I am an economics student who recently shifted over to the geography department to complete my masters. My mind has flipped upside down as I’ve been introduced to the complexities of the real world. Considering the human-nature relationship, which is a central concept - the discipline has progressed from the days of environmental determinism, when the tropics were considered to make people lazy and dull, and therefore great slaves, to its current position where nature and humans are so entwined and embedded within each other that even presenting the two as dichotomous is no longer so straightforward. These human-nature interactions and feedback loops falls within sustainability science which has taken centre stage in this department, and with good reason. It captures the diversity and complexity of society, ecology, cultures and individuals. It incorporates the complexity of the human-nature interactions, the power inequities in geopolitical agendas, and more recently the plurality of knowledges (indigenous, place-based, and science based). These approaches have been widely accepted by major UN organisations, international development organisations, and governments in both the global north and south.
I sometimes walk past my old department and wonder at how far its ideologies have been left behind. Neoliberalism is still the guiding star for the majority of economic think tanks, Ivy league universities, and central banks. I’m sure many Daily Maverick readers may resonate with the claims that free market are the most efficient, especially when freed from state interference, and are unpolitical and objective. But I ask for a reality check… In a world faced by growing inequality, increasingly complex and imbalanced trade dynamics, and devastating climate change, abstract models where people are thought of only as rational agents maximising their utility underly how the SARB makes decisions about what role it can and should play in the South African economy. The most crazy thing is that it is widely accepted that this economic model is universal - it applies everywhere, in every situation, no matter your level of inequality, your position in the global trade market, or your vulnerability to climate shocks.
Enter Heterodox economics. This paradigm considers markets to be imperfect, unstable and shaped by power, history and values entrenched within institutions. The state has a critical role to play in reducing inequities, driving development and managing crises. It considers the influence of social classes, institutions, paradigms and power structures on how decisions are made and rejects the idea of a single universal economic model. Its central concern is reducing inequality as opposed to driving growth at all costs (see the TED talk on doughnut economics for one of the more well-known examples of what this economics looks like).
Which paradigm sounds like it has asked more critical questions and delved deeper into the complexities of reality? Which sounds like it may actually address some of the major issues facing South Africa. Which sounds like it aligns with other advances in different disciplines, such as geography?
Despite these blaring inconsistencies in mainstream economic thought, heterodox economics still exists on the periphery. Classical economics is still the only one taught in schools, so by the time you reach an age where you can begin to engage critically, it is so embedded in your mind that its almost impossible to see beyond. Surely our economic paradigm needs to catch up with our reality? Love to hear your thoughts.