Refreshing Incoherence in Neoclassical Economic Theory

Neoclassical economic theory is often criticized for neglecting some essential elements in models of economic decision making. These criticisms can be categorized into external and internal ones. This paper summarizes a number of incoherence built into the models of neoclassical economic theory. One of the major weaknesses of standard teachings of economics is that students are often exposed to sanitized and uncritical exposition of economic theory as if its ‘imaginary world models’ are theoretically coherent and empirically congruent to real world capitalist order. The paper will provide a refresher of usually neglected part of standard neoclassical economic teaching. Interestingly, despite all these criticisms, economic theory has not only been able to survive but also dominate the academic intellectual world. The concluding section will argue that the answer to this puzzle lies neither in the fact that there is ‘some deeper truth’ hidden behind economic theories nor that these theories have been shown to explain the empirical realities of capitalist order, rather major reasons for the sustainability of neoclassical economics rests on the facts that (i) it continues to provide a justification for the agenda of liberal capitalism against religious social order and (ii) there is no grand alternative competing theory to microeconomics.