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Confessions of a pluralistic textbook author

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By Peter E. Earl

There is an enormous opportunity cost involved in writing economics textbooks, even if one shares the task with someone else. The two that carry my name (Microeconomics for Business and Marketing: Lectures, Cases and Worked Essays, Aldershot, Edward Elgar, 1995, and Business Economics: A Contemporary Approach, written with Tim Wakeley, Maidenhead, McGraw-Hill UK, 2005) were each three years in the writing and, in terms of career progression, it would have been wiser to spend the six years trying to write more papers for the best-ranked heterodox economics journals. However, if things are going to have any chance of changing in the economics classroom, someone has got to write a different kind of textbook. When I started writing the first one, the research audit madness hadn’t arrived and I had the supposed luxury of a full professorship. Little did I realize that I would eventually need to give up the latter to get a better academic environment, something I did shortly before the idea of the second textbook surfaced.

Thought it still sells steadily, my 1995 text was not written to make money but to show that it was possible to offer a pluralistic coverage of microeconomics without the length getting unviable and without diluting the content in order to cram more material in. This book, as its subtitle suggests, also took the radical step of including material that nowadays would normally be put on a companion website but which, in those days, was provided separately in study guides and instructors’ manuals. All this was done within the size of a typical text, which shows just how much padding there normally is.

My first textbook was addressed to lecturers every bit as much as to students, for I realized that many lecturers would not be aware of quite a lot of the heterodox material I sought to integrate. This came mainly from the ‘old behavioural’, post-Marshallian/evolutionary literature, and from consumer research within marketing, rather than from radical political economy. Even with the coverage of mainstream economics, I was trying to show how it was possible to include material that was failing to be introduced to students in standard textbooks, such as Lancaster’s characteristics-based model of demand (to which I then offered behavioural alternatives). I was also trying to help lecturers, who themselves may have been brought up on standard texts rather than original sources, to get a better picture of the evolution of microeconomic theory and how it is frequently misrepresented. Thus, for example, the book presents perfect competition in relation to Sraffa’s critique, after discussing Marshall’s evolutionary analysis, and goes on to explore differences between imperfect and monopolistic competition before moving on to look at non-marginalist approaches to pricing. Much of this owes a lot (as does most of what I’ve written) to Brian Loasby’s work.

The pluralism of my 1995 book wasn’t merely a ruse for getting heterodox economics into the economics classroom. Rather, I believe that there are many good insights in both mainstream and heterodox approaches and that it has been a mistake within economics to try to offer theories without stressing their limited contextual applicability. We’re all prone to do this: when I first got into Andrews’s work on normal cost pricing, I found myself wanting to use it as a general framework. However, I then read John Pickering’s review of Andrews and Brunner’s Studies in Pricing in the Economic Journal (September 1976, pp.  621–2) in which he criticized their approach as being not sufficiently general. I realized he was right about it not being general but wrong to expect theories to have a one-size-fits-all-cases capability. In some contexts, competition is really powerful and firms may have little choice of mark-up (as per Andrews and Brunner), but in others they may well enjoy brand equity and be able to charge premium prices (as per monopolistic competition). I also looked for bridges between rival approaches. In the case of pricing, this role was served by a Schumpeterian spin on Alfred Eichner’s work: today’s profits  enable firms to develop better products that may make it easier to keep at bay any rivals that might appear due to the profits they are currently making. Case studies and exam question post-mortems were used as means for honing up the reader’s ability to analyse the extent of discretion available in a particular context.

While the first book was a prototype, to ready the market, the second book, with Tim Wakeley, was a simpler one that we expected might make us some money. Tim had used the first book in class and invited me to work with him after McGraw-Hill approached him to write a heterodox text. Both of us were involved in MBA teaching at this time and we were aware that MBA students crave tools for use in the real world and are more likely than undergraduates to speak their minds if the theory seems out of touch with reality. Our book ended up being written with that audience in mind, mostly offering micro but also with macro material, including Minsky’s financial instability hypothesis. However, we suspect that its business orientation may partly account for its sales coming nowhere near the rosy forecasts of 6000 copies a year that McGraw-Hill had inferred from talking to heterodox lecturers in the UK. We set out in it to show why an entrepreneur would start a firm and then examined the challenges of growing a firm into a large corporation in the long run, comparing and contrasting mainstream and heterodox approaches along the way. To those from the left, it must seem far too much a book aimed at helping readers to accumulate capital.

I’m hoping others will soon come up with rival products, for otherwise I fear I shall succumb to the temptation to begin work on a third text in a few years’ time, to approach the challenge in a somewhat different way.

From: Pp.8-9 of World Economics Association Newsletter 2(3), June 2012

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