neoclassical economics

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neoclassical economics

the approach to economic analysis, arising especially from the work of Alfred Marshall (1842-1924) and Leon Walras (1834-1910). This dominated ECONOMICS between 1870 and 1930. It replaced the explicitly sociopolitical analysis, in terms of land, capital and labour, which characterized the work of CLASSICAL ECONOMISTS, including MARX (see also POLITICAL ECONOMY), with a more formal analysis of the conditions for the optimal allocation of scarce resources. The approach can be described as ‘subjectivist’, since its central concept, utility, defined as the ‘individual’ satisfaction obtained from the consumption of a good or service, cannot be measured directly but can only be inferred from market behaviour. The approach is also known as marginal analysis, since its central assumption is that economic returns will be maximized whenever equilibria are reached in competitive markets, the point at which ‘marginal utilities’ or ‘marginal revenues’ cease (i.e. where no more of a good or service will be purchased, or where one more unit of production would yield a negative return). While earlier theories of VALUE based on the ‘costs of production’ found room for notions such as EXPLOITATION, no place exists for these in neoclassical theory. Thus it has been suggested that neoclassical economics be seen as involving special pleading on behalf of CAPITALISM AND CAPITALIST MODE OF PRODUCTION. Others, however, argue that the ‘marginal revolution’ in economics can be accounted for by the inherent superiority of this mode of analysis.
References in periodicals archive ?
That real world labor markets depart so dramatically from the assumptions of neoclassical economic theory undermines the claim that employment regulations distort a preexisting, efficient, competitive equilibrium.
20) At times, the divergence between economic reality and neoclassical economic theory is brief.
Nowhere is this more evident than in seeing how the reductionism and rationality of neoclassical economic theory coupled with the Benthamite 'utility' of money count the consumption and destruction of natural resources as income and economic growth.
In my earlier confession, I admitted that until starting my recent book, while inspired by Scholastic philosophy and Catholic social doctrine, what I had actually been doing for years was to use these as a purely verbal gloss on a version of neoclassical economic theory that significantly diverged from the Scholastic economic theory that Catholic social doctrine employs.
Upon looking at trends of labour force emigration policy of Latvia, one can apply presumptions of the neoclassical economic theory based on wage differences among countries as well as network theory expressing opinion that labour force migration is enhanced by tight reciprocal bonds among people which have already left seeking for a job, and people still contemplating on doing so.
Perez thus deepens an ongoing critique among anthropologists who have questioned applying capitalist principles or neoclassical economic theory to understanding fishing households or fishers' motives or to helping them "develop.
Few economists are able to accurately forecast changes in any economy, for one main reason: neoclassical economic theory has evolved to describe almost everything as a form of capital.
During most of the 20th Century, the United States has utilized neoclassical economic theory to guide the economic development efforts of the nation.
This clearly implies that economics to Coleman is neoclassical economic theory.
This paper concentrates on presenting such an alternative vision of the economy and society, not wishing to retrace the well-beaten path of what's wrong with neoclassical economic theory.