History Versus Equilibrium Revisited: Rethinking Neoclassical Economics as the Foundation of Business Education

Abstract

The financial crisis was partially caused by neoclassical economic theory and theorists. This failure has prompted business educators to rethink the role of neoclassical economics as the foundation of business education. The author connects this question to the more general critique of the scientific model of business education and the old historical versus scientific methodology debate in the history of economics. It is argued that neoclassical economics has serious limitations that make it a poor foundation for understanding business behavior in a real economy. A realistic and useful business education needs to include historical and social context, both of which neoclassical economics must exclude.

Keywords:

• business education
• financial crisis
• neoclassical economics