Here is a list of recommended readings for those interested in heterodox economics and critiquing the mainstream, but also with some opposing views from mainstream economists. Forever incomplete, this will be updated intermittently.
Old, but relevant, critiques of the mainstream
The Law of Returns Under Competitive Conditions, Piero Sraffa. Sraffa makes an early case against marginalist theories of the firm based on their observed behaviour, particularly their use of spare capacity and absence of increasing marginal costs.
Economic Philosophy, Joan Robinson. Gives an overview of economic thought, showing how it is almost always impossibly intertwined with ideology.
IS/LM: an explanation, John Hicks. The creator of IS/LM critiques IS/LM, based largely on the confusion surrounding Keynes’ use of ‘uncertainty’.
What Is Neoclassical Economics?, Yanis Varoufakis and Christian Arsnberger. The article that was set for our first reading group, this tries to define neoclassical economics rigorously.
What is this ‘school’ called neoclassical economics?, Tony Lawson. Does the same as the above article, but adopts a slightly different, broader definition to Varoufakis and Arsnperger.
Neoclassical Economics: A Most Peculiar Failure, Yanis Varoufakis. Notes the surprising resilience of the neoclassical paradigm given its remarkable failure in the recent crisis.
Debunking Economics, Steve Keen. Takes aim at numerous neoclassical theories for internal inconsistency, and presents an alternative model of the macroeconomy, suitable for modelling financial crises.
The Skeptical Economist: Revealing the Ethics Inside Economics, Jonathan Aldred. Throws doubt on a lot of the ‘value-free’, market-based ideas implied by economics and economists.
Progress and Poverty, Henry George. Regarded by himself and his followers as the ultimate solution, this book outlines the role land plays in extracting economic rent, making the economy less productive and producing poverty.
Reclamining Marx’s Capital: A Refutation of the Myth of Inconsistency by Andrew Kliman. An excellent and simple exposition of the labour theory of value. Mathematical, but mostly just tables and arithmetic, and clears up the confusion. Aims to show that the labour theory of value is a coherent, valid theory, though it makes no attempt to discern whether it is correct.
The Failure of Capitalist Production: Underlying Causes of the Great Recession. The same author as above tries to make the empirical case for the labour theory of value based on the tendency of the rate of profit to fall, and relates it to the 2008 financial crisis. Paste this link into your browser to get 30% off this book! http://bit.ly/qcCMGr
Verso Books have also published a Marxist-themed ‘post crash’ reading list.
How Markets Work: Demand, Supply and the ‘Real World’, Robert Prasch. Builds up some alternative theories of demand-supply and makes some interesting ethical/political observations along the way. Short, readable and available from the University Library.
Institutional Economics: Surveying the ‘Old’ and the ‘New’, Geoff Hodgson takes a look at both ‘types’ of institutional economics, debating the relative pros and cons of each.
Organisations and Markets, Herbert Simon argues that organisations – firms, governments, unions and so forth – are really the dominant way resources are allocated in society, and that economics should shift away from its focus on markets to reflect this.
Debt: the First 5000 Years, David Graeber. Graeber outlines what he calls the “myth of barter”, stated by many economics textbooks, which argues that money arose because it helped people exchange cows and chickens more easily. He shows that this is not borne out by the historical record: historically, societies have engaged in ‘trade’ through credit relations.
The Use of Knowledge in Society, Friedrich Hayek. Hayek defends a market economy over planning on the basis of imperfect knowledge and disequilibrium.
History of Thought
The Worldly Philosophers, Robert L Heilbroner. The classic text for the history of thought, that should need no introduction. Sketches out the development of economic thought from Adam Smith through Karl Marx to neoclassical economists and Keynes.
Adam’s Fallacy: A Guide to Economic Theology, Duncan Foley. Has the same theme as above, but also traces the history of the idea that the economic sphere is a separate, ‘natural’ phenomenon with which we cannot interfere. An excellent introduction to the history of thought from a heterodox perspective.
Keynes Betrayed: The General Theory, the Rate of Interest and ‘Keynesian’ Economics, Geoff Tily. Discusses the difference between ‘Keynes’ as taught in classrooms and Keynes’ own theories. Relevant to contemporary debates about monetary policy.
The Financial Crisis
“No One Saw This Coming“, Dirk J Bezemer. Notes the 11 economists who made sound predictions of when the financial crisis would happen and how it would happen.
Whoops!, John Lanchester. The most readable introduction to the financial crisis, written by a journalist. Great if you can’t separate your AIGs from your CDOs.
ECONNED, Yves Smith. Probably the best book on ‘what happened’ the financial crisis, and also links in the role of economic theories.
The Debt-Deflation Theory of Great Depressions, Irving Fisher. Short outline of how an indebted economy can suffer from prolonged deflationary depressions, written by Fisher after his faith was shaken in the 1929 stock market crash. Relevant to the recent crisis.
Other Sciences on Economics
Economyths, David Orrell. An Applied mathematician takes his toolkit to mainstream economics. Highly readable and a great introduction to the dynamic thinking used in many natural sciences.
The New Evolutionary Economics, Jason Pott. A biological/game theoretical/Schumpeterian perspective on firms, complexity and expectations.
The Origin of Wealth, Eric Beinhocker. Uses complexity science and ideas from various disciplines, most notably biology, to model the economy as a network.
The Undercover Economist, Tim Harford. The best introduction to economists’ ‘way of thinking’: readable, lucid, and informative.
The Accidental Theorist, Paul Krugman. A nice collection of short stories designed to elucidate certain theories endorsed by mainstream economists.
Taking Economics Seriously, Dean Baker. Defends the field of economics from some common criticisms, arguing that it has tools suitable for event such as the crisis – if only economists would use them.
The Elusive Quest for Growth, William Easterly. An empirical, mainstream survey of various development panaceas and their discontents.
Kicking Away the Ladder, Ha-Joon Chang. Dr Chang, who spoke in our first guest lecture, discusses the rich countries’ use of industrial policy during their development phase, and their subsequent dismissal of the policy for currently poor countries.
Bad Samaritans, Ha-Joon Chang. The follow up to the above, this is more polemic and looks at the interests and institutions behind ‘free trade’ deals. Contains resposnes to critics of KAtL (such as Easterly above).