Economics in Two Lessons Chapter 15

by John Quiggin on July 3, 2018

My long-running book-in-progress, Economics in Two Lessons is nearly done. Thanks to everyone who commented on the first 14 chapters.

Here’s a draft of Chapter 15: Monopoly and the Mixed Economy. Only one more chapter to come after this

Comments, criticism and praise are welcome.

Earlier draft chapters are available. These aren’t final versions, as I am now editing the entire manuscript, but you can read them to see where the book is coming from.

Table of Contents
Chapter 1: What is opportunity cost?
Chapter 2: Markets, opportunity cost and equilibrium
Chapter 3:Time, information and uncertainty
Chapter 4:Lesson 1: Applications.
Chapter 5: Lesson 1 and economic policy.
Chapter 6: The opportunity cost of destruction
Chapter 7: Property rights, and income distribution
Chapter 8:Unemployment
Chapter 9: Market Failure
Chapter 10: Market failure -Externalities and pollution.

Chapter 11: Market failure: Information, uncertainty and financial markets

Chapter 12 on Predistribution

Chapter 13 on Redistribution

Chapter 14: Policy for full employment.

Feel free to make further comments on these chapters if you wish.



Anarcho 07.03.18 at 9:35 am

I would recommend keeping the bit about the pencil in — particularly as it mentions the hierarchies within the workplace. After all, these are autocratic structures in which the many are ruled by a few — in short, there is a very visible fist (and behind that, the power of the State).

After all, Milton Friedman contrasted “central planning involving the use of coercion — the technique of the army or the modern totalitarian state” with “voluntary co-operation between individuals — the technique of the marketplace” as two distinct ways of co-ordinating the economic activity of large groups (“millions”) of people. (Capitalism and Freedom, p. 13)

Yet the capitalist workplace is based on central planning and the use of coercion — obey my orders or be fired. Which is why libertarians have always been socialists (the American propertarians stealing the name in the 1950s, 100 years after Joseph Dejacque coined the term in 1857…)


nastywoman 07.03.18 at 2:24 pm

”Monopoly” is a game where players buying and trading properties, and develop them with houses and hotels. Players collect rent from their opponents, with the goal being to drive them into bankruptcy.

Which currently is most successful in America because rent and housing cost are way over the 30 percent of an average Americans Income – and as ”the players” have the Monopoly in setting housing and rent prices -(which have very little to do with any ”sane markets” or – god help US – ”opportunity cost”) – the ”Mixed Economy” is somewhere else – but NOT in US.

Perhaps somewhere – where one doesn’t pay for education or health-care – which for sure will bankrupt all ”us players” who are NOT independently wealthy?

And that’s what I never understood about the monopoly-thingy –
like for example Italy – Italy has this monopoly of real expensive bags and coffee-machines – and like in ”the rules of monopoly” these very expensive bags and coffee- machines get more and more expensive – and all kind of people -(some of them Chinese) – try to break this monopoly with offering (very expensive) bags and Coffee-Machines a lot cheaper – BUT still they are totally unable to break the monopoly?

How about that?


George Berger 07.05.18 at 2:56 am

Thank you for writing this book and for making it available online, as you wrote it. I know very little economics. Having had Samuelson inflicted on me in college long ago, turned me off. I feel I should learn some and chose your book as my text. I shall read it after you have posted the final chapter.


John Quiggin 07.05.18 at 5:28 am

@3 Final chapter will be up soon. Download it quickly, as the publisher has asked me to take it down once it goes to press. Of course, it will be well worth paying for the final version :-)


George Berger 07.05.18 at 6:28 am

Will do. Of course it would be well worth having a better pension……


satur9 07.06.18 at 2:21 pm

Thank you for this book. Do you have an e-book version of it available somewhere?


John Quiggin 07.07.18 at 12:48 am

@6 The draft chapters are up but as I mentioned, I will have to take them down once the book goes to press. I’m confident there will be an e-book version. It won’t be free, but I’ll be pushing for this to be a cheap “trade” book rather than an expensive academic text.

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