Decolonizing economics means questioning where its ideas came from — and imagining new ones

Statue of Adam Smith, widely considered to be the father of economics and capitalism, in front of St. Giles Cathedral in Old Town Edinburgh, Scotland, in 2021. (Unsplash) Economics shapes many aspects of our daily lives, from the prices we pay to the policies governments adopt. Yet many of the ideas taught as universal principles of economics emerged from a narrow historical context and have rarely been examined through a decolonial lens. A recently published book, Decolonizing Economics, argues that economics is long overdue for decolonization. Its authors contend that the discipline has largely overlooked how colonialism, empire and unequal power shaped the development of modern economies and the economic theories used to explain them. Decolonizing economics means rethinking how we understand economic development and inequality. Rather than explaining prosperity through technology, markets and scientific progress, it examines how colonization, resource extraction and exploited labour shaped today’s wealthy economies while contributing to underdevelopment elsewhere. At its core, it’s about shifting away from an economy that benefits the elite to one that builds people’s capabilities. As an economics professor, I’ve been restructuring my teaching based on my scholarship on critical microeconomics, critical macroeconomics and alternative ways to build the economy. An economist explains: Textbook economics is badly flawed when it comes to climate change Questioning Eurocentric assumptions Many foundational economic theories were developed by wealthy European men during periods of colonial expansion. Yet these ideas are often treated as universal principles rather than products of a particular historical context. Eurocentric economic thought tends to position European economic development as the norm while presenting Indigenous and Global South economic systems as deviations. Decolonizing economics challenges assumptions within mainstream theory about choice, rationality and economic value. Many foundational economic theories developed during periods of European industrial expansion and colonialism. Landing of Columbus (1847), oil painting by John Vanderlyn, depicts the arrival of Christopher Columbus in the West Indies. (Wikimedia Commons) For example, the concept of scarcity emphasizes that people must make choices because resources are limited. However, this can overlook how social and economic inequalities constrain choices. A bonded labourer may appear to have economic choices within a market framework, but coercion and exploitation mean those are not truly choices at all. Decolonizing economics also challenges the assumption that wages reflect an individual’s contribution or value. How can this assumption account for the historically undervalued labour of essential workers, women and other marginalized groups? Similarly, research on poverty and decision-making challenges the idea that people always act as fully informed and rational economic beings. Psychological stress associated with poverty can reduce people’s ability to process information and make effective decisions. That stress can leave them more vulnerable to complex contracts, fine print and information overload. Decolonizing economics also calls for greater scrutiny of free trade theory, which has shaped global development policy. It was advanced by one of the wealthiest economists in history, David Ricardo. Yet many wealthy countries first industrialized through protectionist policies before promoting free trade abroad — a pattern one economist described as “kicking away the ladder.” This kind of sustained critical examination of mainstream economic assumptions is central to the project of decolonizing economics. Recognizing extractive economic systems Decolonizing economics also calls for examining how economic systems can reproduce inequality by marginalized communities in wealthy countries while relying on resource extraction and low-wage labour in the Global South. Critics of the prison industrial complex, for example, argue that it generates profits while disproportionately affecting Indigenous and Black communities through higher rates of incarceration. Hesquiaht author and business leader Carol Anne Hilton critiques the systemic economic exclusion and displacement of Indigenous people. She challenges the narrative that Indigenous people are a fiscal burden, arguing instead they are a source of economic strength. She also highlights how Canada’s prosperity is contingent on the extraction of Indigenous resources. Globally, the economy remains structured around unequal exchanges, with the Global South providing resources and debt payments that exceed foreign aid received. The Democratic Republic of the Congo illustrates this contradiction: despite supplying much of the cobalt used in electric vehicle batteries, it remains economically disadvantaged. Without addressing these inequalities, the transition to a low-carbon economy risks reproducing existing patterns of extraction. Building alternative paradigms If decolonizing economics involves questioning dominant assumptions and recognizing extractive systems, it also requires asking what economic thinking might look like beyond those frameworks. This begins by expanding what counts as economic knowledge. Perspectives from the Global South, including dependency theory, as well as contributions from Muslim thinkers and other non-European scholars, offer alternative ways of understanding development, wealth and economic relationships. These perspectives often emphasize economic approaches that value people, communities and ecosystems over economic productivity. They place greater value on social well-being, ecological sustainability and collective prosperity. This approach informs policies such as economic reconciliation through greater Indigenous access to capital, resources and opportunities; climate justice measures that recognize unequal responsibility for environmental damage; and debt cancellation for debts incurred by governments without the consent of their people. As journalist Nick Romeo has documented, alternative economic models already exist across the globe. They include true-cost pricing that reflects environmental and social impacts, job guarantee programs that address community needs and publicly owned digital platforms for gig work. Others include worker co-operatives that narrow wage gaps between CEOs and workers, purpose-based companies that prioritize affordable housing and other social goals over profit maximization, and participatory budgeting that gives citizens a direct role in public spending decisions. Decolonizing economics is a process that rests on challenging Eurocentric economic ideas, recognizing systems of extraction, highlighting ideas from the Global South and building alternative models. Junaid B. Jahangir does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Published by English – The Conversation · Tue, 04 Aug 2026 15:26:15 GMT

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