Think back to those economics classes you took in college. You can probably still define a few concepts like price elasticity, opportunity cost and diminishing returns, but the rest may be somewhat hazy. Like most busy people, you probably haven't stayed abreast of the latest research on the causes of economic growth or poverty, the metrics for economic policy, the economics of information and the use of evolutionary modelling. Don't worry. In this pleasant fly-over, economist Diane Coyle shows you the newly discovered economic territory you might have missed. Her presentation is all right, though she's defensive about her chosen profession and sometimes dodges around a bit before coming to the point. Still, we believe you'll find her book sensible, accurate, apolitical, fairly well-organized and far more "utility maximizing" than econ class.
In this well thought out and executed literature review Coyle provides an insightful and entertaining narrative of the evolution of economic thinking tracing a path from classical figures such as David Hume, David Ricardo, Adam Smith and Karl Marx through to what she sets up as a great schism in economic thinking in the first half of the twentieth century. Much of the book is a search for reconciliation between the 'neo-classical orthodoxy' of figures such as Paul Samuelson and the Solow-Swan model of macroeconomic growth - with their emphasis on mathematical formalization based on the rational behaviour and efficient markets; and the 'heterodox' outsiders such as Schumpeter, Hayek and the behavioral and institutional theorists with their focus on economic 'reality' rather than 'abstract models'. At the heart of her argument is that the world of economics is populated by much more than the reductionist, autistic caricatures of profit-maximizing, utility-seeking straw men which its critics commonly portray it to consist of - and a plea for these two fighting factions to tolerate and learn from each other rather splinter off into separate departments. Her narrative is given a personal touch by anecdotes of some of these seminal characters wandering around the halls of economics departments in leather riding boots (I suppose that is better than tasseled slippers) and the insights gleaned from the study of the grave-side eulogies of their friends and colleagues. My only quibble with the book was regarding Coyle's treatment of advances in game theory and its relationship with evolutionary economics concepts that have been incorporated into economics from the biological sciences. The economist's notion of equilibrium, even a Nash equilibrium, has no biological analogy. Indeed, many evolutionary economists would argue that the notion of equilibrium is the antithesis to a constantly evolving system, and that no equilibrium, in fact, exists. While it's impossible to do justice to all the sub-fields of economics in such a slim volume, perhaps spending a little more time on the emerging field of complex systems in economics would have been fruitful in this regard.
Such minor points aside, this book generally doesn't pull any punches when it comes to pointing out the limitations of mainstream economics, and it would be just as useful to a critic wanting to add some economic maturity to their arguments as it is to the student of economics looking towards the future of his or her discipline. For the policy maker without the time to go over original sources themselves, this book gives access to the theoretical and philosophical basis of the new pragmatic 'what-works' 'evidenced-based' policy agenda that has emerged since the financial crisis of 2008 and as such is a good guide to some of the most profound epistemological debates which continue to shape and define the world around us.
This book reviews recent developments in economics at a homogeneously superficial level. The author has no pet theory she would be passionate about, and maintains a very good balance between many trends of research, which may explain why most of the book is a never-ending sequence of loosely connected abstracts.
Some major themes come back repeatedly, like the neoclassical theories of economics, which many economists seek to complement or to overturn, and the influences of psychology and biology on economics. But they are never given independent, coherent introductions. Instead, these themes are sprinkled over many chapters. The book also presents a fair number of interesting applications of modern economic theory, but none of these examples enjoys a detailed enough treatment. Therefore, I still do not know what economists really do, and I am still not convinced that it is interesting. (That it matters is hardly in doubt.)
The book might be a good introduction to the recent literature on the subject, although I know too little to judge. But I would not recommend it to those who, like me, have no professional interest in economics.