On a list serve that I receive, Warren Gibson, an economics instructor at San Jose State University, recently wrote:
Rothbard's Man, Economy, and State discusses bargaining at length but I can't think of another text that does so. Rothbard starts with isolated
individuals hashing out terms of a trade, and then moves to more liquid markets where supply and demand curves emerge (yes, he does use graphs).
Most texts that I know of get it backwards, skipping over bargaining entirely and going direct to perfect competition. Then, typically, they tell us that real markets' failure to live up to perfect competition justifies government intervention.
Even Boettke's The Economic Way of Thinking, which I like very much,
falls short. He introduces comparative advantage with an example about two home brewers who decide to specialize and trade. It merely states, "after some negotiation, they agree to try the following arrangement" without saying that the arrangement was just one of many possibilities that could have benefited both.
Warren's right. My favorite intro text is the aforementioned Heyne, Boettke, and Prychitko. But, as he says, even this one doesn't start from small numbers. I'm thinking that this fall, when I teach a principles course, I'll insert a short reading on this. I glanced over Rothbard's pp. 91-108. I'd like something shorter but as readable. Any ideas?