Political Economy I: Capitalism and Democracy
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1 Political Economy I: Capitalism and Democracy Central European University Department of Political Science Mandatory course, 2 Year MA Program, Fall Semester 2016/ CEU credits, 4 ECTS credits Instructor: Bruszt, László Time and Place: Mondays and Wednesdays Office hours: Tuesdays and Thursdays from VF2 Content The course introduces some of the core theories and key concepts in political economy by focusing on the uneasy relationship between capitalism and democracy. The course will ask a number of big questions about politics and economics, such as: Under which conditions is capitalism compatible with democracy? How does the disproportionate power of business affect democracy? Which are the relative strengths and weaknesses of politics versus markets in bringing about economic growth and socioeconomic equality? How does economic globalization and European integration affect democracy? In order to address these and similar questions, the course will review liberal, Marxist, sociological and institutional approaches, and draw on the experiences of European capitalist democracies, East and West. Although this is an introductory course, some basic understanding of macroeconomic concepts is required. Students who are unfamiliar with these are strongly encouraged to take the class Basics in Macroeconomics. Learning outcomes At the end of the course, students will have acquired a basic understanding of some core theories and key concepts in, as well as selected approaches to political economy. The course enhances critical thinking and multidisciplinary orientation, and contributes to the mastery of academic writing and oral skills. Learning outcomes are supported by the course s requirements and assessed accordingly. Course requirements and evaluation: 1. Attendance and in-class participation. Each session will consist of a lecture followed by a class discussion. Attendance and participation in the discussion are crucial (20 % of the grade).
2 2. Short questions. Students are required to submit three short questions on the readings for one session once a week (6 x 3 questions all in all). The questions have to be submitted electronically latest by noon the day prior to the class (Moodle). Students who write position papers cannot submit questions on the same reading. (20 % of the grade). 3. One bigger review paper of ca words or three position papers of words each (excluding bibliography). (60% of the grade). a. Review paper: students are required to choose one topic of the course, identify a major work associated with the topic, and review it critically. The work can be a monograph, special journal issue, or edited book, and students can chose from the recommended literature or come up with their own suggestions. The topic and book has to be agreed upon with the instructor. A critical review is more than a simple summary. It should a) embed the work in the broader debate, b) identify its major arguments, findings, and methods, c) and critically evaluate its merits, shortcomings and contributions to the debate. Students are required to consult at least 3 additional sources (journal articles or books) when completing their review. The paper has to be submitted electronically (Moodle) latest by December, 23 rd, midnight. b. Position papers. Position papers are small essays on the weekly readings. They should shortly summarize the readings, reflect on the major arguments, and include questions for further discussion. Position papers can compare the readings to other readings of the class, or apply the readings to an empirical case. The papers are to be distributed electronically to the whole class latest by noon the day prior to the class (Moodle). Students might be asked to shortly present their papers in class. Late submission According to the departmental policies, late submissions of written assignments will be downgraded in the following manner: - 30 minute to 24 hours late:: 1 grading point hours to 48 hours: 2 grading points - etc. Academic dishonesty Students are expected to be familiar with the CEU policies on scholarly dishonesty. Plagiarism and other acts of academic dishonesty will result in automatic failure of the course and immediate referral to the appropriate committee for academic discipline. Electronic devices The use of electronic devices (laptops, tablets, e-readers, phones, etc.) is not allowed.
3 Topics and Readings SESSION 1: INTRODUCTION Gabriel Almond. Capitalism and Democracy. PS: Political Science and Politics Vol. 24, No. 3, pp SESSION 2: HOW DID EUROPE DEMOCRATIZE? (CLASSICS) Moore, Barrington. Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World. Reprint edition. Boston: Beacon Press, 1993, chapter 7: The Democratic Road to Modern Society, pp Moore, Barrington. Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World. Reprint edition. Boston: Beacon Press, 1993, chapters 8-9, ) Huber, Evelyne, Dietrich Rueschemeyer, and John D. Stephens. The Impact of Economic Development on Democracy. The Journal of Economic Perspectives 7, no. 3 (July 1, 1993): Therborn, Goran: The Rule of Capital and the Rise of Democracy, New Left Review 103:3-41. SESSION 3: HOW DID EUROPE DEMOCRATIZE? (RECENT APPROACHES) *Ziblatt, Daniel. How Did Europe Democratize? World Politics 58, no. 2 (2006): doi: /wp
4 Acemoglu Daron and and James A. Robinson. The Economic Origins of Dictatorship and Democracy. Cambridge: Cambridge University Press, 2006, pp (The Argument). Boix, Charles. Democracy and Redistribution. Cambridge: Cambridge University Press, Collier, Ruth Berins. Paths toward Democracy. Cambridge: Cambridge University Press, Mares, Isabela From Open Secrets to Secret Voting: Democratic Electoral Reforms and Voter Autonomy. New York, NY: Cambridge University Press. Tilly, Charles Contention and Democracy in Europe, Cambridge: Cambridge University Press, 2005 SESSION 4: THE (IM)POSSIBILITY OF DEMOCRACY AND CAPITALISM IN EASTERN EUROPE *Claus Offe (1991). Capitalism by Democratic Design? Democratic Theory Facing the Triple Transformation in East Central Europe, Social Research, 58(4), Bohle, Dorothee, and Béla Greskovits. Capitalist Diversity on Europe s Periphery. Ithaca, New York: Cornell University Press, Bunce, Valerie J., and Sharon L. Wolchik Defeating Authoritarian Leaders in Postcommunist Countries. Cambridge: Cambridge University Press. Ekiert, Grzegorz, and Stephen E. Hanson. Capitalism and Democracy in Central and Eastern Europe: Assessing the Legacy of Communist Rule. Cambridge University Press, Frye, Timothy (2010). Building States and Markets after Communism: the Perils of Polarized Democracy (Cambridge: Cambridge University Press, 2010). Introduction and chapters 1, pp Greskovits, Béla. The Political Economy of Protest and Patience: East European and Latin American Transformations Compared. Central European University Press, Roberts, Andrew L The Quality of Democracy in Eastern Europe: Public Preferences and Policy Reforms. New York: Cambridge University Press. SESSION 5 MARKETS AND (SOCIAL) DEMOCRACY (CLASSICAL DEBATES)
5 *Hayek, Friedrich August von. Competition as a Discovery Procedure. Translated by Marcellus S. Snow. Quarterly Journal of Austrian Economics 5, no. 3 [1968] (2002): *Karl Polanyi (2001 [1944]). The Great Transformation. The Political and Economic Origins of Our Time. Boston: Beacon Press, chapters 6 and 11, pp , Recommended Block, Fred. Karl Polanyi and the Writing of the Great Transformation. Theory and Society 32, no. 3 (2003): Hayek, Friedrich A. von. The Constitution of Liberty. London: Routledge, Höpner, Martin, and Armin Schäfer. Embeddedness and Regional Integration: Waiting for Polanyi in a Hayekian Setting. International Organization 66, no. 03 (2012): Levitt, Kari Polanyi. Keynes and Polanyi: The 1920s and the 1990s. Review of International Political Economy 13, no. 1 (2006): Levitt, Kari. Life and Work of Karl Polanyi. Black Rose Books Ltd., Muller, Jerry Z. The Mind and the Market: Capitalism in Modern European Thought. 1st ed. New York: Alfred A. Knopf, 2002, chapter 13. Polanyi, Karl (2001 [1944]). The Great Transformation. The Political and Economic Origins of Our Time. Boston: Beacon Press SESSION 6: SOCIAL DEMOCRACY *Esping-Andersen, Gosta and Walter Korpi. Social Policy as Class Politics in Post- War Capitalism: Scandinavia, Austria and Germany. In: John H. Goldthorpe (ed.): Order and Conflict in Contemporary Capitalism. Studies in the Political Economy of Western European Nations. Oxford: Oxford University Press. 1984, pp Recommended Berman, Sheri. The Primacy of Politics: Social Democracy and the Making of Europe s Twentieth Century. Cambridge Univ Press, Blyth, Mark. Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century. Cambridge University Press, Giddens, Anthony. The Third Way: The Renewal of Social Democracy. John Wiley & Sons, Kitschelt, Herbert The Transformation of European Social Democracy. Cambridge Studies in Comparative Politics. Cambridge: Cambridge University Press. Przeworski, Adam. Capitalism and Social Democracy. Studies in Marxism and Social Theory. Cambridge: Éditions de la Maison des sciences de l homme, 1985.
6 Scharpf, Fritz Wilhelm, Ruth Crowley, and Fred Thompson. Crisis and Choice in European Social Democracy. Cornell University Press Ithaca, NY, SESSION 7 BUSINESS AND DEMOCRACY (COMPARATIVE PERSPECTIVE) *Pepper D. Culpepper (2010). Quiet Politics and Business Power. Corporate Control in Europe and Japan. Cambridge: Cambridge University Press, chapters 1, 7pp. 1-24, Hall, Peter A., and David Soskice. Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. Oxford University Press, Gourevitch, Peter A., and James Shinn. Political Power and Corporate Control: The New Global Politics of Corporate Governance. Princeton University Press, SESSION 8: BUSINESS AND DEMOCRACY (IPE) *Strange, Susan The Retreat of the State: Diffusion of Power in the World Economy. Cambridge Studies in International Relations 49. Cambridge: Cambridge University Press. Chapter 4: Politics and Production, pp Crouch, Colin The Strange Non-Death of Neo-Liberalism. Cambridge, UK; Malden, MA: Polity Press. Rodrik, Dani The Globalization Paradox: Democracy and the Future of the World Economy. New York: W. W. Norton & Co. SESSION 9: INEQUALITY AND DEMOCRACY
7 *Piketty, Thomas. Capital in the Twenty-First Century. First Edition. Cambridge Massachusetts: Belknap Press, Introduction, p Recommended Readings Bartels, Larry M. Unequal Democracy. The Political Economy of the New Gilded Age. (New York: Russel Sage Foundation, 2008). pp. 1-29; Hacker, Jacob S., and Paul Pierson Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class. New York: Simon & Schuster. Schäfer, Armin Consequences of Social Inequality for Democracy in Western Europe. Zeitschrift für Vergleichende Politikwissenschaft, 2010, DOI /s SESSION 10: DEBT AND DEMOCRACY *Calomiris, Charles W., and Stephen H. Haber Fragile by Design: The Political Origins of Banking Crises and Scarce Credit. Princeton, New Jersey: Princeton University Press, chapter 7: The New U.S. Bank Bargain: Megabanks, Urban Activists, and the Erosion of Mortgage Standards, pp Aalbers, Manuel Subprime Cities: The Political Economy of Mortgage Markets. 1st ed. Malden, MA: Wiley-Blackwell. Crouch, Colin The Strange Non-Death of Neo-Liberalism. Cambridge, UK; Malden, MA: Polity Press. Schwartz, Herman Subprime Nation: American Power, Global Capital, and the Housing Bubble. Cornell University Press. Soederberg, Susanne Debtfare States and the Poverty Industry: Money, Discipline and the Surplus Population. Routledge. Streeck, Wolfgang Buying Time: The Delayed Crisis of Democratic Capitalism. Brooklyn, NY: Verso. SESSION 11: THE EURO CRISIS AND DEMOCRACY
8 *Scharpf, Fritz W. (2011): Monetary Union: Fiscal Crisis and the Pre-emption of Democracy. LSE Europe in Question Discussion Paper Series, LEQS Paper 36/2011. Recommended Blyth, Mark. Austerity: The History of a Dangerous Idea, Oxford: OUP Deutschmann, Christoph The Future of the European Union A Hayekian Regime? European Journal of Social Theory 17 (3): doi: / O Rourke, Kevin H. (2011). A Tale of Two Trilemmas. Dublin: Department of Economics and IIIS, Trinity College, available at pdf Streeck, Wolfgang, and Armin Schäfer, eds. Politics in the Age of Austerity. 1 edition. Cambridge, UK: Polity, Wolf, Nikolaus (2012). Crises and Policy Responses within the Political Trilemma: Europe, and , unpublished paper, EHES Working Paper in Economic History No. 16, European Historical Economics Society SESSION 12: WRAP UP General discussion
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