POLI 4062 Comparative Political Economy The Political Socio-Economics of States, Markets, and Societies Fall 2008, Monday, 4:40 7:30 pm at 241 Lockett

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1 POLI 4062 Comparative Political Economy The Political Socio-Economics of States, Markets, and Societies Fall 2008, Monday, 4:40 7:30 pm at 241 Lockett Prof. Wonik Kim Office # 229 Stubbs Hall Department of Political Science wkim@lsu.edu Office hours: Tuesdays and Thursdays 4:40 5:30 p.m., or by appointment Course Overview The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back soon or late, it is ideas, not vested interests, which are dangerous for good or evil. John Maynard Keynes, General Theory of Employment, Interest, and Money This advanced upper-level course provides the fundamentals of political economy or political socioeconomics. Our central puzzle throughout the course is, in David Landes words, Why Are We So Rich and They So Poor? Since the focus of this course is on the fundamentals, we take unit of analysis rather broadly, which means that We and They can be regions, countries, political entities, economic systems, institutions, societies, people, citizens, individuals, or agents. Discussions center on economic development and inequality. And discussions are based on our rigorous reading of the texts and phenomena. Reading means open to all kinds of possibilities and potentialities. We proceed behind a veil of ignorance, amicable to various methodologies, ideologies, cultures, religions, and cults. As such, the only approach is Bayesian (i.e., updating our initial belief through learning), and the sole goal is to understand (as a corollary, possibly change) the world. This course has three goals: 1) to understand the nature of the capitalist system and the relationship between the state(s), market(s), and society(ies), 2) to examine macro-historical evidence of capitalism, focusing on primitive accumulation, the origin and expansion of capitalism, and the divergent paths of economic development across countries and regions, and 3) to make sense of the current revival of economic liberalism in the context of globalization and the role of politics partisan policies, elections, and representativeness in generating (in)equality within a society. To do so, this course is divided into three parts: Part I Part II Part III Great Ideas and the Genesis of the Political Socio-Economics History of Capitalism and the Great Divergence Neo-liberalism and the Politics of Inequality 1

2 N.B. 1. Basically, classes will involve lectures and discussions of the reading material assigned for each session. But, I will introduce and explain some issues and concepts that are not in the readings, so the attendance is crucial. This means that a significant amount of material on the examinations will come from class lectures presenting information not discussed directly in the text and other readings. Participation from students is important and will count toward the final grade. N.B. 2. Some materials and lectures might be difficult, but you should ask questions if you don t understand. Whenever you are puzzled, feel free to stop my lecture and scream, to me, and to stop by my office. The general philosophy is that students who are eager to learn must be rewarded. N.B. 3. If you do not take any of the examinations, or if you do not submit any of the reaction papers, you will automatically receive an F. No make-up examinations will be given for any reason. No late papers will be accepted for any reason. Course Readings Each student is expected to read (before class) all the required readings for each session. There are five required books: 1) Karl Polanyi The Great Transformation: The Political and Economic Origins of Our Time. Boston: Beacon Press. 2) Joseph Schumpeter Capitalism, Socialism, and Democracy. New York: Harper Perennial. 3) Eric Jones The European Miracle: Environments, Economies and Geopolitics in the History of Europe and Asia. Cambridge: Cambridge University Press. 4) Robert Marks The Origins of the Modern World: A Global and Ecological Narrative from the Fifteenth to the Twenty-first Century. Second Edition. Oxford: Rowman & Littlefield. 5) David Harvey A Brief History of Neoliberalism. Oxford: Oxford University Press. In addition, two required readings from book chapters are posted on Semester Book. All students should have a LSU account for access to Semester Book through the PAWS desktop. *Here are selected background/recommended /further readings related to my lectures. Part I constitutes the great thinkers and foundational ideas. Anyone who is serious about political economy must read and study at least these three masterpieces: Adam Smith s Wealth of Nations (1776), Karl Marx s Capital, Vol. I (1867), and Max Weber s The Protestant Ethic and the Spirit of Capitalism (1905). For those who are interested in political economy but don t have time to sit down and dig in, rely on Robert Heilbroner s The Worldly Philosophers (1999), Simon & Schuster, and David Warsh s Knowledge and the Wealth of Nations(2006), W. W. Norton; they are very useful introduction to the intellectual history of the political economy. One unfortunate aspect in Part I is that the entire Hayekian model is missing. To remedy this, read F. A. Hayek s classic, The Road to Serfdom (2007), definitive edition with Caldwell s introduction, University of Chicago Press, and Milton Friedman s 2

3 Capitalism and Freedom (2002), University of Chicago Press. A profound but eccentrically convoluted perspective on the state-market-society nexus was provided by Antonio Gramsci s Prison Notebooks (1971), International Publishers. If you like Schumpeter, read Thomas McGraw s beautiful biography, Prophet of Innovation (2007), Harvard University Press. Part II is about the history of capitalism. Some of the essential readings consistent with the course s spirit are: Arnold Toynbee, The Industrial Revolution (1956[1884]), Beacon Press; Marc Bloch, Feudal Society (1961), University of Chicago Press; Douglass North and Robert Thomas, The Rise of the Western World (1973), Cambridge University Press; Eric Hobsbawm, Industry and Empire (1999), The New Press, and his The Age of Capital, and The Age of Empire, ; Ellen Wood, The Origin of Capitalism (2002), Verso; Michel Beaud, A History of Capitalism, (2001), Monthly Review Press; Immanuel Wallerstein, World-Systems Analysis (2006), Duke University Press; Janet Abu-Lughod, Before European Hegemony (1989), Oxford University Press; Giovanni Arrighi, The Long Twentieth Century (1994) and Adam Smith in Beijing (2007), Verso; Bin R. Wong, China Transformed (1997), Cornell University Press; Andre Gunder Frank, ReOrient (1998), University of California Press; Kenneth Pomeranz, The Great Divergence (2000), Princeton University Press; J. M. Blaut, The Colonizer s Model of the World (1993), The Guilford Press. Jared Diamond has popularized the significance of geography as a material condition: Guns, Germs, and Steel: The Fate of Human Societies. (1999), Norton. I think the most important achievement in this field is Fernand Braudel s monumental Civilization and Capitalism 15 th -18 th Century, three volumes (about 1,800 pages), 1992 translation edition, University of California Press (there is a short-version (only 120 pages) neatly summarized by Braudel himself, La dynamique du capitalisme (1985), Paris: Arthaud. Part III covers diverse topics so involves the enormous literature. For the first section of Part III, selected recommended books are: Andrew Glyn et al., Capitalism since 1945 (1991), Blackwell; Joseph Stiglitz, Globalization and Its Discontents (2003), W. W. Norton; Jagdish Bhagwati, In Defense of Globalization (2004), Oxford University Press; Robert Brenner, The Economics of Global Turbulence (2006), Verso. For the second section of Part III, read: Carl Schmitt, The Crisis of Parliamentary Democracy (1988[1926]), The MIT Press; Albert Hirschman, Exit, Voice, and Loyalty (1970), Harvard University Press; Adam Przeworski and John Sprague, Paper Stone (1986), University of Chicago Press; Gøsta Esping-Andersen, The Three Worlds of Welfare Capitalism (1990), Princeton University Press; Monica Prasad, The Politics of Free Markets (2006), The University of Chicago Press; Paul Kingston, The Classless Society (2000), Stanford University Press; Geoffrey Evans, The End of Class Politics? (1999), Oxford University Press; S. M. Lipset, It Didn t Happen Here (2000), W. W. Norton; Thomas Frank, What s the Matter with Kansas? (2005), Owl Books. If you d like to dig in more and hit the bottom in vain - get inspiration with no solution, see the 1970s Marxian debate on the role of the state and ruling elite in the capitalist regime; Louis Althusser s Ideology and Ideological State Apparatus (1969), Ralph Miliband s The State in Capitalist Society (1969), Nicos Poulantzas s Political Power and Social Classes, (1973), Steven Lukes s Power: A Radical View (1974), and Göran Therborn s What Does the Ruling Class Do When It Rules? (1978). Yet, I strongly recommend Karl Marx s The Eighteenth Brumaire of Louis Bonaparte (1852). Raymond Aron, a great liberal anti-socialist thinker once commented on this book: in many respects, this brilliant pamphlet is more satisfying than his massive scientific books, and Marx here forgot his theories and analyzed events as an observer and as an observer of genius. I am certain that this small book will be read admiringly after thousands of years. 3

4 Course Requirements 1) Midterm and final examinations (20% each) The emphasis is on important concepts and competing explanations of various political economic phenomena. 2) Five reaction papers (10%) You will write a reaction paper on the assigned book. We have five required books, and you will write total five reaction papers in this course. A reaction paper is a short paper (no longer than three double-spaced pages), discussing some aspects of the reading. In the reaction paper you must briefly summarize the book and evaluate some central aspect of its discussion. Note: evaluate means that you must identify some central aspect of the author s analysis, explain why you think this aspect is interesting/important, and present your evaluation of the author s position (note that you must try to make an argument, simply asserting your agreement or disagreement will not be sufficient). The reaction papers are due in class on the date scheduled for discussion of the readings (see the important dates below). You should submit a hard copy. Since we will discuss the readings in class, late papers will not be accepted. 3) Class participation (10%) Attendance will be taken for each session. Students may earn credit for their attendance at each class session, while repeated and unexcused absence will cause deduction in student s total grade. In addition to attending class, students are highly encouraged to ask and answer questions, and to make appropriate comments on issues covered in class. Important Dates Examinations Midterm Final October 13 from 4:40 to 7:30 pm December 8 from 8:00 to 10:00 pm Reaction papers (due in class; hard copy only) 1 st on Polanyi September 29 2 nd on Schumpeter October 6 3 rd on European Miracle October 20 4 th on Origins of the Modern World November 3 5 th on Neoliberalism November 10 Labor Day Conference September 1 No class November 17 No class 4

5 Course Outline Part I. Great Ideas and the Genesis of the Political Socio-Economics I.1. (09-08) Adam Smith: Miracle of Market and the Engine of Growth Universal motive. Invisible hand. Price. Competition. De-centralized allocation mechanism. Two fundamental theorems. Ricardo, Malthus, and J. S. Mill. Neo-classical model. Diminishing return. Convergence. No reading. I.2. (09-15) Karl Marx: Disaster of Market and the Dynamic of Growth Surplus value and exploitation. Contradiction between forces and relations of production. Class. Pauperization and falling tendency of the rate of profit. Primitive accumulation. Centralized allocation mechanism. Liberal, socialist vs. social-democratic blueprints. No reading. I.3. (09-22) Max Weber: Value as a Fundamental Buttress of Capitalism Role of the value system. Spirit of capitalism. Dependent variable problem. Sociological approach. Summary of the three classical perspectives. No reading. I.4. (09-29) Karl Polanyi: Liberal Utopia and the Discovery of Active Society Embeddedness. Fictitious commodities. Self-regulating market and self-protecting society. Market failures. Government failures. Double movement. Karl Polanyi The Great Transformation: The Political and Economic Origins of Our Time. Beacon Press. I.5. (10-06) Joseph Schumpeter: Creative Destruction and Political Competition Increasing return. Monopoly. Creative destruction. Capitalism as civilization. Static efficiency and dynamic inefficiency. Maximalist vs. minimalist approach. Democracy as a method. A unified framework toward the political socio-economics. Joseph Schumpeter Capitalism, Socialism, and Democracy. Harper Perennial. (Focus on Part II and Part IV) Part II. History of Capitalism and the Great Divergence II.1. (10-20) The Rise of the West and the European Miracle Industrial Revolution. Industrious revolution. Commercialization. Size of family. Property right. Internal dynamic and gradual process. Ghost acreage. Agrarian capitalism. European state-system. 5

6 Eric Jones The European Miracle: Environments, Economies and Geopolitics in the History of Europe and Asia. Cambridge University Press. II.2. (10-27) Formation of the Modern Nation-State War-making and state-making. Protection racket. Unintended consequence. Selective affinity between capitalism and the state. Tilly, Charles Coercion, Capital, and European States, AD London: Blackwell, Chapter 3-4. [Semester Book] II.3. (11-03) Did the West Really Get Rich by Themselves? Eurocentric vs. polycentric views. Ecological constraints. Trade and colonialism. Turning point. Take-off. Path dependence. Contingency. Conjuncture. Causality and counterfactuals. Robert Marks The Origins of the Modern World: A Global and Ecological Narrative from the Fifteenth to the Twenty-first Century. Second Edition. Rowman & Littlefield. Part III. Neo-liberalism and the Politics of Inequality III.1. (11-03) Globalization and Varieties of Capitalism Free market vs. central planned economies. Lenin and the New Economic Plan. Keynes vs. Hayek. Globalization in historical perspective. Compensation thesis vs. efficiency thesis. Partisan vs. electoralist models. No reading. Film: The Commanding Heights: the Battle of Ideas. III.2. (11-10) Neoliberalism: Origins and Consequences Why neoliberal turn? Washington Consensus. Class compromise and class dominance. The neoliberal state. Thatcher, Reagan, and Deng Xiaoping. Social consequences. Accumulation by dispossession. Polanyi revisited. David Harvey A Brief History of Neoliberalism. Oxford University Press. III.3. (11-24) The Politics of Inequality and Democratic Representativeness The US as a case study. Income inequality. Does class matter? Partisan control of the economy. Elections. Information. Accountability and representation. Democratic incapacity? Structural dependence of the state on capital. Three dimensions of power. Are we continuously duped? Bartel, Larry Unequal Democracy: The Political Economy of the New Gilded Age. Princeton: Princeton University Press, Chapter 1-3. [Semester Book] III.4. (12-01) Conclusion Summary of the course. Importance of what we care about. Wittgenstein s dictum. Harry Frankfurt On Bullshit. Raritan VI, No.1. 6