Econ textbook racket..

Prof. Henry Farrell had written a scathing piece on textbook racket, particularly the economic ones. Core, the free economics textbook by INET institute adds to the discussion.

First Farrell:

The Orange County Register reports that Alain Bourget, a math professor at Cal State Fullerton, is in danger of serious disciplinary action from his employer. His crime? Refusing to teach the assigned textbook, which costs $180 and was co-written by the chair and vice-chair of his academic department. According to the Register, the mathematics department decided way back in 1984 to “approve” the text and hasn’t revisited its decision since. Bourget wanted to use two other textbooks instead — one of which costs $76, and the other of which was free. Maybe there are other underlying complications that the Register hasn’t reported — but the story reinforces a strong basic message. College textbooks are a racket.

Here’s how the racket works

I teach international relations at a university where political science is the most popular major. As well as teaching intensive seminars, I sometimes teach big entry level courses with 300 students. Every year I do this, I get free textbooks during the summer from academic publishers who want me to assign them. I get phone calls and e-mails from publishers’ reps, asking if they can come around and talk to me about all the great books that they have on offer. Occasionally, publishers contact me to see if I’ve any interest in writing a textbook myself. I politely decline all these gracious offers on ethical grounds. I simply don’t think it’s right or fair to force college students to pay hundreds of dollars, in addition to their tuition, for books that replicate knowledge which is freely available elsewhere.

College textbook publishers charge vast and extortionate amounts for their textbooks for one simple reason. They do it because they can. Students usually have to take a few required big courses for their major, and they haveto buy the required textbooks for these courses. This means that the market is price insensitive (which is economic jargon for saying that demand doesn’t go down as much as it should when prices go up). Professors often don’t care as much as they should about the costs of the textbooks — after all, they don’t have to pay those costs themselves. Students do usually care, but they don’t have any choice in the matter — they have to buy the textbooks they are required to buy. Businesses can make big, big profits from selling to price-insensitive markets, since they can jack up prices without weakening demand for their product. It’s a sweet deal for academic publishers, but not so great for students.

Typically it’s textbooks for required courses that are most expensive, while textbooks for “elective” (optional) courses are more reasonably priced. However, this isn’t always true. For a couple of decades, every graduate student of international relations effectively had to read Kenneth Waltz’s short but highly influential book, “Theory of International Politics,” and the publisher charged hundreds of dollars for it. When the influence of the book began to fade, the price fell dramatically.

He takes on Greg Mankiw’s books which cost $300!:

t may be that economists are blind to the problems of this market becausethey are themselves involved in it. Take, for example, Gregory Mankiw, who is the Robert M. Beren Professor of Economics and former head of the Council of Economic Advisers. He has also regularly taught Harvard’s required introduction to economics course, where he has required students to buy his own textbook (which now costs a smidgeon under $300), while refusing to consider donating his profits from this captive market to charity. I suggested seven years ago, that Prof. Mankiw, who is skeptical of regulators and strongly committed to free markets, consider taking his actions to their logical economic conclusion.

If I were him, … 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 [to them]. This would really bring the arguments of public choice [economics] home to them in a forceful and direct way, teaching them a lesson that they would remember for a very long time.

Inexplicably, Prof. Mankiw has yet to take up this suggestion. Doubtless, he thinks that his textbook is the very best introductory textbook on the market.

Core points to the views of authors of the free book:

Open access is a principle of CORE: our electronic textbook is free of charge to students. We asked our contributors their view on the cost of textbooks for other classes they teach.

Professor Diane Coyle of the University of Manchester is one of the authors of our forthcoming unit on intellectual property. In response to Farrell’s article, last week she tweeted a link to a student blog which shows how the cost of economics textbooks means that students look for scarce second-hand copies, old editions and often pirated versions.

She says that students should not be having to find additional money to buy coursebooks. “So much of the material is available free online now–including CORE of course–that there is less and less reason for setting a required textbook. If one is required, university libraries need to offer digital access under a suitable licence.”

Professor Juan Camilo Cárdenas lectures at the Universidad de Los Andes in Colombia, and is a co-author of our unit on Economics and the environment. He is helping us to deliver our free teacher resources, especially classroom economic games.

In Colombia, he says, if a student has to buy four or five textbooks per semester, the textbook cost of education each semester would be a month’s salary at minimum wage. “The main textbook for the introductory microeconomics course I teach costs about USD$50. The used books market is very thin. If a student has to buy four or five of these for her classes, we are talking about $200 a semester.”

Professor Arjun Jayadev teaches CORE at UMass in Boston and also the new CORE course at Azim Premji University in Bangalore: “My students are not wealthy, so I would ideally give them something free, or at most something in the range of $20 or $30.”

Economists who point to scams and rackets everywhere should also look at their own backywards..

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