different theoretical foundations, are substantive in understanding the economy, should be integrated within economics bachelor programs. This way, we, as students of the economy, will benefit from the best of several worlds of knowledge.
Finally, we should gain a solid introduction in the foundations of our own discipline (Backhouse, 2001; Kerr, 2002; Weintraub, 1999). To understand where the theoretical concepts come from and what axioms are built into them, it is essential that theories are not presented in a vacuum. As Nobel laureate Robert Shiller (2010, p. 403) notes: “Teachers (...) best serve their students if they refer regularly and respectfully to the history of economic thought, conveying the reasons for the theoretical constructs of other times and the tentativeness of current theories”.
Again, this does not imply that we should get a full basic training in other disciplines, nor does it imply that we should study dozens of approaches. It does imply that (1) we should learn that different approaches are available, that (2) we should be taught to see what approach to use in what cases, and that (3) we should gain familiarity with the foundations of their own discipline, to better understand the discussion and contestation about economic concepts and theories.
However, it is also relevant to distinguish between the variety of fields within such approaches. To give a detailed overview of the breakdown of what fields within neoclassical theory receive most attention, table 13 gives an overview of the attention paid to the different sub-branches of neoclassical economics. The three biggest sub-branches being marginalist micro-economics, public economics/welfare economics and neo-Keynesian economics, with respectively 17.1%, 13.7% and 11.6%.
See Classification of economic approaches for key theoretical mathematical models and figures for each neoclassical sub-branch.
Similar lists could of course be drawn up for every approach treated in this report. But since no other approach than the neoclassical was allocated significant teaching time, the subdivisions within other approaches didn't seem worth going into for now.