Naked Economists spill the beans

Despite my 4 years of economic studies (and some years actually teaching it to others!), I make no claim to understand the nature of the global plague that has befallen us in the past few decades. I start to read the books which promise to clear my confusion but find that my eyes soon glaze over….

I toiled during my studies in the early 1960s to make sense of its focus on marginal calculations and “indifference curves” but can remember only the following lessons from my four years engrossed in economics books

- the strictness of the various preconditions which governed the idea of (perfect) competition – making it a highly improbable occurrence;

- the questionable nature of the of notion of “profit-maximisation”;

- the belief (thanks to the writings of James Burnham and Tony Crosland) that management (not ownership) was the all- important factor

- trust (thanks to Keynes whose work was dinned into me) in the ability of government to deal with such things as “exuberant expectations”  

- the realization (through the report of the 1959 Radcliffe Commission) that cash was but a small part of money supply. Financial economics was in its infancy then.

For someone with my education and political motivation and experience, however, my continued financial illiteracy is almost criminal but not, I feel, in any way unusual. Most of us seem to lack the patience to buckle down and take the time and discipline it needs 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. Like many people, I’ve clicked, skimmed and saved – but rarely gone back to read thoroughly. The folders in which they have collected have had various names – such as “urgent reading” or “what is to be done” – but rarely accessed. Occasionally I remember one and blog about it.

The version of Dispatches to the next generation – the small version I posted a few days ago offered 4 recommended books which gave what I considered an alternative account of modern economics –. But I realised that I had omitted not only the best written one (Keen) but an old favourite (Douthwaite); one that is causing a quite a stir (Raworth); as well as the one I would probably rate the best for the interested citizen needing an up-to-date and easy to follow explanation of what is wrong with most economics textbooks (Weeks). 
So my more considered recommendations are -

- Almost Everyone’s Guide to Economics; JK Galbraith and N Salinger (1978) quite inspiring from one of the world's best writers and economists quizzed by a young French woman. I discovered it in 2022 thanks to a great biography of the man by Stephen Dunn.

- For the Common Good; Herman Daly and John Cobb (1989). The book which inspired a different approach to economics – written by a theologian (Cobb) and Herman Daley who for 6 years was the principal economist of the World Bank. But, by virtue of being a train blazer, not the easiest of reads

- Short Circuit – strengthening local economies in an unstable world” - Ronald Douthwaite (1996). Very practical – but also inspirational….22 years on, it hasn’t really been bettered. Full text available at the link

- Debunking Economics – the naked emperor dethroned; Steve Keen (2001 and 2011) Written before the crash. it might be called the first alternative textbook (except it’s much greater fun to read!). Can be read in full.

- Economics for Everyone  – a short guide to the economics of capitalism”; Jim Stanford (2006) is a very user-friendly book and has an excellent “further reading” list which was probably the best there was at that time….Once upon a time it was freely available on the internet but now I can find only excerpts…..

- Zombie Economics - how dead ideas still walk among us; by John Quiggin (2010) is a great read – with a self-explanatory title. He is an Australian author currently completing a book called Economics in Two Lessons…
- 23 Things they didn’t tell you about capitalism; Ha Joon-Chang (2010) superbly-written demolition job on the myths perpetrated on us by economists

- Austerity – the history of a dangerous ides; Mark Blyth (2013) written by a political scientist/political economist, it shows how old theories still affect the contemporary world profoundly   

- Economics of the 1% - how mainstream economics serves the rich, obscures reality and distorts policy; John F Weeks (2014) One of the best introductions to the subject - which can't be faulted for being over-diplomatic! 
- Credo – economic beliefs in a world of crisis; Brian Davey (2015) An alternative approach to economics which situates it in its cultural and historical context. It may be long (at 500 pages) but is definitely worth persevering with....

- Vampire Capitalism – fractured societies and alternative futures; Paul Kennedy (2017) A sociologist’s treatment which earns high points by stating in the very first sentence that it has “stood on the shoulders of so many giants that he is dizzy” and then proves the point by having an extensive bibliography with lots of hyperlinks…

- Doughnut economics – 7 ways to think like a 21st century economist; Kate Raworth (2017). This Oxford economist has made quite an impact with this book

economics and management - the modern religious doctrine

One of my heroes has always been the little boy in Hans Christian Andersen’ tale "The Emperor’s New Clothes" – the only person able to break the hypocrisy, fawning and lies around him and speak the truth. I was very happy therefore a few days to come across Steve Keen’s 2001 book “Debunking Economics – the naked emperor of the social sciences”. The last decade has, of course, seen many books critiquing the basic assumptions of economics and trying to build a more realistic discipline – but Keen’s seems to go further is being almost an alternative textbook. You can get a good sense of it here
For my sins, I not only studied economics, I actually tried to teach it at a polytechnic for several years. At University I had had the greatest of difficulty with some of the basic ideas (particularly the theory of the firm!) and would, occasionally, feel that I was studying a set of religious texts. )(Incidentally, this is an idea brilliantly explored in 1994 in Susan George and Fabrizio Sabelli's Faith and Credit - the World Bank's Secular Empire).

I stuck with the subject only because of my interest in regional and urban development for which I could see some practical application. Eventually my disillusionment became too great and I switched my work to urban management. The other part of my Degree had been Politics and political sociology - with John Mackintosh (of "Cabinet Government" fame) one of my tutors. Here I felt on stronger ground - and was particularly excited to read books such as Heclo and Wildavsky's The Private Government of Public Money and EH Carr's The Twenty Years' Crisis - both of which stripped away rhetoric to expose the realities of power.

But Britain has retained its mythical attachment to its form of "liberal democracy" - and developed a similar mystique around economics. Almost the same day I found the Keen book, I found a marvellous statement of the reality of the British political system - produced a few months ago by the UK Thinktank Democratic Audit
It is easier nowadays to make the point that economics is a religious doctrine - resting, as people beyond the classrom are slowly recognising, on dogmatic assumptions. The same is true of the even more popular field of management - which I have seen grow in my lifetime from a few (American) departments and books to a series of global industries In reality it is a new Roman Catholic Church - with its interdoctrinal disputes. Sad that there are so few demystications available in that field - Zuboff's The Support Economy (2001) was one of the few.
But back to economics - one of the latest Nobel prizewinners, Paul Krugman, asked last month why the economists got it (the finanical crisis) so wrong. He suggests that mathematical modelling is the answer - but the question which should be asked is why noone pays attention to the answers which have been available for 20 years or so? Paul Ormerod wrote his Death of Economics in 1993 - and that reflected a decade or so of private, professional concerns which could not be voiced for fear of losing tenure etc. A good resource for crtiqiues is post-autistic economics which was set up in 2000 by French students objecting to the irrelevance of economics