Rethinking What Every Economics Student Needs to Know: A review of John Komlos’ (2019) Foundations of Real-World Economics

Abstract

There is a strong case to re-evaluate and change what economics students learn in their introductory courses (see, for example, Bowles & Carlin, in press; Tieleman, de Muijnck, Kavelaars, & Ostermeijer, 2018). Leading textbooks (for example, Mankiw, 2017 [1998]) have been extensively criticised for lagging behind current developments in research, misleading oversimplifications, and providing an emphasis on frictionless free markets.Komlos’ book ‘Foundations of Real-World Economics’ (2019) provides a timely alternative to what is currently available on the market. Under the banner of ‘humanistic economics’, which revolves around the central question ‘for whom’ the economy is doing well, Komlos sets off to expose the differences between imaginary and real markets. The book provides readers with a rich account of actual economic actors and their decision-making processes, how these differ from the frictionless free markets that are most often presented in standard introductory textbooks, and how these simplifications can result in misleading economic conclusions.Our review is structured as follows. We first present a summary of the contents, then outline the most notable contributions, and finally discuss some points for improvement.