Economics Confronts the Economy
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Abstract
‘‘Change is inevitable,’’ and this phrase is true even to the most standardized discipline—economics. Economics is a materialistic subject that is not intended to bring material gain to those who study it. It is a discipline that deals with how humankind makes use of the productive and consumable resources of the world. It is concerned with the organization that has evolved for the purpose of providing a livelihood for people: an abstract mechanism. But sometimes a mechanism malfunctions; and some groups believe that a mechanism should be modified or that it should be scrapped and one with a different design put in its place. For these reasons, economists usually refer to an abstract mechanism of this kind as an economy. This is an organization or system for making use of resources, a system for providing goods and services to the members of the community. However, economic theory is itself changing rapidly at the moment—and, interestingly, one of the new developments is that the ideas of the Classical School are coming back into economic theory. In contrast to modern economic theory, in the more holistic Historical School of economics, both time (history) and place (geography) play a natural part. Against this backdrop, the book under review, Economics Confronts the Economy, authored by Philip A. Klein, assumes much relevance. It is a carefully crafted (organized into eight chapters), well balanced and eminently readable. It bravely tackles some of the critical, yet controversial, issues of changing paradigms of economic theory. The first chapter concentrates on the unchanging focus of modern economics. Chapter two brings out the importance of economic theory and how progress is interrelated with it. Chapter three analyses the learning of economics from 1950 to 2000. The fourth and fifth chapters cover the trivialization and elegance of microeconomics and macroeconomics respectively. The sixth chapter discusses the REVIEW OF SOCIAL ECONOMY, VOL. LXIX, NO. 1, MARCH 2011