Thoma on heterdox economics

Mark Thoma has a good explanation of neoclassical vs. heterodox economics, noting that:

Economists would like to find the set of laws that will allow us to explain the great diversity of economic behavior we see in the world, and the neoclassical model is one such attempt. It is a hard model to beat. One reason the neoclassical model has survived as long as it has is because it is pliable, maybe too pliable as it is difficult to find economic behavior that can't be explained by tweaking some element of the model. Pretty much any maximizing behavior can be rationalized using some variant of the neoclassical model. But the model is not perfect and there are certainly things it cannot explain very well.

In our quest to discover the laws of economics, we propose and use many different models. Those that work best survive and their inventors become well-known within the economics community, and those models that don't work are discarded. It's an imperfect process, but the process moves us forward and, over time, our models have improved.

I think there is "one economics," a set of core economic principles that apply anywhere and everywhere and, when embedded within the existing institutions, customs, power relationships, technical knowledge, etc., these principles can explain the world we see around us. Unfortunately, however, we don't know what that "one economics" is, not for sure - we're not even close in some ways - and because of that there is room for many variations of the core neoclassical model (e.g. fixed price and wage macro models with monopolistically competitive players as an alternative to real business cycle models), and for challenges to the core model itself.

It's always hard for the new (heterodox) model to upset and eventually displace the traditional theoretical model. One reason, of course, is that there is lots of resistance from those vested in the current model and they will not let go easily. But it's not impossible and if the heterodox economists really do have a better model, they should keep sounding the horn, improving their models as much as possible so the superiority of the new model becomes more evident, and be persistent until people begin to notice and want see for themselves if the claims have any validity. If the heterodox economists are right, if they really do have a better model, then they will eventually carry the day, become entrenched as the new establishment, and be the target of a new set of heterodox economists upset that they cannot get a proper hearing for their ideas.