Prelude to Political Economy: A Study of the Social and Political Foundations of Economics

Rating:
Summary: Remodelling government into game-theoretic reasoning
Review: This is a delightful and well-argued account of how government may be endogenised in economic analysis. The author would have us believe that government as an actor is in the same category as a consumer or an entrepreneur. Basu bravely questions conventional wisdom about assumptions held regarding institutions in economic analysis. Ambitiously titled "A Study of the Social and Political Foundations of Economics", the best part of this book are the author's numerous examples to show how economists have a poor understanding of motives, powerbases and collective action. There are just a few typographical errors (for instance the missing curve I in Figure 9.2 on page 207). However, what stops me from giving it five-star rating is that the book does have some conceptual infirmities (for instance, the author confuses the notion of government with the concept of nation-state, collective action is insufficiently explored, unconscious group processes not hypothesised at all, the terms lawful and legal are occasionally used interchangeably etc.). The most intellectually stimulating part of the book is the appendix that takes us through a hilarious account of the Fallacy of the Ignored Bridging Function. This was not an easy book to walk off from and I am glad to have finished it at one sitting. The author's clarity of expression and his sense of humour make this a book to remember and to recommend to others.