Definition of Neo-Classical Economics
Source Jim Devine
Date 06/06/02/10:01

IT'S HARD TO define NC economics. Peter Dorman's definition may
work: NC economics sees the simple harmonious exchange relationship as
the paradigm for all social relationships. Another definition is
derived from the work of Phil Mirowski: NC economics

1. employs mathematical modeling rather than institutional analysis or
historical evidence as its main tool for understanding the world

2. claims to be "scientific" in a positivist or Cartesian way, in
imitation of idealized natural science (positivism);

3. utilizes constrained maximization, equilibrium, and comparative
statics as its main analytical pillars (equilibrium economics);

4. emphasizes individual utility-maximization (consistent
goal-seeking) as the determinant of human behavior (utilitarianism);

5. always seeks out microfoundations, i.e., solely individual
explanations of aggregate phenomena (reductionism, methodological
individualism); and finally,

6. leaves many of the most important variables, such as tastes and
technology, as exogenously determined by nature or other forces
outside of the economist's concern (naturalism).

Much of game theory and behavioral/experimental economics deviates
from this definition.

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