Economics 322 - Comparative Economic Systems
Spring Semester, 2014
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., please)
Office hours: Mondays and Thursdays, 5:00-6:30, and by appointment

Purpose of the course

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 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 efforts of the governments of Russia and China to maintain a lot of central control of their economies while gaining the benefits of markets.  

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. Western governments regulate their economies extensively and provide “social safety nets” of different extent. The United States’ government has significantly increased financial and banking regulation recently with the sweeping Dodd-Frank Act, and the Affordable Care Act (ObamaCare), has greatly increased the US government’s role in health care. All 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. I’ll coach you on writing better as much as my time allows.  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 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:

If you need help with basic grammar and punctuation, you have two options.  You may contact the university’s Writing Center at Alternatively, you can find information on specific points of grammar and punctuation online at Towson’s Online Writing Support:

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.

Course Procedures

Online logistics

We will use 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 To log in, go to Please explore the system and read my "Announcements." 


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") at our Blackboard site. These guides point out which passages you may skim, which you should read, and which you should study. 

Most weeks, either in addition to the reading notes or interspersed in those notes, I’ll give you 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.


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, written lightly.  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.

Academic Integrity

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:

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 class discussions: This is very valuable to all. Let ’er rip. Prepare, treat others courteously, participate freely.

Short papers

Most weeks you will be required to write a short (about two pages, double-spaced) paper 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. (I plan seven of these, the first ungraded. I’ll drop the lowest grade of the other six in calculating the course grade.)

Longer papers

You’ll have three longer papers (five to seven pages, double-spaced) to submit.

·         Due February 16 – on Looking Backward and A Conflict of Visions (eight points). I’ll give you a detailed assignment in the first weeks of the term.

·         Due April 7 – Summarize the Socialist Calculation Debate (twelve points).

·         Due April 23 – on one of three books you are to read during the term, The Noblest Triumph, by Tom Bethell, The Future and Its Enemies, by Virginia Postrel, or The Mystery of Capital, by Hernando de Soto. I’ll give you a detailed assignment in the first weeks of the term.

All papers 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, unless I ask you to submit a paper electronically; 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; 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 are accepted even though they are late. They 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.

Reminder about academic honesty in your papers:  Remember that whenever you use your scholar's words you must put them in quotation marks and identify the source (in our course, just putting the page number in parentheses will do where the book or article being discussed is clear).  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.

Book essay mark-ups: These are pass/fail/bonus, due at class time on April 28.  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 April 28 and 30 we will discuss the books you have read.  Everyone will give an oral presentation of a few 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, Tuesday, May 20, 8:00-10:00.  (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

Bellamy-Sowell paper

Socialist Calculation Debate summary
Book essay

Contribution to class discussions
Final exam








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
90 - 93
87 - 90
83 - 87
80 - 83
77 - 80
70 - 77
60 - 70
  0 - 60


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.

Required readings - books

Edward Bellamy, Looking Backward

Thomas Sowell, A Conflict of Visions
Articles and book chapters in a required photocopied packet
One other book for the book essay


Recommended reading

Diana Hacker, A Writer's Reference

Schedule of assignments



Reading assignments

Writing assignments 
(and selected class activities)

Jan. 27

Syllabus, "I, Pencil" in class.
For Wednesday, Bellamy, Looking Backward, Chapters 1-14

Do plagiarism exercise on Blackboard.

Feb. 3

Bellamy, Looking Backward, Chapters 15-28 (end)
For Wednesday, Sartell Prentice, Jr. “Our First Thanksgiving

Short paper on Bellamy (ungraded)

Feb. 10

Thomas Sowell, A Conflict of Visions, Preface - Chapter 3

Short paper #2

Feb. 17

Thomas Sowell, A Conflict of Visions, Chapters 4 - 6

Short paper #3

Feb. 24

Thomas Sowell, A Conflict of Visions, Chapter 7 - end (you may skip Chapter 9, the final chapter)

Bellamy – Sowell paper due Wednesday.
"Profit, Loss and Discovery" lecture on Wednesday

Mar. 3

David Ramsay Steele, From Marx to Mises, Chapter 1, "A quick look at the Mises argument" (packet) (27 pp.)
Ludwig von Mises, “Economic Calculation in the Socialist Commonwealth,” (packet) (44 pp.)


Mar. 10

F.A. Hayek, “Socialist Calculation II: The State of the Debate (1935), Chapter VIII of Individualism and Economic Order” (packet) (33 pp.)

Short paper on Mises

Mar. 17

Spring Vacation


Mar. 24

Oskar Lange, “On the Economic Theory of Socialism” (packet) (72 pp.)

Short paper on Hayek 1935

Mar. 31

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) (packet) (43 pp.)

Short paper on Lange

Apr. 7

"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 (packet)
"The Road to Nowhere" by Peter Boettke (packet)

Summary of Socialist Calculation Debate due Monday, April 7 at class time.

Apr. 14

Bethell, de Soto, Postrel

Short paper on Boettke.
Lecture - "Incentives and Institutions" 

Apr. 21

Bethell, de Soto, Postrel

Lecture - "Incentives and Institutions."
Book essays due Wednesday, Apr. 23 at class time.

Apr. 28

Classmates' papers as assigned (mark them up)

Book essay markups due Monday.
Book presentations both days

May 5

Daniel B. Klein, "Planning and the Two Coordinations, with Illustration in Urban Transit" (packet) (17 pp.)

Book essay revisions due Mon., May 5, at class time

May 12

Last class.  Prepare for the final exam

Wrap up and review

 Final Examination: Tuesday, May 20, 8:00-10:00.  (Please check this day and time against the university schedule to make sure I have it correct.)