Economics: The User’s Guide by Ha-Joon Chang

Zoe Williams in The Guardian:

It is a mark of where we are in our political discourse that even to say “neoclassical economics is not the only school” seems radical. This is where Ha-Joon Chang starts, in a book that is more sober and less effervescent than his bestselling 23 Things They Don't Tell You About Capitalism, but is just as page-turning.

Since no single economic theory has beaten the others, it follows, Chang writes, that there is no objective truth on which every economist is agreed. Economics can never be a science in the way that physics is; it cannot reach a consensus on its fundamental questions, let alone what the answers are. This isn't some extended handwringing, a trashing of his discipline dressed up as a mea culpa. Chang isn't looking for a formula: fundamentally, he argues, economics is politics. As such, we shouldn't be thinking in terms of an ideal answer – the discussion should never close.

If there is a sense in which economics has “failed”, Chang argues, it is not because it should have “predicted” the crash and the disasters of the last seven years, nor for thoseKrugmanian reasons that range the state against the market, regulation against self-interest, cooperation against moral hazard. Rather, we are witnessing a failure of plurality. Our current landscape has been created by the acceptance of a few core principles – the individual as perfectly selfish, perfectly rational, able to create perfect markets by acting in her own interests; we have ignored plausible competing theories and have suffered for it.

More here.