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

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 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.

Course Procedures

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.

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: 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.

Requirements

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.

Grading

Graded assignments

Percent of grade

Quizzes and short essays
Conflict of Visions/Reader essay
Socialist Calculation Debate paper
Book essay
Final exam
Total

30
4
7
24
35
100 

 

Pass/fail/bonus assignments
Class participation
Presentation on Socialist Calculation Debate
Mark-ups of classmates' book essays
Book essay presentation

One point deduction from
final course grade for failure
on any 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

 A
 A-
 B+
 B
 B-
 C+
 C
 D
 F

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

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 
(and selected class activities)

Sep. 2

Syllabus, "I, Pencil"

Enroll in Blackboard site.
Do plagiarism exercise.
Do discussion exercise.
video - "Is America #1?"

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.)
1 "Capitalism and Greed" by James Doti 
2 "Social Responsibility of Business and Labor" by Milton Friedman 
3 "The Moral Meaning of Capitalism" by Ayn Rand
4 "Freedom and Failure" by Dwight Lee
6 "Of the Division of Labour and Restraints Upon importation" by Adam Smith
9 "The Relation between Economic Freedom and Political Freedom" by Milton Friedman
10 "Private Property, Freedom, and the West," by James Gwartney
23 "The Role of Government in a Free Society," by Milton Friedman

"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.)
Ludwig von Mises, “Economic Calculation in the Socialist Commonwealth,” (packet) (44 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)
"The Road to Nowhere" by Peter Boettke (packet)

Nov. 11

Israel Kirzner: “The Perils of Regulation: A Market Process Approach” (packet)

Market Reader (56 pp.)
8 "Liberty and Individual Responsibility" by Dwight Lee 
19 "The Price Blackout" by Dwight Lee 
20 "Roofs or Ceilings? The Current Housing Problem" by Milton Friedman and George Stigler

By Nov. 11 book essay topic should be cleared with HB, via email.
Lecture: "Incentives and Institutions" 

Nov. 18

33 "The Politics of Poverty and the Poverty of Politics" by Dwight Lee 
34 "Created Equal" by Milton Friedman
35 "The Constraints on Helping" by Charles Murray

Work on book essays
Lecture: "Incentives and Institutions" 

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;
Book presentations

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
Discuss Klein; wrap up and review

 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.)