One of the challenges of today’s time is how we can tackle some of the pressing society problems. One way often is through economics as it is the way our lives are greatly affected. Since the 2007-08 financial crash, many people realised that the economics taught and what goes in reality are polar opposite in relation. Also, the current discourse in mainstream economics is not working from the DSGE model to rational assumptions of human behaviour.
Now, there is a drive to rethink in what ways economics should be led in the future which has resulted to emerging interested from heterodox thought which challenges the hegemony of the current new classical school. It offers rich insights about society, human relations, well being etc. Some of the books discussed give a useful introduction to the field and the criticism of the mainstream school of thinking.
The Value of Everything: Making and Taking in the Global Economy
The value of everything by Mariana Mazzucato scrutinised one of the overlooked concepts in modern economics — the idea of value. She delves in what has come of value in society and how it is important to rethink the concept for a sustainable economy life. Her main argument rest on the claim that many economic actives are focused on extracting value in a short term way rather than creating value of the long term.
One of the interesting ideas of the book is exploring the myth of what is value and who creates it. The often argument in mainstream economics, where private sector are the only one who creates wealth in contrast to public sector is challenged. She also highlights the pitfalls in the current economic situation is through the “financialisation” of the economy. Started from the 1970s, it focuses on short term profit and maximising shareholder value and ignores the repercussions of the stakeholders - labour, consumers, environment etc.
The book gives ways to rethink economics, the capitalist structure, and highlights the importance of the public sector. It is an essential read to think again what is value in our life and what is required for a sustainable economy.
One of the famous books in the contemporary times, Doughnut Economics by Kate Raworth, establish a new way of thinking about the interaction between humans and the the economy. The ‘doughnut’ model which is a division where we realise the limitations and consequences of the current structure of economies. It pushes people to think in how we can live in a more ecologically and social just space.
Raworth begins her argument by criticising how mainstream economics has led to precarious lives with rising inequality and environmental degradation. It questions the idea of the economic growth which is generally assumed as a well being indicator of the citizens. Her new model of economics — “doughnut model “ — focuses on the value of human lives and advocates for a ‘regenerative and distributive economy’.
The book challenges the status quo discourse of the economist and policy makers of ‘economic efficiency, productivity’ etc. and argues for it to become more practical with of human centric solutions. The book will challenge the ideas of economics we take for granted and give us a guiding way to rethink the way our economies are structured.
Thinking in Systems: A Primer
Understanding today’s economic problems requires ways to look at the roots of the problem. One way as argued by Donella Meado in Thinking in Systems is through understanding the world through systems and its interconnectedness. The books gives a useful introduction to system thinking and tells us ways we can applying in real life applications.
One of the main ideas argued by Meadows is how all things are interrelated and have strong feedback loops. From the boom and the burst of the stock market to the collapse of the ecosystems. A particular science behind global dilemmas which offers a different way of thinking than the mainstream economics.
The book also contains on how to be an effective systems thinker. It’s about getting to understand the working of a system before you try and change it. And also realising that new paradigms are around the corner by seeing reality in a different way.
Debunking Economics published in 2001 by Steve Keen is an important introduction to start thinking about the ways economics has gone wrong. His main argument focuses on that the economists deserved none of the credit for the economy's performance in recent times and with their delusion overconfidence, policy makers have dismantled institutions (community, public sector etc.) which has helped to control the instability of the economy system.
He criticises the main ideas of new classical economics. One particularly, the efficient market hypothesis, which is an oversimplification idea where the economy does not behave in equilibrium. He supports that other schools of economic thought should be encouraged, such as marxian economics, complexity economics etc. to give a more realistic account of the understanding of economy.
It is an essential read to start thinking about the problems of mainstream economics in the ways it is designed and structured. And further highlighting the need for heterodox approach to reform the economics field.