1. Enriching an orthodox module

An example of how heterodox criticisms can be valuable in the process of critical teaching involves consumer theory. This may be studied at either introductory or intermediate level. Particularly in the latter case, the treatment often involves noting the assumptions underpinning indifference curve analysis, including rationality, transitivity and completeness. The assumptions are covered in most textbooks. A lot can be gained by critically examining the assumptions. Heterodox texts can be crucial in this regard. For example, Dorman (2014a) discusses whether the assumptions hold in reality. Significantly, they examine experimental evidence that throws doubt on the assumptions (Becker (2004) also notes this example). In so doing, the authors introduce students to a body of work of growing importance in economics. This is an easy innovation to make given the welter of theoretical and empirical literature now available on behavioural economics.

On that theme, another piece of heterodox work which is accessible to lower-level undergraduate students is Tomer’s (2001) critique of ‘economic man’. Tomer examines ‘economic man’ from a particular psychological perspective. Economic man is self-interested, rational, separate from his environment, unchanging and unreflective. Tomer argues that economic man applies to only a minority of humans, for a small portion of their lives. Again, the orthodox concepts are interrogated – and understood – and an alternative body of theory is introduced.

Consumer theory is a particularly rich area for drawing on heterodox critiques and enriching the teaching of orthodox material. Veblen’s concept of conspicuous consumption allows the assumption of independence of preferences and prices made in orthodox consumer theory to be questioned. Galbraith’s thoughts on advertising (1958, 1967), which echo some contemporary mainstream work by, for example, McCloskey (1994) on rhetoric, and Mullainathan and Shleifer (2005) on finance, are an engaging and accessible source for evaluating advertisements. The new literature on behavioural economics allows for a much richer consideration of consumer behaviour than was typically delivered. A similar approach can be taken throughout the module.

Tables 1a and 1b show suggested content and key questions for introductory and intermediate level microeconomics modules.

Table 1a: Introductory Micro module (‘orthodox-plus’)

Topic	Heterodox angle
What is economics?	Question positive/normative distinction; note variety of definitions of economics
S&D and markets	Note: markets as institutions
Demand curves	Note: up-sloping demand; question law of demand; Veblen; Figure 6: biscuit experiment
Elasticity	How do firms calculate elasticities? Can they? Do demand curves exist?
Production and costs	Does the law of diminishing returns hold? Question shape of average cost curve; Figure 4: paper aeroplanes
Profit maximisation	Goals of the firm? (See Mallin, 2009). Mark-up pricing
Factor markets	Workers getting their marginal product? Marx
Structure–Conduct–Performance	Stress barriers to entry. Austrian school
Market failure	Question distributional fairness
Government intervention	Political arguments for intervention; distribution; Figure 3: Kemp/Wunder market game

Table 1b: Intermediate Micro module (orthodox-plus)

Topic	Heterodox angle
Consumer theory	Tomer on economic man; Galbraith on advertising; Figure 8: media watching exercise; persuasion; experimental evidence
Household choice theory	Critique of Becker; altruism; cooperative and non-cooperative equilibria (Himmelweit et al.)
Analysis of choice under risk	Problem of non-probabilistic uncertainty? Question the value of the expected utility hypothesis under uncertainty
Analysis of long-term decision making	Assumptions made? Discounting and the environment?
Decision-making and asymmetric information	Power structures and information flow: to whom?
Isoquant theory	Figure 2: Brokken and Bywater (1982)
Labour markets	Query about exploitation; labour market discrimination
Market structure and efficiency	Austrian critique; contestability; monopoly capital
Game theory	Limitations of? Implications of game theory for conventional theory?
Price discrimination	Question informational assumptions
General equilibrium analysis	Institutional analysis of markets; question assumptions; social markets (Himmelweit et al. 2001). Figure 3: Kemp/Wunder game

Both the introductory (Table 1a) and intermediate (Table 1b) modules look standard in their list of topics, except, perhaps, for the addition of household choice theory. The emphasis remains on communicating the key orthodox concepts, but this is assisted by employing the heterodox angle. Of course, given time constraints and the abilities of the students, the content will vary, as will the extent to which one can engage with the critical literature. However, note that in many cases, the critical literature will assist in learning the key concepts. Two examples of this are shown in Figures 2 and 3.

 

In the cases of Tables 1a and 1b a few comments can be made on omissions. For example, in Table 1a, possibly some of the time normally allocated to deriving long-term cost curves, repeatedly calculating elasticities or practising the perfect competition diagram will be sacrificed. However, the concepts and key implications of those topics would be retained.

To make space for the inclusion of heterodox perspectives in an orthodox module, something must be omitted, but what? This is significant precisely because an objection to the above proposal is that key concepts are omitted. There is no single model for an introductory or intermediate microeconomics module, so it impossible to state categorically whether the modules in Tables 1a and 1b match such a standard. However, the author would argue that in terms of topics and concepts covered, they do. Comparing the module structures to the Economics Benchmarking Statement reveals no relevant omissions.

The examples here have been focused on microeconomics. This is because macroeconomics has typically always been taught more comparatively, e.g. by examining debates between Keynesians and classical economists. With the dominance of the new consensus model, this is changing, though. Nonetheless, Section 3 of this booklet discusses an introductory macroeconomics module at the University of the West of England which attempts to teach according to contending perspectives. Similarly, that section presents an introductory survey module at Leicester University, which presents contending perspectives via engagement with a series of real-world problems. Insights from these modules can easily be applied to the examples above.

A module which attempts to enrich an orthodox module with heterodox content is presented in Figure 4.

More specialist modules can offer further opportunities for ‘orthodox-plus’ formulations. Often this is necessary given a lack of orthodox material in certain areas, and/or significant heterodox contributions there. For example, a module on economic growth would look rather bare if it comprised only classical models, such as the Harrod-Domar, plus the neoclassical Solow model. An adequate module must also include so-called ‘endogenous growth theory’, which some regard as being post-neoclassical. Indeed, arguably the theory of cumulative causation – and therefore of Veblen (the originator of the term) and the family of Kaldorian growth models – ought be included in any growth module, given that it is in many ways a precursor to endogenous growth theory. Drawing on the heterodox theories does not reduce the module’s content or technical level.

Other examples include:

• A module on banking and finance formerly taught at Stirling University draws on neoclassical theory but, because of the nature of the literature and the relative paucity of orthodox treatments, necessarily draws on heterodox theories of banking and (other) financial institutions.
• Dayal (2013) discusses a course on public economics taught at the Institute for Economic Growth in Delhi, India. The module innovates in three ways. First it separates the module content into unconventional sections. Second, it includes an explicitly institutionalist slant, partly via an introductory section. Third, it has an empirical section, which encourages students to interrogate the theoretical content, which remains predominantly orthodox.
• Lee (2010) describes a graduate microeconomics module taught at University of Missouri-Kansas City. The module employs a strategy for teaching orthodox microeconomics, but critically. The core orthodox material is delivered, but always this material is also problematized. Lee reflects the heterodox focus on history of thought by delivering the standard content via an historical narrative.

Section 2 of the handbook chapter considers the strengths of the orthodox-plus approach.