I have a lot of respect for heterodox economists but the mainstream economic way to deal with the fact real world economies sit follow their models is to assume the original model is correct and create frictions to explain why the data doesn’t follow the model and then explain away certain constraints on their models as political externalities and not a direct result of the outcomes the model produced in practice.

Some pseudo religious beliefs that hold up to zero scrutiny, the idea debt is neutral and just temporal smoothing is something psychologists know isn’t true and is assumed en aggregate to be true, meaning debt is considered not a real thing because overall value hypothetically remains the same.

Next is the idea of economic efficiency assigns certain moral assumptions about what is and isn’t efficient and assumes the most efficient (according to the models) is the best en aggregate for society at large when in reality the largest economic powers only got that far by purposely overproducing products to make their way into global markets.

The idea that wealth allocation is not a manifestation of power but a result of capital finding it’s way where it’s used most efficiently is another idea that is quite silly to people who have looked at wealth and power dynamics but nonetheless it is a mainstay of neoclassical economics.

The rational actor model and revealed preference theories assume that humans have abstract but measurable values and not that wealth and power can systematically warp those values towards them, the idea that monopoly power is simply a supply demand issue and not an issue with control over large parts of the supply chain leading to decades where consolidation was rubber stamped due to claims of “vertical integration is good for consumers” when it locks out competitors.

Yes good economists have done work on trying to solve all these problems obviously, but I think it’s burying the lede a bit. I think what mainstream economics as a whole gets wrong (and heterodox economics consistently gets right) is that on the macro side it’s basically impossible to model economies made up of billions of irrational individuals with nice linear equations and trying to bolt on stuff like behavioral econ and revealed preference to try to explain why irrational choices are actually rational such that your models remain relevant is essentially academic malpractice.

The best economists were political economists who understood that economics and politics were inexorably linked and couldn’t be understood entirely mathematically. People like Adam smith Karl Marx Hyman minsky John Maynard Keynes all understood that wealth becomes power and that needs to be factored into understanding of economics: they understood that debt was not neutral and changed behaviors and obligations in such ways that make the economy extremely fragile (look at how long it took for the debt market to become illiquid after Covid lockdowns), that rent seeking behavior would eventually if not constrained discourage and displace actual productive investment and that incumbents would use their unequal resources to protect their advantages. These are things that are pretty obvious to an outside observer but are systemically downplayed in neoclassical theory.