A review of Alex M. Thomas, Macroeconomics: An Introduction, Cambridge: Cambridge University Press, 2021, xx + 234 pages, 978-110873199-7
by Subhasree Ghatak1
“Textbooks often portray economics as a settled science, but this is far from the truth.”
Macroeconomics: An Introduction deals with pluralist ideas that challenge and unsettle the settled thoughts of orthodox economics. The book presents a view of economics as an everyday science embedded in the social fabric of human interactions while also dealing with the complex web of foundational macroeconomic theories.
Take, for instance, the emphasis placed by marginalist economics on the ‘rationality’ of an ‘economic man’, which relegates the economic position of women by disregarding the burden of unpaid care-work on which the economy thrives. The author points out not only the need to change the male pronoun, but also to question the failings of orthodox economics that lead to this neglect. Neoclassical economics determines wages as a function of the marginal productivity of labor. Given this reasoning, it fails to explain the wage gap between men and women in the same occupation with similar levels of skill and expertise. This is just one instance of how the author subjects macroeconomic theory to critical scrutiny in light of its real-world implications, a definitive characteristic of this textbook.
This book offers a novel problem-setting approach rather than a problem-solving one in the teaching and discussion of macroeconomics. This approach aims to construct the context around which the problem will be addressed. It relies on day-to-day observations made on the economy to answer macroeconomic questions. The discourse and pedagogy around macroeconomics heavily center on the mainstream line of reasoning. Instead, this textbook focuses on the significance of pluralism and acknowledgment of contending to enrich the understanding of economic phenomena. Alternative perspectives rooted in Classical Political Economy and the Keynesian school of thought as propounded by Adam Smith, David Ricardo, Karl Marx, John Maynard Keynes, Kalecki, and Piero Sraffa are invoked to compare and contrast with the marginalist paradigm.
The study of macroeconomics as prescribed in the curriculum of Indian universities is widely Eurocentric, sidelining the unheard perspectives from the Global South. This book aims to improve accessibility of economics to readers in India by drawing on examples from the Indian context rather than from the Global North. Thomas also makes a point to urge the readers of the book to supplement reading with various governmental and non-governmental issued reports, releases, newspapers, and literary fiction. A comprehensive list of suggested readings, including academic writing and fictional work, rooted in the local context accompany each chapter to enable the readers to study the subject further. For example, the sixth chapter on ‘Why Economic Theory Matters’ has a suggestive list of G. Omkarnath’s 2012 book Economics: A Primer for India (Hyderabad: Orient Blackswan) and Arun Kumar’s 2017 book Understanding the Black Economy and Black Money in India (New Delhi: Aleph) among others.
The highlighting of economic thought in literary fiction and political writing is also a novel concept put to use in this work. For instance, to exhibit the complicacies in the land ownership issues in India, the author highlights the work of Hansda Sowvendra Sekhar in his short story, The Adivasi Will Not Dance. The story is centered on the fierce agitation by landless Adivasi people (tribals) to reclaim their land-owning status. A reference is also made to Dr. B.R. Ambedkar’s Annihilation of Caste, which analyses the role played by the caste system in the economy, arguing that caste is characterised not just a division of labour but a division of labourers. Thomas deftly incorporates gender concerns in the recognition of the extent of labor immobility that women face, depending on the specificities of caste, community, and region. India fares poorly in terms of female labor force participation, Thomas brings the manifold reasons behind this to the fore using literary texts. He cites Shrilal Shukla’s Raag Darbari, Kota Neelima’s Death of a Moneylender, and Skybaaba’s short story Vegetarians Only to exhibit the socio-cultural specificities that inhibit women’s labor mobility. The author’s use of literary texts emphasises that economic behavior has been studied in fictional contexts as well. This further strengthens the understanding and provides a junction for the humanities and social sciences to interact.
The structure of the book reflects the author’s “context-measurement-theory-policy” approach, comprising nine chapters with detailed references and an index. Chapters 1 and 2 essentially introduce the idea of economics and conceptualize the macroeconomy. Chapters 3, 4, and 5 deal with the theoretical and foundational framework of the macroeconomy, addressing the issues of money, interest rate, output, employment levels, and economic growth. Chapters 7 and 8 concern itself with the understanding of ground realities and what could be the relevant policy implications for solving macroeconomic problems. Chapters 6 and 9 ultimately provide a philosophy behind the study of the discipline, unearthing the underlying theory explaining both monetary and non-monetary transactions.
This book deserves ample praise for centering the role of socio-economic factors in economic processes, an approach lacking in textbooks set in the mainstream tradition. It leverages the social context of India to highlight issues of caste, class, and gender, and their importance for all-round development of the economy. Thomas’ Macroeconomics: An Introduction undoubtedly simplifies otherwise abstract macroeconomic theories by setting them in a context accessible to its readers through use of novel methods. Perhaps its most significant contribution is in equipping its readers to unlearn orthodox explanations and develop an enriched understanding of the economy that harnesses the wealth of the pluralist traditions in economics.
- Research Scholar, Department of Humanities and Social Sciences, IIT Patna ↩︎