Agency is power—the power to act and the power to choose, the power to imagine, and the power to understand, engage, and manipulate the surrounding biological and social environment. Mainstream economics defines agency in terms of methodological individualism and the individual agent by an optimizing, rational economic man. Agency within the mainstream framework is endowed without discretion to all individuals who independently choose to act based on the weight of ‘objective’ costs and benefits (Davis 2003; Lavoie 2006). One of the justifications for this simplified depiction of the acting individual is that such behavior is observable in the animal world; indeed ‘optimization’ may be found at the microscopic level (Hodgson 2004). The explanation of behavior in a Petri dish, however, does not provide a satisfactory or meaningful explanation in the crucible of the real world, with intelligent, creative, and socially situated human beings—at least not to heterodox economists.
The argument set forth here is that heterodox economics is distinguished from mainstream economics by the way in which it conceptualizes and deploys individual agency and consequently, interactive agency. The procedure is straightforward. In the first section, the theory of the individual in heterodox economics is discussed by outlining the conceptualization and internal evolution of the economic agent and her agency, and how that theoretical construct fits within the research programs of three heterodox schools of thought: original institutional economics (OIE), Marxian economics, and Post Keynesianism. The second section explores the ways in which these three heterodox schools theorize that an individual’s agency changes in response to external forces, both structural sources and mechanisms of mediation between structure and the individual. The third section builds upon the discussion laid out in the previous two sections by detailing the concept of interactive agency, again exploring the similarities and differences between the three heterodox schools. The final section concludes that the similarities which unite these heterodox schools offer a much more complex, nuanced, and ultimately more useful theory of interactive agency and that such complementarity need not require a sacrifice of diversity or pluralism more broadly.
Wrenn, M. (2017). Heterodox economics and theories of interactive agency. In T. Jo, L. Chester, & C. D’Ippoliti (Eds.), The Routledge Handbook of Heterodox EconomicsRoutledge