Thursday, September 30, 2004

"Let those who will write the nation's laws if I can write its textbooks." 

Chester Finn and Diane Ravitch think statewide textbook adoptions are an avenue for rentseeking. They're right. Rentseeking will include both the actions of the cultural elites forcing through their preferred politically correct books, as well as domination of the textbook business by a few firms. Here's the killer paragraphs to me as an economist:
In the last two decades, the el-hi publishing industry has gone from having considerable competition among independent publishing houses to a cartel of four mega-publishers. Dozens of venerable houses, including MacMillan, Holt, Rinehart
and Winston, and Prentice Hall have either been acquired and absorbed as imprints or shut down. Today, four multi-national conglomerates�Pearson, McGraw-Hill, Reed Elsevier, and Houghton Mifflin�chalk up a total of about $3 billion in el-hi sales and account for roughly 70 percent of all K-12 textbooks sold.

Not surprisingly, the cartel's development, by restricting choices and imposing prohibitive entry barriers, has made it harder than ever to develop or locate high quality textbooks. Publishers now typically spend millions in development and production costs merely to prepare a textbook for the adoption process, and few medium-sized publishers can afford such outlays or the risk of going insolvent if they aren't adopted. In addition, state committees have repeatedly buttressed the cartel by demanding gilded textbooks and every imaginable supplemental instructional aid. Gilbert Sewall of the American Textbook Council points out that "any company that plans to compete nationally in school publishing must be capital intensive and 'full service,' offering study guides, workbooks, and technology, along with discounts, premiums, and an array of teacher enticements. Spanish text versions, margins, texts, binders, and answer keys may determine which books are adopted."

I would argue the same is true for colleges, where the same consolidation has taken place, often with some real rentseeking behavior. Here's a paper that argues the point.

As the quote in the title makes clear, who controls the textbooks has some real power. (Hat tip: Joanne Jacobs)