Economics 322 - Comparative Economic Systems
Spring Semester, 2013
Towson University
Revised on account of “snow”
day. See changes, in red in
Schedule of Assignments
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: Mondays
and Tuesdays, 5:00-6:30, 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
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 housing bubble of 1997-2007, the
financial turmoil of 2008, and the Great Recession, whose unemployment lingers
until today 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?
The course aims to help you begin to
answer these questions.
Writing clarity and organization
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 mailto: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/writing/index.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.
I expect students to do all the week's reading before the first
class meeting each week, so that you 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 our Blackboard site. These guides point
out which passages you may skim, which you should read, and which you should
study.
Group discussions in class
Early in
the term we’ll divide the class at random into four or five groups which will
stay together for the whole term. Most weeks we’ll begin with group discussions
of the discussion questions on that week’s readings. Please come prepared with
tentative answers to the discussion questions, ready to discuss them, with
relevant passages in the readings marked up and noted. If I ask you good
questions—I’ll try hard to do so—this should be the part of the course in which
you learn the most.
Short essays
Most weeks
you will be required to write a short essay on what you have read and discussed
that week. The essay will be due Monday of the next week. The idea is that you
will learn well by first reading, then discussing the ideas in the reading,
then writing up your reactions to the ideas.
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.
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 Discussion Board (you’ll see there what to do)
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 small group
discussions: This is very valuable to all. Let
’er rip. Prepare, treat others courteously, participate freely. You’ll all get a chance to evaluate your
groupmates’ contributions to what you all learn.
Short essays: Most weeks I will assign a paper of one to two pages to be
done at home and submitted at the beginning of the next class. Your
average on these papers will count 25% of the course grade; in calculating that
average I will drop your two lowest grades. All should meet the following
standards:
Writing quality: Papers must be
clearly written, using correct grammar. They should be sensibly organized,
edited, and proofread. Grammar, punctuation, spelling and the like will
count up to half the paper's grade. On
each paper, every additional error in basic correctness of writing will count
more than the last.
Format: Submit hard copy only, please; submit no papers by
email. (The opportunity cost of my time going back and forth to the
printer to collect your work is too high for me to bear.) Please print
with a word processor or type; double-space; format neatly. Use a
normal-sized font. Staple multiple sheets together.
Name placement: Please write your name only on the bottom
of the back of the last page to help me avoid bias based on my
expectations of different students.
Late or missed assignments: Late papers may be penalized 5% per 24-hour period (including weekend days), beginning at class time the day they are due. Please submit late papers to my faculty mailbox or the slot on my office door; write both the due date and the date and time when you drop it off on bottom of the back of the paper by your name.
The final exam must be taken on its scheduled date unless you arrange some other time with me, well before the exam date. If some emergency prevents you from taking the exam on schedule, you must present a written explanation of the problem before the quiz or exam, or as soon as possible afterwards, so that we can make alternative arrangements.
Papers explaining passages from the
Socialist Calculation Debate:
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 a short passage in each of two of the five articles we
read from the Socialist Calculation Debate. The papers will be due two weeks
apart. In them, you should carefully summarize for the class the ideas in your
assigned pages. 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 three or four
pages, 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 that identifies the passage you
are summarizing, 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 Wednesday of the week in which we
study your assigned pages.
Needless to say, you should be your
group’s expert on those pages during your small group discussions of the articles
from which they are taken.
Book essay: The other main assignment of the term is an
essay on a book that directly or indirectly 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
The Power of Productivity, by William
Lewis
The Future and Its Enemies, by Virginia Postrel
The Mystery of Capital, by Hernando de
Soto
Antifragile, Things That Gain From
Disorder, by Nassim Taleb
Your
assignment is to answer the following question:
Tell what you find in this book to be most useful to us in our
study of economic systems, and explain why it is useful.
For example, you might explain how
ideas in the book relate to other ideas in the course, what additional insights
the book gives about concepts or principles we have discussed, what new
insights about comparative systems the book gives that our course has not even
touched on, what the book shows about the beliefs of those with different
visions and hence different opinions about what makes a good economic
system—that kind of thing.
A good way to think about your task
in this paper is that you have five pages in which to pass on to your
classmates as much as possible of the good stuff you have learned from this
book. Make the most of those five pages. Don’t just repeat what the book says,
although you’ll have to do some of that; also explain why it matters for us in
this course.
These
essays should be approximately five (5) pages long, double spaced and neatly
printed. They are due at the beginning of class on Monday, April 29. By that time you must submit
an electronic copy for your classmates to mark up. You will post your essay on
a Blackboard discussion board forum set up for the purpose. You will have an
opportunity to revise your paper based on the comments and markup you receive
from your classmates before submitting a final version to me two weeks later,
on May 13.
Book essay mark-ups: These are pass/fail/bonus, due at class time on May 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 May 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, Monday, May 20, 3:00-5:00. (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 |
|
Short
papers In-class
discussion |
25 25 8 12 30 |
|
Pass/fail/bonus
assignments Mark-up of classmates' book essays Book presentation |
Deduction
from final course grade for failure on either of these. Possible bonus for
very good work. |
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
Articles and book chapters in a required photocopied packet
Articles available online or in optional photocopied packet
One
other book for the book essay
Recommended
reading
Diana
Hacker, A Writer's Reference
|
|
Reading assignments |
Writing assignments |
|
Jan.
28 |
Syllabus,
"I, Pencil" |
Enroll
in Blackboard site. Read
syllabus. Do plagiarism
exercise on Blackboard. Do
reading and video watching assigned on Blackboard. Begin
reading Sowell. |
|
Feb.
4 |
Thomas
Sowell, A Conflict of Visions, Preface - Chapter 3 |
|
|
Feb.
11 |
Thomas
Sowell, A Conflict of Visions, Chapters 4 - 6 |
|
|
Feb.
18 |
Thomas
Sowell, A Conflict of Visions, Chapter 7 - end (you may skip Chapter
9, the final chapter) |
|
|
Feb.
25 |
F.A.
Hayek, “Cosmos and Taxis” (photocopy to be handed out) John H. Cochrane, “After the ACA: Freeing the market for health care”
(http://faculty.chicagobooth.edu/john.cochrane/research/papers/after_aca.pdf) |
"Profit,
Loss and Discovery" lecture on Wednesday |
|
Mar.
4 |
David
Ramsay Steele, From Marx to Mises, Chapter 1, "A quick look at
the Mises argument" (packet) (27 pp.) |
Mises
papers due Wed., Mar. 6 |
|
Mar.
11 |
Reading due Wednesday,
March 13: 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 |
|
Mar.
18 |
Spring Vacation |
|
|
Mar.
25 |
Reading due Wednesday,
March 27: Oskar Lange, “On the Economic
Theory of Socialism” (packet) (72 pp.) |
Lange
papers due |
|
Apr.
1 |
Reading due Wednesday, April
3: 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 |
|
Apr.
8 |
Reading due Wednesday, April
10: "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)
|
|
|
Apr.
15 |
Reading due Wednesday, April
17: Israel Kirzner:
“The Perils of Regulation: A Market Process Approach” (packet) |
Wednesday:
lecture: "Incentives and Institutions" |
|
Apr.
22 |
Readings
to be assigned |
Work
on book essays |
|
Apr.
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 Monday, Apr. 29 at class
time; |
|
May
6 |
Classmates'
papers as assigned (mark them up) For Wednesday, Daniel B. Klein, "Planning and the Two Coordinations,
with Illustration in Urban Transit"
(17 pp.) |
Book
essay markups due Monday. Book presentations continue Monday. |
|
May
13 |
Last
class. Prepare for the final exam |
Book
essay revisions due Mon., May 13, at
class time Wrap
up and review |
Final Examination: Monday, May 20, 3:00-5:00. (Please check this day and time against the university schedule to make sure I have it correct.)