Foundations of Real-World Economics
What Every Economics Student Needs to Know (2nd Edition)
I met with John Komlos, an American economic historian of Hungarian descent and former holder of the Chair of Economic History at the University of Munich. We spoke about his latest book, Foundations of Real-World Economics: What Every Economics Student Needs to Know (Routledge, 2019). This is a very original textbook, a good answer to the call from the Rethinking Economics movement to revise our economics textbooks and programmes.
Komlos argues that the 2008 financial crisis, the rise of Trumpism and the other populist movements which have followed in their wake ‘have grown out of the frustrations of those hurt by the economic policies advocated by conventional economists for generations. Despite this, textbooks continue to praise conventional policies such as deregulation and hyperglobalization.’
His book demonstrates how misleading it can be to apply oversimplified models of perfect competition to the real world. ‘The math works well on college blackboards but not so well on the Main Streets of America. This volume explores the realities of oligopolies, the real impact of the minimum wage, the double-edged sword of free trade, and other ways in which powerful institutions cause distortions in the mainstream models. Bringing together the work of key scholars, such as Kahneman, Minsky, and Schumpeter, this book demonstrates how we should take into account the inefficiencies that arise due to asymmetric information, mental biases, unequal distribution of wealth and power, and the manipulation of demand.’
This book offers students a valuable introductory text with insights into the workings of real markets not just imaginary ones formulated by blackboard economists. A must-have for students studying the principles of economics as well as micro- and macroeconomics.
It is a very original book, in the ambition, in the way it is written, even in its evocative chapter titles and in the unusual tables, carts, diagrams and pictures. I hope you will enjoy the podcast and the book itself.
Andrea Bernardi is Senior Lecturer in Employment and Organization Studies at Oxford Brookes University in the UK. He holds a doctorate in Organization Theory from the University of Milan, Bicocca. He has held teaching and research positions in Italy, China and the UK. Among his research interests are the use of history in management studies, the co-operative sector, and Chinese co-operatives. His latest project is looking at health care in rural China. He is the co-convener of the EAEPE’s permanent track on Critical Management Studies.