The Routledge Handbook of Heterodox Economics is a collection of essays written by authors representing a wide range of theoretical traditions within heterodox economics. It is a project that encapsulates past and current developments in heterodox economics for the purpose of ‘analyzing, theorizing, and transforming capitalism.’

With the death of John Henry at the age of 77, the economics profession lost a fine scholar and the dissenting economists’ community, one of its most courageous and outspoken voices. I first met Jo...

It is often argued that Richard Nelson and Sydney Winter's evolutionary theory is an alternative to neoclassical economics and is compatible with or complementary to Veblenian evolutionary economics. This article subjects such arguments to critical examination. I argue that while Nelson and Winter's theory provides a more realistic account of the firm behavior than Marshallian-neoclassical theory does, it is a neoclassical evolutionary theory in much the same sense as Marshall's economics is quasi-evolutionary, "neo-classical" economics according to Veblen. Therefore, Nelson and Winter's evolutionary theory is in fact a protective modification of neoclassical economics and is antithetical to Veblen's evolutionary economics.

Critics have repeatedly claimed that heterodox economics has failed. They blame heterodox economists for their own failure. I subject this claim to critical examination from the perspective of Veblen’s evolutionary methodology. Veblen’s theory of the business enterprise will be used as an example, which exemplifies the case that a ‘blasphemous’ theory is ignored and marginalized even though it provides rich and perspicacious insights into the evolution of economy and society. It is also argued that social science does not follow the biological principle of natural selection and the survival of the fittest. What survives does not necessarily mean the fittest in the social realm. The history of science is replete with paradoxical incidents that an incoherent, irrelevant, or even wrong theory becomes dominant and widely accepted because it is one that serves the vested interests in academia and society. Economics is no exception.

This article examines the historical developments of the institutionalist theory of the business enterprise since the early 1900s in order to demonstrate its distinctive characteristics that are often overlooked or belittled by some institutional-evolutionary economists and most mainstream economists. I argue that the institutionalist theory is an evolving and emergent theory, which bears a reciprocal, evolutionary, and cumulative relationship between the business enterprise and society. The institutionalist theory is, therefore, suitable for the understanding of the real-world business enterprise as it can be modified and refined along with the evolution of capitalism. The article begins with a discussion of the present state of the institutionalist theory. The following section is devoted to the major contributions to the institutionalist theory situated in the evolution of U.S. capitalism. The penultimate section provides a critical discussion of new institutional and evolutionary approaches to the firm. The article concludes with a brief discussion as to what should be done for the further development of the institutionalist theory of the business enterprise.

The social provisioning process is how heterodox economists define economics in general. Instead of having a narrow definition of what constitutes economics, such as the mainstream has with its allocation of scarce resources among competing ends via the price mechanism, heterodox economists have opted for a much more expansive definition that permits different theoretical explanations for ways in which the provisioning process can take place in different types of economies in different historical contexts. In this chapter, we first examine the changes in the definition of economics from classical political economy to neoclassical and heterodox economics. The comparison between classical political economy and neoclassical economics manifests a clear distinction in view of economy and economics. The second section substantiates the meaning of the social provisioning process. In doing so we make a case that, first, defining heterodox economics as the study of the social provisioning process positions heterodox economics as an alternative to neoclassical economics, and, second, that such an expansive definition of economics has potential to synthesize various heterodox theoretical frameworks in a constructive manner.

Heterodox economists long complained about having no systematic alternative to neoclassical production and cost theory. This paper deals with this complaint. That is, it presents a theory of production and costs of the business enterprise that is a complete alternative to the neoclassical theory of production and costs of the firm.

Frederic S. Lee (1949-2014) was a dedicated captain of the heterodox economics movement over the past thirty years. In the course of his unfaltering fight for the future of heterodox economics, Lee contributed to both the development of heterodox microeconomic theory and the establishment of a global community of heterodox economists. This short tribute delineates Lee’s unique and important contribution, which should be remembered and renewed. As a heterodox microeconomist, Lee challenged the neoclassical price mechanism that is theoretically incoherent and empirically invalid. At the same time, he was critical of any heterodox theory that does not add to our understanding of how the capitalist economy actually works. He urged heterodox economists to build a better theory, which goes beyond the conventional micro-macro divide, to question the status quo of capitalism by examining underlying causal mechanisms and agency, and to communicate with others in different theoretical traditions in order to make heterodox economics more pluralistic and integrative. At the same time, he fought tirelessly to build institutions under the conviction that the future of heterodox economics lies in the strategic (and unselfish) actions of present heterodox economist. JEL: B50, D01, D40

In this introduction we highlight Frederic Lee’s contributions to heterodox economics in terms of theory and community, which should be acknowledged and, more importantly, carried on by those who are concerned with the advancement of heterodox economics as an alternative critical theory to the status quo.

:Inspired by Frederic ("Fred") S. Lee's theoretical contribution to institutional-heterodox economics, I make the case that the neoclassical price mechanism is not only flawed, but also irrelevant for the study of actual coordination mechanisms, hence the price mechanism — as a theory as well as a way of thinking — should be discarded. While this position was addressed by early institutionalists, starting with Thorstein Veblen, later institutionalists have not completely rejected the price mechanism. The sympathy for the price mechanism has prevented institutionalists (and other heterodox economists) from fully developing an alternative theoretical framework concerning how actual economic activities are organized. I, therefore, provide an institutionalist-heterodox framework of the provisioning process focusing on business enterprise activities. This framework shows how institutional economics becomes more refined and useful when it is married to other traditions in heterodox economics, in particular, Marxian, social, and post-Keynesian economics. Such an integrative approach is what Fred Lee showed through his work toward producing a better theory and policy for the underlying population.