I've been revising a paper today, and in the process I came across a quote from Tyler Cowen's In Praise of Commerical Culture:

“Books were prohibitively expensive in the so-called ‘good old days.’ In colonial America, in 1760, a cheap schoolbook cost twice as much as a good pair of leather shoes; Smollett’s Complete History of England cost as much as eighty pairs of shoes, six head of cattle, or thirty hogs. An ordinary laborer had to work two days to earn enough money to buy the cheap schoolbook, or 144 days to buy the Smollett. The modern innovations of mass production and marketing have brought down the cost of a paperback to only slightly more than the American minimum wage.”

--Tyler Cowen, In Praise of Commercial Culture, p. 52

This got me thinking about the ongoing debate about the high cost of textbooks. Discussion below the fold. Update of discussion also below the fold.

First, Greg Mankiw is spot-on: if textbooks are grotesquely over-priced, this suggests a profitable opportunity for people and organizations (like the New York Times) to make a pile of money by undercutting the textbook companies. In the NYT editorial discussed by Mankiw, the Times ironically (?) calls for government legislation while pointing out ways that the market is correcting itself (ASTRTWT).

Second, the quote from Cowen made me wonder whether textbooks are really that expensive relative to the alternatives he mentions (good shoes, cows, hogs). The Seventh Edition of Steven Landsburg’s Price Theory and Applications is listed at $103.29 at Amazon.com with a close substitute (the sixth edition, which has the same outline) listed at $35.00. The brand-new Landsburg 7 does in fact cost about as much as two pairs of cheap shoes (like the New Balance sneakers I’m wearing now). I wondered how much a “good pair of leather shoes” would cost, so after a bit of searching I came across a price for the “Loake Royal Brogue” at www.petersshoes.com. The price: 98.95 pounds. At the exchange rate of about $2 per pound on April 30, that would come to around $200 for the pair of shoes. The price has almost inverted: today, a “good pair of leather shoes” costs approximately two brand-new copies of Landsburg 7.

According to a USDA website, the average price in Tennessee for a slaughter cow with an average weight of 1079 pounds was $53.05 (if I'm not reading the price correctly, please let me know). So a copy of Landsburg 7 is worth about two slaughter cows. According to Glenn Grimes and Ron Plain of the University of Missouri, the price of pork product (per cwt of carcass) was $72.21, so each Landsburg 7 was worth about 1.33 pig carcasses. Again, if I'm not reading these prices right, please let me know.

NB: this also shows us something important about the market economy and the social division of knowledge. I don't know much about cattle and hog farming (what does "cwt" mean?) and yet in our highly specialized world I don't have to worry about running out of beef or bacon.

5/1 UPDATE: I knew I was wrong. I thought there was no way a cow would cost $50. Reader Nathan Wagner writes that he's "pretty sure (my) price quote for a slaughter cattle is off by a factor of about ten" because "'cwt' is an abbreviation for hundredweight." Readers Tim Worstall, Nate Maxwell, and Sam Liddicott tell me that the "short hundredweight" (the US measure) is 100 lbs, the "long hundredweight" (the British measure) is 112 lbs. Thus, my relative price calculations were wrong: the cattle prices were over $500 each, so a copy of Landsburg 7 only cost about 1/5 of a slaughter cow or 130-150 lbs of pig carcass. Now I'll know that next time I'm at a cattle auction.

5/1 UPDATE 2: I forgot to mention that I downloaded Smollett's Complete History of England last night from www.books.google.com for a price of $0.00.