So I picked up a copy of N. Gregory Mankiw’s Principles of Economics 5th edition for fun and to educate myself on Economics. I’m 5 pages in and I’m already encountering gross over simplifications that suggest a political bent that I sorely disagree with. Now granted, I’m only 5 pages in. And this is a first semester undergraduate Economics textbook. So of course there are going to be some oversimplifications. But some of them are so blatantly Laissez-faire Capitalist and anti-government conservative in their world view and in the way the issues are simplified that I can’t not answer them in some way. I’ve already writen notes all over this page. Let me give you an example of Mankiw’s take on the environment:
Laws that require firms to reduce pollution raise the cost of producing goods and services. Because of the higher costs, these firms end up earning smaller profits, paying lower wages, charging higher prices or some combination of these three. Thus, while pollution regulations yield the benefit of a cleaner environment and the improved health that comes with it, they have the cost of reducing the incomes of the firms’ owners, workers and customers.
Yes – reconfiguring production to reduce pollution can incur short term costs. But often the lower pollution method of production is much more efficient and reduces costs in the long run. For example, clean renewable energy. There’s an enormous entry cost. But once you’ve built the wind mills and solar panels you have only maintence to consider. You don’t have to pay for fuel! Which means in the long run they are far more efficient!
There are more, but they aren’t quite as blatant as that one. And one of the revolves around an assertion that higher taxes create a disincentive to work and thus lower overall production. It comes as an unsupported assertion in the book and I wonder what kind of evidence their could possibly be to support that. I’m sure there is evidence, but I wish he’d provide some in the text book. Hopefully I’ll see it further along.
