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 decolonisation. 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.
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.
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.