ECON 330 WORKERS AND THE
ECONOMY ASSIGNMENT 5 BOOK
REVIEW ATHABASCA UNIVERSITY.
lOMoAR cPSD|19857451
A Comparison ofNeoclassical and Radical
Economic Theories
While both neoclassical and radical economic theory agree that capitalism has contributed to
economic growth and development the likes of which has never been seen in the history of
mankind, the neoclassic theory under the libertarian perspective asserts capitalism as being
unequivocally superior whereas the radical economic theory faults capitalism as the cause of
much of the inequality we see today. This essay will compare the similarities and differences
between the two theories.
Both the neoclassic and radical theories are inspired greatly by the works of classic economic
theorists Adam Smith and David Ricardo. However, according to Yates in his book Naming the
System the neoclassic theory was formulated as a result of the radical theories put fourth by
Karl Marx and Friedrich Engels along with the working-class movement of the time (Yates, 2003,
p.120). The neoclassic theory strictly opposes the self organization of workers as it is deemed as
the single greatest threat to the production requirements of employers and their profit
generating capabilities. In contrast the organization of workers is heavily influenced by the
writings of Marx and Engels. So, one theory helped birth the working-class movement calling for
the collective organization of workers while the other was formed to oppose it.
The neoclassic theory focuses on the individual as the basis of analysis and puts fourth the view
that everyone is free to make decisions and choices. All individuals are presumed to act in their