Book review: Economics (Ben Mathew)

I just finished reading Ben Mathew's 2013 book, imaginatively titled Economics. The subtitle is more descriptive though: "The remarkable story of how the economy works". The subtitle is also an accurate statement, as how the economy works does make for a remarkable story. Unfortunately, Mathew only provides a narrow (and biased) part of the story.

Don't get me wrong. This book is beautifully written, and will be easy for most non-economists to follow. I really enjoyed large parts of it. It is also quite humorous in parts. Consider this bit, which is both quite true and quite funny:

A Scottish philosopher by the name of Adam Smith figured out the answer and wrote it down in a book called An Inquiry into the Nature and Causes of the Wealth of Nations. The massive tome was published in 1776 and invented modern economics. All economists have a copy on their shelf, and some have even read parts of it.

Guilty as charged: I have a copy of The Wealth of Nations in my bookshelves, and I have even read parts of it (but not the whole book).

What lets this book down is the single-minded market fundamentalist approach. This book is everything that critics of 'neoliberal economics' love to hate. Mathew puts capitalism, the market, and prices at the centre of the 'remarkable story', which is sensible. However, he bats away or ignores critical problems with markets, such as externalities, information asymmetries, and monopoly or market power. Public goods do get a mention, but not until the last five pages of the book. Aside from public goods, the only market failures that are discussed are those caused by government intervention: price controls and taxes.

This uneven treatment isn't going to convince many readers, and those who area already skeptical of markets and economists will have cause to double-down on their skepticism. The market fundamental approach is understandable coming from Mathew, who was trained at the University of Chicago, the epicentre of 'price theory'. However, given how wonderfully Mathew writes, I feel like this was a real missed opportunity to have a book that truly describes the remarkable story of how the economy works, not based on a market-centred idealist view, but in all of its messy glory. Perhaps readers should read this book alongside Michael Sandel's What Money Can't Buy (which I reviewed here), and take the average of the two?