Heterodoxy over the Failed Mainstream

The worldwide financial crisis with its origins in the United States (US) in the mid-2000s resulted in an economic slowdown spreading across the developed and the developing countries in the world. The financial crisis is said to be an outcome of economic policies that had been designed on the basis of the economic principle of optimisation which assumes that the objective of the consumer and the producer is to maximise utility and profit, respectively. There is an underlying assumption of “perfect level of rationality of market participants and of the information available to them” necessitating state intervention in the functioning of the economy to be kept at a very minimal level.

Many economists, including Robert Shiller, the winner of the Nobel Prize in Economics in 2013, have argued that mainstream economics wrongly teaches theories which assume openly competitive markets and well-informed buyers and sellers which eliminate the risk of asset prices rising beyond a sustainable level for a long period (Phillip 2013). The mainstream teaching of economics with its high emphasis on mathematical modelling along with many unrealistic assumptions has reduced the discipline to a branch of study that has moved far away from how economics works in real life. It is in this context that C T Kurian’s book brings the relevance of economics as a subject both from the point of view of policymakers as well as participants in the economy to the fore.