Individuals, Values, Inequality and Governance Brickbats and Bouquets for Developments in Mainstream Economics

This paper surveys some of the controversial issues with regard to the treatment of the individual in economic theory. The discussion also includes personal and social values, inequality and incentive payments. It also discusses corruption and social costs as (un)ethical aspects of governance. Drawing attention to the divide made between orthodox mainstream economics and heterodox economics, the paper argues that mainstream economics too with the aid of the "representative individual" has been increasingly concerned with adequate treatment of real individuals. Methodologies such as aggregation over individuals pose the same problems for both schools of thought. When the social issues such as inequalities are to be analysed, neither framework may be adequate; and while specific modelling of individuals' psychological actions, which have economic relevance, is important, it is equally important to model the economic consequences of governments' actions.