Greg Mankiw has made millions off the $280 textbook Principles of Microeconomics. Specifically, $42 million.
I’ve read that textbook. It’s atrocious — full of “rational actors,” questionable statements at odds with reality, and gems like this.
The effects of taxes on welfare might at first seem obvious. The government enacts taxes to raise revenue and that revenue must come out of someone’s pocket. As we saw in Chapter 6, both buyers and sellers are worse off when a good is taxed: A tax raises the price buyers pay and lowers the price sellers receive. Yet to understand more fully how taxes affect economic well-being, we must compare the reduced welfare of buyers and sellers to the amount of revenue the government raises. The tools of consumer and producer surplus allow us to make this comparison. Our analysis will show that the cost of taxes to buyers and sellers typically exceeds the revenue raised by the government.
Why, you might ask, would one read a four hundred page textbook that one knows to be full of bogosity?
Have to know the enemy to fight the enemy is why.
That Mankiw made $42 million off that turd is ipso facto proof enough that our entire economic system is broken.
Is this required reading for getting a BS degree in economics?
It is in most US colleges — the vast majority of them use it as the main micro-econ textbook.
I had to purchase Mankiw’s Principles of Macroeconomics when I took the class. So many ridiculous assumptions were embedded in this textbook I just did the absolute minimum. It all makes sense if you’re addled.
That line:
“Our analysis will show that the cost of taxes to buyers and sellers typically exceeds the revenue raised by the government.
is astounding considering there is no consensus on the optimum Laffer curve point range (~35-70% is useless), which is funny because the guy sketched it on the back of a cocktail napkin.