Book of the week: Economics under the microscope

Cover of Whose Model Is It Anyway?Whose Model Is It Anyway? Why Economists Need To Face Up To Reality
by Frances Weetman
Published by Virago e-book, £2.99
(Buy at Amazon)

The failure to forecast key economic events over the past decade has given rise to soul-searching among economists. But a growing number of people think that tinkering around the edges isn’t enough, and that both the core assumptions underpinning the subject and the way that it is taught need to be reexamined. This short e-book by Frances Weetman, which is based on an essay for the New Statesman, makes a case for radical reform.

Some of Weetman’s criticisms are familiar. Modern economics is too abstract, too mathematical, and the idea of a super-rational homo economicus is unrealistic. She also argues that economics courses in most universities neglect economic history and ignore schools of thought that stray from the neoclassical consensus, such as behavioural economics. These criticisms all have merit.

However, Weetman overstates her case, going off on misguided tangents about psychopathy (while it’s true that economics views people as cold-blooded calculating machines, the defining characteristic of psychopaths is that their egoistic and self-interested behaviour is allied to poor impulse control, which is precisely the opposite of the case with homo economicus).

She also fails to acknowledge that even in its most abstract form economics is much more evidence-based than she gives it credit for. Overall, this is an entertaining pamphlet that can be read in an afternoon, and which provides plenty of food for thought. However, it is far from being a comprehensive and detailed critique of the subject.