Microeconomic Theory: A Heterodox Approach develops a heterodox economic theory that explains the economy as the social provisioning process at the micro level. Heterodox microeconomics explores the economy with a focus on its constituent parts and their reproduction and recurrence, their integration qua interdependency by non-market and market arrangements and institutions, and how the system works as a whole.
This book deals with three theoretical concerns. Due to the significance of the price mechanism to mainstream economics, a theoretical concern of the book is the business enterprise, markets, demand, and pricing. Also, since heterodox economists see private investment, consumption, and government expenditures as the principal directors and drivers of economic activity, a second theoretical concern is business decision-making processes regarding investment and production, government expenditure decisions, the financing of investment, the profit mark-up and the wage rate, and taxes. Finally, the third theoretical concern of the book is the delineation of a non-equilibrium disaggregated price-output model of the social provisioning process.
This book explores the integration of these various theories with a theoretical model of the economy and how this forms a theory that can be identified as heterodox microeconomics. It will be of interest to both postgraduates and researchers.
Frederic S. Lee (1949-2014) was a dedicated captain of the heterodox economics movement over the past thirty years. In his unfaltering fight for the future of heterodox economics, Lee contributed to both the development of heterodox microeconomic theory and the establishment of a global community of heterodox economists. This short tribute delineates Lee’s unique and important contribution that should be remembered and renewed in order to reproduce heterodox economics.
NEOCLASSICAL MICROECONOMICS FROM A HETERODOX PERSPECTIVE
Frederic S. Lee
Department of Economics
University of Missouri-Kansas City
Dates Developed: 1981-3, 2001-14
For many years (1981-3, 2001-14) I have developed a critical presentation of neoclassical (or mainstream) economics for my graduate students. I had intended to convert my lecture notes into a book, but health problem got in the way. So I am unable to complete the task. Therefore, I am making my notes/drafts of chapters available to anyone to either complete the task or at least use the notes for their own teaching and research. I have written an article about the course which can be found at this link. The problem sets, mathematical notes, and assessment (tests) can be found linked on the course outline on my homepage (http://heterodoxnews.com/leefs) under courses-Economics 5502: http://heterodoxnews.com/leefs/courses/econ-5502/.
The lecture notes/chapters have changed over time, but the core has remained the same (see below). You will find that some Parts are relatively complete and others are not; also some parts are better developed and others are not. This is why I have not published the lectures—much work needs to be done. The lectures are calculus based in part because higher level mathematics provide no additional understanding of the theory and because the mathematics background of my students was only calculus. Moreover, the lectures are both historically oriented (that is trying to provide an historical understanding of the development of neoclassical microeconomics since 1900); and critical in that neoclassical microeconomics is shown not to be a theoretically sound body of arguments—but precisely the opposite (I and Steve Keen published an article summarizing many of the criticisms—see the link). Finally, the lectures try to provide an overall view of what neoclassical microeconomics is theoretically about. That is, neoclassical microeconomics deals with the economy as a whole in a disaggregate fashion and tries to explain how the economy works through the price mechanism. Whether one agrees with the theory or not is beside the point; neoclassical microeconomics attempts to provide a coherent theory of how the economy as a whole works. This is why any attacks on the theoretical coherence and empirical support of neoclassical microeconomics is vigorously attacked: such as the administered price/administered wage controversy, the cost controversy, and the marginalist/full-cost/normal cost pricing controversy (and of course there are others such as the capital controversy). These controversies directly attacked the theoretical coherence of the price mechanism though the use of empirical evidence. These controversies represent the most significant attack on neoclassical microeconomics (hence neoclassical economics as a whole); and the controversies are not yet over. The lecture notes deal with these controversies in the ultimate chapter which is not yet written and this is to be brought together to deliver a final pronouncement of neoclassical microeconomics. Somebody will now have to write that chapter.
1. History and Methodology of Heterodox Microeconomics
2. Critiques of Mainstream Microeconomics
3. Principles of Heterodox Microeconomic Theory
4. Theory of the Business Enterprise
5. Structure of Production and Costs of the Business Enterprise
6. Costing, Pricing, and Prices
7. Investment, Finance, and Employment
8. Households, Consumption, and Market Demand
9. Industry and Market
11. Corporate Governance, Market Governance, and Market Regulation
12. Social Welfare
13. Heterodox Microfoundations and Modeling the Economy