Topics in the History of Economic Thought Location: Instructor: Paul Castañeda Dower Office: 1901 Office Hours: TBA E-mail: pdower@nes.ru A. Course Description This course covers topics in the history of economic thought. The particular emphasis of this course is to demonstrate the persistence of policy debates by taking a closer look at the classical school of economic thought and its critics. The student should have some knowledge of intermediate micro- and macroeconomics. B. Course Materials The textbook we will use is History of Economic Theory and Method by Ekelund R.B. and Hebert F.R. (EH) We will draw on a number of other readings. C. Course Requirements There is a mandatory attendance policy for this course. You may have up to two unexcused absences before a penalty will set in. Your grade will be composed of the following: 1. Writing Assignments: 15% 2. In-class Participation: 15% 3. Presentation: 20% 4. Final Paper: 50% Weekly writing assignments will consist of a two-page critical analysis of an assigned reading. The analysis should select a particular theme of the text and discuss its relevance for a pertinent contemporary policy issue. If you are having difficulty connecting the reading to a policy issue, you may evaluate the text from a modern economic theory. However, you will be rewarded for making a strong case for the relevance of the text to today. You are responsible for three weekly assignments throughout the course and you may not write more than one assignment per week. The in-class participation will be based on discussion as well as individually (or group) led discussions of a scholarly article related to the class material.
The presentation will take the form of a debate concerning a particular policy issue. We will spend the last week of class on these debates. The exact format will depend on the number of students enrolled. The final paper will consist of no longer than 8-12 pages (double-spaced, Times New Roman, 12 pt) and is due on the last day of exams. Topics should be approved by the fourth week of class. The paper should discuss the ideas of some economist writing before the twentieth century. You will be graded on how accurately you portray the idea(s), how well you identify the relevance of the idea to contemporary issues and how well you evaluate the idea from a modern perspective. D. Tentative Course Outline (Incomplete) I. Classical Foundations of Economic Order Session 1: Introductory Comments and Precursors to Classical Thought EH ch. 1, 3 Blaug, Mark. (2001), No History of Ideas, Please, We're Economists, Journal of Economic Perspectives, 15 (1) Winter: 45-164. Shiller and Shiller (2011) Economists as Worldly Philosophers Session 2: Adam Smith EH ch. 5 Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. Introduction, Book I, ch. 1-5, 7, 11; Book II, ch. 3; Book III ch. 1 http://www.econlib.org/library/smith/smwn.html Session 3: Malthus EH ch. 6 Malthus, An Essay on the Principle of Population, chapters 1, 2, 4, 5, 16, 17 http://www.econlib.org/library/malthus/malpop.html
Malthus, Principles of Political Economy, ch. 3, sections I and VIII, http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3ftitle=2188 Session 4: Mill and Ricardo EH ch. 7 and 8 David Ricardo, On the Principles of Political Economy and Taxation, third edition, chapters I-VI, XXIV, XXX, XXXII, 1821. http://www.econlib.org/library/ricardo/ricp.html John Stuart Mill, Principles of Political Economy, Book III, chapters I-VI, and Book IV, chapters I-VI, ed. William Ashley, 1848. http://www.econlib.org/library/mill/mlp.html Session 5: The Classical Emphasis on Legal Order EH ch. 8,9 Jean--- Baptiste Say, Of the Right of Property, A Treatise on Political Economy, Book I, Chapt. XIV. http://www.econlib.org/library/say/sayt.html David Hume, Justice and Property, A Treatise on Human Nature, (Oxford edition). http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3ftitle=342&chapt er=55219&layout=html&itemid=27 Bentham, Introduction to Principles of Morals and Legislation, chs.1, 2 3,10, 11, 17; http://www.econlib.org/library/bentham/bnthpml.html Evensky, Jerry (2005) Adam Smith s theory of Moral Sentiments: On Morals and Why They Matter to a Liberal Society of Free People and Free Markets. Journal of Economic Perspectives 19 (3): 109-130. David Levy and Sandra Peart, The Secret History of the Dismal Science
Session 6: Policy Debates and the Principle of Laissez Faire Poor Laws, Corn Laws, Trade, EH ch. 9 John Stuart Mill, Of the Grounds and Limits of the Laisser--- Faire or Non--- Interference Principle, Principles of Political Economy, Book V, Chap. 11. http://www.econlib.org/library/mill/mlp.html Frederic Bastiat, What is Seen and What is Unseen, Selected Essays on Political Economy. http://www.econlib.org/library/bastiat/basess.html David Ricardo, On Foreign Trade, Principles of Political Economy and Taxation. http://www.econlib.org/library/ricardo/ricp.html II. Critiques of the Classical Approach (4 lectures) Session 7: Marx EH ch. 10 Marx. Capital (1887) Volume I, ch. 1, 2, 4-7, 23-24, 26, 32; Volume III, ch. 14, 39 http://www.econlib.org/library/ypdbooks/marx/mrxcpa.html http://www.econlib.org/library/ypdbooks/marx/mrxcpc.html Session 8: Marginal Revolution: Mathematical and Genetic-Causal Approaches EH ch. 12, 13 Jevons, The Theory of Political Economy, chapters I, III, VII. http://www.econlib.org/library/ypdbooks/jevons/jvnpe.html
Carl Menger, Principles of Economics, I and III, 1871. http://www.mises.org/books/mengerprinciples.pdf Robin Cowan and Mario Rizzo (1996), The Genetic-Causal Tradition and Modern Economic Theory Kyklos 49 (3). Session 9: Keynes EH ch. 18 John Maynard Keynes, General Theory of Employment, Interest and Money, Chap. 2, 3 24. http://ebooks.adelaide.edu.au/k/keynes/john_maynard/k44g/chapter2.html http://ebooks.adelaide.edu.au/k/keynes/john_maynard/k44g/chapter3.html http://ebooks.adelaide.edu.au/k/keynes/john_maynard/k44g/chapter24.html John Maynard Keynes, Essays in Persuasion (New York: Harcourt Brace, 1932). Am I a Liberal?, http://babel.hathitrust.org/cgi/pt?seq=343;id=uc1.32106006101007;page=root;view=1up;size=100;orient=0 ;num=323 The End of Laissez--- Faire, http://babel.hathitrust.org/cgi/pt?seq=332&id=uc1.32106006101007&page=root&view=image&size=100& orient=0 Economic Possibilities for Our Grandchildren http://babel.hathitrust.org/cgi/pt?seq=378;id=uc1.32106006101007;page=root;view=1up;size=100;orient=0 ;num=358 Session 10: Veblen EH ch. 16 Thorstein Veblen, Why is Economics not an Evolutionary Science? The Quarterly Journal of Economics, Vol. 12, No. 4 (July 1898), 373-397.
Thorstein Veblen, The Limitations of Marginal Utility, The Journal of Political Economy, Vol. 17, No. 9 (November 1909), 620-636. Thorstein Veblen, The Theory of the Leisure Class, chapters 1, 2, 4, 1899. http://oll.libertyfund.org/index.php?option=com_staticxt&staticfile=show.php%3ftitle=1657&itemid=27 III. Policy Ideas in the History of Economic Thought (4 classes) Session 11: Say s Law Jean--- Baptiste Say, Of the Demand or Market for Products, A Treatise on Political Economy, Book I, Chap. XV. http://www.econlib.org/library/say/sayt15.html#bk.i,ch.xv John Stuart Mill, The Influence of Consumption on Production, Chap. II, Essays on Some Unsettled Questions of Political Economy, paragraphs II.69 II.78. http://www.econlib.org/library/mill/mluqp2.html#essay%20ii.%20of%20the%20influe nce%20of%20consumption%20on%20production. Steven Kates, On the True Meaning of Say s Law, Eastern Economic Journal, Vol. 23, Spring, 1997. Paul Krugman. Baby-sitting the Economy, Slate, August 14 th 1998. Mark Blaug, Say s Law of Markets: What Did It Mean and Why Should We Care, Eastern Economic Journal, Vol. 23, 2, 1997. Session 12: Socialist Calculation Debate Oskar Lange On the Economic Theory of Socialism: Part One Review of Economic Studies 4 (1) 1936 F. A. Hayek, The Use of Knowledge in Society, American Economic
Review, September 1945. Peter J. Boettke, Theoretical Problems of Socialism, Why Perestroika Failed. Lawrence H. White, The Bolshevik Revolution and the Socialist Calculation Debate, The Clash of Economic Ideas Sessions 13 and 14: Student Presentations Possible Debates: Business Cycle (Hayek vs. Keynes); Free Trade; Pigovian Taxes; Globalization; Libertarian Paternalism; Foreign Aid; Inequality; Transition and Shock therapy; Job Creation; Development Planning. Useful references: A. C. Pigou, Divergences between Marginal Social Net Product and Marginal Private Net Product, The Economics of Welfare, Part II, Chap. IX, sections 1, 3, 10, 13. Ronald H. Coase, The Problem of Social Cost, Journal of Law and Economics, October 1960. James M. Buchanan, Private and Social Cost, Cost and Choice, Chap. 5. Lawrence H. White, The Roaring Twenties and the Austrian Business Cycle Theory, The Clash of Economic Ideas, Chap. 3., The Great Depression and Keynes s General Theory, The Clash of Economic Ideas, Chap. 4. Lawrence H. White, The Second World War and Hayek s Road to Serfdom, Clash of Economic Ideas, Chap. 6 (ms. forthcoming book). (H) F.A. Hayek, Genius for Compromise, The Spectator (UK), Jan. 26, 1945. F. A. Hayek, Planning and Democracy and Planning and the Rule of Law, The Road to Serfdom (1944), Chap. 5, 6, pp. 100--- 23.