Economics 322 - Comparative Economic
Systems
Fall Semester, 2008
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, 3:45-5:15, Thursday 11:00-12:30, 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
become familiar with 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 have suffered
terrible economic backwardness and deprivation, political terror, and environmental
destruction for more than half 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 strictly 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.
Writing
As Econ 323, this course used to be
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.
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.
Absolutely as soon as possible, all students should enroll in this
course's Blackboard site. To enroll, follow the instructions on the
internet at http://www.towson.edu/learnonline/Documents/Version8/Stu_Enroll_Student.pdf. Once you enroll yourself, 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.
Writing
Though this is no longer an advanced
writing course, all your graded assignments will be written, so the quality of
your writing is very important. Every grade in the course will be based in part
on the quality of your written presentation of your ideas. It is not enough to
have good ideas and understanding; you must also express them clearly.
Correct grammar, punctuation, and
word usage are expected. I recommend Diana Hacker's A Writer's
Reference for concise explanations of these.
Deadlines
Deadlines are deadlines.
Lateness on any assignment will 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 will 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 everyone in the course. "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, September 9th
and on Tuesday, September 16th.
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. 9th:
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, September 16th, 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.
Online
Discussions (optional, for extra credit):
This is an optional, but highly recommended activity. It will not be graded,
but will earn extra credit for those who contribute well. Everyone is
encouraged contribute to online discussions of the ideas we are reading about
and discussing in class that week. These discussions will be located on the
Discussion Board of our Blackboard site.
There are two main benefits from
these online discussions. One is that they give you writing practice; the
other is that they give you the opportunity to discuss with one another what you
think about the ideas we are studying. Most of your essays and our
short two and a half hours of class time per week will aim at
understanding what the readings are saying, leaving little time for you to
express your own opinions, to explore implications of the ideas, to disagree,
etc. The Online Discussions are your main chance to do this kind of
thing.
The content of your postings must
relate to the ideas we are reading about and discussing. Stay close to
the texts we are studying. What is the author saying? Is the
argument sound and persuasive? What are its implications? What
backing for it, or challenge to it, can you offer? Give short, apt
quotations from the readings you discuss where appropriate. My favorite
discussions, those which get the most credit, are those in which two or three
students really dig into a difficult passage, take it apart, and help one
another understand it.
Note further that while these online
discussions comprise a lot of writing, it should be fairly easy writing that
you can do quickly. You are bound to have some strong reactions to the course
ideas and your classmates' comments on them: just write up those reactions.
In order to help you learn both how
to participate in these online discussions and what guidelines and conventions
we will use, I have set up a simple exercise as the first discussion forum in
our Discussion Board. Once you have set up your account and enrolled in the
course, please go to the Discussion Board and do the first exercise.
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 30, 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 October 2.
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. These
papers will be posted online as a study resource for the first essay question
on the exam, "Summarize the socialist calculation debate." 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 in
a way that will 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. You must also submit an electronic copy in the appropriate
Discussion Board forum.
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 one point of those
your paper discusses:
Identify the most important point
"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:
Looking Backward, by Edward Bellamy
The Noblest Triumph, by Tom Bethell
Cowboy Capitalism, by Olaf Gersemann
The Power of Productivity, by William
Lewis
Eat the Rich, by P.J. O'Rourke
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. Lange, Taylor, Roper, and
Dickinson 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
11 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 December 2. 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 9. 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 2 and 4 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, Friday, December 19, 10:15 a.m. - 12:15
p.m. The quality of your writing counts in this exam, of course.
|
Graded assignments |
Percent of grade |
|
Quizzes and short essays |
30 |
|
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
Three articles available online
Recommended reading
Diana
Hacker, A Writer's Reference
Schedule of assignments
|
|
Reading assignments |
Writing assignments |
|
Sep. 2 |
Syllabus, "I, Pencil" |
Enroll in Blackboard site. |
|
Sep. 9 |
Thomas Sowell, A Conflict of
Visions, Preface - Chapter 3 |
One-paragraph essay on A Conflict of Visions,
chapter 2. |
|
Sep. 16 |
Thomas Sowell, A Conflict of Visions, Chapters 4 -
6 |
One paragraph essay, open topic |
|
Sep. 23 |
Thomas Sowell, A Conflict of Visions, Chapter 7 - end
(you may skip Chapter 9, the final chapter) |
|
|
Sep. 30 |
Market Reader
(68 pp.) |
"Profits and Discovery"
lecture on Thursday Conflict of Visions/Market Reader paper (see syllabus) due Thu.
Oct. 2 |
|
Oct. 7 |
David Ramsay Steele, From Marx to Mises, Chapter 1,
"A quick look at the Mises argument" (packet) (27 pp.) |
Mises papers due Thu. Oct.
9 |
|
Oct. 14 |
F.A. Hayek, “Socialist Calculation II: The State of the
Debate (1935)” (packet) (33 pp.) |
Hayek 1935 papers due Thu.
Oct. 16 |
|
Oct. 21 |
Oskar Lange, “On the Economic
Theory of Socialism” (packet) (72 pp.) |
Lange papers due Thu. Oct.
23 |
|
Oct. 28 |
F.A. Hayek, “Socialist Calculation III: The Competitive ‘Solution,’”
and “The Use of Knowledge in Society” (43 pp.) |
Hayek 1940, 1945 papers due Thu.
Oct. 30 |
|
Nov. 4 |
"Planning with Material Balances in Soviet-Type
Economies" by J. M. Montias (handout) |
|
|
Nov. 11 |
Israel Kirzner: “The Perils of
Regulation: A Market Process Approach” (packet) Market Reader
(56 pp.) |
By Nov. 11 book
essay topic should be cleared with HB, via email. |
|
Nov. 18 |
33 "The Politics of Poverty and the Poverty of
Politics" by Dwight Lee |
Work on book essays |
|
Nov. 25 |
James Gwartney, Randall Holcombe and Robert Lawson,"
The Scope of Government and the Wealth of Nations," Cato Journal 18(2), 1998. (25 pp.) |
|
|
Dec. 2 |
Classmates' papers as assigned (mark them up) |
Book essays due Tuesday
at class time; |
|
Dec. 9 |
Daniel B. Klein, "Planning
and the Two Coordinations, with Illustration in Urban
Transit" (17 pp.) |
Book essay markups. Book essay revisions due Thu. Dec. 11, at class time |
Final Examination: Friday, December 19, 10:15-12:15 (Please check this day and time against the university schedule to make sure I have it correct.)