Heterodox Challenges in Economics: Theoretical Issues and the Crisis of the Eurozone

The aim of these chapters, or lessons as they were called in the Italian edition, was to answer the simple question: “What should an informed and committed citizen know about economics?” The lessons were also directed at students of economics and other disciplines who are bored with conventional teaching or are simply curious. They were also aimed at many opinion leaders and politicians who express views on everything, but who privately confide that they have never understood economics. Above all, they were for the thousands of people who in these difficult years, particularly in Italy, have done their best to grasp and then clear away the mountain of lies that has buried us, primarily the idea that fiscal austerity was necessary in the name of Europe. My aim was to reinforce this effort by providing a sound analytical background for rejecting mainstream economic recipes. ... After explaining the approach of classical economists and Marx in Chap. 2, in the third we look at mainstream theory, showing its implications for contemporary debate, for example, on the flexibility of the labour market and on the economic constitution of Europe. In Chap. 4, we see how the combination of classical theory and the critique of Keynes are a formidable instrument for analysing economic crises. In Chap. 5, we discuss the role of money, seeking to show that there is nothing mysterious or mystical about it. In this chapter, we also illustrate what for non-conformist economists is the central node of economic policy, the balance of payments constraint (here my MMT friends will disagree with me). Fortified by these notions, in the last two chapters we return to the question of Europe and the crisis in the eurozone.