Foundations of Real-World Economics What Every Economics Student Needs to Know
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 remain frozen in time, continuing to uphold traditional policies as though nothing has happened.
Foundations of Real-World Economics 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 mainstream models. Bringing together the work of key scholars like Kahneman, Minsky, and Schumpeter, this textbook takes into consideration the inefficiencies that arise when the perfectly competitive model is applied to the real world dominated by multinational oligopolies. The third edition has been updated throughout, bringing in new material on the financial crises, the rise of populism, racism, inequality, climate change, and the Covid-19 pandemic.
A must-have for students studying the principles of economics as well as micro- and macroeconomics, this textbook redresses the existing imbalance in economic teaching as John Komlos focuses on the paradigm of humanistic economics.
1. Welcome to Real-World Economics 2. The Evidence: Markets Are Neither Omniscient Nor Omnipotent 3. The Nature of Demand 4. Homo Oeconomicus Is Extinct: The Foundations of Behavioral Economics 5. Taste-Makers and Consumption 6. Oligopolies and Imperfect Competition 7. Returns to the Factors of Production 8. The Case for Oversight, Regulation, and Management of Markets 9. Microeconomic Applications On and Off the Blackboard 10. What Is Macroeconomics? 11. Macroeconomics Part II 12. Macroeconomics Part III 13. The Tsunami of Globalization 14. The Financial Crisis of 2008 15. Economists’ Mistakes Lead to Right-Wing Populism and an Insurrection 16. Hidden Racist Elements in Blackboard Economics 17. The Covid-19 Pandemic Exposed the Need for a Black-Swan-Robust Economy 18. Conclusion: Toward a Capitalism with a Human Face
"Finally, an economics textbook that puts people before business!"
Richard Easterlin, Professor Emeritus of Economics at the University of Southern California
"The real world seldom operates like the diagrams in economics textbooks. Often left out are that human beings often act irrationally, markets have rules, and models typically began with the assumption of ‘all else being equal.’ John Komlos provides a welcome and much needed real-world look at the dismal science in his Critique of Pure Economics. In plain language that even high school seniors can grasp, Komlos shows the wishful thinking that infects standard economic texts and builds his case with empirical facts."
David Cay Johnston, Pulitzer Prize-winning author of The Fine Print: How Big Companies Use "Plain English" to Rob You Blind and of the New York Times bestseller, Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich—and Cheat Everybody Else
"The 'Great Recession' which began in 2008 was not anticipated by economists, and they remain divided about the remedies. Economics requires a re-think, but this is proving hard. In this excellent book, John Komlos makes a start: he shows what parts of theory remain useful, and which ones have been falsified by experience. He highlights what the new theory will need to explain. Most importantly, he shows that it is necessary to start from current economics in order to reform it. Fluently written, accessible, and highly recommended as a corrective to standard textbooks."
Avner Offer, Emeritus Fellow of All Souls College, University of Oxford, Fellow of the British Academy
"Komlos’s provocative book at once brings together and creatively synthesizes a great deal of work critical of conventional economics and lays out the broad contours of an alternative approach that the author calls humanistic economics. Komlos’s book is timely and relevant. The author includes excellent discussions of income and wealth inequality, the cultural contradictions of capitalism, and green environmental accounting, as well as an entire chapter on the financial sector (a sector often omitted entirely in introductory classes) and the sector’s role in the Great Recession."
Peter Coclanis, Director of the Global Research Institute at the University of North Carolina at Chapel Hill
"A wonderful book, a manifesto, written in a style that is easy to follow. Highly innovative and a must-read, especially but not only for students who are new to economics. John Komlos has given us a valuable tool that we can use to enrich our teaching and open the minds of our students. We owe him our thanks. More, we owe him our students’ patronage."
Gerald Friedman, Professor of Economics, University of Massachusetts, Amherst
"John Komlos has given us a very useful companion text to the standard introductory economics version. Students would do well to read the two together. In fact, anyone who has taken introductory economics and had it shape their thinking about the world would benefit from learning about the issues raised in this book."
Dean Baker, Senior Economist, Center for Economic and Policy Research
"John Komlos provides an important complement to―and corrective for―the standard Economics 101 textbook. This book clearly explains why free markets are far from perfect and, indeed, do not exist in the vast majority of the modern economy. Instead of fetishizing economic efficiency, Komlos explains why economics should focus on creating a better society and helping all of us live more fulfilling lives."
James Kwak, Professor of Law, University of Connecticut, co-author of 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown
"This book is a must-read, not only for economic students and professors who teach economics, but for psychology, sociology, political science, history, and philosophy students and professors as well. That is, it is a must-read for anyone who wishes to understand the discipline of economics and the way in which it has contributed to the conservative/neoliberal economic, social, and political policies that have guided us to the dysfunctional social and political systems we find ourselves in the midst of today."
George H. Blackford, formerly University of Michigan-Flint, Contributions to Political Economy (2019), 1-2
"Komlos uses a literary style that empowers the reader with information and in-depth discussion of topics of current interest from the repercussions of the financial crisis to the rise of populism. The book is full of creative ideas and the author achieves his goal of presenting a realistic approach to introductory economics."
Andres F. Cantillo, Kansas City Kansas, Community College, Australasian Journal of Economics Education Volume 16, Number 1, 2019
"This book is aimed at the introductory level and grounds its presentation in a lot of helpful stylised facts to connect to the real world. It contrasts the mainstream approach with many important heterodox insights in order to help readers to get a more realistic and multifaceted picture of economic relationships."
Torsten Niechoj, Rhine-Waal University of Applied Sciences, Kamp-Lintfort, Germany, and FMM Fellow, European Journal of Economics and Economic Policies: Intervention, Vol. 17 No. 1, 2020
"This book explains a tremendous amount of how economies like the U.S. function in recent years. In doing so, it integrates conventional economic analysis with wide ranging socio-economic analyses and the thoughtful insights of the author on many topics related to how economies function or do not function well. At the very least, he has gone a long way in showing how economies can become a more important and different discipline than it has been. I highly recommend his text for many students of economics."
John F. Tomer, Emeritus Professor of Economics, founding member of the Society for the Advancement of Behavioral Economics (SABE), Society and Economy
"John Komlos’s book has the sense and sensibilities for building up an economy that works for the 99%, not just the 1%."
Annavajhula J.C. Bose, Shri Ram College of Commerce, India, Ecotalker blog