Economic schools of thought can be defined as the systems of beliefs that some of the historical economists held about economics. The different schools of thought or rather doctrines differ in their methodologies and assumptions that are made to describe a certain economic phenomena.
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Among the major economic schools of thought include; Keynesian, Marxist, Neoclassical, Austrian, institutional economics and open economy macroeconomics just to mention but a few (Spiegel, 1991, p.102). It is essential that these schools of thought are put into consideration for the better understanding of economics.
Karl Marx together with Friedrich Engels developed the Marxist economic thought where they concluded that economic doctrine is based on the fact that the people in the society undergo societal developmental stages. These stages include; crude communism, slavery, feudalism and capitalism then finally communism with each stage leading to the next (Spiegel, 1991, p.123).
On the other hand the Keynesian school of thought explains economics in terms of integrating demand and supply to influence the decision makers who can be individuals or the government. The neoclassical school of thought is similar to the Keynesian doctrine with it having its focus on price, income and output determination. As a matter of fact, it emphasizes on maximising utility such that profit is obtained.
Of all the schools of thought, the neoclassical school of thought has had the most influence in my way of thinking. The neoclassical school of thought is said to have evolved from the classical doctrines. A close look at this school of thought it is depicted that it concentrates on how the rationality of an individual is affected by demand and supply together with their utility maximisation while neglecting the strong types of uncertainty.
This theory led to the generation of many mathematical equations to express economic terms (Strober, 2010, p.1). Due to the fact that neoclassical school of thought deals with allocation of resources as its major focus point, it has had a great influence in my way of thinking since allocation of resources is an important obligation for an individual as well as a nation.
This is because it is necessary that one knows which factor to allocate what amount of resources. Failure to do that leads to misappropriation or even lack of fulfilment of the obligations. The concept of free market is also rampant among neoclassical economists who believe that the free markets are what lead to the effective allocation of resources.
As a result, neoclassical school of thought has led me into thinking big since it presents the economists with a choice to make between equity and effectiveness especially when allocating resources. In real sense it presents the economists with a moral dilemma. This way, one is indulged into critical thinking which broadens the mind hence applicable in other non-economic issues as well.
Studying this unit has led to a great transformation in my view of the application of economics in the social world (Strober, 2010, p.1). Despite neoclassical school of thought being the superior and most prevailing economic theory it is recognised for its normative and moral dimensions when taught in education facilities.
In my case it has socialisation since moral principles are important for socialisation to be effective. However, the neoclassical school of thought has been criticised for having much bias as well as not having actual descriptions of economic situations but instead dealing with unreal situations. All the same, the fundamentals it holds are what are important in the development of the minds of economics and the non-economics.
Spiegel, H. (1991). The Growth of Economic Thought. Durham & London: Duke University Press.
Strober, M. (2010). Is Teaching Neoclassical Economics as the Science of Economics Moral? Web.