The Economics Anti-Textbook: A Critical Thinker’s Guide to Micro-Economics (review)

Imagine being an undergraduate student with a critical social conscience, interested in the all-too-obvious problems of the modern global economy: unemployment, poverty, environmental destruction, financial meltdowns, and the sheer uselessness and wastefulness of so much economic activity. Thinking (reasonably) that the world needs more committed and creative economists working to solve these problems, you enroll in Economics 101 to begin your training. There you are immediately confronted with a contorted and factually erroneous depiction of human nature (namely that we are motivated by material greed, and nothing else), an analytical method that is other-worldly (the axiomatic assertion of initial assumptions, followed by working out the elegant but irrelevant implications of the resulting theoretical structure), and an endless string of supply-and-demand graphs (which always cross in the middle) or, worse yet, simultaneous equation systems. You would be forgiven for thinking you had accidentally stumbled into a physics class, where the graphs describe the behaviour of atoms, not human beings – except that, in this post-modern era, even physics admits more uncertainty and chaos than neoclassical economics.

Most likely you would abandon the course before the first mid-term, becoming yet another refugee from the dismal science. And the economics profession would thus lose another of what it desperately needs to reverse both declining economics enrolments and the declining relevance of economics: critical-thinking minds determined to apply economic ideas to the solution of real existing crises. A few rare and determined critical thinkers might stick with the discipline, regurgitating what they have been taught in order to pass their exams. Surely, however, in a university, every subject benefits from some debate and challenge, and brave students will want to challenge what they are being taught. But where to begin? Both the subject matter and the methodology are so arcane, and very often so artificially and unnecessarily technical, that well meaning students on their own would be hard-pressed to challenge the orthodox curriculum.

That’s where this “anti-textbook” for critical thinking economics students comes in very handy, indeed. Rod Hill and Tony Myatt are members of an all-too-small constituency: heterodox economists teaching in a mainstream economics department (at the University of New Brunswick). They have assembled an anti-textbook that can be read alongside an orthodox microeconomics course. It provides a needed antidote to the unreal and infuriating doctrines of fundamentalist free-market theory.

Neoclassical economics is traditionally divided (not very successfully) into two broad streams: microeconomics and macroeconomics. (Hill and Myatt cite the old joke that microeconomists are wrong about specific economic issues, whereas macroeconomists are wrong about the economy in general.) In my experience, microeconomics is the more obtuse of the two, particularly removed from the sorts of real-world issues that motivate the interest of many students. However, since orthodox prescriptions, even macroeconomic ones, are ultimately rooted in the underlying microeconomic general equilibrium system, it is essential that even critical economists fully understand that Walrasian micro vision, all the better to critique it more completely and convincingly. So the need for this micro anti-textbook is especially pressing, but the profession could certainly benefit from a companion volume that critiques macroeconomic orthodoxy, as well (which Tony Myatt is currently planning).

The book’s introduction states the authors’ core thesis: standard textbook treatments of microeconomic theory are an ideologically-motivated distortion of economics, and these caricatures cause great harm by instilling in practitioners and policy-makers a confidence in market mechanisms that is not justified by serious economic inquiry. Their target, they claim, is not mainstream economics in general, but mainstream textbook economics. They argue that standard introductory presentations of neoclassical economics oversimplify their subject matter, deny the diversity of opinion that exists even within mainstream circles, and promotes a unidimensional worship of markets that is neither analytically justified nor appropriate in the real world. All this is surely correct, although in...