Economic crises, neo-classical theory and paradigmatic change

Because of its magnitude and breadth, the first economic crisis of the third millennium - which is primarily a western economic crisis - invites one to analyze whether the crisis is a simple regulatory mechanism of temporarily failing markets or whether it is the symptom of a more severe type of failure, that of 'systemic failure'. Since the current economic system is rooted in western-based neo-classical economic theory (and in neo-liberalism), this chapter will first elucidate the difference existing between economic crises and business cycles; it will then explore the extent to which neo-classical theory can be classified in the Marxian group of 'ideologies'; it will finally suggest a durable way out of the crisis which implies first an exit from economic ideology (from neo-classical thinking) by borrowing from European and Asian philosophy and theology, as well as the building of a new economic paradigm. The chapter argues in particular that crises are not inherent to all economic systems and that economics ought to reconcile itself with philosophy for the elaboration of premises upon which a new paradigm can emerge.