I’ve finished perusing the first ten units of introductory economics posted by CORE, an initiative funded by the Institute for New Economic Thinking, among others. A large team of well-regarded economists has collaborated to produce an online, open-access textbook, with other materials promised to come. You can view their handiwork here.
As you can imagine, being the author of a pair of introductory textbooks (here and here), I was eager to see what the CORE corps came up with. As it happens, their approach is quite different from mine. I think that’s a good thing: instructors should have a wide range of materials and approaches to choose from. More is better. (And I do hope there will be more.)
In this post I’d like to share my reactions to this new CORE-iculum. In the process I’ll indicate where their strategy differs from mine, but my main purpose is to describe and situate their text so you can consider whether it’s right for you.
The first thing to say is that, based on these first ten units, CORE has made a fundamental decision about how to respond to the call for new thinking in the teaching of economics: they have come to an understanding among themselves about what economics should look like, and they use their textbook to get it across. This has three consequences. (1) They include material not commonly found in introductory economics courses, for instance the Ricardo/Marx perspective on economic growth and the extended treatment of the evolutionary basis for prosocial behavior. (2) They exclude (at least up to this point) material commonly found in standard textbooks, like detailed treatment of elasticities or the role of transaction costs. (3) Their tone is generally authoritative: this is how it is. In this last respect, of course, they are similar to most other texts. (I have tried to deviate from this.)
Second, while the level of difficulty varies from one unit to another, much of their presentation is geared to students who will continue in economics. Here is an example: they make use of iso-profit curves in market analysis, rather than the usual reliance on marginal revenue and cost curves. Now of course these are all the same; the iso-profit curves are derived from MR and MC, so nothing substantive is at stake. The way I see it, becoming familiar with profit functions and their mapping on two-dimensional price and quantity space prepares students majoring in economics for the greater formalism that lies ahead. On the other hand, I doubt that most students reading this text will find iso-profit curves as intuitive as MR and MC, despite a paragraph or two in which the derivation of these curves is described. Similarly, much of the material in the first several units is presented at a level of formalism that goes beyond what is necessary for non-majors to get the point, but which will undoubtedly be useful for the next cohort of economics devotees. See, for instance, unit 5, which consists entirely of a long, detailed and precisely constructed two-person bargaining problem to illustrate Pareto Optimality, rent/surplus, and fairness. (My chapter on bargaining is less abstract and draws a few simple conclusions from Nash and Rubinstein.)
Third, most of the assumptions made by economists are off the radar. In a sense, this follows from the first point, since the main purpose of making assumptions explicit is to draw attention to their limitations. As an example, like other texts (but not mine), this book largely takes for granted the welfare interpretation of opportunity costs and willingness to pay—in other words, the treatment of market demand and supply curves as conveying welfare information. There is a bit of backpeddling in unit 10, but only well after the fusion of positive and normative analysis at the market level is a done deal. I will be the first to admit, however, that it is a judgment call as to whether the advantages of dwelling on assumptions outweigh the disadvantages. In my own teaching I take up a lot of time examining assumptions, but many students would prefer that I just get on with it. Others find this the most compelling aspect of my courses. As always, one size doesn’t fit all.
Now on to a few notes I took on specific units:
Unit 6 covers the theory of the firm. Surprisingly, most of the material is Marshallian. There is a passing mention of Coase and no coverage at all of Austrian perspectives—the role of entrepreneurship, discovery, etc. Also, this chapter does not reach out to management theory, which I see as a lost opportunity. Finally, there is hardly any reference to the public debates over corporate organization or strategy that draw many students to the study of economics. For me, this was probably the least effective unit.
Unit 8 does a fine job of introducing students to the experimental literature on market games. It’s much more extensive than my treatment, and I recommend it.
I found unit 9 to be the strongest of the first ten. It covers a number of topics in market dynamics and goes well beyond the rather thin coverage one typically finds in intro texts. It opens with a powerful story about how the blockade of southern cotton exports during the US civil war triggered a series of economic adjustments in England, India and elsewhere. Very nice! On the other hand, those who have followed the evolution of Austrian thinking will notice that this unit gives us the “old” knowledge argument of Hayek (complexity and fragmentation of knowledge) and not the “new” (the role of discovery through rivalrous trial and error). Both are in his classic essay, but attention has shifted toward the discovery process, which is more radical in its wider implications. There is a very lengthy treatment of the order process in financial markets which some students will find useful but is not integrated with the rest of the unit. The discussion of bubble dynamics in asset markets is extensive and quite effective, although I personally find asymmetric incentives (better to go with the herd) especially compelling and develop the argument in my macro text. Finally, the unit develops monopolistic competition as a framework for understanding short run sticky prices and quantity adjustment, presumably laying the ground for macro arguments to come—back to the 30s!
Unit 10 is a fairly standard treatment of market failure, primarily externalities and public goods, with a loose discussion of morality and fairness appended at the end. This leaves out multiple equilibria, which is my own obsession and which I develop at some length in my micro text, but instructors habituated to the approach commonly found in conventional textbooks will not experience a sense of loss. My two main suggestions to CORE would be to move at least some treatment of market failure forward so that students encounter these ideas at the same time they are being lectured on the welfare-enhancing virtues of the market, and also that more space be given to a presentation of key environmental issues—especially climate change.
As you can see, I found a lot to appreciate. I’m sure this text, which will get broader and deeper as more units are added on, will appeal to many instructors. The real test, of course, is the classroom, and I wonder what CORE folks are planning in the way of feedback channels and upgrade cycles.
POSTSCRIPT: Much of my reaction to CORE could be summed up this way: I imagine that there were deep and fascinating discussions within the team about what was wrong with the content of undergraduate economics teaching and what they would do about it. I'd love to have videos of them. But I don't get the sense that they talked much about what's wrong with the teaching of economics at the bottom rungs; their text uses conventional methods to deliver new material. If any of you were on the team and think I'm wrong about this, please correct me. I'm just going on impressions.
Peter, thanks for this careful, constructive, and I think very fair review. This is exactly the kind of feedback we need. Glad you liked Unit 9, that was the one I was most closely involved with. The material is being classroom tested right now so this is just the beta version. We'll take your comments into account moving forward.
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