Paradoxes of synthesis in economics

TERRA ECONOMICUS, , Vol. 19 (no. 3),

The neoclassical synthesis of the 1940–1960s, and the new neoclassical synthesis of the 1990s, are important milestones in the development of neoclassical economics. However, after each synthesis solutions are not found to the continuously debated theoretical problems of neoclassical economics, such as weak predictive capabilities, inability to reflect the relevant social and environmental context, and solutions to the problem of the “classical dichotomy”. The reasons for the persistence of such problems, which we call paradoxes (from ancient Greek παράδοξος – unexpected, strange), have not been sufficiently studied. However, they are important for understanding the limitations and prospects for neoclassical economic theory. The paper is devoted to the analysis of these paradoxes. We highlight the general factors that influenced the results of both syntheses. Among them, firstly, the challenges of reality, secondly, the presence of new ideas and creative discussions in the scientific community, and thirdly, the preservation of the methodological categorical core of neoclassic economic theory. However, it is paradoxical that at the same the hard methodological core is a limitation on solving the problems of neoclassical theory mentioned above. Moreover, the rigidity of the methodological core significantly enhances the ideological nature of neoclassical economics, its noticeable “fixation” on micro-foundations, and the preservation of the optimization mathematics of equilibrium models. In modern conditions, which are significantly different from those existing when the methodological core of neoclassical economic theory was finally formed (mid-twentieth century), adherence to its postulates becomes a limitation on the fruitful development of orthodox economic theory.
Citation: Kirdina-Chandler S.G. (2021). Paradoxes of synthesis in economics. Terra Economicus 19(3): 37–52. DOI: 10.18522/2073-6606-2021-19-3-37-52

Keywords: orthodox economic theory; neoclassical synthesis; new neoclassical synthesis; methodology of economic science; heterodox economic theory

JEL codes: B15, B25, P16, P51

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Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606