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.

Decolonising economics means rethinking how we understand economic development and inequality. Rather than explaining prosperity through technology, markets and scientific progress, it examines how colonisation, 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.

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. Decolonising economics challenges assumptions within mainstream theory about choice, rationality and economic value.

For example, the concept of scarcity emphasises 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.

Decolonising 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 marginalised 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.

Decolonising 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 industrialised 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 decolonising economics.

Recognising extractive economic systems

Decolonising economics also calls for examining how economic systems can reproduce inequality by marginalised 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 decolonising economics involves questioning dominant assumptions and recognising 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 emphasise 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 recognise 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 prioritise affordable housing and other social goals over profit maximisation, and participatory budgeting that gives citizens a direct role in public spending decisions.

Decolonising economics is a process that rests on challenging Eurocentric economic ideas, recognising systems of extraction, highlighting ideas from the Global South and building alternative models.

This article is republished from The Conversation under a Creative Commons license. Read the original article.