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neoclassical economics
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The revolution was set against the then orthodox economic framework, namely the neoclassical economics.
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Variations of market socialism include libertarian proposals such as mutualism, based on classical economics, and neoclassical economic models such as the Lange Model.
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Marxian economics provided a foundation for socialism based on analysis of capitalism, while neoclassical economics and evolutionary economics provided comprehensive models of socialism.
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He is also a notable proponent of analytical Marxism, and a critic of neoclassical economics and public choice theory, largely on behavioral and psychological grounds.
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The idea of trade and market exchange automatically channeling self-interest toward socially desirable ends is a central justification for the laissez-faire economic philosophy, which lies behind neoclassical economics.
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There is some debate about what is covered by the term "classical economics", particularly when dealing with the period from 1830–75, and how classical economics relates to neoclassical economics.
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During the 20th century, proposals and models for both planned economies and market socialism were based heavily on neoclassical economics or a synthesis of neoclassical economics with Marxian or institutional economics.
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In Efficiency Wage Models of the Labor Market, Akerlof and coauthor/former Fed Chair Janet Yellen propose rationales for the efficiency wage hypothesis in which employers pay above the market-clearing wage, in contradiction to the conclusions of neoclassical economics.
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During the Great Depression of the 1930s, Keynes spearheaded a revolution in economic thinking, challenging the ideas of neoclassical economics that held that free markets would, in the short to medium term, automatically provide full employment, as long as workers were flexible in their wage demands.
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New classical macroeconomics, sometimes simply called new classical economics, is a school of thought in macroeconomics that builds its analysis entirely on a neoclassical framework.
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The historical debate was cast between the Austrian school of economics, represented by Ludwig von Mises and Friedrich Hayek, who argued against the feasibility of socialism, and between neoclassical economists and Marxian economists, most notably Cläre Tisch (as a forerunner), Oskar Lange, Abba Lerner, Fred M. Taylor, Henry Douglas Dickinson and Maurice Dobb, who took the position that socialism was both feasible and superior to capitalism.
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