chapter  Chapter 3
17 Pages

Neo-Classical Monoeconomics: Market Fundamentalism and Decentralized Development

WithWilfred L. David

The universalist ontology undergirding the neo-classical paradigm rests on the assumption of a ubiquitous scarcity of resources relative to human wants and needs. The neo-classical interpretive mode has been accompanied by a marked shift in the boundaries of the economics discourse. To the extent that there is a neo-classical perspective of development, it is synonymous with “economic” development, or as emphasized in classical political economy, a process of economic growth based on free and efficient markets. The philosophical presuppositions, concepts, and analytical modalities of neoclassical economists dominate the theory and practice of economic development. Economic behavior is interpreted in terms of a model of competitive equilibrium, which assumes that the operation of free markets for commodities and factors of production and the system of relative prices would provide necessary conditions for individual economic agents to achieve maximum economic welfare and personal liberty.