A Review of Neoclassical Economics and its Importance

How was the term "neoclassical economics" introduced to economics and what thoughts does it imply? Is the current use of this term consistent with the initial efforts of its founders? These questions are among the categories that always occupy the minds of economic scholars. Neoclassical economics was first introduced to economics by Veblen, and it referred to the marginalist thoughts that prevailed in the last decades of the nineteenth and early twentieth centuries. In order to escape from the classical theory of objective value, marginalists resorted to subjective preferences for determining values, hoping that by abandoning objective value, they could establish economics on a more scientific basis. Although these efforts were initially considered good advances, after a while they became so abstract that they seemed to be anything but a theory about human behavior. In this article, we will take a brief look at the scientific life of neoclassical economics to show how this intellectual tradition was formed, what its most important features were, and what it became over time. We will also show that, contrary to existing perceptions, the early thinkers of this intellectual tradition did not have an anti-historical and anti-institutional outlook.

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