Something may finally be changing in the study of economics. A new textbook, half of which has now been published online, is a small step in the right direction.
The book is called the “The Economy,” and it is produced by a group of economists known as Coreecon. They are supported by the Institute for New Economic Thinking, which is largely funded by speculator-turned-philanthropist George Soros. The text is available for free – which itself is a fine example of non-conventional economic thinking.
The voluntary effort is commendable, and the many students who complain that academic economics describes an imaginary world should be grateful. Still, the limits of “The Economy” show just how far the reformers still have to go.
To be fair, the authors were constrained. Most professors still do not see any large problems in the way that economics is taught. An overly heterodox approach would have prevented the book from achieving its primary goal of being adopted in normal academic economics programmes.
The intellectual conservatism, which is shared by the many political liberals in the discipline, is frustrating. Faulty assumptions and a dubious reliance on excessively abstract and unrealistic models too often lead to inaccurate observations, poor policies and worse forecasts. As a discipline, economics should be reconsidered from the roots.