A dime for your sterling thoughts

May 26, 2000

It may not be a macho pursuit, but John Driffill could not resist adapting a major American economics text for European readers.

Writing textbooks is not an activity universally held in high esteem in the macho, narrowly focused world of academic economics. Research papers in Econometrica, The American Economic Review or other international core journals are the gold standard, and - in Britain at any rate - we are all held in thrall by the research assessment exercise.

Deviations from the straight and narrow of fundamental research are widely regarded as evidence of premature senility. Deviants risk being held in contempt and dismissed as old farts. Despite the dangers, some opportunities are irresistible. I was not able to resist when offered the chance of adapting Joseph E. Stiglitz's introductory textbook Economics, first published by Norton in the United States in 1993, for a British and European readership.

There were several attractions: working with one of the giants of the discipline; writing for a vastly wider readership than basic research is likely to reach; writing on a wide range of issues free from the constraints of the journal article. The breadth, the wide-open spaces and the fresh air.

The original US edition is broad in coverage and consequently not a short book, reflecting partly general trends in introductory economics, and partly the energy and breadth of view of its author. It aims to make the subject accessible and entertaining by avoiding technical material and including many practical examples. The text is liberally sprinkled with boxes, close-ups and policy perspectives to bring economics to life. A distinctive feature is the emphasis on imperfect competition and imperfect information, two of the many areas in which Stiglitz has made fundamental contributions. The concepts of moral hazard and adverse selection are explained completely intuitively. The many ways in which they provide an understanding of otherwise peculiar goings-on all around the economy are developed throughout the book.

Adapting a US text for a predominantly British readership is sometimes dismissed as replacing the dollar signs with pound signs, and adding replacement case studies. There is an element of that involved, of course. Part of the rationale for adapting texts to different readerships rather than starting from scratch is economy of effort: the principles are universal while the applications and nuances differ from place to place. Demand curves slope downwards and supply curves upwards for the same reasons everywhere.

The examples, however, are not simply little bits and pieces pasted in here and there. They are extensive and woven deeply into the fabric of the text. Some chapters, such as those on supply and demand curves devoted largely to explaining basic ideas, needed little amendment. Others, where policy issues, institutions and recent history come to the fore, required a complete rewrite. The extensive discussion of monetary and fiscal policy was substantially rewritten, as was a great deal of material on labour markets, competition policy, Europe, social security and welfare, housing and public finance. A chapter devoted to the twin deficits (trade and federal budget), an issue that is not absent from discussion in Britain and Europe but that looms much larger in the US, was removed, and a chapter on economic integration, mainly devoted to the European Union was inserted. Connections between trade and fiscal deficits are now developed elsewhere.

While most of the material relating specifically to the US was removed, of course it did not seem, and surely would not have been, appropriate, to write the US out of existence. The adaptation aims to take the more international view appropriate to a small open economy where the rest of the world comes closer to home. Some of the American examples in the original are particularly compelling and resonate globally. Therefore they have been retained. Conspicuously, the US edition opens with a brief history of the automobile industry from its birth to the present day. It is a wonderful example with which to introduce many fundamental economic principles. Is there anything equally vivid that is also completely British? The automobile - the motor car - is such a universal modern icon that the basic story was retained, with some important changes. The vicissitudes of the British motor industry make a sharp contrast with the American triumph.

This adaptation has been some years in preparation. Questions from colleagues about when it might appear in print became an embarrassment. The cause of the lengthy gestation is that I did not understand at first how much work would be involved and how long various stages in the process might take. The publication of the second US edition in 1997, while mine was in progress, did not speed things up. Hindsight is a wonderful thing. In retrospect, it is clear that I spent far too long in the early stages deliberating on whether to make many tiny changes, trying to get details of data and nuances of wording precisely right. The approach one takes to writing research papers for scholarly journals is completely wrong for this kind of project. Far better and quicker to pass over the whole thing rapidly initially and return to tie up loose ends later, in the course of the many rounds of revision and bringing of data and examples up to date.

Writing about such a range of issues for a readership new to economics was enjoyable - it has a recreational aspect that writing research papers sometimes lacks. With some topics, the ratio of input to output was high: a lot of time spent reading beyond my special interests to be confident that the paragraphs in the book on these topics would withstand scrutiny. Writing so as to make the book topical and yet reasonably durable is a challenge. It is a pleasure and relief to see the finished work. The publishers have produced a splendid-looking and colourful book. Although it would involve another major effort, I hope that this will attract enough readers to warrant a second edition.

John Driffill is professor of economics, Birkbeck College, London.

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