Kling’s article rings of truth. A lot of neoclassical economics, as it is taught and practiced, does tend to simply treat “labor” and “capital” as blobs and ignores the individual believes and attitudes of individuals. People are reduced to “representative agents” or mere resource-allocators in the standard neoclassical framework. Firms are treated as mere input-output machines that run by blobs of homogenous things known as “capital” and “labor.”
Kling proposes to insert the ideas of cultural evolution into economics, a proposal I am sympathetic to. And, at one time, economists took this factor into account. Adam Smith, David Ricardo, Frederic Bastiat, and many other of the classical economists knew you had to take into account people’s attitudes, desires, sympathies, etc and they acted on these. Adam Smith’s Theory of Moral Sentiments is a proto-economic book and he discusses at length how our sympathies and morals, shaped and shaping those around us, affect our behavior. Frederic Bastiat, in The Law and That Which is Seen and That Which is Unseen discuss the role of institutions and how people react to those institutional frameworks if they deviate from their moral foundations.
In a sense, Kling is correct. We need to overthrow neoclassical economics. I’d like to see it return, at least insofar as the assumptions concerning homo economicus goes, to its classical roots.