NBN Classic: John Komlos, "Foundations of Real-World Economics: What Every Economics Student Needs to Know" (Routledge, 2019)

This episode proved remarkably popular, so we're reposting it as an NBN classic for those who missed it the first time. I met with John Komlos, an American economic historian of Hungarian descent and former holder of the Chair of Economic History at the University of Munich. We spoke about his latest book, Foundations of Real-World Economics: What Every Economics Student Needs to Know (Routledge, 2019). This is a very original textbook, a good answer to the call from the Rethinking Economics movement to revise our economics textbooks and programmes. Komlos argues that 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 continue to praise conventional policies such as deregulation and hyperglobalization.’ His book 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 the mainstream models. Bringing together the work of key scholars, such as Kahneman, Minsky, and Schumpeter, this book demonstrates how we should take into account the inefficiencies that arise due to asymmetric information, mental biases, unequal distribution of wealth and power, and the manipulation of demand.’ This book offers students a valuable introductory text with insights into the workings of real markets not just imaginary ones formulated by blackboard economists. A must-have for students studying the principles of economics as well as micro- and macroeconomics. It is a very original book, in the ambition, in the way it is written, even in its evocative chapter titles and in the unusual tables,