A $280 college textbook busts budgets, but Harvard author Gregory Mankiw defends royalties (2024)

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Gregory Mankiw, author of the popular "Principles of Economics," appears before the U.S. Congress Joint Economic Committee in 2004, when he was chairman of the Council of Economic Advisers. College students and professors complain about the textbook's $280 price tag, but the Harvard University economist maintains he earns his royalties.

(Chris Kleponis/Bloomberg News)

Would you buy $280 a textbook? Plenty of college students pay the eye-popping price.

Portland State UniversityinstructorMike Paruszkiewicz sees deep irony in the staggering $280 price of"Principles of Economics,"the introductory textbook he reluctantly assigns to students.

The book, in its seventh edition with a million copies sold, was written byGregory Mankiw. The Harvard University economics-department chairman advised presidential candidate Mitt Romney and headed the Council of Economic Advisers under President George W. Bush.

Just like every intro-econ text, Paruszkiewicz said, Mankiw's book contains a section on uncompetitive markets, monopolies andoligopolies -- markets made up of a few dominant players that influence prices. Paruszkiewicz views the $280 textbook as a creature of a classic oligopoly, a lucrative cabal that clashes with an emergingopen-source market in which professors write books for free.

Mankiw's royalties on this book alone may exceed $42 million, supplemented by revenues from several other textbooks. But the professor, who writes a popular economics blog, makes no apologies.

Asked in an email, "Would you ever write an open-source textbook? Why, or why not?" Mankiw responded:

"Let me fix that for you: Would you keep doing your job if you stopped being paid? Why or why not?"

To many who teach and study in colleges beyond hallowed Harvard Yard, Mankiw's book symbolizes all that's unfair about burdens placed on debt-laden college kids who sacrifice to buy books required for their majors. Universities in Oregon and nationwide are seeking ways to cut prices of course materials.

Students confront bookstore sticker shock

"No student should have to make a decision on whether to buy a textbook or eat," says Jeff Dense, an Eastern Oregon University political science professor.

Dense serves on an Oregon committee finding ways to curb course-material costs, given that college textbook prices climbed by 812 percent from 1978 to 2012. Read an

about runaway prices and proposed remedies.

Yet textbook-industry representatives disagree.

Communications managers for Cengage Learning, Mankiw's publisher, did not respond to repeated interview requests. But David Anderson, executive director for higher education at the Association of American Publishers, which includes Cengage as a member, said high-quality commercial textbooks cost a lot to produce.

Production often takes teams of 250 people, including authors, editors, graphic artists, peer reviewers and focus groups, Anderson said. Development costs for one textbook can range from $500,000 to $3 million, he said.

Anderson said publishers are curbing price increases by pioneering less expensive, more engaging "digital platforms" that feature e-textbooks, instant test results and adaptive-learning quizzes that assess students as they go. The more engaging products improve students' grades, he said, saving them money as they advance faster to upper-level courses, graduation and careers.

But student public-interest research groups note that publishers of digital-textbook products often limit their use by issuing access codes that expire after a semester or so. Therefore students lose the savings that they used to gain by reselling hardcover textbooks.

Anderson responded that only about 35 percent of students sell back their books. But responding to a separate question, he said that publishers only have one or two semesters to recoup costs of producing new textbooks because of strong competition from used-book sales.

Anderson disputed Paruszkiewicz's characterization of the textbook market as an oligopoly, saying multiple companies engage in fierce competition. Later, however, he said that anti-trust concerns prevented him from revealing standard royalty amounts paid to textbook authors.

Agents in the general trade-book market, where writers can receive about 10 percent of a book's revenues, said textbook royalties tend to be about 15 percent -- or higher for best-selling authors. That percentage would substantiate the estimate of at least $42 million in royalties for Mankiw's "Principles of Economics."

Paruszkiewicz describes himself as a reluctant cog in a publishing machine that handsomely rewards Mankiw and other stars at the expense of students held captive by course requirements. The PSU instructor said Mankiw commands a "textbook empire," churning out multiple books and editions on macroeconomics and microeconomics.

Paruszkiewicz said his reluctance is assuaged somewhat by the teachable moment the situation affords for students of market economics. He acknowledged that if "a sort of pressure-relief valve" didn't exist, he'd consider assigning a cheaper book.

Paruszkiewicz discovered one feature of this valve in the form of little-known lower-priced international textbook versions. Now, he said, his students often buy previous editions of Mankiw's book. They can also rent the book or find deals on book, marked down new from more than $300 or used and heavily highlighted by previous owners.

And then there's piracy, a tactic of the Internet age know to computer-savvy students the world over.

"Many of them know how to pirate this book the same way you can pirate movies or music on the Internet," Paruszkiewicz said. "I would not suggest that to them or promote that."

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