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15 of 17 people found the following review helpful
4.0 out of 5 stars Good subject matter, but needs to be tied together more tightly
This book is a useful and quick read for those interested in why academic economics sometimes seems to make so little sense. It is not about what is wrong with economics, it is more about what is wrong with neoclassical economics. However, in the public's mind and in most economics department neoclassical economics is economics. Unfortunately, the monopoly position of...
Published on September 11, 2005 by Jason E. Bradfield

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7 of 8 people found the following review helpful
1.0 out of 5 stars With enemies like this, economics doesn't even need friends
In June 2000, several Parisian economics students circulated a petition calling for the reform of their economics curriculum. Their complaint was the inability of the neoclassical economics they were studying to satisfy their need for a deep understanding of the operation of real-life economies. They called for a reform of the university curriculum that would tolerate...
Published on May 18, 2007 by Herbert Gintis


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15 of 17 people found the following review helpful
4.0 out of 5 stars Good subject matter, but needs to be tied together more tightly, September 11, 2005
This review is from: A Guide to What's Wrong with Economics (Anthem Frontiers of Global Political Economy) (Paperback)
This book is a useful and quick read for those interested in why academic economics sometimes seems to make so little sense. It is not about what is wrong with economics, it is more about what is wrong with neoclassical economics. However, in the public's mind and in most economics department neoclassical economics is economics. Unfortunately, the monopoly position of neoclassical economics leaves many students bewildered, especially those who are at least somewhat familiar with the ideas of the 19th century political economists.

The book is a collection of essays by a wide variety of economists, many with heterodox views.

The essays vary wildly in style, relevance, and value, but reading the book is justified not by the analytical excellence of every single essay, but by the few stand out essays which will allow the reader to pursue interesting strands of heterodox thought. In particular I found the essay by Steven Keen to be particularly worthwile. After reading it I decided to immediately buy his book "Debunking Economics."

It is vitally important that those studying economics have at least a passing familiarity with heterodox views, whether or not they agree with them. What heterodoxy provides is a better way of understanding, critiquing, and ultimately expanding and strengthening the current paradigm in economics. In other words, even the staunchest neoclassical economist will gain from reading this book because it will challenge one to think more critically about underlying assumptions. Of course, there is the possibility, ever so remote, that one strand of heterodox thought may succeed in overthrowing the dominant paradigm and become the new king of the hill in economic thought.
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7 of 8 people found the following review helpful
1.0 out of 5 stars With enemies like this, economics doesn't even need friends, May 18, 2007
By 
Herbert Gintis (Northampton, MA USA) - See all my reviews
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This review is from: A Guide to What's Wrong with Economics (Anthem Frontiers of Global Political Economy) (Paperback)
In June 2000, several Parisian economics students circulated a petition calling for the reform of their economics curriculum. Their complaint was the inability of the neoclassical economics they were studying to satisfy their need for a deep understanding of the operation of real-life economies. They called for a reform of the university curriculum that would tolerate analytical diversity and foster critical dialogue across contrasting approaches to economics. Their demand was taken up by large numbers of students, and a similar demand was formulated by Ph.D. students at Cambridge University in the UK the next year. This reform movement has grown in Europe, under the rubric of "post-autistic economics." This volume presents their case, but with voices of professional economists rather than students.

My interest in this book and this movement stems from my life-long battle against neoclassical orthodoxy. My conclusion from reading this edited volume is that the post-autistic economics critique is intellectually shoddy and incapable of leading to positive change in how economics is done and taught. Their central critique is that neoclassical economics does not describe real-world economies, and must be replaced by or supplemented with other approaches. This is just wrong. While the elementary courses are far from the real world, advanced courses in such areas as labor, international finance, macroeconomic policy, economic development, law and economics, environmental economics, and so on, are quite real-world. If undergraduate students left with a degree in economics that allowed them to understand The Economist and the Journal of Economic Perspectives, the level of economic awareness in the world would be considerably higher. If the undergraduate curriculum does not bring students to this level, the curriculum is, to my mind, faulty. Perhaps less stress on arcane theories that are relevant only to professional economists should be replaced by a more historical, institutional, and hands-on approach to microeconomic and macroeconomic issues. But, this is not a critique of neoclassical orthodoxy, and does require a move towards a "heterodox" analytical environment in the economics profession.

There is a reason that neoclassical theory has triumphed: it is the only promising approach to economics. Marxism, Keynesianism, Institutionalism, Syndicalism, Austrian economics, and the like developed strongly for a while and then foundered. They certainly do not present analytically interesting alternatives to neoclassical economics. My own view is that neoclassical economics has profound problems, but they can only be addressed from within, not by embracing some "heterodox" alternative. Nothing in this book even remotely shakes my confidence in this matter. With enemies like post-autistic economics, neoclassical economics doesn't need much in the way of friends.

[...] There is a short piece on behavioral economics, which has been one of the most vibrant areas in economics over the past 25 years, but the author makes the mistake of thinking that behavioral economics is an alternative to neoclassical economics. It is not. It uses decision theory and game theory to critique the Homo economicus of traditional economic theory, but the profession is responding by revising Homo economicus, not by rejecting behavioral economics (see recent papers in Econometrica, the Quarterly Journal of Economics, and other journals). I believe the post-autistic economics people are simply ignorant of the phenomenal work of Ernst Fehr, Abijit Banerjee and Esther Duflo, Colin Camerer, Samuel Bowles, George Loewenstein, Daniel Kahneman, Benoit Mandelbrot, Edward Glaeser, David Laibson, Matthew Rabin, Bruno Frey, Elinor Ostrom, Armin Falk, Simon Gaechter, Jean Tirole, Aldo Rustichini, and many others. They never heard of neuroeconomics or econophysics or the notion of the economy as a complex system, with its stress on agent-based modeling. All of these authors present profound critiques of standard neoclassical economics, and some actually would sympathize with the post-autistic critique. But, the current movement is to transform analytical economics to meet the empirical challenges posed by new data, not retreat to some defunct 19th century doctrine.

This volume shows that the leaders of the post-autistic economics movement prefer quantity to quality. The papers in this book are generally quite lacking in challenge for the professional economist. Many are just silly, and some are egregiously incorrect. Perhaps the worst is the paper by Bernard Guerrien, "Can We Expect Anything From Game Theory?" Guerrien asserts, without evidence, that "game theory models are always `stories', like fables or parables, with no relation to real-life situations." Really? What about auction theory, which has been so successful in organizing the sale of bandwidth in many countries? How does one explain the role of game theory in revolutionizing Industrial Organization? Moreover, game theory is the basis for all of behavioral economics, and accounts for its experimental success in large part. Guerrien's description of game theory is quite faulty. "...players are supposed to choose separately and simultaneously one element of their strategy set...", says Guerrien, and launches a broad critique on that basis. But, he is just wrong. Evidently he never heard of extensive form games or behavioral strategies. In short, the intellectual level of this critique is abysmally low.

This book is just on the wrong track. It's as simple as that. They argue that the success of neoclassical economics is due to bureaucracy, ideology, and partisan politics. In fact, it is the only game in town, although it is a flawed game that deserves to be treated with continual hostility---but hostility from within, since there is no credible alterative. Let me be even more positive: I find contemporary economic theory extremely deep and challenging, and I believe it has some of the answers, and will aid in the development of other areas in which its answers are stupid and absurd. For instance, in perhaps the best piece in the book, Geoffrey M. Hodgson asks "Can Economics Start from the Individual Alone?" He argues persuasively that it cannot. However, traditional institutional economics is hardly the remedy. Rather I suspect that a fundamental theorem of Robert Aumann on the relationship between correlated equilibrium and Bayesian rationality is the key to transcending neoclassical economics' methodological individualism. But, the post-autistic people probably haven't a clue what Robert Aumann has written, and if they did, they would write incredibly sloppy critiques, on the order of Guerrien's critique of game theory.
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3 of 4 people found the following review helpful
2.0 out of 5 stars Much Ado About Nothing, August 2, 2008
This review is from: A Guide to What's Wrong with Economics (Anthem Frontiers of Global Political Economy) (Paperback)
While this book attempts to provide a comprehensive critique of (neoclassic) economics, it's hard not to come away feeling, "If that's all there is, then I feel pretty good about economics!"

Perhaps the book's objective is best described by one of its contributors, Peter Söderbaum, who admits, "Those of us who depart from the neoclassical mainstream do it in many cases for ideological reasons rather than scientific reasons..." we do not like the ideology... and regard (its) monopoly position as an essential part of the problems faced by modern society." The small number of chapters on the environment and human welfare get at these concerns although hardly in ways that haven't already been covered much more effectively elsewhere and then often with simplistic and highly biased one-sided logic. These arguments unfortunately seem half hearted

The first half of the book (along with its critique of mathematics) attempts to undermine neoclassical economics by using the flawed strategy of presenting a one-sided and disconnected laundry list of complaints that merely show that economic theories and models are gross simplifications for a very complex reality. Only the most naïve students of economics will be surprised by these ideas. Ironically, the book frequently cites the (behavioral) work of recent Nobel Prize winners to make its case.

Perhaps this flaw is best illustrated by its contributors, Richard Wolff's, argument that, the world is so complex, comparisons of cost and benefit between alternatives are necessarily political. For those of us in the real world, that's hardly news. But what's the alternative, to make no attempt at all? Wolff, of course, offers none. Without comparing one alternative approach to another while making a strong two-side case for one of the two alternatives, the reader is left with little that they might use to make better decisions.

The second half (third) of the book is typified by a Jean Gadrey contribution that, in part, argues that growth in GNP does not fully account for human welfare. Surely that's true, but the arguments put forward that human welfare has not improved at all are simplistic to the point of being silly. A reasonable argument would likely need to dispute Dollar and Kraay's (2002) argument that growth in the incomes of the poor worldwide has been tightly correlated to overall economic growth and further that the poor don't benefit greatly from increased income (likely more so than the rich). Hopefully, Gadrey's preposterous argument that we could grow GNP by hiring workers to intentionally damage cars (so they could be repaired) requires no need for negation. Much of the book's logic is similar.

I debated about whether to give the book 3 stars because it rightly, fairly and comprehensively summarizes the many cases against economics. Perhaps it's not the book's fault that the case is weak. But I settled on 2 because surely a sharper account of the differences between morality and measurable economics utility can be made.
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5.0 out of 5 stars If you think something is missing from popular economic theory..., February 21, 2013
This review is from: A Guide to What's Wrong with Economics (Anthem Frontiers of Global Political Economy) (Paperback)
Though the book doesn't explicitly refer to the connection between war and capitalism, it does criticize the core teaching of capitalism, which is the exclusive pursuit of money, that overlooks equality and fairness to others and ecological sustainability. The essays are acdemic and technical but most are readable and several are excellent in illuminating problems and suggesting alternatives. I would certainly recommend this to all economic students as well as to others who are concerned about economic issues, sustainability and world peace.
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10 of 16 people found the following review helpful
1.0 out of 5 stars Not a Viable Answer to Neoclassical Orthodoxy, May 18, 2007
By 
Herbert Gintis (Northampton, MA USA) - See all my reviews
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This review is from: A Guide to What's Wrong with Economics (Anthem Frontiers of Global Political Economy) (Paperback)
In June 2000, several Parisian economics students circulated a petition calling for the reform of their economics curriculum. Their complaint was the inability of the neoclassical economics they were studying to satisfy their need for a deep understanding of the operation of real-life economies. They called for a reform of the university curriculum that would tolerate analytical diversity and foster critical dialogue across contrasting approaches to economics. Their demand was taken up by large numbers of students, and a similar demand was formulated by Ph.D. students at Cambridge University in the UK the next year. This reform movement has grown in Europe, under the rubric of "post-autistic economics." This volume presents their case, but with voices of professional economists rather than students.

The central critique in this edited volume of post-autistic economics papers, repeated by virtually every author, is that neoclassical economics does not describe real-world economies, and must be replaced by or supplemented with other approaches, among which are mentioned Marxism, institutional economics, post-Keynesian economics, and approaches based on Critical Realism. Authors arrive at this result by analyzing the undergraduate university curriculum, with some regard for the introductory graduate economics offering. It is indeed correct that the undergraduate curriculum should be far broader, with less stress on arcane analytical issues in microeconomic theory and greater stress on real-world economic phenomena and performance. The critics are also correct in complaining that attention to a broader variety of economic philosophies would benefit students, especially if offered in the context of the history of economic development and comparative economic systems. Moreover, it is sad that most economic majors are incapable of reading The Economist and have little sophistication in their understanding of economic issues. It is a sad fact that most economics departments support an undergraduate curriculum geared towards the few students who go on to do graduate work, whereas a special track could easily accommodate such students without the need for totally distorting the undergraduate curriculum.
This is much is a critique of pedagogy, not of economic theory. But, the post-autistic economists are just as concerned to present a critique of economic theory on the professional level as well. Unfortunately, they not only do not succeed, but they actually hurt their own cause. They treat standard economic theory as "unrealistic," when in fact, on the professional level, 99% of economists, starting with their Ph.D. dissertations, deal directly with real-world economic issues and problems. Very few young economists take the Walrasian general equilibrium model seriously, or use Representative Agent models in macroeconomics, or use microeconomic price theory except in the most elementary sense. Thus, the post-autistic critique comes off as seeming seriously misdirected.
A more gutsy critique would be to say that neoclassical economics is incorrect, not simply "unrealistic," and to provide alternatives precisely where the theory is incorrect. But, what alternatives? Marxism, Keynesianism, Institutionalism, Syndicalism, Austrian economics, and other non-neoclassical models all developed strongly for a while and then foundered. They certainly do not present analytically interesting alternatives to neoclassical economics. Of course, neoclassical economics is not the only credible starting point for serious economic analysis, but alternatives that are old, warmed-over theories that have not stood the test of time will not succeed in displacing the current orthodoxy. The pleas for democracy, toleration, and pluralism by the "heterodox" is simply an admission that they can't win the intellectual battle by having better theories, only by having more troupes.

Curiously, the authors are unaware of contemporary economic theoretical research, which addresses many of the serious problems with neoclassical theory. There is a short piece on behavioral economics, which has been one of the most vibrant areas in economics over the past 25 years, but the author assumes that behavioral economics is an alternative to neoclassical economics. Rather, it is a complement to economic theory and a source of empirical data that can be used to generate better models. Behavioral economics uses decision theory and game theory to critique the rational actor of traditional economic theory, but the profession is responding by revising the rational actor model, not by rejecting behavioral economics (see recent papers in Econometrica, the Quarterly Journal of Economics, and other journals).

The papers in this book generally present no challenge for the professional economist. Many are just superficial, and some are egregiously incorrect. Perhaps the most bizarre is the paper by Bernard Guerrien, "Can We Expect Anything From Game Theory?" Guerrien asserts, without evidence, that "game theory models are always `stories', like fables or parables, with no relation to real-life situations." Really? What about auction theory, which has been so successful in organizing the sale of bandwidth in many countries? How does one explain the role of game theory in revolutionizing Industrial Organization? Moreover, game theory is the basis for all of behavioral economics, and accounts for its experimental success in large part. Guerrien's description of game theory is quite faulty. "...players are supposed to choose separately and simultaneously one element of their strategy set...", says Guerrien, and launches a broad critique on that basis. But, he is just wrong. Evidently he never heard of extensive form games or behavioral strategies.
Post-autistic economics ignores the innovative work of many innovative, nonstandard, economists, including Ernst Fehr, Abijit Banerjee and Esther Duflo, Colin Camerer, Samuel Bowles, George Loewenstein, Daniel Kahneman, Benoit Mandelbrot, Edward Glaeser, David Laibson, Matthew Rabin, Bruno Frey, Elinor Ostrom, Barkley Rosser, Armin Falk, Simon Gaechter, Jean Tirole, Aldo Rustichini, and many others. It ignores neuroeconomics, econophysics, and the notion of the economy as a complex system, with its stress on agent-based modeling. These researchers transform analytical economics to meet the empirical challenges posed by new data. Some of them are extremely critical of neoclassical theory, and others are a bit more tolerant. Some of them call themselves behavioral economists, neuroeconomists, complexity economists, and the like, while others simply say they do economics, without the need to identify with a school of thought. Unlike leaders of the post-autistic school, however, they do not urge a retreat to philosophy or some defunct 20th century doctrine.
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4 of 7 people found the following review helpful
4.0 out of 5 stars Reasonable discussion of neoclassical economics, November 16, 2006
By 
M. A. Krul (London, United Kingdom) - See all my reviews
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This review is from: A Guide to What's Wrong with Economics (Anthem Frontiers of Global Political Economy) (Paperback)
Fullbrook's collection of critical papers titled "What's Wrong With Economics", with contributions from twenty-six different authors on seven core subjects, is a reasonable introduction to heterodox economics for the layman with an interest in the 'technical' aspects of economics. Practically all the essays in this book are written from a radical neoclassical perspective criticizing the mainstream, although the writers vary much in the degree of their radicalism. Some authors just call for more attention to local circumstances or the environment, others, such as Steve Keen, Geoffrey Hodgson and Bernard Guerrien seek to demolish certain fundaments of the neoclassical mainstream.

None of the papers, perhaps with the exception of Keen's, are very difficult to read, and most are short and to the point, which is very pleasant. The quality is varying, with some papers making rather weak points that could be avoided with just minor surface changes of mainstream practice or that attack precisely things that are not the issue of neoclassical economics, such as with Anne Mayhew's contribution. Generally though the essays are reasonably interesting and informative, and because of the excellent scope of this book, a balance between width and depth is achieved that allows any intelligent reader to get a primer on what is, indeed, wrong with economics. The only major flaw is that it contains no criticisms other than radical neoclassical; there's no neo-Ricardian or Marxist in sight.
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6 of 10 people found the following review helpful
4.0 out of 5 stars Is the economics news trustworthy?, July 9, 2005
By 
Arista (Oregon, USA) - See all my reviews
This review is from: A Guide to What's Wrong with Economics (Anthem Frontiers of Global Political Economy) (Paperback)
This is an insightful and very important book. Its focus is the underlying assumptions that dominate economics in the news, political debate, and the academy. The writing is largely accessible to the intelligent lay person. (One does not need to be a mathematician.) The authors put the current consensus, neoclassical economics, to the test of the real world. It doesn't do well, and they point to a better way. (For a sort of preview of this book, see "Let there be markets," by Gordon Bigelow, in the May '05 _Harper's_.) After reading _A Guide_, you'll undoubtedly have some new questions about, for example, the next report that GDP ("the economy") is growing. If this volume whets your appetite, see _The Wealth of Nature_ (2003), by Robert L. Nadeau. (Note: Nadeau's book is less lay reader-friendly, though it too does not require a mathematician.).
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23 of 48 people found the following review helpful
1.0 out of 5 stars Mathematical analysis is not what's wrong with economics, May 7, 2005
By 
Michael Emmett Brady "mandmbrady" (Bellflower, California ,United States) - See all my reviews
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This review is from: A Guide to What's Wrong with Economics (Anthem Frontiers of Global Political Economy) (Paperback)
Fullbrook(F)has edited a collection of essays written by a group of heterodox economists belonging to the American Post Keynesian,Institutionalist,and Cambridge Keynesian schools of thought.Underlying most of the essays is the explicit or implicit belief that the use of formal mathematical and statistical tools by mainstream(neoclassical)economists has been counterproductive because the models used by such economists are not relevant to the real world.I will concentrate my review on Part V of the book,titled"Misuse of Mathematics and Statistics".First,there are a number of problems with the way in which particular mathematical and statistical techniques are used and applied(misused and misapplied)by mainstream(neoclassical)economists.Both J M Keynes and Benoit Mandelbrot pointed out that mathematical modeling in economics must allow for interdependencies,multiple equilibria,and feedback effects,while statistical applications to economics(econometrics)must first concentrate on the analysis of the data.An example would be to use a chi-square or Lexis-Q test for goodness of fit instead of just assuming that the normal(lognormal,binomial,etc.) distribution can be applied.Unfortunately,the essays by S.Keen and D.Gillies on mathematical economics and the essay by S.Ziliak on economic statistics and econometrics contain many unsupported claims,as well as errors of omission, that have little,if anything,to do with the attempts made by Keynes and Mandelbrot to convince economists to be much more careful and selective in their initial use of particular techniques .Ziliak(and his frequent coauthor, D.N. McCloskey)fails to realize that the problem facing econometricians is much,much more severe than just the apparent failure of most econometricians to successfully differentiate between the concepts of statistical significance and economic significance.The problem is that econometric practice is founded on the a priori belief that practically all analysis of economic data can be based on the assumption of normality.In fact,the reverse is the case.In general,the normal probability distribution does not come close to being a correct statistical approximation of most economic data.This was the major point made by Keynes in his 1939-40 exchange with Tinbergen on the logical foundations of econometrics.It has been one of the major points made by Mandelbrot since the mid 1950's.Nowhere in Ziliak's essay will the reader get these points because neither Keynes nor Mandelbrot are mentioned anywhere.Gillies' article is marred by his failure to point out that the mathematics of field theory,electron spin theory,string theory and super string theory in mathematical physics ,like much of neoclassical economics,has little or no empirical and/or experimental support now or even in the distant future.Gillies' claim that Keynes's footnote on p.280 of the General Theory meant that the mathematical analysis in chapter 20 could be ignored reveals Gillies' mathematical innumeracy and ineptness,since this chapter provides the mathematical proof of Keynes's claim that stable unemployment equilibriums, with associated involuntary unemployment levels,could occur due to the multiple equilibrium nature of capitalist economies.Of course,Keynes had explicitly provided his readers in chapter 19,pp.261-262,with the major result of his theory,that only in the case of a marginal propensity to spend with a value of 1(or if the mpc+mpi=1=mpc+mps,where the mpc is the marginal propensity to consume,mpi is the marginal propensity to invest,and mps is the marginal propensity to save)will a full employment equilibrium occur.Chapters 20 and 21 provide the interested reader with the formal mathematical derivation of the result stated by Keynes in chapter 19.Keynes successfully generalized neoclassical theory in chapters 20 and 21.Hence the footnote at the bottom of p.280.A reader who is not interested in the manner in which Keynes derived his result can skip this part of the chapter.In conclusion,Gillies' claim that the General Theory is a qualitative theory without any mathematical foundation is simply false(Gillies,p.197).Keynes's general theory is specified by the condition that w/p=mpl/(mpc+mpi),where w/p = the real wage.Keen's article claims that the theory of the perfectly competitive firm is based on a mathematical error.This claim is simply false.The theory is based on the subjective assumption by the owner of such a firm that it is impossible for him to raise or lower his price.Given this assumption,the firm's demand curve will appear as a horizontal line,which is the only way you can economically model such a firm.The conclusion is that he will receive the same price for different amounts of his output.Only after the basic economic assumptions have been specified will a mathematical representation consistent with the economic assumptions be supplied.The best exposition is in the third edition of C E Ferguson,1972,Microeconomic Theory,pp.123-124,251-253.Section 8.4,pp.255-270.Keen is correct that the 1957 article by Stigler in the Journal of Political Economy contains a mathematical error.Ferguson was well aware of this article(see Ferguson,1972,p.317).He correctly ignores Stigler's attempt to provide a purely mathematical foundation for the perfectly competitive firm without first specifying the economic assumptions that must go first.What is wrong with economics is the failure of the economics profession to grasp the mathematical proof that Keynes constructed in the GeneralTheory in chapters 20 and 21 or comprehend the optimality condition spelt out by Keynes on pp.261-262 of the General Theory. None of the authors in this book have the slightest clue about what Keynes did.It is better to go and buy a copy of the General Theory than purchase this book in its current form.
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0 of 6 people found the following review helpful
5.0 out of 5 stars good book, May 14, 2007
This review is from: A Guide to What's Wrong with Economics (Anthem Frontiers of Global Political Economy) (Paperback)
A Guide to What's Wrong with Economics covers several papers on the problems about neo classical economics.
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