Since I’ve already been giving grief to prominent economists today, I might as well annoy one of our regular commenters (whom I actually quite like) still further, by linking to this “Harvard Crimson article”:http://www.thecrimson.com/article.aspx?ref=522288 on the political economy of the textbook market (many thanks to the correspondent who sent it to me).
Since N. Gregory Mankiw returned to Harvard to teach the College’s introductory economics class, 2,278 students have filled his weekly lectures, many picking up the former Bush advisor’s best-selling textbook, “Principle of Economics” along the way. So, what has professor of economics Mankiw done with those profits? “I don’t talk about personal finances,” Mankiw said, adding that he has never considered giving the proceeds to charity. … With textbook prices sky high, some professors feel an obligation to donate the proceeds they receive by assigning their own textbooks for their classes. Kenneth A. Shepsle, the professor of government who teaches Social Analysis 46: “Thinking About Politics,” allows students to e-mail suggestions for where the charity money should go. … Similarly, the professor who introduces thousands of Harvard undergraduates to what is just finds it unjust to profit from textbook sales.
… Like many introductory textbooks, Mankiw’s book has seen frequent republication. Retailing for $175 on Amazon.com, “Principles of Economics” has come out in four editions since its first publication in 1998. Economics chair James K. Stock is known for complaining in class about this practice, although not about “Principles of Economics” in particular. “New editions are to a considerable extent simply another tool used by publishers and textbook authors to maintain their revenue stream, that is, to keep up prices,” Stock wrote in an e-mailed statement. He said that while he requires his own book for his class, he encourages students to buy older editions and international copies, and said one student bought a Korean copy for 15 percent of the domestic list price. “Some new editions really do make substantial intellectual improvements, but I would suggest that is the exception not the rule,” Stock said. … Mankiw asserts that “Principles of Economics” has been the bible of Harvard economics concentrators since before he took over “Economics 10.” … “The textbook chose the professor, the professor didn’t choose the textbook,” Mankiw said.
If he’s being quoted accurately, Mankiw seems unduly defensive. If I were him, I’d take a much more pro-active stance. I’d claim that I was teaching my students a valuable practical lesson in economics, by illustrating how regulatory power (the power to assign mandatory textbooks for a required credit class, and to smother secondary markets by frequently printing and requiring new editions) can lead to rent-seeking and the creation of effective monopolies. Indeed, I would use graphs and basic math in both book and classroom to illustrate this, so that students would be left in no doubt whatsoever about what was happening. This would really bring the arguments of public choice home to them in a forceful and direct way, teaching them a lesson that they would remember for a very long time.
The alternative – that a benevolent and all-seeing regulator named Gregory Mankiw has chosen the _very best_ textbook available for the students, and that any rents flowing from the $175 cover price were completely irrelevant to his decision making process – seems to be closer to Mankiw’s preferred explanation, and I see no reason whatsoever to doubt his sincerity (really – I’m not being sarcastic here, even if, like Stock, I generally consider the frequently updated textbook game to be a very fishy business). But it’s a claim that’s surely rather hard to reconcile with the usual political lessons we’re expected to draw from econ 10, econ 101 and their cousins.
