Thursday 12 March 2020

Differing perspectives on introductory economics textbooks

The latest issue of the Journal of Economic Literature has two very interesting articles, offering different perspectives on teaching introductory economics. The first article (ungated earlier version here) is by Samuel Bowles (Santa Fe Institute) and Wendy Carlin (University College London), two of the principals of the CORE team, the authors of the free e-text The Economy. Their article is interesting because it talks about the development of textbook resources over time, with a particular focus of the contribution of Paul Samuelson's seminal 1948 textbook:
Samuelson was aware even then that a substantial fraction of all students in higher education would take an introduction to the subject; those who would go on in economics were a minority...
That key issue (that most first-year economics students will do no economics after that first paper) has not changed in the 70-plus years since Samuelson's text was first published. Bowles and Carlin then go on to present some reasonably sophisticated textual analysis comparing Samuelson's text with two widely used modern textbooks, one by Gregory Mankiw, and one by Paul Krugman and Robin Wells. They then compare the CORE textbook with Krugman and Wells. They identify several important differences in the modern textbooks compared with Samuelson's textbook, such as the:
...shift away from Samuelson’s early engagement with the most pressing economic problems of the day to a focus on economics as individual decision making, “thinking like an economist,” and the application of market-clearing supply and demand models to a larger domain of economic problems.
In contrast, the CORE text is explicitly written with a focus on the issues of our times, like climate change and financial crises, firmly in mind. The other key difference between CORE and other modern textbooks is the topic ordering. Mankiw and Krugman/Wells essentially start with supply and demand, and branch off from there to teach alternative market structures as exceptions to the perfectly competitive market. However, the CORE text goes back to Samuelson's approach, about which Bowles and Carlin note that:
Even within part three, Samuelson adopts an unconventional ordering of topics both by previous and by today’s standards. The firm’s output and pricing decisions are presented first for the monopolistically competitive firm (“includes most firms and industries” p. 492) and then finally a section on the perfectly competitive firm (“includes a few agricultural industries”) in which he introduces right at the start “decreasing costs and the breakdown of competition” (p. 505).
That 'unconventional ordering' of monopolistic competition as the norm, with perfect competition (supply and demand) as an exception, is the model applied in the CORE text. We use the CORE textbook in ECONS101 at Waikato, and I have a lot of sympathy for their approach, not least because it engages students who have done economics at high school in topics that they are unfamiliar with from the beginning (such as constrained optimisation and game theory), demonstrating that first-year economics is not simply a do-over of Year 13 economics.

The second article (ungated earlier version here) is by Gregory Mankiw (Harvard University), author of the widest selling introductory economics textbook. In the article, Mankiw explains his philosophy for writing textbooks:
I have always thought that instructors, especially in introductory courses, are like ambassadors for the economics profession... Just as ambassadors are supposed to faithfully represent the perspective of their nations, instructors in introductory courses (and intermediate courses as well) should faithfully represent the views shared by the majority of professional economists.
There is a clear difference in emphasis from the CORE authors. Bowles and Carlin take a much more explicitly student-centred approach, while Mankiw seems to me to take a discipline- or content-centred approach. Or at least, that's my reading of the two articles. Mankiw then goes on to defend the focus on supply and demand in his textbook:
To understand how market economies work, the single most useful tool is the model of supply and demand. When teaching the introductory course, therefore, this model should be developed as fully and consistently as possible. This tenet was my guiding beacon as I drafted my principles text. 
According to Mankiw, one of the key advantages of utilising supply and demand as a framework is that it allows for a clearer focus on welfare economics. I have a lot of sympathy for this argument as well. We used the Mankiw textbook for more than a decade in ECON100, before switching to the CORE textbook when we introduced ECONS101. Mankiw is still the required textbook for my ECONS102 class (Economics and Society), which has a more explicit focus on welfare economics.

Reading these two articles together was good for gaining an understanding of two competing perspectives on the teaching of introductory economics. It would have been more interesting had the two articles explicitly referenced each other - what would Bowles and Carlin say in response to Mankiw's insistence on supply and demand and the implication that the CORE text undervalues welfare economics? What does Mankiw think about the downplaying of the concept of elasticity in the CORE text? These and many other questions come to mind.

Although these two approaches appear contradictory, they need not be. I think it is useful to expose our economics students to both perspectives, which is why I am glad that they see the CORE text in ECONS101, and the Mankiw text in ECONS102 (albeit with lots of extra material from a range of perspectives added in). I'm increasingly of the opinion that the difference in focus of the two texts sets our students up well for future study in economics. Bowles and Carlin make the case for pluralism in their article, but argue against 'pluralism by juxtaposition', instead arguing that:
Pluralism can also be pursued, as Samuelson aspired to do, by integrating the insights of differing schools of thought and knowledge from other disciplines into a coherent paradigm. This can give students analytical tools borrowed from many schools or disciplines and help them to do economics rather than simply to talk about it. We call this pluralism by integration.
I'd argue that there my students who do both ECONS101 and ECONS102 get a more thorough pluralism by integration, involving two different perspectives. There is no perfect way to teach introductory economics. However, providing students with a range of tools and perspectives on how to understand economic problems is a great way to start.

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