Reality, Humanity and Economics: A Review

Economic theory is expected to answer the two fundamental questions of how real economic systems work and how they should work to meet the goals of human societies. Orthodoxy explains, through an axiomatic approach, how an ahistorical economic system, made up of rational agents, works according to a set of unrealistic assumptions. Orthodox equilibrium economics, by postulating optimality and fairness, lacks realism and predictive power, and fails to properly incorporate ethical issues. This article reviews three contributions that demonstrate how modern heterodoxy aims to recover realism and humanism within economic theory in order to face the challenges of real-world human economic systems. These contributions are books by Deborah M. Figart and Ellen Mutari (Economic well-being: An introduction), John Komlos (Foundations of real-world economics. What every economics student needs to know), and John P. Watkins (The origins and evolution of consumer capitalism. A Veblenian–Keynesian perspective).