What is Heterodox Economics? Its Perspective and Possibility

Session Description

Papers (title, presenter, affiliation):

1. ‘The Politics of Economics – Heterodoxy, Pluralism and Ideology’
   Dr. Shu Shimizu
   Miyazaki Municipal University
2. ‘Neoliberal and European’ Global Finance? A Critical Examination on the History of the Eurodollar Market’
   Dr. Kim, Seung Woo
   Coordinator, East Asia Working Group, YSI/INET
   Graduate Institute of International and Development Studies

Summary of the Session

This panel seeks prospective and possibility of heterodox economics. Since the Financial Crisis of 2008, mainstream economics has been questioned of its validity and faced challenges from non-orthodox schools of economic thought or methodologies. Under this umbrella, various schools of theories offer alternative ways to engage in economics – institutional, post-Keynesian, feminist, ecological, and Marxian. Also, in the critique of the ahistorical assumption in the orthodox, historical approaches have been advocated, notably by the International Political Economy. However, owing to heterodoxy’s inclusiveness or indifference, which merely set the final goal of "pluralism of economics" and often overlook its practical limits. Furthermore, their uses of the past in the non-orthodox approach often dismiss the importance of a critical method in historical studies and implicit ideological assumptions. In doing so, these papers problematize the current status of heterodox economics and present its perspective and possibility.
The first paper by Dr. Shu Shimizu of the Miyazaki Municipal University titled ‘The Politics of Economics – Heterodox, Pluralism and Ideology’ contends the importance of ‘politics’ of economics as a way for heterodox economics to pursue its normative agenda of ‘pluralism of economics’.
According to the Oxford Dictionary, ‘Heterodox’ means “Not conforming with accepted or orthodox standards or beliefs.” In other words, ‘Heterodox’ indicates an engagement with unaccepted beliefs. Indeed, heterodox economics emerged by manifesting to stand against orthodox views of economy such as hard-core rationalism, intra-subjectivities and such. It claims itself a new project to construct new understandings of economy alternative to orthodox economics. In this sense, it can be said that heterodox-economics has a priori antagonism towards orthodox economics, because it is in nature the denial of the orthodox standards and the unacceptance of the orthodox belief. Despite such antagonism, however, they also set their final goal as ‘pluralism of economics’. Nevertheless, would such equivocal agenda not spoil its own raison d'être or water down its heterodox stance? It is equivocal because, whereas their heterodoxy is based on the denial of the orthodox, they eventually aim at compromising with it.
Pluralism, generally speaking, sounds justifiable and theoretically achievable. However, heterodox-economists seem not seriously concern the practical limits of pluralism. As can be seen in Chalmers’ critique of Feyerabend’s methodological anarchism in the philosophy of science, pluralism is not necessarily to change the status quo. Pluralism may be too generous to change anything. So, if heterodox-economists wish for a radical change (reorientation) of economics, what they must examine is the reason why it is so difficult to change (reorient) it. In so doing, what they need to deal with is the ‘politics’ of economics that is treated as ‘unknown knowns’ in contemporary economic studies.
The second paper examines the political features of neoliberal and Eurocentric assumptions in the literature of International Political Economy with an empirical study concerning the engagement of the Global South in the Eurodollar market in the late 20th century. Dr. Kim, Seung Woo of the Graduate Institute of International and Development Studies critically examines the study on the re-emergence of global finance and suggests new themes for the scholarship.
The Financial Crisis of 2008 galvanized the academic as well as public attention to the role of ‘unfettered’ global finance. Scholars of IPE and economic history examined the history of the Eurodollar market, an offshore market for US dollars, in the trajectory and development of the recent economic disaster. The blooming scholarship led into debates on the features of the Eurodollar market. However, as Kim contends, it has mainly attached to the theme of ‘neoliberal’ aspects of global finance without considering its contested and ambivalent nature. In other words, it posits the dichotomy of ‘state versus finance’ or the antagonistic relationships between them, which is relevant to the thesis of ‘gentlemanly capitalism.’ Based on archival materials, Kim criticizes its ahistorical aspects and suggests the ambivalent nature of the state in its relation to global finance.
Furthermore, this paper claims another implicit feature of Eurocentrism in the IPE, which has marginalized accounts of less-developed-countries. As an alternative narrative, Kim presents the early engagement in the Eurodollar market by the Global South and the development of offshore markets around the globe by examining the political origins of Singapore’s Asian Dollar Market and how these tax havens challenged developed countries efforts to control the Eurodollar market in the late 1970s. Furthermore, he introduces Young Scholars Initiatives of the Institute of New Economic Thinking as an institutional platform to achieve goals for heterodox economics in this age of the crisis of mainstream economics and the rise of economic pluralism.