Rescues economic theory from mathematics, restoring a realistic approach to human motivations and behavior in the real world economy

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Copyright © 2001, University of Michigan. All rights reserved.


Economics as a Social Science is a highly readable critique of economic theory, based on a wide range of research, that endeavors to restore economics to its proper role as a social science. Contrary to conventional economic theory, which assumes that people have no free will, this book instead bases economics on the realistic assumption that human beings can choose; that we are complex beings affected by emotion, custom, habit, and reason; and that our behavior varies with circumstances and times. It embraces the findings of history, psychology, and other social sciences and the insights from great literature on human behavior as opposed to the rigidity set by mathematical axioms that define how economics is understood and practiced today.
Andrew M. Kamarck demonstrates that only rough accuracy is attainable in economic measurement, and that understanding an economy requires knowledge from other disciplines. The canonical hypotheses of economics (perfect rationality, self-interest, equilibrium) are shown to be inadequate (and in the case of "equilibrium" to be counterproductive to understanding the forces that dominate the economy), and more satisfactory assumptions provided. The market is shown to work imperfectly and to require appropriate institutions to perform its function reasonably well. Further, Kamarck argues that self-interest does not always lead to helping the general interest.
Economics as a Social Science examines and revises the fundamental assumptions of economics. Because it avoids jargon and explains terms carefully, it will be of interest to economics majors as well as to graduate students of economics and other social sciences, and social scientists working in government and the private sector.
Andrew M. Kamarck is former Director, Economic Development Institute, the World Bank.

Andrew M. Kamarck is the retired Director of the Economic Development Institute at the World Bank and the founding Director of the Bank's economics complex. Prior to World War II he worked in the International Section of the Federal Reserve Board and with the Secretary of the Treasury. During the war Kamarck was posted to the Allied Control Commission for Italy, where he supervised the Banca d'Italia, until he was assigned as Chief of the U.S. Financial Intelligence in Germany in 1944.

Back at the Treasury in 1946, Kamarck chaired the Staff Committee for the cabinet-level National Advisory Council for International Monetary and Financial Problems, which set the financial, fiscal, foreign exchange, and monetary policy guidelines for the Marshall Plan. Over the next twenty years he held the positions of U.S. Treasury Representative in Italy; World Bank Economic Adviser on Europe, Australasia, and Africa; Regents Professor at UCLA; and Research Associate at the Harvard Center of International Affairs; then returning to the World Bank as Director of the Economic Development Institute. Over his long and varied career, he has authored or co-authored many books on a wide range of economic subjects.

"Andrew Kamarck has written a refreshing and inspiring book, an intelligent critique of formalist theory. He transcends the narrow traditional conceptions of greed and rationality and more generally highlights the inherent limitations of economics. He draws our attention beyond the exchange transactions in the market to the widely neglected phenomena of gift, coercion and preying. Internal consistency, he argues, is not a sufficient condition for good theory."
—Dr. Armand Clesse, Director, Luxembourg Institute for European and International Studies

- Dr. Armand Clesse, Director, Luxembourg Institute for European and International

"Every discipline needs iconoclasts. Like Khrushchev's blind horse, it is all too easy to keep in the same old track even as the world changes. Andrew Kamarck provides us with a fine iconoclastic critique of economics by an insider trained in the theory and an experienced practitioner of the craft. Economists will benefit from reading it, and those most sure of themselves should study it with the greatest care."
—Jan Hogendorn, Colby College

- Jan Hogendorn, Colby College

"Andrew Kamarck presents a trenchant critique of the set of assumptions that are made about economic behavior in mainstream economic analysis. He argues that the basic axioms and assumptions are oversimplified in order to produce rigor and precision at the expense of capturing the complexity and variations that characterize real-world economic behavior. He argues that much of the sometimes-elegant and sophisticated mathematical/statistical modeling fails to capture crucial aspects of real-world economic behavior, leading to erroneous conclusions and often misguided policy prescriptions."
—William M. Capron, Professor Emeritus of Economics, Boston University

- William M. Capron, Professor Emeritus of Economics, Boston University