Book Review: The Economics Anti-Textbook (2010)

The world we live in is a frictionless wonderland of free and fair markets, where all exchange is voluntary, everybody earns their marginal product, rising tides lift all boats, externalities are rare-to-nonexistent, and the Invisible Hand benevolently coordinates the human family’s aggregate selfishness and hunger for scarce resources into the Best of All Possible Worlds.

Or not.

In The Economics Anti-Textbook: A Critical Thinker’s Guide to Microeconomics, Rod Hill and Tony Myatt, professors of economics at the University of New Brunswick (who self-describe as a “post-Keynesian” and a “European-style social democrat”), pull back the veil on the glittering “free” market utopia to reveal a morass of value judgments, hidden assumptions, and market fundamentalism dressed up as objective social science. These value judgments are not limited to the introductory textbooks that serve as the authors’ principle target. They are, as demonstrated by numerous textual examples (and evident from a cursory glance at the news cycle) “like a vise on the mind of economists [and policy-makers], who get tetchy when you present results that reveal the behavior of real people to be not as those textbooks assume” (qtd. P. 243), who balk at the suggestion that efficiency (as defined by the production of more and more stuff) may not be the be-all-end-all determinant of human happiness, that there may be such things as “equity costs” or pervasive externalities.

The Economics Anti-Textbook

A great (I’d go as far as necessary) addition/corrective to any intro-level econ course.

In this lucid, highly readable volume shows how the standard texts systematically oversell  perfectly competitive markets, ignoring empirical evidence that suggests that such perfectly competitive markets are incredibly rare (if non-existent). It shows how the normative assumption of efficiency as a goal in and of itself squares neither with ecological imperatives nor with the empirical evidence of human nature and behavior. I was particularly interested in the chapters on the behavior of firms, the determination of wages, government, and “free” trade, as it is here that power and history reenter the picture most clearly. (I consider the almost total—and perhaps totally intentional—absence of any theory of power to be one of the chief failings of neoclassical economic doctrine.)

That said, if what a text leaves out is as telling as what it includes, then I was also intrigued by the almost total omission from this anti-textbook of Marxian economics. Perhaps it is because the authors wished to take on the neoclassicals on their own turf, preferring to cite Nobel Prize-winning economists such as Joseph Stiglitz and Kenneth Arrow to give their arguments more weight with other economists and with a Marx-phobic public. I found much here that seems totally consonant with Marxian analysis – for instance, a model of monopsony (“one-buyer,” so the demand-side counterpart to monopoly, “one-seller”) predicts that workers will be systematically paid less than their marginal product, a key Marxian insight. It might have been nice to make those kinds of connections explicit in the text.

On the other hand, I’m relatively familiar with Marxian economics already, it was fun and instructive for me to put the puzzle pieces together myself. And it’s likely enough that most of Hill & Myatt’s target audience—economics students and educated laypeople—share our society’s pervasive distaste for Marx (or rather, for the popular distortion of him and his work). A heavy Marxian presence in the text might have done more harm than good, whatever the value of that particular perspective (which I’m inclined to think is greater than many would like to admit).

In any event, it’s nice to know you don’t have to be a “godless communist” to mount a meaningful attack on market fundamentalism, that different perspectives are cognizant of the fact that the edifice of neoclassical orthodoxy needs to be condemned. With its well-written discussions of how and why, and what kinds of theories might serve as the foundations for saner economic policy, The Economics Anti-Textbook serves as a necessary addition/corrective to any standard Intro to Econ course. Highly recommended.

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