Classical economics developed at a time when slavery, colonialism and empires were the norm, but such relationships never get mentioned in the great works that have shaped the discipline of economics. Then Neo-classical economics even removes classes and power relationships. The Mint talked to Ingrid Harvold Kvangraven, about the need to reassess the very foundations of economics and acknowledge its colonial legacy.
Key points
Colonization’s Influence on Classical Economics
- Classical economists (e.g. Smith, Ricardo) developed Eurocentric theories that:
- Portrayed capitalism as internally developed in Europe through rationality/hard work
- Ignored colonial exploitation and global trade’s role in enabling industrial revolution
- Used methodological individualism, overlooking interconnected global dynamics
- Justified inequalities through racist ideologies and “civilizing” narratives
- Violence and war compartmentalized as separate from economic analysis
- Some pushback existed but was largely marginalized
Marginalist Revolution and Cementing of Eurocentric Foundations
- Marginalists (e.g. Marshall, Walras) in late 1800s further entrenched Eurocentric biases:
- Shifted to subjective theory of value and methodological individualism
- Removed class analysis and social relations of production
- Presented economics as technical, obscuring political assumptions
- Assumptions of rationality and efficient markets ignored global inequalities
- Alternative perspectives existed but were sidelined, especially during Cold War
Impacts on Modern Economics
- Lack of colonial/power dimensions persists in mainstream economics:
- Development theories often ignore historical context (e.g. modernization theory)
- New Institutional Economics treats colonialism as past “external shock”
- Randomized control trial approaches avoid engaging with structural issues
- Connecting thread is continued avoidance of exploitation and power dynamics
- Theoretical frameworks make it difficult to incorporate these perspectives
Decolonizing Economics
- Requires critically examining historical foundations of the discipline
- Incorporating marginalized perspectives from Global South scholars
- Recognizing ongoing impacts of colonial legacies and power structures
- Challenging individualist frameworks to address structural issues
