A better economics

No sooner was my post about The Global Minotaur up than I found another of Yanis Varoufakis’ books freely available on the internet – this time a very original Foundation of Economics – a beginner’s companion (1997). It links nicely to a post last month about populism which had a little section dealing with the state of economics readers may have missed -

2008, of course, should have been the death knell for economics since it had succumbed some decades earlier to a highly-simplified and unrealistic model of the economy which was then starkly revealed in all its nakedness…..Steve Keen was one of the first economists to break ranks very publicly way back in 2001 and to set out an alternative - Debunking Economics – the naked emperor dethroned. This coincided with economics students in Paris objecting to the homogeneity of syllabi and reaching out to others – creating in the next 15 years a movement which has become global

This is a good presentation on the issues (from 2012) - and I am now reading an excellent little Penguin book The Econocracy – the perils of leaving economics to the experts by Joe Earle, Cahal Moran and Zach Ward-Perkins (2017) from their experience of stirring things up on the Manchester University economics programme. The book’s sub-title says it all!
Dani Rodrik is one of the few economists with a global reputation who has bothered to give them support (Ha-Yoon Chang is another) and indeed Rodrik published an important book recently reviewing the state of economics - Economics Rules – the rights and the wrongs of the dismal science; (2016) which was nicely reviewed here. Clicking the title gives you the full text – and it seems a very good read

The Financial Times recently reviewed several other such books - so the situation is not beyond repair but we have to be realistic. Academic economists have invested a lifetime’s reputation and energy in offering the courses they do - and neither can nor will easily offer programmes to satisfy future student demands for relevance and pluralism….. chances are that the next cohort will be more pliable... 

The excerpt suggested that Steve Keen was one of the “first economists to break ranks in 2001” – in the sense of presenting a wholesale critique of the economics discipline. But Varoufakis’ Foundation of Economics – a beginner’s companion was published even earlier - in 1997. And his “Further Reading” section – a veritable model of a bibliography – includes critical books from the 1970s and one from the 1950s.

I know how boring economic writing is – but it is time we understood that commentators, business people and governments make the subject boring for a very good reason….It makes us apathetic. - and less inclined to challenge the system...

I was once, if briefly and somewhat under false pretences, an economics lecturer – but my financial illiteracy is almost criminal but not, sadly, at all unusual. Most of us seem to lack the patience to buckle down and take the time and discipline needed to understand the operation of the system of financial capitalism which now has us all in its thrall. We leave it to the "experts" and have thereby surrendered what is left to us of citizenship and political power.

What makes Varoufakis' various books such excellent reading is the sheer originality of his prose –showing a mind at work which is constantly active…...rejecting dead phrases, clichés and jargon… helping us see thlngs in a different light..... using narrative and stories to keep the readers’ interest alive…He's in total command of the english language - rather than, as so usual, it in control of him.....

You don’t expect to find good prose in the “Further Reading” section of a book, but just see what Varoufakis does with the task…… 

The main reason for writing this book was a lack of sources to which I could refer my students for a more wholesome diet than that offered by conventional textbooks. The problem with books and articles which treat their reader to the fascinating debates is that they are too hard for beginners; especially for today’s university environment which is more demanding on first year undergraduates’ time than once was the case. Thus in order to achieve maximum emphasis I will confine myself to a small number of suggestions for further reading. 

The one book you must read First, I must recommend Robert Heilbroner’s bewitching introduction to the evolution of economic ideas entitled The Wordly Philosophers (1953). If you are to read one book beyond the standard economics textbook (and perhaps the one you are holding), attempt this one; you will not regret it.

Textbooks The first economics textbook which set the scene for today’s multi-colour glossy door-stops was written by Paul Samuelson (first published in 1948). It is entitled “Economics” - and is the most famous text since the Second World War and, still, the most interesting (notwithstanding my overall displeasure with economics textbooks). All the textbooks have since attempted to emulate Samuelson and, as is always the case with imitators, they succeeded only partially. Those of you with a sense of textbook history will benefit from reading Samuelson’s mega-hit.

An economist’s ambition I don’t care who writes a nation’s laws—or crafts its advanced treatises — as long as I can write its textbooks.Paul Samuelson 

If you want something more contemporary, helpful on a day-to-day basis (especially for first year economics students) and with an appreciation of the limitations of economics and the importance of history and political debate, try the large (though not expensive) volume which was put together by the economists at the Open University. Being part of a distance-learning institution, the Open University team edited a book that students can read independently as opposed to a reference manual to be consulted after a lecture. Its title is Economics and Changing Economies (published by the Open University in association with Thomson Business Press in 1996). It contains chapters on everything that you are likely to encounter in your first (perhaps even your second) year as an undergraduate and each topic is treated sensitively and with a humility that is uncommon (unfortunately) amongst economics texts. If you want to improve your essay skills and dazzle your tutor with your command of particular topics, don’t miss this book.

If you wish for something smaller and somewhat simpler (e.g. if you are an interested general reader rather than a student worried about particular assignments), I suggest Robert Heilbroner and Lester Thurrow’s Economics Explained (Simon and Schuster, 1994). On the other hand, if you want a ‘cutting-edge’ neoclassical textbook, I find Robert Frank’s Microeconomics and Behavior (McGraw-Hill, 1993) to be the most (although still insufficiently) open-minded of the introductions to neoclassical thinking.

Unconventional textbooks. I will mention only two. For a holistic, open-minded and rather comprehensive approach to economics, I suggest Vicky Allsopp’s Understanding Economics (Routledge, 1995). Allsopp manages to remain well within the mainstream while reorganising the various topics in such a way as to make it easier for the beginner to see economic thinking as more than technical gymnastics. For instance, she offers her readers a chapter on ‘Law, custom and money’ which is a far better introduction to the concept of money (not an easy one!) than the standard chapters on money demand, money supply, assets, etc. which pollute most textbooks. Additionally Allsopp offers a comprehensive chapter on ‘Investment’, a much neglected yet crucial topic.T

The second suggestion here is one for those of you whose appetite was whetted by the glimpses of non-neoclassical economic theory in this book. If you wish to explore those ideas further, a good place to start is Malcolm Sawyer’s Introduction to Radical Economics (Macmillan, 1989). There you will find simple introductions to the Ricardian, Marxist, Neo-Keynesian and Neo-Austrian ideas mentioned in this book’s more critical chapters (primarily Chapters 6 and 7).

The road to paradise Let’s face it: economics is boring most of the time. Economists’ best efforts (of course I include myself in this sad category) are unlikely to offer excitement and reading pleasure for more than a few moments. To punctuate the boredom, I suggest that you move to the borderline between economics and the other social sciences. That is the way, if not to heaven, to less arid fields of thought.Looking at books I enjoyed as a student, one book whose effects I have tried to emulate here is Economics: An anti-text, edited by Francis Green and Peter Nore (Macmillan, 1977), a book devoted to countering the brainwashing of economics textbooks.

I also recall fondly another book  whose influence stays with me today: Ed Nell and Martin Hollis’s Rational Economic Man (Cambridge University Press, 1976). I remember it was hard-going in parts but lucid and simple, as well as very exciting, in other parts. Much of my Chapters 4 and 11 have been inspired by that book.
 Unfortunately time has left its mark on it and it will perhaps seem somewhat dated to a fresh pair of eyes. None the less it may still be a good idea to borrow a well-thumbed copy from a library for perusal. Since then Nell and Hollis have published other books which are more up to date. Nell’s Making Sense of a Changing Economy: Technology, markets and morals is an interesting read (Routledge, 1996). However, again with a view to narrowing down your ‘shopping list’, I want to urge you to read some of Hollis’ work. (If you could see and hear me I would be gesticulating very energetically in support of this recommendation!)
Although not an economist (Hollis is a philosopher), his writings pack great insight and inspiration for students of the economy. Have a look at his enticing (and easy-going) The Philosophy of Social Science: An introduction (Cambridge University Press, 1994).

And if you feel more adventurous and altruistic to your future self, tackle two more of his books: Reason in Action (1996) is a collection of articles on many philosophical issues central to economics (e.g. the free-rider problem) whereas The Cunning of Reason (1987) is a wonderful investigation on what it means for a social animal to be rational.
Be warned: these two books (both published by Cambridge University Press) are hard work for first year students and you are unlikely to plough through their entirely. Nevertheless even reading bits of them, and making a point of returning to them in the years to come, will fill you with joy and pride.