Abstract

Neoclassical economics is almost unique amongst the different schools of economics in that it does not address the question of distribution. By ignoring this important aspect, it avoids one of the important ethical questions of fairness and social justice. Mainstream ideology of capitalist societies, neoclassical economics, assumes a fair distribution and flow of resources across society, and ostracizes and intimidates those who are critical about this assumption. The most puzzling aspect of neoclassical theory is that in perfectly competitive markets there can be no profit. As we all know, competition eliminates the profit margin by reducing the unit sales price to the level of unit costs. Thus a key epistemological axiom of neoclassical economics, perfectly competitive markets, is at odds with another axiom, namely that profits drive investment and entrepreneurship.