Economics for Real

Introduction

Uskali Mäki's realist philosophy of economics¹

Aki Lehtinen

1 Introduction

Mainstream economics abounds with complicated mathematical models that use a variety of unrealistic assumptions. Assumptions such as infinitely living individuals, perfectly balanced budgets, perfectly rational individuals, zero transaction costs, constant returns to scale, fixed preferences, fictional auctioneers, and societies with no government are regularly employed in economic modeling. Furthermore, some things such as institutions, habits, and changing preferences seem to lean on economic phenomena but are summarily set aside under the suspicious-sounding but omnipresent ceteris paribus clause. Given these features of economics, it is not surprising ...