We hear it from politicians, journalists, activists — anyone who's paying attention. The clamor is near unanimous, or so it seems: We need to break with the capitalist system. Technology and economics have gotten us into a huge mess: (a) The planet is at great risk. (b) From France to Chile to the United States, social tension is at an all-time high, largely the result of increasing income inequality. (c) Stable jobs seem like a thing from the past. The list goes on and on. So, we need to get rid of a system that does not work and of the technocrats who designed it.
Economists have not always been at the forefront of policy. However, their influence has increased substantially in the past thirty or forty years. As such, we might say that the problem is not just the market economy but also economics as an academic discipline.
Some swear by economics, some swear at economists. As I will argue in the next few hundred pages, both are right in some sense and both are wrong in a different sense.
The world and the world's economy have changed a lot in the past half century or so.
The microeconomics textbook, however, has really not evolved that much since Samuelson's Economics was first published in the 1940s. The graphs got better, new examples were added, but the core has remained the same for the longest time.
This book is an attempt to correct the way economics is taught and at the same time an attempt to answer the critics' wake-up call. The book's motto might be
Technology and the market economy got us into the present mess, but technology and the market economy are the only hope of getting us out of the present mess.
Instructors:ask me about solutions to end-of-chapter exercises, slides, and other materials
1.0: August 25, 2020
1.1: September 10, 2020. Fixed a number of typos and minor inaccuracies.
1.2: December 31, 2020. Added section on COVID-19. Added end-of-chapter problems. Fixed a number of typos.
1.3: August 31, 2021. Added some content and some end-of-chapter problems. Fixed a number of typos.