Thinking Like an Economist: The Neoliberal Politics of the Economics Textbook

Abstract

This article surveys 10 introductory economics textbooks to examine whether and how economics contributed to the rise of neoliberalism. It defines neoliberalism as a political rationality characterized by market constructivism. In contrast with conventional liberal approaches that view limited government as legitimized by the failure of naturalist markets, neoliberalism constructs the market as norm and means of government. Economics textbooks overall have a liberal outlook, as exemplified by Samuelson's classic, however, with three liberal subgenres: the imperfect market view, the free market view, and an institutionalist view. While the introductory textbook cannot be construed as an instruction manual for neoliberalism, the article nevertheless identifies two important neoliberal moments: the discussion of market-based forms of government and the rise of a new genre of principles textbook that urges students to “think like an economist.” The article concludes with novel insights on how economics may have contributed to the spread of neoliberalism.

Keywords::

• introductory economics textbook
• neoliberalism
• liberalism
• market-based government
• thinking like an economist

JEL Classification::

• A11
• A13
• A22
• B20

Acknowledgements

The author wishes to thank the two anonymous referees of this journal for their thoughtful and stimulating comments which helped improve this paper. The author is grateful for the constructive feedback on earlier versions of this article from Arjo Klamer, Bregje van Eekelen, Hilla Dayan, Olav Velthuis, Peter Rodenburg, Arjan Keizer, participants of the Erasmus Seminar on Cultural Economics, Erasmus University Rotterdam, and the Summer Institute for the Preservation of Economic Thought, University of Richmond, VA, USA. Financial and material support from the latter is gratefully acknowledged. The research for this paper was conducted as part of a PhD. project titled “Images of Markets” funded by the Dutch Science Foundation (NWO).

Notes

¹ The full quote runs: “Some sage, it may have been I, declared in similar vein: ‘I don't care who writes a nation's laws – or crafts its advanced treaties – if I can write its economic textbooks’” (Samuelson 1990: ix). As Colander and Landreth (1996: 28, n. 41) noted, Samuelson was most likely quoting himself, since in 1986 he stated: “Let those who will write the nation's laws if I can write its textbooks” (Samuelson quoted in Breit and Spencer 1986: 68). Samuelson's statement has been cited widely, also by Mankiw (1997) in the preface to his textbook, by Sylvia Nasar (1995) in a New York Times article on economics textbooks, and resurfaced in many obituaries after Samuelson passed away.

² This characterization was suggested by Arjo Klamer as reported by Seiz (1990).

³ It is notoriously difficult to obtain exact sales figures for textbooks. Mankiw is the market leader, who together with McConnell, Brue, and Flynn serves 40% of the market (Lopus and Paringer 2012). Although far from representative, a quick scan of sales rankings on amazon.com (last accessed on May 28, 2012) confirms that Mankiw (2008, rank #8,433) can be considered the market leader, followed by McConnell, Brue, and Flynn (2011, #11,155), who advertise their text as “the world's best-selling college economics textbook.” A relatively new text by Krugman and Wells (2009, #32,895) ranks third, followed by Baumol and Blinder (2008, #89,952), Heyne, Boettke, and Prychitko (2009, #121,745), Gwartney, Stroup, MacPherson, and Sobel (2010, #126,534), Frank and Bernanke (2012, #135,836), Samuelson and Nordhaus (2009, #177,435), Colander (2009, #258,365), and Stiglitz and Walsh (2006, #587,325).

⁴ For an excellent account of Foucault's sources for his claims about German and American neoliberalism, see Tribe (2009).

⁵ In postwar Germany according to Foucault, the inverted neoliberal governmental logic of ordoliberalism provided an expedient answer to the reigning skepticism of the state after Nazism, as it offered a neutral way of legitimizing the state. Foucault refers to a speech by Ludwig Erhard, Director of the Bi-zonal Economic Council who had close affinities with the ordoliberals in 1948: “We must free the economy from state controls … only a state that establishes both the freedom and responsibility of the citizens can legitimately speak in the name of the people” (quoted in Foucault 2008: 80–81).

⁶ This point may serve to illustrate the difference between governmentality and ideology. The authors discussed in this section need not necessarily be branded free market ideologues. The point is that by stressing the unrelenting nature of the market, they are articulating a strong version of a liberal governmentality, which may or may not be part of a free market ideology.

⁷ The notion of a ‘moment’ as a disruption or even deconstruction derives from Ruccio and Amariglio (2003). It serves to express that the overall liberal way of reasoning about government that runs through the textbooks is at moments interrupted by the articulation of neoliberal political rationalities.

⁸ From the textbooks surveyed, 5 out of 10 (BB, C, HBP, LC, RG) explicitly discuss market-based solutions as one of the ways to address market failure. All textbooks, however, contain a brief discussion of the emissions trading, either in text or as a text box. Five texts have a separate chapter on the economics of the environment (BB, FB, RG, SN, SW), in which emissions trading features prominently.

⁹ Already in their first edition Baumol and Blinder (1979) devoted an entire chapter to the economics of environmental protection. Well before emissions trading became reality, it mentions emissions permits, but not yet their trading (Baumol and Blinder 1979: 683). The first edition also already features 10 ideas for beyond the exam, and Idea 2 is titled “Economic Principles to Protect the Environment,” which in later editions was modified into “Externalities: A Shortcoming of the Market, Cured by Market Methods” (BB 6).

¹⁰ For a great rap on Mankiw's principles, see stand-up economist Yoram Bauman, who has a hilarious sketch making fun of the generality of some of his principles: www.standupeconomist.com (accessed December 10, 2012).

¹¹ The distinction between traditional definitions of economics in terms of what it studies (such as those by Marshall, Robbins, and Pigou) and definitions that define economics in terms of its approach was made most forcefully by Gary Becker in The Economic Approach to Human Behavior (1976).

¹² For more on the Freakonomics genre and its meaning and impact, see special issue of the Journal of Economic Methodology 19(3), 2012.

¹³ Mallin (2010) has a similar argument. Comparing Mankiw's notion of “thinking like an economist” with Marx's idea of commodity fetishism, he argues that Mankiw's usage fetishizes the market model by obscuring the historical and social conditions it presupposes.

Additional information

Notes on contributors

Peter-Wim Zuidhof

Peter-Wim Zuidhof is assistant professor in the Department of European Studies at the University of Amsterdam, the Netherlands. His research focuses on the history and philosophy of neoliberalism in relation to economics.