Contemporary Theories of Political Economy

Contemporary Theories of Political Economy
Location: 2040 VLS
TuTh 2-3:30P

Beverly Crawford
University of California at Berkeley
127 Stephens
Office Hours: Thursdays 4-5


Assignments and Study Questions



Course Requirements

Your Instructor

lecture outlines


statement on Plagiarism

This course syllabus presents a general plan for the course; deviations announced to the class by the instructor may be necessary. Later sessions, in particular, may be revised to incorporate newer material, i.e. a new financial crisis, climate change calamity, etc.

I. Introduction to the Course: The Central Issues (August 29)
What is political Economy? How are Power and wealth related?  Markets and governments, markets and democracy..what’s good about markets, what’s bad about them? What is the business cycle? Are good and bad in the eye of the beholder? 

II. Theories of Political Economy

A . The Political Economy of Freedom: Liberalism--classical and neo

Nowadays People know the price of everything and the Value of Nothing

    --Oscar Wilde

Do you have to be free to be rational?  What is rationality?  What is the difference between Liberals and Conservatives? What should be private and what should be public?

1. Economic Freedom (September 3)

  • Friedrich Hayek, "The Use of Knowledge in Society"
  • Friedrich Hayek, “The Road to Serfdom” in Barma and Vogel The Political Economy Reader
  • Milton Friedman, “Capitalism and Freedom” in Barma and Vogel The Political Economy Reader


Hayek, Friedman, and the Illusions of Conservative Economics

For Discussion:

which one, Hayek or Friedman, appeals to you most and why?
•Why does Hayek think that planning makes the future more insecure than non-planning?
•Why is Obama called as a “socialist” regarding his Public Health Care Reform? Look for passages in the readings that justify this description.

2. Political Freedom (September 5)


Reveiw: John Locke (1689). Second Treatise of Government, chapters 2 (The State of Nature), 5 (Property), 9 (The Ends of Political Society) and 11 (The Extent of Legislative Power). Available at Project Gutenburg:

Excerpt from Isiah Berlin's "Negative and Positive Liberty."

Questions for Discussion

1. In which way does the argument that freedom of communication is more important than freedom of information access fit the idea of political liberalism?

2.  Friedman writes in the end of the chapter that we read for session 2: " The paternalistic ground for government activity is in many ways the most troublesome to a liberal; for it involves the acceptance of a principle - that some shall decide for others."  What response would the political liberal give to this?

3. Which normative considerations of political liberalism harmonize respectively with your understanding of the political goals of Democrats and Republicans?

4. Look for passages where Holmes indicates what liberalism is not: Which of these elements are part of American politics and society of today?  In what ways is the U.S. a politically liberal country and in what ways is it not politically liberal?

5.  Is Holmes saying that for democracy to thrive, there has to be a market economy?

6. How is "self-interest" different from "advantage-seeking" according to Holmes?

7. What is the "self-exemption taboo?"

8.  Did the American founding fathers want to create a weak state or a strong state?  What was their reasoning?

9. Do you think that Madison's ideas about minority support for decisions of a democratic government can explain the recent economic "bail-out" of  Wall Street, leaving out Main Street?

10.  Why, according to Holmes' characterization of political liberalism, should Obama's opponents call him a liberal rather than a socialist?

11. Are Democracy and Freedom universal human desires or are they constructs of Western Philosophy?

12. According to the Encyclopedia Film, where does the United States stand on the "respect scale" and the "power scale?"

3. Freedom and Rationality (Sept 10, 12)

John Elster, “Rationality, Morality, and Collective Action”

John Elster, “Rationality and the Emotions”

And for a critical perspective.........Adam Curtis Part I: F-you Buddy: the history of game theory

Questions for Discussion Sept. 10

1) What does “Freakonomics” tell us about rationality and people’s incentives? Do you believe their argument?

2) What do the findings in both “Freakonomics” and Coase’s work tell us about the role of causation in determining economic costs and benefits?

3) Coase states that his measurement of social costs that can be used to “choose the right social arrangement” to prevent harmful effects? How objective is his measurement?

4) What does Coase’s approach to social costs mean for the role of the state in the economy?

5) How do Olson’s findings about the individual’s behavior in different group sizes affect the liberal argument about market rationality?

6) Why does Olson find it necessary to distinguish between “rationality” and “self-interest”? What does this distinction mean for the liberal argument?

7) What are the biggest differences between rationality, social norms, and emotions?

Questions for Discussion Sept.12

1) Why is Competition is an essential feature of markets
2) Why is that considered good?
3) Why is it rational to compete
4) Why is it more rational to compete in large groups than in small groups?
5) Why cooperation is sometimes better than competition What are the differences between political and economic liberals on this question?
6) How can you get cooperation? What are the differences between political and economic liberals on this question?

4. Market Freedom, and the Division of Labor: (Sept. 17) How can we all get richer than we used to be?

  • Charles Lindbloom “The Market System” in Barma and Vogel The Political Economy Reader pp. 243-247
  • Adam Smith “The Wealth of Nations” in Barma and Vogel The Political Economy Reader pp.27-35
  • David Ricardo from Political Economy and Taxation, Chapter 7, “Comparative Advantage” paragraphs 7.11 to 7.36 ONLY

Questions for Discussion:

  • Describe the theory of Comparative Advantage
  • what is the difference between absolute advantage and comparative advantage?
  • What are opportunity Costs?
  • According to the theory, how does free trade create innovation and specialization?
  • What is the Labor Theory of Value, and does it still hold today? How have modern theories of Political Economy modified this classical theory?
  • Why does Krugman think that rich countries don't have to worry that poor countries will take their jobs?
  • What's wrong with self-sufficiency?
  • Does Free Trade make the state obsolete?

5. Are We really Free? The Limits of Liberalism (Sept. 19 and 24) Are we really rational? Is the market really a "spontaneous" institution, arising from "human nature?" Do Markets and Democracy really go together?

Quotes of the week: “The poor man shall be satisfied in his end: Habitation; and the gentleman not hindered in his desire: Improvement.”
“Labor is only another name for human activity that goes with life itself. . .land is only another name for nature” –Karl Polanyi

Questions for discussion:

  • What does Polanyi think of "economic progress"
  • What is Polanyi's main thesis?
  • What is his central critique of economic liberalism?
  • What was Speenhamland and why was it important? (Hint: What is the perversity thesis?)
  • Do you agree that Land, Labor, and Money are "fictitious commodities?" Defend your answer
  • What is the "Great Transformation?"
  • Is Polanyi's history correct?

  • Irrationality, Institutions, and the Market-Democracy Nexus, (Sept. 24)

Quote of the Day: “ Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity are in a state of shocked disbelief."

--Alan Greenspan, October 2008.


*J. Bradford DeLong, “The Republic of the Central Banker”


Questions for discussion:

1. Before 2008 many people were convinced that "irrationality disappears when it comes to important decisions about money." Does the stock market crash, then, suggest that people are irrational?  Does irrationality explain the crash? 

2. Does standard economics (economic liberalism) really suggest that we don't have cognitive limitations?  Or does it admit that we always make "rational" decisions within constraints? Is Ariely overstating his case for irrationality?

3. Ariely quotes Alan Greenspan, the former chairman of the Federal Reserve, saying that he was “shocked” that the markets did not work as anticipated, or automatically self-correct as they were supposed to. Ariely quotes him as saying that he made a mistake in assuming that the self-interest of organizations, specifically banks and others, was such that they were capable of protecting their own shareholders. 

Doesn't game theory suggest that non-cooperative decisions are often sub-optimal but we make them because we want to preserve our freedom of choice?  And doesn't the business cycle suggest that markets will always go through periods of boom and bust?  Is Greenspan really so naive?

4. Ariely writes: " When I look at the health care debate, it seems to be fueled by ideological beliefs about the importance of competition and freedom of choice on one hand, and the evilness of regulations and limits on the other."  What would Lindbloom say to him?

5. Do insights about the "optimism bias"  undermine the standard definition of rationality that Elster puts forth? 

6. How do economic liberals treat "fairness" in their models?  Does the "ultimatum game" suggest that the model is wrong?

7. How does "guilt" undermine standard notions of rationality?

8. How would rational economics respond to Ariely's critique?

9. Is Williamson trying to justify the emergence of large, monopoly corporations with his emphasis on the rationality of reducing transaction costs? 

10. Which importance do institutions have in the market?

11. How would an economic liberal react to Lindblom's statement that government is the central actor in the market?

12. Is Lindblom a liberal?

13. Why does Gourevitch reject that markets and democracy does not necessarily go hand in hand? Is this a blow to liberalism?

14. How do Lindblom and Gourevitch differ in the overall conclusions about the relationship between the state and the market?

B. The Political Economy of Equality
Sept. 26 the Question of distributive justice

What do we deserve? Should resources be equally allocated? How does market freedom lead to economic inequality? Should Equality trump freedom? Can freedom and equality be reconciled?

Recommended Reading:

Richard Miller, "Rawls and Marxism",%20Richard%20Miller.pdf

Ethica implications of charitable giving RSA Animate

Questions for discussion:

  • What is plural affiliation and how is it related to "fairness?"
  • What does Sen mean when he talks about Rawls' "original position?"
  • What is global justice for Sen and how does he propose to achieve it?
  • Political Liberals all rely on the market as the most fair or just means of allocating resources in society. Assuming you are a liberal, would you rely on the market alone, would you insist on strict merit as a way to achieve gains in the market; would you insist on a "level playing field," then "merit," then let the market work; or would you rely on the principle of redistribution to achieve fairness? What is the reasoning behind your choice? Why would you reject the other choices?
  • How do "entitlements" differ from what we deserve in the theory of distributive justice?

Oct. 1. : the issue of exploitation and its impact on equality. Is market socialism a remedy?

Quote of the Day: "The theory of the Communists may be summed up in a single sentence: Abolition of private property" --Karl Marx

Questions for Discussion

  • How does Marx' concept of freedom differ from the liberal concept of freedom?
  • What is the reasoning behind this conclusion in chapter I: "In one word, [the Bourgeoisie] creates a world after its own image".
  • Why do Marx and Engels say that the "abolition of private property" sums up the ideology of communism?
  • Why is the bourgeoisie, according to the Manifesto, inherently unstable and will consequently fall?
  • Is the fall of the bourgeoisie and the following victory of the proletariat an automatic mechanism? Or does it need action to trigger the change?
  • When reading the Manifesto, why do you think there was (and is) such a strong intellectual opposition to communism in the U.S.?
  • What does the Manifesto says about communism and democracy? Do they enforce or contradict each other?
  • What does Roemer mean when he contrasts the "thin" view of markets with the "thick" view?
  • How does Roemer's characterization of the socialist's view of "equality of opportunity" differ from the liberal view of "equality of opportunity" as characterized by Holms?
  • What does Roemer mean by a "public bad?" How is it different from a "public good" and how is it related to the "free rider problem"?
  • What is Roemer's remedy for inequality and how does it differ from the theory of distributive justice?
  • What is "market socialism?"

C. The Political Economy of Community: Communitarianism, Nationalism, Economic Nationalism

Who should we care about when it comes to resource allocation? Can market allocation destroy community? Can a global market destroy the nation?

1. Varieties of Community (Oct. 3)

Questions for Discussion

  • What is the communitarian's critique of liberalism?
  • How does the "general will" differ from "democracy?"
  • Is Polanyi a communitarian, a socialist, or both? Why?
  • Is a gift economy a viable system for allocating resources in society? Explain.
  • Why are digital goods "anti-rival" goods? How do they differ from other goods that need to be produced and allocated in society?
  • Are digital communities really "communist?" (in the Marxist sense?)

2. Community and Nation (Oct. 8)

Quote of the Day: "My Country 'Tis of Thee, Sweet Land of Liberty, of Thee I Sing. Land of the Pilgrams' pride, Land where My Fathers died, From every Mountainside, Let Freedom Ring."

Questions for Discussion

  • In what ways and on what grounds does Fascism oppose Liberalism and Socialism?
  • According to Chapra, why are the positive economics and normative goals mutually inconsistent in Conventional Economic thought?
  • Because of the collective action problem, does community as an allocative principle always require absolute authority?
  • What are the basic components of a national community?
  • Can liberalism and nationalism coexist? What about liberalism and community?
  • What are your views on panhandling? How do your views reflect your deeper assumptions about political economy?
  • How would marxists critique the fascist idea of the strong nation states?
  • What is corporatism and why is it significant for the political economy of community?
  • To what extent would Rousseau applaud Mussolini's Fascist theory?
  • Can the nation-state ever be transcended? Can culture be transcended?
  • Which one of Guerovitch's arguments would Lee Kwan Yu make? Is it convincing to you?
  • Is a global community possible? Why or why not?

3. Protecting the Nation: Economic Nationalism (March 1)

Questions for Discussion

  • Why does List emphasize that the power of producing wealth is more important than wealth itself? What is his "theory of the productive powers?"
  • For List, how does the "nation" relate to his view of the labor theory of value? Why, in his view, do some countries prosper and some decline?
  • Does List believe in the ability of the market to generate wealth and provide for the division of labor in society? Explain.
  • With regard to international trade, why should a state regulate its own national industry? Does List believe that free trade is possible?
  • Keynes might agree with List's argument but takes it one step further to cast doubt on the economic liberal's assumption that free trade leads to peace. What are his doubts about that assumption?
  • According to Krasner, why is it easier for large states to engage in Free Trade (economic openness) than smaller states?
  • What is the relationship between state size, state preferences, and a state's receptivity to Free Trade?
  • What is a hegemonic system? Why would a hegemonic distribution of economic power lead to a more open international economy?
  • Why would Krasner predict that the United States would opt for Free Trade?
  • Are List, Keynes, and Krasner implying that there is a contradiction between the global impact of Free Trade and its impact on a particular nation? How do their arguments differ from those made by Ricardo and modern defenders of Free Trade and Comparative Advantage?
  • How is the anarchic international system like a prisoner's dilemma game?

Midterm Review Session March 1st, 5-6 p.m. Room TBA

Midterm March 3

III. Theory and Reality: A Brief Modern History of the Struggle between Freedom and Equality, and the search for Community

A. Freedom in Crisis: Depression, Fascism, and War (March 8, 10)

Quote of the Day: "In the Long Run we are all dead." --John M. Keynes


Questions for Discussion

  • How does the Great Depression illustrate the "tendency for capital to overaccumulate?"
  • What is a "deflationary bias" and how is it explained?
  • Which school of thought in political economy (Freedom, Equality, or Community) best explains the causes of the Great Depression? Which school best explains the consequences?
  • What is Hegemonic Leadership? Is it useful in explaining the events of the 1930s? Explain your answer.
  • How do the arguments of Kindelberger and Eichengreen relate to Krasner's arguments?
  • James Divine speaks of the "laws of motion of capitalism." What does he mean?
  • What was the Gold Standard and what were its positive aspects? Why did the negative aspects outweigh them in the Great Depression?
  • What is the Tendency toward Economic Nationalism?
  • Which aspects of the Great Depression are echoed in the ongoing economic crisis that began in 2008? What is different about the two periods? Do they have similar theoretical explanations?

B. Limiting freedom in the wake of Depression and War: The Global and Local Quest for Equality and Community and Liberalism's struggle to rise again

1. The Global Quest for Equality and Community in a New Liberal World: Embedded Liberalism and Global Governance (March 15) (should be two sessions)

Quote of the day: "Efforts to construct international economic regimes in the  interwar period failed not because of the lack of a hegemon. They failed because, even had there been a hegemon, they stood in contradiction to the transformation in the mediating role of the state between market and society, which altered fundamentally the social purpose of domestic and international authority." --John G. Ruggie


  • Robert Keohane, "The Theory of Hegemonic Stability and Changes in International Economic Regimes," in Ole R. Holsti, et. al. (eds), Change in the International System (Boulder, CO: Westview), 1980, pp. 131-162

Questions for Discussion

  • Was the Liberal trade and monetary order that emerged after WW II simply "old wine in new wine bottles" or was it something distinctly different
  • What is "the compromise of embedded liberalism" and why is it significant?
  • According to Ruggie, how did the Gold Standard affect state-society relations before the Great Depression?
  • Why did the architects of the postwar international economic system decide not to bring back the gold standard? How did they propose to ensure a stable international monetary system?
  • According to Ruggie, how does trade in the Post World War II period differ from trade before the Great Depression? Why the difference

2. The Local Quest for Equality and Community in a Liberal World: The Welfare State (March 17) (should be two sessions)

Quote of the Day: "Can the Welfare State fundamentally transform Capitalist society?" ------Gosta Esping-Andersen

Esping-Andersen, Gøsta, “Three Political Economies of the Welfare State”

Questions for Discussion

  • Why does Esping-Andersen think that the Welfare State is a "power resource?"
  • Why was democracy an "achilles heel" to many liberals?
  • What is patriarchal neo-absolutism? Does it foster freedom, equality, or community?
  • Can the argument that parliamentary class mobilization is a means for the realization of socialist ideals be justified? How?
  • Why would industrialization make social policy necessary and possible?
  • Which Marxist arguments must be abandoned in order to make a strong case for the welfare state?
  • What is social citizenship and why is it a core idea of the welfare state?
  • How is the concept of "fairness" or "justice" understood differently in the three political economies of the welfare state?

Midterm Exam Due: March 18 5p.m. electronic submissions only

Spring Break: Week of March 21

D. The Political Economy of Development

1. Liberal Explanations (March 29)

Quote of the Day

“Once developed economically, nations are destined to become democracies. The relationship between liberal democracy and economic development is one of symbiosis, not conflict.  The relationship has only become stronger and more widespread with the fall of communism and in the era of globalization.”

Questions for Discussion

  • According to liberal theories of development, why do businesses move around? Specifically, why do they move from the industrialized to the non-industrialized world?
  • How does product-cycle theory relate to comparative advantage?
  • Why are economic liberals optimistic about economic development?
  • If you were looking at current events in the world economy from Rowtow's point of view, would you say that Tunisia and Egypt are entering the "take-off" phase of development? What characteristics of the "take-off" do they exhibit?

2. Inequality and Underdevelopment: A Critique of Liberal Development Theory (March 31)

Quote of the Day:

“Globalization is nothing new; it began with the expansion of European Capitalism in the 16th century; furthermore it is far from a linear,  irreversible, and inexorable trend" --Immanuel Wallerstein

Questions for Discussion

  • What is Wallerstein's critique of Rostow's "stages" of development?
  • Wallerstein says that capitalism and a "world economy" are two sides of the same coin. What on earth does he mean by that?
  • What is the "development of underdevelopment" and how does it contradict the liberal view of "tradition" vs. "modernity?"
  • How does Wallerstein's division of the world economy into "core" and "periphery" differ from the liberal concept of the international "division of labor."
  • How does Wallerstein treat the historical manifestation of the concept of "freedom" in the development of the world capitalist economy?
  • According to Wallerstein, what is the relationship between capitalism and the "nation-state" in the world economy? What explains the development of "strong" and "weak" states?
  • What accounts for the stability of the world capitalist system?
  • How, according to Wallerstein, did the globalization of capitalism end slavery?
  • Is your own well-beomg wrapped up with the survival of the world capitalist system, as Wallerstein describes it? Are other alternative systems possible?
  • How does Wallerstein's view of the rise of the welfare state differ from Rowtow's?
  • Rodrick writes: "income distribution tends to be stable and rather unresponsive to policy changes." According to him, why is this so?
  • Again Rodrick writes: "A policy that increases the income of the poor by one rupee can be worthwhile at the margin even if it costs the rest of society more than a rupee." According to his argument, why is that worthwhile? Would Friedman disagree? Why?
  • What is the role of the welfare state in the world economy, according to Wallerstein?
  • Think through Rodrick's "tradeoff" questions on fiscal policy, market liberalization, and institutional reform. On each, decide your policy preference. What will be the "cost" of that policy preference.
  • Is the debate over growth vs. poverty reduction a meaningless one?
  • Is Rodrick a liberal? What kind?

3. Institutional Arguments for Development: Why do some develop and others don't? (April 5)

  • Gerschenkron, Alexander “Economic Backwardness in Historical Perspective” in Barma and Vogel The Political Economy Reader
  • Steven Vogel, “Why Freer Markets Need More Rules,” in Barma and Vogel The Political Economy Reader
  • David Landes, “The Wealth and Poverty of Nations,” in Barma and Vogel The Political Economy Reader

Questions for Discussion

  • What Does Gerschendron mean by "The Advantages of Backwardness?"
  • Can you identify the "families" and branches of political economy that Vogel and Landes belong to?

4. What did Asia do Right? What does Asia teach us about the market-democracy relationship?Can/Will others follow in Asia's path? (April 7)

*Dani Rodrik, Arvind Subramanian and Francesco Trebbi, “Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development,” NBER Working Paper 9305.
*Dani Rodrik, "A Practical Approach to Formulating Growth Strategies," December 2004
Daron Acemoglu, Simon Johnson and James Robinson, “The Colonial Origins of Comparative Development: An Empirical Investigation,” American Economic Review, Vol. 91, No. 5, pp. 1369-1401.

Questions for Discussion

--Which elements of dependency theory does Cummings utilize in his analysis? And which does he leave out?

-  Does the BAIR-model equal economic nationalism?

- Was Japan’s imperialism good or bad for the economic and political development of South Korea and Taiwan? What can we take from this argument?

- Which role does the societal character play in Cummings’s argumentation?

- Is Cummings a liberal, institutionalist or dependency theorist? Or maybe a mix? Why?

- Stiglitz criticizes the wave of liberalization and radical reforms in Russia. How would an economic liberal explain the economic difficulties of Russia’s development?

-What does “social capital” mean and why is it important from an institutional perspective?

-How would Williamson react to Stiglitz’s use of the term “Washington Consensus”? What does Stiglitz mean?

-The chapter on Russia is found in the book titled “Globalization and its Discontents”. Does Stiglitz discontent globalization? If so, what is his critique?

-Stiglitz talks about the debate between two schools called “shock therapy” and “gradualist”. How do they relate to different developmental models and how?

- Could dependency theorists explain Russia’s economic problems? Is Russia the core or the periphery? How does it matter today?

- What does Guthrie mean when he states that China’s development has been “fundamentally political”? What is his evaluation of the Chinese state?

-Which political and/or economic systems could adapt China’s model of development?

-Guthrie concludes: “Capitalism has arrived in China, and it has done so under the guise of gradual institutional reform under the communist mantle”. Which causal factors would liberalists identify behind China’s rapid growth? On which points would they agree with Guthrie, on which would they disagree?

- Guthrieemphasizes that China was much more decentralized than the Soviet Union. What does he think this factor explains? Is it a factor we generally should be aware of when assessing the potentials of economic growth in a developing country?


April 13 5:00 p.m. Second Newspaper Assignment Due

E. Theories and Practice of Globalization: Hopes, Fears, and Nightmares

Globalisation proceeds through the breaking down of boundaries, the unfolding of diversity and freedom of choice - so why is it experienced by so many people as a constriction, an oppression and a loss of freedom?

1.Expanding freedom? Neo-Liberalism and and Globalization (April 12)

Quote of the Day:

"The Golden Straitjacket is the defining political economic garment of this globalization era. The Cold War had the Mao suit, the Nehru jacket, the Russian fur. Globalization has only the Golden Straitjacket." --Thomas Friedman

Questions for Discussion

  • John Ruggie, in his discussion of "norm-governed change" describes the international political economy after the decline of U.S. hegemony in 1971, claiming that "orthodox liberalism has not governed international exonomic relations at any time during the postwar period." Why does he think that is true? Is he still correct? Why or why not?
  • What is "managed floating?" Is it better than the gold standard? Why or why not?
  • Why would some consider "orderly marketing arrangements," "voluntary export restraings," "negotiated minimum price agreements," etc. barriers to trade?
  • What is "adjustment" in international trade? What is "structural adjustment" and how does it relate to IMF conditionality requirements for lending?
  • What did the fall of the "gold-convertible dollar" mean for the international monetary system?
  • Ruggie says that embedded liberalism never reached the poor countries of the South, and Friedman argues that the South is now governed by the very beneficial Golden Straightjacket. Why didn't embedded liberalism reach the global South? What is the Golden Straightjacket and how would you argue against it? Does it undermine democracy?
  • Is the Washington Consensus the same thing as the Golden Straightjacket? Is it the same thing as neo-liberalism? Why or why not? Do you agree with Williamson's list of requirements for development?
  • Is Williamson a Keynesian? What are some hints that he is? Some hints that he isn't?
  • After reading the Williamson article, would you say that you support or oppose the "Washington Consensus?" Please explain.
  • Does Rodrick make an economic nationalist argument in his article you read for this session? Why or why not?

2. Weakening Community? Globalization and the Fears of the Economic Nationalist (April 14)

Questions for Discussion

  • How can it be that interdependence both promotes peace and conflict at the same time? Does Waltz make a strong argument?
  • How does the notion of comparative advantage harmonize with Waltz’s claims about the absence of interdependence between countries?
  • Does Waltz’s claim weaken thecase of liberals such as Ricardo and Friedman?
  • How does Waltz perceive the distinction between “power” and “wealth”?
  • Does China’s growth disprove any liberal claims about development?
  • In what sense does China’s mercantilism diminish the mutual benefits of trade? What can be done? What kind of hegemon do we need?
  • Schumpeter states: “It may seem strange that anyone can fail to see so obvious a fact which moreover was long ago emphasized by Karl Marx”. Does he side with Marx in an attack on the liberal logic?
  • Would classical liberals such as Ricardo disagree that economies are “evolutionary”? How does Schumpeter's ideas differ from the classical notion of comparative advantage?
  • What essential element do the classical liberalists overlook according to Schumpeter?
  • In which time did Schumpeter write his piece? What does that mean for his conclusions?

2. Communities Fight Back: The Backlash against Globalization (April 19)

Questions for Discussion

  • Does globalization mute or reinforce ethnic and religious (communal) identity?
  • How does globalization contribute to communal conflict?
  • What is the evidence for the claim that globalization contributes to communal conflict?
  • Is there evidence that globalization mutes communal conflict?
  • Do you agree with Huntington's argument? Why or why not?

3. Weakening Equality? Globalization's impact on Income and Work (April 21)

Qustions for Discussion

  • Is the Golden Straightjacket still the only piece that countries can  find on the rack today? And how tight is it
    Is Friedman right when he argues that all politics is global? Is  globalization really reaching into every corner of the world?
    Should the U.S. government support American companies that use  foreign labor or foreign companies that use American labor? 
    What are the  arguments for and against?
    Why is it important to define ³who is us²? Has the ³us² changed from  1990 to 2011?
    How has the U.S. succeeded in terms of competitiveness of its labor  force?
    How can it be that the average American worker earns less today than  40 years ago?
    What is the Marxist critique of globalization?
    Foroohar writes: "Yet even if unemployment starts to ease, it's unclear whether  labor's portion of the pie will stop shrinking. 
    The global headwinds may be  too strong.² What logic does Foroohar refer to?  
    What is a symbolic analyst?  How does his/her work category differ from other work categories

4. Can Freedom, Equality, and Community coexist? The European Experiment and the Welfare State (April 26)

Student debate over the role and future of Europe

Debate Questions

  • What is the REAL purpose of the European Union, from your perspective?
  • Is the introduction of the Euro a positive or a negative aspect of European integration?
    (Is the Euro just a 21st century version of the Gold Standard?)
  • Does the EU protect or destroy the welfare state?  Depending on how you answer this, is the impact of the EU on the welfare state a positive or negative one.
  •  Is Germany playing the role of the liberal hegemon in the EU?  Or is it an economic nationalist or simply an imperialist?
  • Should Turkey be admitted to the EU?
  •  Is the widening of EU membership to post-communist Eastern Europe a good or bad thing?
  •  France is stopping trains coming from Italy for fear that there are illegal immigrants on the train.  What does each group think of that?  (read background info from the press)
  • What does each group think about the recent economic bailouts for Greece, Ireland, and now Portugal (potentially Spain)?
  • What does Rifkin mean by the "European Dream?"

5. Resource Scarcity, Exploitation, and Environmental Degradation: The ultimate challenge to contemporary theories of political economy (April 28)

"We destroy the beauty of the countryside because the unappropriated splendours of nature have no economic value. We are capable of shutting off the sun and the stars because they do not pay a dividend." --John Maynard Keynes

  • Are all climate-skeptics "liberals?"  Is there a connection between climate skepticism and some members of the "freedom" family?
  • What is the tragedy of the Commons? How does it manifest itself in the Arctic?
  • Liberal thought and beliefs about our own well-being are based on the assumption that economic growth is good and the optimistic belief in progress (David Landes article).  Is there any thought in any family that would criticize or question these assumptions?
  • How is the tragedy of the commons related to "large group behavior?"  Is Hardin an economic liberal?
  • Will privatization or the Coase Theorem provide solutions for some or all environmental problems?

IV. Summary and Conclusions Toward new Theories of Political Economy May 3-5

•We can't solve problems by using the same kind of thinking we used when we created them."
•"Education is what remains after one has forgotten everything he learned in school."
•"The important thing is not to stop questioning. Curiosity has its own reason for existing.“

    --Albert Einstein

Recommended Reading: Buddhist Economics

Final Exam: Friday May 13, 7-10 pm

For those who want to read further, I recommend the following::

Peter Evans, “Counter-Hegemonic Globalization: Transnational Social Movements
in the Contemporary Global Political Economy”

· Peter Evans, "The State as Problem and Solution: Predation, Embedded Autonomy, and Structural Change," in Haggard and Kaufman, pp. 139-181.

World Development Vol. 21, No. 8 August 1993. Special Issue: "Economic Liberalization and Democratization: Exploration of the Linkages."

Three Pillars of Welfare State Theory: T.H. Marshall, Karl Polanyi, Alva Myrdal

* Robert Gilpin with Jean Gilpin, “The Nature of Political Economy in The Political Economy of International Relations (Princeton: Princeton University Press), pp. 25-45.

* Lindblom, Charles E. “The Market as Prison” Journal of Politics 44

*Michael Doyle, “Liberalism and World Politics”

· Amarta Sen, 1999 “”Global Justice: Beyond International Equity” in Inge Kaul et al, eds., Global Public Goods, (Oxford University Press).

*Stephen Hymer, "International Politics and International Economics: A Radical Approach"

· Albert Hirschman, National Power and the Structure of Foreign Trade (Berkeley: Univ. of Cal. Press), 1980, pp. 3-52.

Jacob Viner, "Power vs. Plenty as objectives of foreign policy"

· Philip Selznick, “Social Justice: A Communitarian Perspective.”

* Robert Gilpin, "The Nationalist Perspective"

James Varellas "Globalization as Constitutional Counterrevolution" pp. 145-152 only

* Peter Temin, “The Golden Age of European Growth Reconsidered,” European Review of Economic History, Vol. 6, No. 1, pp. 3-22.

* Keohane, Robert and Joseph Nye Power and Interdependence 1989 Chapter 1.

* Peter Evans, “National Autonomy and Economic Development: Critical Perspectives on Multinational Corporations in Poor Countries,” International Organization, Vol. 25, No. 3, pp. 675-692.

James R. Markusen. 1995. "The Boundaries of Multinational Enterprises and the Theory of International Trade." Journal of Economic Perspectives 9(2): 169-189.

· Krasner, Stephen D., Structural Conflict: The Third World Against Global Liberalism Berkeley: Univ. of Cal. Press, 1985 3-25.

Evans, Peter Dependent Development: The Alliance of Multinational, State and Local Capital in Brazil Princeton Univ. Press: 1994.

*James Hoge, "A Global Power Shift in the Making" Foreign Affairs 2004

*Steve Weber and John Zysman "The Risk that Mercantilism will define the next Security System” in Wayne Sandholz, et. al. The Highest Stakes: The Economic Foundations of the Next Security System, (Oxford University Press, 1992) pp. 167-196.

*Jeff Frieden, "Invested Interests: The Politics of National Economic Policies in a World of Global Finance" in International Organization (Autumn 1991) Vol. 45, No. 4. pp. 425-451.

*C. Fred Bergsten, "Fifty Years of the GATT/WTO:
Lessons from the Past for Strategies for the Future"

· Peter Evans, "The State as Problem and Solution: Predation, Embedded Autonomy, and Structural Change," in Haggard and Kaufman, pp. 139-181.
Williamson, John, "Did the Washington Consensus Fail?"

* Soros, George “The Capitalist Threat” Atlantic Monthly 279. 2 February 1997

· Roberto Sanchez 1994 “International Trade in Human Wastes: A global problem with uneven consequences for the third world” in Journal of Environment and Development 3:1 pp. 137-152.

Dani Rodrik, "The Developing Countries' Hazardous Obsession with Global Integration" January 8, 2001