Economics 322 - Comparative Economic Systems
Fall Semester, 2011
Towson University
Purpose / Procedures
/ Integrity / Requirements
/ Grading / Books / Schedule
Instructor: Dr. Howard Baetjer, Jr.
Office: Stephens 123H
Phone: Office: (410)-704-2585
Home:
(410)-435-2664 (No calls after 9:00 p.m.)
Email: hbaetjer@towson.edu
Office hours: Monday,
5:00-6:30, Tuesday 2:30-4:00, and by appointment
The underlying purpose of the
economics we study in this course is to help you improve your ability to make
sense of political-economic systems and processes. Through taking the course, you
should learn some essential concepts of political economy and develop habits of
thinking that will help you use those concepts to make sense of the social
world. The more immediate purpose of the course is to investigate how much
economic freedom societies should have. At one logical extreme,
government might be used only to protect private property and enforce
contracts, leaving citizens free to engage in any mutually agreeable exchanges
they choose. At the other logical extreme, government might own all
property, plan centrally, and dictate all economic activities. Between
those two extremes, where should societies locate themselves? Where
according to the demands of justice? Where in order to achieve the
greatest economic well-being? Are the answers to these last two questions
different? If so, which should we favor?
This is a fascinating and important
topic. Its historical importance should be obvious: Under planned-economy
ideology and policy, about half of Europe and much of Asia suffered terrible
economic backwardness and deprivation, political terror, and environmental
destruction for more than half of the last century. And millions of people were
murdered by their own governments in the Soviet Union, China and the
"killing fields" of Cambodia. Yet, arguably, these regimes were
not true communism, and perhaps true communism would have been much better.
Understanding the relative merits of
more-free and more-planned economies is also important to understanding the
present-day struggles of the nations of the former Soviet Union and China to
free their economies, privatize their state-owned industries and enterprises,
and gain some of the benefits of a liberal market order. Unless we understand
the problems of the system they are trying to cast off, we are hard put to
understand their challenges and opportunities, or to assess what policies might
help them free their economies as quickly and painlessly as possible.
Comparing economic systems is useful
in still another way. It helps us understand our own political economy. The
western democracies are mixed economies rather than free economies. We
have a substantial amount of government intervention into economic affairs,
rather than consistent laissez-faire. This intervention has similarities
to Soviet-type planning, although it does not go nearly as far. Accordingly,
understanding the problems of central planning can help us make sense of and
evaluate much of our own policy.
The recent housing bubble and
financial turmoil have been blamed by some on unfettered free markets,
insufficient regulation, and capitalism run wild. It has been blamed by others on wrong-headed
government intervention in housing, money, and banking. Who’s right?
Or are they both wrong?
Writing
In its former life as Econ 323, this
course was an advanced writing course satisfying the GenEd requirement
I.D. Even though the course no longer
has an explicit writing focus, you will do a lot of writing and I’ll coach you
on writing better. One goal of this
writing is to help you improve your ability to express yourself clearly and
persuasively. Economist Deirdre McCloskey, one of the best writers in the
field, once wrote that our goal in writing should not be to make it possible
for the reader to understand what we mean. It should be to make it impossible
for the reader not to understand what we mean. This course
emphasizes CLARITY in both the particular phrasing and the overall organization
of your ideas. Correct grammar,
punctuation, and word usage are expected. There are no quantitative
problems or multiple choice questions in this course; every graded assignment
is a writing assignment, so you must write clearly to earn a good grade.
Getting help on your writing: Students are
expected to write at a college level. Sadly, many students arrive at
Towson poorly prepared to do so. It is
not usually your fault, but the fault of the dreadful writing instruction you
have received in school. Be that as it
may, you are in college now and I’ll expect you to write at a college level. Here are three programs that you can use to
improve:
For help with organization and content, please make an appointment with the CBE Writing Proficiency Program, located in Stephens Hall 117, by calling 410-704-4379 or sending an e-mail to cbewriting@towson.edu . The program is available Monday through Friday during the semester. Writing consultants in the program will review your work and provide feedback. See the Program website: http://www.towson.edu/cbe/student_resources/writingprogram.asp.
If you need help with basic grammar and punctuation, you have two options. You may contact the university’s Writing Support Center at http://wwwnew.towson.edu/writingsupportprogram/index.htm. Alternatively, you can find information on specific points of grammar and punctuation online at Towson’s Online Writing Support: http://wwwnew.towson.edu/ows/.
Course catalog description
Effects
of alternative institutional arrangements on incentives and individual behavior
affecting the allocation of resources.
Differences between decentralized or market systems and centralized or
government planning. Prerequisites: ECON 201/203 and ECON 202/204.
Online logistics
We will make extensive use of
Blackboard, the university's web-based system for facilitating course
delivery. If the university’s software
systems are working properly, they will enroll you in this course's Blackboard
site. For further information about the Blackboard system, and to log in
to this course’s Blackboard site, please go to http://bbweb.towson.edu. Please explore the system and read my
"Announcements." Note that in "Student Tools" there is a
student manual that describes the system.
Reading
The course centers on the readings. Students
are expected to do all the week's reading before the first class
meeting each week, so that they can participate helpfully in class discussions.
Courses such as this one, which depend on active discussions among the
students, are greatly improved by students’ doing the reading thoroughly before
class. Those who don't prepare adequately free ride on the efforts of their
classmates, to their own embarrassment and others’ annoyance. By contrast, when
everyone is prepared, discussions can be lively and rewarding. Please commit
yourself to preparing thoroughly each week if you take the course.
That said,
I do not expect you to study all the reading, as you would a poem or
technical textbook. Some of the reading, especially on the socialist
calculation debate, is difficult. For most readings I have posted notes
("Notes on the Readings") in the "Course Documents" section
of our Blackboard site. These guides point out which passages you may skim,
which you should read, and which you should study. Give each reading a
decent amount of time, taking notes on the main idea(s) you find in each
section and on any main questions that remain for you, and press on. (Making
brief notes on all these main ideas and main questions will give you a
valuable, concise outline of all the readings, an outline useful in class
discussions and in reviewing for the exam.)
With few exceptions if any, there
will be a quiz on the reading every week at the beginning of the first class.
Deadlines
Deadlines should be deadlines.
Lateness on any assignment may be penalized at 5% per day, including weekend
days, beginning the day and time the assignment is due, unless some
extraordinary emergency has caused the lateness. Printer failures, hard
drive failures, bad disks, crowded computer labs and the like are all normal
occurrences that you should anticipate and allow for. Lateness for
reasons such as these may not be excused.
"Blind" grading
Please never identify yourself on
the front of any paper you hand in. Instead, put your name ONLY on the BOTTOM
of the BACK of the LAST PAGE of your paper. This practice is to prevent
me from knowing who you are as I grade your work. Not knowing who has
written what helps me avoid any unconscious bias or waste of time wondering if
I'm being fair.
Discussion in class
On the theory that students learn
the most when they are actively involved in the learning process, I try to do
comparatively little straight lecturing. My informal, overstated principle
underlying this policy is that if you aren't talking, you aren't learning.
Accordingly, I will pose questions for discussion, help clarify
misunderstandings, keep discussions on a useful trajectory, and coach you in a
discovery process of your own. (This is the theory, at least. In fact I
will probably talk more than I should.) Please feel free to speak up any
time. My preference is for an informal, lively, even noisy class atmosphere,
keeping within the bounds of good manners, of course.
Sometimes classes may consist of
first a small-group, then a whole-group discussion of questions on the
readings. These questions may be handed out at the beginning of class
and/or posted on our Blackboard site.
This should go without saying, but
let us say it anyway: Be honest. Present as your own work only your own work.
Your integrity is far more important than your grade. Practice integrity in
your actions and you will build it in yourself. Anyone who cheats or
plagiarizes will fail the course.
The danger area for academic
dishonesty in this course is plagiarism. Plagiarism is presenting others' words or ideas as your
own. Learn what plagiarism is and how to avoid it! There will be many occasions
where you can inadvertently fall into plagiarism; don’t! To help you avoid plagiarism, I provide two
links to useful discussions of plagiarism offered by other universities. You
will find them in the "External Links" section of our Blackboard
site. Study them until you are certain that you understand
what plagiarism is and how to avoid it. To get you started, here's "[a]
good rule of thumb for written material taken from another author," from
Professor J. Douglas Woods of the University of Toronto: "if it amounts to
more than three connected words, give the citation for it." (This used to
be at the following now-broken link: http://citd.scar.utoronto.ca/LINB27/introduction/plagiarism.html.)
Your first assignment is to read
through the web pages on plagiarism to which I provide you links, then email me
a short note from our Blackboard site either telling me that you have read and
understand them or asking for clarification of particulars.
Frequently I will encourage you to
work together. It is especially useful to get someone else to look over your
written work and point out errors and unclear phrasing. Doing so is perfectly
acceptable, even when the assignment is for a grade. But don't let someone else
write your work for you, and make clear to your reader what is your own, what
is joint effort, and what is others’. When in doubt, cite your classmate.
Participation in class discussions: This is very valuable to all. "If you aren't talking,
you aren't learning." There are no stupid questions, but it can be stupid
not to ask questions. Let ’er rip. Prepare, treat
others courteously, participate freely. Very good
contribution to the quality of discussions may earn a bonus on the final course
grade, while poor class participation will result in a reduction of the final
course grade. In this course, class attendance is extremely important.
Quizzes and short essays: You will be quizzed on the reading first thing each week;
occasionally you will be assigned short essays that will count as quizzes also.
The three lowest quiz grades will be dropped; the rest will count unless
extraordinary (and well-documented) emergencies force you to miss or come
unprepared for more than two.
·
Quizzes in class take 20 minutes or
less. You may write on no more than one side of one sheet of paper; therefore
plan your answers before beginning and write concisely.
·
Please use clean-edged paper, rather
than tearing sheets out of a spiral bound notebook. The ragged edges outrage my
sense of neatness.
·
Please put your name ONLY on the BOTTOM
of the BACK of the quiz paper.
Writing
practice during the first weeks:
In order to clarify my expectations for your writing, and to give you a little
bit of writing practice and coaching early in the term, you will have two
writing assignments due on Tuesday,
Sep. 6th and on Tuesday, Sep. 13th.
Each of these short essays is to be one paragraph only, and no
longer than one page. These will not be graded (unless they are late or
not submitted, in which case they receive a zero). They are for practice,
and ungraded to keep the pressure off you until you have worked the rust out of
your writing skills. Here is your
assignment for the very first short essay due Sep. 6th:
In a well-organized, one-paragraph essay of no
more than one page, double spaced, contrast the essentials of the
"constrained vision" and the "unconstrained
vision," as presented in chapter 2 of A Conflict of Visions.
For the other short essay due Tuesday, Sep. 13th,
you may choose any topic that appeals to you, provided that it deals directly
with ideas that have arisen in the course readings and discussions. Pick
a topic with which you are comfortable and about which you have something you
would really like to say. I don't want difficulty of topic to get
in the way of writing practice.
Two versions of these short essays
are required: 1) an electronic version submitted in the "Practice
Essays" Discussion forum on our Blackboard site by class time, and 2) a hard
copy version submitted to me at the beginning of class. These must be
identical. I recommend that once you have carefully proofread and printed
your final hard copy, you copy and paste your paper from your word processor
into the Discussion forum. The reason for the electronic copies is that I
draw examples from them for writing instruction in class.
Please put your name ONLY on the
BOTTOM of the BACK of the essay, and please also write down the due date,
either in a first-page header, or along with your name at the bottom of the
back.
Essay
on A Conflict of Visions and The Market Economy: A Reader: Your first longer writing assignment is a simple essay of
three to four pages, double spaced. Your assignment is to choose any one
of the articles from The Market Economy: A Reader assigned for September 27, and answer
this question about it:
Is this article based
more on the unconstrained or the constrained vision, as these are presented by
Thomas Sowell?
Try to draw at least some of your references
to A Conflict of Visions from passages in the "applications"
section, chapters 6-8, that relate closely to economics and economic
policy. I'll give a bit of additional credit to papers that do so.
Your paper should be neatly printed. Please provide a title page, but
remember to leave your name off that title page; put your name only on the
bottom of the back of the last page. The paper is due at the beginning of
class on September 29.
Paper explaining a passage from the
Socialist Calculation Debate and in-class presentation: This assignment is an adaptation of one developed by
Professor Zenon Zygmont.
Accordingly, I quote his description of it:
One
of the most crucial aspects in the development of the theory of the Soviet-type
economy (STE) was the Socialist Calculation Debate. The debate didn't occur at
a specific time and place; rather it was a periodic and lengthy exchange of
ideas on the feasibility of socialism and, by implication, the sustainability
of the STE (more specifically, the USSR). The debate was prompted with Lange's
article "On the Economic Theory of Socialism" in 1936-37 which
"proved" that socialism was a feasible system of economic
organization. Lange's article rebutted Mises’ 1920 article "Economic
Calculation in the Socialist Commonwealth" which claimed that socialism
was "impossible." Lange's view was widely accepted by economists as
the correct and the definitive contribution on the subject. Hayek later
challenged Lange and the prevailing view of socialism in a series of articles;
but despite the insights of the former, it was the latter’s view that remained
firmly entrenched among economists and others interested in the Soviet Union
and the STE.
Although several other important
figures participated in the debate, we will focus on the main participants:
Mises, Lange, and Hayek.
Each
of you will focus on the ideas of one of these scholars and carefully summarize
for the class a few assigned pages of his work. Your audience is your
classmates, not your professor. The overall goal of these papers, taken
together, is to help all of us understand better the various arguments made in
the socialist calculation debate. Your particular task is as follows:
Identify the most important points in the
sections assigned to you, and explain them so as to help your classmates
understand them.
Caution: Make sure you
discuss only as many points as you can explain thoroughly in the limited space
you have, and only such particular points as you really understand. I prefer
thorough explanation of fewer points to superficial explanation of more points.
Start early, and get help from me if you are confused about what something
means, so that you understand well what you write about. This is
a challenging assignment. There is no substitute for exhaustive study of your
assigned passage, if you are to explain it well.
Reminder about academic honesty in your calculation debate papers:
Remember that whenever you use your scholar's words you must put
them in quotation marks. Failure to do so is plagiarism. Also be
careful not to alter his wording superficially and offer it as your own.
To do so is plagiarism. Because you are explaining the author's ideas, of
course you should indicate in the usual citations what pages those ideas come from.
Your paper should be printed, double-spaced, three to four
pages in length. Please use a title page, but remember to leave your name
off that title page; put your name only on the bottom of the back of the last
page. Your paper is due on Thursday
of the week in which we study your assigned pages.
In your presentation you will do
orally the same job your paper does in writing, except that with so many
students in the course, you will have time to discuss only two or three of the
points your paper discusses:
Identify two or three of
the most important points "your" scholar makes in the sections
assigned to you, and explain it in a way that will help your classmates
understand it.
The goal of the presentation is the
same as that of your paper: to help your classmates understand the main
ideas in your section. In your presentation, please point out and
read aloud the particular passages from the original article that contain the
main idea you discuss. Give your classmates page numbers and locations on
the pages so that we can note the passages and read along. For each
passage you point out as containing a main idea, explain that idea
clearly. You may simply read your paper if you wish, but I prefer to have
you just talk to us. Keep it simple; make it clear. Be ready to
answer questions from the class.
Presentations are pass/fail/bonus.
Notably good work may earn a bonus on the course grade. Failure will result in
a reduction of the final course grade.
Book essay: The other main assignment of the term is an
essay on a book that addresses the merits of different economic systems.
The books from which you may select are:
The Noblest Triumph, by Tom Bethell
Cowboy Capitalism, by Olaf Gersemann
The Power of Productivity, by William
Lewis
The Future and Its Enemies, by Virginia Postrel
The Mystery of Capital, by Hernando de
Soto
The question, "What role should governments play in the
economy?" underlies
everything we read and talk about this semester. Indeed, differences in
the activities of governments largely define different economic
systems.
Those with the constrained vision
believe governments should play a smaller role. They rely less on
government, and more on evolved institutions of the market, the common law,
culture and custom to shape and guide people's lives. Those with the
unconstrained vision, by contrast, believe governments should play a larger
role. They believe that a more-educated elite—"those with cultivated
minds"—should hold the reins of power and intentionally shape social and
economic affairs.
Excerpts we read from The Market
Economy, A Reader considered a variety of roles governments might play in
the economy, whether by forcing businesses to be socially responsible, or
protecting people from the painful consequences of business failure, or
controlling the means of production, or defining and enforcing private property
rights.
The Socialist Calculation Debate is
directly concerned with the proper role of government in the economy.
Mises and Hayek on one side argue that government should protect private
property rights and freedom of enterprise.
Taylor, Roper, Dickinson, and Lange on the other side argue that society
at large should own all the means of production, and government, as society's
agent, should direct the use of those means of production and determine
incomes.
The books you are reading for your
book essays also take various positions on the role governments should play in
the economy. Some of these books take such positions directly—the authors
tell you what government should do in the economy. Other books only imply
their positions, but with careful reading we can perceive what kinds of actions
in the economy their authors approve of, and what kinds of actions they condemn.
Your assignment is to answer the
following question:
According to the book you
have read, what is the proper role of government in the economy?
By "role" here, I mean
actions, tasks, activities; not goals. For example, do not tell us that,
according to your book, the role of government is to assure peace, justice, and
prosperity. That goes without saying. Tell us what the book states
or implies about specific kinds of actions that governments must take or
refrain from taking (in order to accomplish those goals).
Remember that an essay is a
statement with proof. Your answer to this question will be your
statement. Make that answer clear in your introduction (a paragraph or
two). Your proof will be the evidence you provide, drawn from the book, to
support that answer.
The question may be answered in
various ways. Some of you may choose to answer in terms of the things
governments should do (or be required to do), others
in terms of the things governments should not do (or be forbidden to do).
Still others may choose to answer in terms of both. Some answers will
probably point out just one or two main activities of government, while others
may point out four or five. The actual content of your book will
determine this for you. Make your answer true to your book.
You are permitted, if you wish, also
to give your judgment of the strength or weakness of the book's case for the
economic role of government it advocates.
Doing so is entirely optional, but
some of you are likely to find yourselves becoming intellectually (and maybe
emotionally) invested in what the book is saying, and I want you to have a
chance to have your say.
You
must develop your paper's precise topic and its main supporting subtopics in
email dialogue with me by November 15 as
follows:
·
As soon as you have an answer the
question and the main points you plan to present in support, email me that,
worded as well as you can at that point, recognizing that you'll probably
refine that topic.
·
I will comment in a reply.
·
You will then rethink and, as soon
as you are able, email me your next version.
·
We'll repeat the process until I am
satisfied that you have a clear and manageable topic.
These
essays should be approximately five (5) pages long, double spaced and neatly
printed. They are due at the beginning of class on Thursday, Dec. 1. You must also submit an
electronic copy for your classmates to mark up. You will have an opportunity to
revise your paper based on those comments before submitting everything to me
the following week. Please provide a title page, but, as usual, put your
name only on the bottom of the back of the last page.
Book essay mark-ups: These are pass/fail/bonus, due at class time on December 6. In preparation for that
class, you will read copies of book essays written by four or five of your
classmates (number to be determined), mark them up electronically, and comment
on them. Further details of this assignment will be handed out in class.
Book essay presentation: On December 1 and 6
we will discuss the books you have read. Everyone will give an oral
presentation of about 10 minutes on his or her book and answer questions from
the class. These are pass/fail/bonus.
Final examination: This will be a normal exam, written in the designated exam
period, Thursday, December 15, 12:30-2:30. (Please verify that I’m reading the schedule
correctly.) The quality of your writing counts in this exam, of course.
|
Graded
assignments |
Percent of grade |
|
Quizzes
and short essays |
27 |
|
Pass/fail/bonus
assignments |
One
point deduction from |
The
grading scale is as follows:
|
93
- 100 |
A
|
Grades
in the A range are awarded only for excellent work, work that
shows mastery of the subject. Grades
in the B range indicate good work, work that shows significant
grasp of the subject. Grades
in the C range indicate satisfactory work. We
all know what D and F mean. |
Thomas
Sowell, A Conflict of Visions
James L. Doti and Dwight R. Lee, The Market
Economy: A Reader
Articles and book chapters in a photocopied packet
Two articles available online
One
other book for the book essay
Recommended
reading
Diana
Hacker, A Writer's Reference
|
|
Reading assignments |
Writing assignments |
|
Sep.
1 |
Syllabus,
"I, Pencil" |
Enroll
in Blackboard site. Begin
reading Sowell. |
|
Sep.
6 |
Thomas
Sowell, A Conflict of Visions, Preface - Chapter 3 |
One-paragraph
essay on A Conflict of Visions, chapter 2. video
- "Is America #1?" |
|
Sep.
13 |
Thomas
Sowell, A Conflict of Visions, Chapters 4 - 6 |
One
paragraph essay, open topic |
|
Sep.
20 |
Thomas
Sowell, A Conflict of Visions, Chapter 7 - end (you may skip Chapter
9, the final chapter) |
|
|
Sep.
27 |
Market
Reader (68 pp.) |
Conflict
of Visions/Market Reader paper
(see syllabus) due Thursday, Sep. 29 "Profit,
Loss and Discovery" lecture on Thursday |
|
Oct.
4 |
David
Ramsay Steele, From Marx to Mises, Chapter 1, "A quick look at
the Mises argument" (packet) (27 pp.) |
Mises
papers due Thu., Oct. 6 |
|
Oct.
11 |
F.A.
Hayek, “Socialist Calculation II: The State of the Debate (1935), Chapter
VIII of Individualism and Economic
Order” (available in optional packet, at Google Books, or in PDF at Mises Institute) (33 pp.) |
Hayek
1935 papers due Thu., Oct. 13 |
|
Oct.
18 |
Oskar
Lange, “On the Economic Theory of Socialism” (packet) (72 pp.) |
Lange
papers due Thu., Oct. 20 |
|
Oct.
25 |
F.A.
Hayek, “Socialist Calculation III: The Competitive ‘Solution,’” Chapter IX of
Individualism and Economic Order
and “The Use of Knowledge in Society,” Chapter IV of Individualism and Economic Order)
(both available in optional packet, at Google Books, or in PDF at Mises Institute) (43 pp.) |
Hayek
1940, 1945 papers due Thu., Oct. 27.
Book essay topic is due in two weeks; see assignment for Nov. 15, below. |
|
Nov.
1 |
"Planning
with Material Balances in Soviet-Type Economies" by J. M. Montias, American
Economic Review, Dec. 1959, Vol. 49, No. 5, pp. 963-969 and 976-981 only
(available in optional packet or http://www.jstor.org/stable/1813077) |
Work
out book essay topic with HB |
|
Nov.
8 |
Israel
Kirzner: “The Perils of Regulation: A Market Process
Approach” (packet) |
|
|
Nov.
15 |
Market
Reader |
By
Nov. 15 book essay topic should be
cleared with HB, via email. |
|
Nov.
22 |
Market
Reader Recommended
reading: “Licensing Doctors: Do Economists Agree?”, Econ Journal Watch, American Institute
for Economic Research, August 2004 |
Work
on book essays |
|
Nov.
29 |
James
Gwartney, Randall Holcombe and Robert Lawson," The Scope of Government and the Wealth of Nations," Cato Journal 18(2), 1998. (25 pp.) |
Book
essays due Thursday, Dec. 1 at class
time; |
|
Dec.
6 |
Classmates'
papers as assigned (mark them up) Daniel
B. Klein, "Planning and the Two Coordinations,
with Illustration in Urban Transit"
(17 pp.) |
Book
essay markups. Book presentations continue. |
|
Dec.
13 |
Last
class. Prepare for the final exam |
Book
essay revisions due Tue. Dec. 13, at
class time Wrap
up and review |
Final Examination: Thursday, December 15, 12:30-2:30. (Please check this day and time against the university schedule to make sure I have it correct.)