the First Edition of Microeconomics in Context
Came to be Written for Russia
(From a Fall 1999 talk by Neva Goodwin)
point was a phone call from Wassily Leontief, in the
early summer of 1989. He told me that a member of
the Soviet Academy of Sciences had contacted him,
saying, "We are going to throw out all of our economics
textbooks and replace them with Western texts. Which
American text should we translate in their place?"
Leontief knew that I was interested in economic textbooks,
and asked for a recommendation.
to the request for an appropriate textbook for use
in Russia during what was obviously about to become
a major economic transition (it was not yet obvious
quite how great a political transition was also about
to take place), I looked for a text that would include
a sensitivity to the issues of environment and equity
(including intergenerational equity) that are generally
lacking in neoclassical texts. What I sought was an
approach that would be grounded in the real world,
starting with real situations (such as the way markets
actually work), and would then generalize to theory.
The more usual neoclassical approach is to emphasize
the theoretical abstractions -- e.g., the idea of
perfect competition in a perfect market. Reality is
then brought in as an afterthought, using words that
suggest that it may be regarded as an exception, or
a special case: e.g., "market failure" "imperfect
competition", "disequilibrium", etc. -- when, in fact,
it is the "perfect market", "perfect competition"
or "equilibrium" that is the exception, rarely if
ever found outside of economic writings.
I finally found
what I was looking for, in a textbook written by the
highly regarded economist, Kelvin Lancaster, with
Ronald Dulaney. In addition to the "theory of the
second best," Lancaster was also known for his common-sense
additions to consumer theory, and for his ability
to translate ideas into mathematics. I suppose it
was because I was especially aware of Lancaster's
strength in mathematics that I was surprised to find
that his textbook, Economics, Principles and Practice,
had so many of the qualities I was seeking. It may,
indeed, have been Lancaster's facility with mathematics
that enabled him to use it selectively, relying on
mathematical methods only where they genuinely add
to the exposition of reality-oriented ideas.
If all of
this seems too good to be true, it is: the Lancaster
and Dulaney textbook had been out of print in the
U.S. since 1979 (although it continued to be used
in translation in at least one country in Western
Europe until the late 1980s). Meanwhile, by the time
I had researched the universe of US economic texts,
and had relayed this mixed result to Wassily Leontief,
the Berlin wall had come down, the Soviet Academy
of Sciences had ceased to exist as such, and the original
impetus for the project vanished.
I was able to see for myself when on a World Bank
mission to Moscow in 1992, the need did not go away.
The Western textbooks (McConnell and Brue,
Samuelson, etc.) which have been translated into Russian
are a source of frustration to teachers and students,
depicting an idealized world, largely unrecognizable
to Russians, in which a social optimum will be reached
by perfect competition in a smoothly functioning market.
Texts that have been developed since 1991 by Russian
economists are influenced by the pre-Perestroika tradition,
that Western economics could only be studied in the
mathematical institutes. The writers coming out of
those institutes carry even further the Western tendency
to re-frame reality in the sublime abstractions of
mathematics. It seemed clear that what was needed
was a team of Russian and Western economists who could
look with fresh eyes on Western economic theory, selecting
the relevant portions to represent within a more realistic
understanding of the actual contexts within which
my interest in this project, Sam Bowles introduced
me to Thomas Weisskopf, a fluent Russian speaker and
distinguished economist who had taught in several
former Soviet states since 1989. In 1993 Tom and I
attended a Moscow State University conference on "The
Present and the Future of Economics Education in Russia,"
where we encountered a number of Russian economists
who had similar concerns to ours, regarding the need
in Russia for something other than the standard U.S.
textbooks. Drawing on these, and on some of Tom's
earlier contacts, we invited a group of Russians to
the U.S. in the following spring (after initial funds
had been raised from the Eurasia Foundation and other
sources) for a workshop to hammer out our approach.
It seemed practical to start from a text that represents
the best of what is offered in neoclassical economics,
but that was written with an awareness of the important
issues that lie outside the traditional boundaries
of the field. Kelvin Lancaster agreed to allow us
to use his text as the starting point for our revisions.
and I, with help from others who contributed pieces
of particular chapters, roughed out a first draft
of Microeconomics in Context, and then Tom was asked
to take a position of large administrative responsibility
at the University of Michigan. Fortunately, soon afterwards
Frank Ackerman joined the GDAE staff, as senior editor
for three of the Frontiers volumes; he has been a
major player in moving the textbook to its final form.
In the end about one-third of the book is straight
Lancaster and Dulaney, while the rest is either wholly
new, or has been thoroughly worked over and rearranged.
The job of
the authors of the textbook, as we saw it, was to
organize the most enduring portions of the Lancaster
and Dulaney material within a new framework, stressing,
even more than they did, the real-world contexts within
which economic activity takes place. Then we filled
out that framework with material that we regarded
as a major improvement on the neoclassical approach.
Much of this material came from institutionalist,
political, humanistic, feminist, ecological economists,
etc.. These offerings had conflicted in various ways
-- assumptions, logic, methods, or ideology -- with
the overall structure of the neoclassical paradigm.
Our framework has proven to be more hospitable to
heterodox material. However, our patchwork could not
be complete as long as we used only material that
was already available. We have had to supply the thread
that sewed it together, and to create new patches,
large and small, for a number of places where we knew
of nothing ready-made to fill particular gaps. The
new paradigm -- contextual economics -- will continue
to require creative efforts to improve on what has
been done so far.