These days I was somewhat enthusiastic to find...

These days I was somewhat enthusiastic to find that the emblematic Economics Anti-Textbook, which focuses on a critical presentation of standard microeconomics content, has now been complemented by a companion volume on macroeconomic issues. This book is authored by Tony Myatt, who is also one of the original lead authors of the Economics Anti-Textbook, and carries the very consistent title “The Macroeconomics Anti-Textbook”. As my teaching duties typically require me to also incorporate neoclassical concepts and theories, I am very thankful for books like these that are designed from the start to provide a critical entry-point to the dominant theories of our discipline (in the past I have also successfully used John Komlos’ Foundations of real-world economics as well as the Microeconomics/Macroeconomics in Context books).

Pointing out the fallacies in mainstream thinking in ways that are pedagogically useful is always a delicate task as it is a knife-edge issue. You always run the risk of oversimplifying; on the other hand, things quickly get technically intricate if you delve too deeply into certain subtleties. In this matter, I also highly appreciate Steve Keen’s contributions, which often excel at striking the right balance. An example, which in my view does succeed in this regard, is this recent video in which Steve addresses energy as a blind-spot in mainstream theory, while – at the same time – explaining why the neoclassical gross-substitution axiom is self-defeating when it comes to hardly substitutable primary inputs. It is especially in these contexts where a standard Leontief-approach is arguably a superior tool for prediction. Moreover, Steve manages to connect this discussion to current policy-challenges in Europe induced by the Russian attack on Ukraine (by referring to the case of a German gas-embargo as a key example), and also suggests that we can interpret the capital-output ratio as a (probably rough) proxy for energy-efficiency. All of this seems like a lot but it takes Steve only 22 minutes to address it, so be prepared for his usual stormy talk ;-)

All the best,

Jakob

PS: While I think the example of Steve’s video is very neat, it also serves well to explain one tricky aspect of such criticism: in many cases, there exists a variation of some standard mainstream model in the literature that seems to address a certain more specific critique. Sometimes this only holds superficially, but at least with regard to Steve’s criticism of the mainstream’s obsession with substitution there is a somewhat valid exception that has similar concerns on, and makes similar arguments about, the crucial role of primary inputs, as Steve does (see here for the paper I am talking about). Of course, a structured and constructive discourse on such potential common grounds is difficult. For one, the mainstream is an inconsistent amoeba of models with ‘a model for every purpose’. For another, such papers are typically crafted for other mainstream academics, which makes potential common grounds truly hard to spot. Still as open-minded people, we should occasionally give it a try… ;-)