the Microeconomics anti-textbook

Cover
Half title
Title
Copyright
Contents
Tables and figures
Acknowledgements
INTRODUCTION: OUR GOALS, AUDIENCE AND PRINCIPAL THEMES
	In brief
	The structure
	Our thesis
	The world-view of mainstream textbooks
	What’s wrong with this worldview?
	The textbooks and the Anti-Textbook
	Resources
	Suggestions for further reading
	Addendum: our sample of standard texts
1 WHAT IS ECONOMICS? WHERE YOU START INFLUENCES WHERE YOU GO
	1 THE STANDARD TEXT
		1.1 Economics is the science of choice
		1.2 Scarcity
		1.3 Opportunity cost
		1.4 Marginal thinking: costs and benefits
		1.5 Rational and self-interested individuals
		1.6 Markets are usually a good way to organize economic activity
		1.7 Governments can sometimes improve market outcomes
		1.8 Another government role: providing equity
		1.9 The equity–efficiency trade-off
	2 THE ANTI-TEXT
		2.1 The inherent tension with macroeconomics
		2.2 Scarcity and unlimited wants? Reconsidering the economic problem
		2.3 The individual versus the community
		2.4 The individual versus the corporation
		2.5 The trade-off between efficiency and equity reconsidered
		2.6 The homo economicus assumption and its pernicious effects
		2.7 Reconsidering the assumption of rationality
		2.8 Behavioural economics
		2.9 Concluding comment
	Suggestions for further reading
2 INTRODUCING ECONOMIC MODELS
	1 THE STANDARD TEXT
		1.1 Model building and model testing
		1.2 Examples of economic models
		1.3 Positive and normative economics
	2 THE ANTI-TEXT
		2.1 Textbooks ignore their own methodology
		2.2 Testing economic models in practice
		2.3 Core propositions are incapable of refutation
		2.4 When is a particular model useful?
		2.5 The rhetoric of economics
		2.6 The inseparability of positive and normative economics – and a word on the Art of Economics
		2.7 Paradigms and ideology
		2.8 Concluding remarks
	Suggestions for further reading
3 HOW MARKETS WORK (IN AN IMAGINARY WORLD)
	1 THE STANDARD TEXT
		1.1 What is a competitive market?
		1.2 The demand curve
		1.3 The supply curve
		1.4 Market equilibrium
		1.5 Comparative static analysis
		1.6 A government-regulated price ceiling: rent controls
		1.7 A government-regulated price floor: minimum wages
		1.8 Who bears the cost of sales taxes?
		1.9 The costs of taxation
	2 THE ANTI-TEXT
		2.1 The demand and supply model is sold as a generic tool
		2.2 How many markets are perfectly competitive?
		2.3 Is the competitive model a useful approximation?
		2.4 But don’t price floors cause surpluses and price ceilings shortages?
		2.5 What the texts don’t tell you about the competitive model
		2.6 Summing up
	Suggestions for further reading
	Addendum: the indeterminate and unstable economy
4 PEOPLE AS CONSUMERS
	1 THE STANDARD TEXT
		1.1 Utility maximization and individual demand
		1.2 Market demand
	2 THE ANTI-TEXT
		2.1 What if preferences are not ‘given’?
		2.2 Incomplete and asymmetric information
		2.3 Preferences and relative position
		2.4 Beyond textbook utility: measuring what matters
		2.5 Summing up
	Suggestions for further reading
5 THE FIRM
	1 THE STANDARD TEXT
		1.1 Production
		1.2 Costs of production in the short run
		1.3 Production and costs in the long run
		1.4 Profit maximization for perfectly and imperfectly competitive firms
	2 THE ANTI-TEXT
		2.1 Profit maximization re-considered
		2.2 Shaping the external environment: using power for profit
		2.3 Power and hierarchy within the firm
		2.4 What do firms’ costs actually look like?
		2.5 How do firms really set prices?
		2.6 Summing up: the firm in the textbook and the firm in reality
	Suggestions for further reading
6 MARKET STRUCTURE AND EFFICIENCY – OR WHY PERFECT COMPETITION ISN’T SO PERFECT AFTER ALL
	1 THE STANDARD TEXT
		1.1 The types of market structure
		1.2 Perfect competition
		1.3 Non-competitive markets: there is no supply curve
		1.4 Monopoly
		1.5 Other market structures
	2 THE ANTI-TEXT
		2.1 Can something be ideal if it is not equitable?
		2.2 Static efficiency is less important than dynamic efficiency
		2.3 Perfect competition is flawed even as a standard of static efficiency
		2.4 The textbooks concede the point
		2.5 Evidence, please!
		2.6 The omitted legal framework
		2.7 Conclusion
	Suggestions for further reading
7 EXTERNALITIES, COMMON ACCESS RESOURCES AND PUBLIC GOODS: THE UBIQUITY OF MARKET FAILURE
	1 THE STANDARD TEXT
		1.1 Externalities
		1.2 Common access resources
		1.3 Public goods
	2 THE ANTI-TEXT
		2.1 Externalities in reality
		2.2 Another look at common access resources
		2.3 Public goods – a second look
		2.4 Summing up: externalities, common access resources, public goods and the market economy
	Suggestions for further reading
8 THE MARGINAL PRODUCTIVITY THEORY OF INCOME DISTRIBUTION – OR YOU’RE WORTH WHAT YOU CAN GET
	1 THE STANDARD TEXT
		1.1 Introduction
		1.2 The demand for factors of production
		1.3 Determination of wages in a perfectly competitive labour market
		1.4 Wage differentials in competitive labour markets
		1.5 Monopsonistic labour markets
		1.6 Markets for other factors of production
	2 THE ANTI-TEXT
		2.1 Theoretical problems with the standard textbook story
		2.2 Compensating differentials in practice
		2.3 Empirical evidence and the competitive model
		2.4 Labour markets are not like the market for bananas
		2.5 How about dynamic monopsony?
		2.6 Does the marginal productivity theory help to legitimize actual factor prices?
		2.7 CEO and management compensation
		2.8 Concluding comments
	Suggestions for further reading
9 GOVERNMENT, TAXATION AND THE (RE)DISTRIBUTION OF INCOME: IS A JUST SOCIETY JUST TOO EXPENSIVE?
	1 THE STANDARD TEXT
		1.1 Public choice and government failure
		1.2. The costs of taxation
		1.3 Taxes: an international comparison
		1.4 The distribution of income and wealth
		1.5 Poverty
		1.6 Income redistribution
	2 THE ANTI-TEXT
		2.1 Public Choice and the unsubtle bias against taxation, government spending and income redistribution
		2.2 The subtle bias against taxation, government spending and income redistribution
		2.3 The equity–efficiency trade-off, reconsidered
		2.4 The pervasive costs of inequality
		2.5 Summing up
	Suggestions for further reading
10 TRADE AND GLOBALIZATION WITHOUT THE ROSE-TINTED GLASSES
	1 THE STANDARD TEXT
		1.1 The extent and growth of international trade and investment
		1.2 The economics of tariffs and import protection
		1.3 The argument for free trade
		1.4 Potentially valid arguments for protecting domestic production against foreign imports
		1.5 Illegitimate arguments for protection
		1.6 The global trading system
	2 THE ANTI-TEXT
		2.1 Problems with the textbook model
		2.2 Relaxing the textbook’s assumptions
		2.3 What’s missing from the textbooks
		2.4 Summing up
	Suggestions for further reading
11 CONCLUSION
	The distinction between positive and normative economics
	The rational individual
	The goals of equity and efficiency
	The assumption that more is better
	Methodological problems
	Overemphasis on perfectly competitive markets
	Textbooks ignore their own ideological leanings
	The implication that smaller government is better
	Downplaying the importance of the legal framework within which markets operate
	The omission of power
	The presumption in favour of free trade
	The omission of community
	Downplaying the ecological crisis facing humanity today
	Critical thinking about economics
	Suggestions for further reading
12 POSTSCRIPT: A CASE STUDY OF CLIMATE CHANGE AND THE TEXTBOOKS
	1 THE STANDARD TEXT
		1.1 The greenhouse effect and climate change
		1.2 Policies to reduce emissions
	2 THE ANTI-TEXT
		2.1 What do the texts really say about climate change science?
		2.2 What do the texts not say about climate change science?
		2.3 Carbon tax/Cap & trade: Silver bullet or simplistic prescription?
		2.4 Why are we waiting?
		2.5 Corporate power and the strategy of denial and doubt
		2.6 Psychology of climate change and evolving social norms
		2.7 Summing up
	Suggestions for further reading
Notes
Bibliography
Glossary
Index