ECONOMICS 4260/8266

HISTORY OF ECONOMIC THOUGHT

Spring 1999

(last revised: February 23, 1999

Arthur Diamond

Office: CBA 512E

Office Phone: 554-3657

Office Hours: Mon. 10:30-11:25 AM; Weds. 4:30-5:55 PM; and by appointment.

Internet address: adiamond@unomaha.edu

World Wide Web home page: http://unicron.unomaha.edu/faculty/adiamond/diahompg.htm

Seminar Description:

The first part of the seminar will focus on the development of economics from Adam Smith in 1776 through John Maynard Keynes in the 1930's. The focus will be on the substantive issues that concerned economists during different periods and on the tools of analysis that they developed in order to address those issues. In particular, we will study the economic writings of those economists who have subsequently been identified as 'great' by modern economists. The first part of the seminar will be mainly lecture format.

During the second part of the seminar we will use the history sketched in the first part of the seminar as a partial basis for addressing important questions about the methodology, institutional structure, and policy impact of economics.

Prerequisites:

The main prerequisite for the seminar is the possession of intellectual curiosity. To take the seminar for a grade, the student also should have previously completed at least an introductory microeconomics course (ECON 2200).

Reading Schedule:

The first half of the seminar will make use of a good, fairly brief, text:

Harry Landreth and David C. Colander. History of Economic Thought, 3rd ed. Boston: Houghton Mifflin Company, 1994.

The first nine weeks we will concentrate on achieving a basic familiarity with the history of economic thought by lecture-discussions focused on the text and on portions of the classics (like The Wealth of Nations). In the early years of the course, readings from the classics were spiral-bound into a packet that was sold by Kinkos (or by some Kinkos clone). Several years ago, however, a group of book publishers won a landmark court ruling against Kinkos that has made it much more expensive for Kinkos to produce readings packets. As a result, Kinkos in Omaha decided not to produce readings packets. The University Bookstore is willing to produce a packet for material that is clearly old enough to be beyond the copyright period. But the Bookstore will not take the initiative to obtain copyright permission for more recent readings. For those we will we will have to make use of the Reserve Desk of the library. (The one exception is the Veblen volume which is inexpensive enough that it has been added to the list of required books for the course that is available in the bookstore.) In the tenth week, we will have a midterm. In the last five weeks we will concentrate on some of the topics in the annotated bibliography. Readings for the topics sessions will be available from the reserve desk at the library. The following is a rough list of readings assignments for the first seven weeks. The page numbers in brackets are for the editions that are included in the spiral-bound packet:

Jan. 13: General introduction.

Jan. 20: Landreth/Colander text, Chs. 1-4; Smith, Adam, The Wealth of Nations, Book 1, Ch. 1, Of the Division of Labor, Ch. 2, Of the Principle Which Gives Occasion to the Division of Labor, Ch. 3, That the Division of Labor is Limited by the Extent of the Market; Book 5, Ch. 1, Part 3, Article 2, Of the Expence of the Institutions for the Education of Youth (first 6 or so pages) [pp. 13-36, 758-764].

Jan. 27: Landreth/Colander text, Ch. 5; Ricardo, David, Principles of Political Economy, Preface, Ch 1, On Value (skip the appendix), Ch. 2, On Rent, Ch. 5, On Wages [pp. 5-8, 11-51, 67-84, 93-109].

Feb. 3: Landreth/Colander text, Ch. 6; Mill, John Stuart, Principles of Political Economy, Preface; Book 1, Ch. 1, Of the Requisites of Production, Ch. 2, Of Labour as an Agent of Production; Book 2, Ch. 11, Of Wages; Book 5, Ch. 1, Of the Functions of Government in General [pp. xxvii-xxxi, 22-43, 343-360, 795-801]. Students should turn in a list of their top 3 choices of topics for papers. Topics will be assigned (based on student preferences and on goal of no two students having same topic).

Feb. 10: Landreth/Colander text, Ch. 7; Marx, Karl, Capital, Vol. 1, Part 1, Ch. 1, Sections 1 & 2, Commodities; Part 3, Ch. 10, The Working Day [pp. 35-46, 231-302] (Blaug, p. 266, notes that Marx himself suggested to a friend that the best way to begin reading Capital was with chapters 10, 13-15, and 25-33.) Marx, Karl, The American Journalism of Marx and Engels. "The British Rule in India," and "The Future Results of the British Rule in India." [pp. 93-109]; Senior, Nassau, Industrial Efficiency and Social Economy, in: Lakachman, "Nassau Senior," The Varieties of Economics, [pp. 277-288].

Feb. 17: Landreth/Colander text, Chs. 8 & 11; Marshall, Alfred, Principles of Economics, Preface to 1st edition; Preface to 8th edition; Book 5, Chs. 1-3; [pp. v-xvii, 323-350]. Donald N. McCloskey, "Economical Writing," Economic Inquiry 23 (April 1985): 187-222.

Feb. 24: Landreth/Colander text, Ch. 16; Keynes, John Maynard, The General Theory of Employment, Interest and Capital, Preface, Ch. 1, The General Theory; Ch. 2, The Postulates of the Classical Economics; Ch. 3, The Principle of Effective Demand; Ch. 5, Expectation as Determining Output and Employment; Ch. 8, The Propensity to Consume: I. The Objective Factors; Ch. 9, The Propensity to Consume: II. The Subjective Factors; Ch. 23, Notes on Mercantilism, the Usury Laws, Stamped Money and Theories of Under-consumption; Ch. 24, Concluding Notes on the Social Philosophy Towards Which the General Theory Might Lead [pp. xxi-xxiii, 3-34, 46-51, 89-112, 333-384]. Students should turn in an initial bibliography for paper (of four or more references).

March 3: Landreth/Colander text, Ch. 12; Veblen, Thorstein, Theory of the Leisure Class, Preface; Ch. 1, Introductory; Ch. 2, Pecuniary Emulation; Ch. 3, Conspicuous Leisure; Ch. 4, Conspicuous Consumption [pp. xiii-xiv, 1-101].

March 10: Midterm

March 17: Spring Break--no class

March 24: Paul Clark. "Say's Law and the Supply Siders: Bad Economics or Good Politics?"

Michael Msuya. "The Role of Mathematics in Economics."

Mark A. Olivio. “The Influence of Keynes on Policy.”

March 31: G.S. Vidyashankar. "Indian Economic Thought."

Apisit Amka. "How Effectively has Economic Theory Been Communicated to the Public?"

Haizhi Tong. "The Influence of Events and Policies on Economic Thought."

April 7: Narumone Boonpluang. "Does the Study of Economics Make People More Conservative?"

Arthur Diamond. “Does Economics Progress?”

April 14: German Vargas. "Is There a Rhetoric of Economics?"

Andrew Allison. "David Ricardo's Thoughts on Taxes: Why Was this So Important that He Would Write So Much, But It Would be Ignored Later?"

Naruetai Suwattananont "Do the Sources of Financial Support Influence the Economics Produced?"

April 21: César Hernandez. "Does Economics Have a Useful Past?"

Poj Chokchai-acha. "Does an Economist's Life Effect the Economist's Work?"

Kultida Weerachartwattana. "Have Economists Influenced Government Economic Policies in the Past: The Case of the English Corn Laws."

April 28: Michael Berryman. "History of the Application of Economics to Equity Markets."

Kitti Sriwathangkul. "How Did Early Economic Thought Influence the Founding Fathers?"

Papers due. Concluding reflections on lessons learned from the history of economic thought. Course evaluations.

May 5: Final Exam.

Topics available:

Kannika Vudhisethakrit

Sakchai Limsuchaiwat "Can Economics be Used to Explain the Behavior of Economists?"

Patchara Sarayudh. "Views on Currency without Debt Banking in the History of Economic Thought."

Arthur Diamond. "Have Scientific Revolutions Occurred in Economics?"

"Can Chaos Theory be Fruitfully Applied to Economics?"

Some graduate topics that have not been chosen by anyone:

"Has Economics Progressed Since Walras?"

"Have Economists Influenced Government Economic Policies in the Past: The Case of John Maynard Keynes."

"Have Economists Influenced Government Economic Policies in the Past: The Case of Paul Douglas."

"Does the Study of Economics Make People More Conservative?"

"Has the Development of Economic Theory Been Influenced by Theories in Physics?"

"Has the Development of Economic Theory Been Influenced by Theories in Psychology?"

Undergraduate topics:

Scott Schubert, Stigler utility article

Geoffrey Stewart, Stigler economists mattering article

Richard A. Moore, Ault and Ekelund article

Kenneth Grobeck. "Evolution in the History of Economic Thought."

426 Course Requirements:

Course grades will depend on the grades received on a midterm (30%), a final exam (40%), and a short paper (30%) that is a critical review of an article (or book) on some topic in the history of economic thought. The midterm will consist of a combination of multiple choice questions and essay questions. Some of the multiple choice questions will require identifying the economist who wrote a given passage. Some of the essay questions will deal with the main contributions of the important economists who are studied in the first half of the seminar. The short paper should be 5-6 pages of double-spaced, typewritten text (not including any footnotes and references). (With special permission, the student may select a relevant topic that is not included on the reading list). Late papers will have 5% of the possible paper points deducted initially and an additional 1% deducted for each day the paper is late beyond the first day.

Undergraduates also have the option of fulfilling the requirements for the graduate version of the course (listed below). In that case their grade will be based on the same activities listed for the graduate class, but the grading scale will be less severe than for graduate students and the time taken for the class presentation need not be as long (i.e., the graduate student cutoff points for various letter grades will be higher than the cutoff points for undergraduate students).

“Honors Contract” for Undergraduate Honors Students:

Undergraduate students enrolled in the Honors Program, may receive honors credit for the course by completing an honors contract and fulfilling the terms of the contract. The contract will specify conditions identical to the graduate requirements for the course (viz., a presentation and a longer term paper).

826 Course Requirements:

Course grades will depend on the grades received on a midterm (30%), a class presentation (10%), an extended research paper (40%) on a thesis related to one of the topics covered on the reading list, and a final exam (20%). The midterm will consist of a combination of multiple choice questions and essay questions. Some of the multiple choice questions will require identifying the economist who wrote a given passage. Some of the essay questions will deal with the main contributions of the important economists who are studied in the first half of the seminar.

In the second half of the course, each graduate student will be expected to give a summary presentation, and then lead discussion on one of the topics listed in the annotated reading list. The research paper should argue for a particular thesis related to one of the topic areas and should reflect critical thought instead of a mere summary of the positions of the published authorities. (With special permission, the student may select a relevant topic that is not included on the reading list). The paper should be 20-25 pages of double-spaced, typewritten text (not including any footnotes and references). Late papers will have 5% of the possible paper points deducted initially and an additional 1% deducted for each day the paper is late beyond the first day. The presentation should be on the same topic as the research paper, but the presentation should be more self-consciously designed so that all reasonable positions on the topic are given a credible defense.

Cheating:

Exams will be attentively monitored. The result of academic dishonesty will be a grade of F for the seminar and a recommendation for expulsion from the university.

GUIDELINES FOR PRESENTATIONS

The presenter will assign readings to fellow students two weeks prior to the seminar presentation. The presenter should either (1) provide two photocopies to me to place on reserve or (2) provide sufficient photocopies for each student to have her own copy. Photocopies should have full bibliographic information on the top of the first page of each separate source. Full bibliographic information means: author(s), article or book title, volume number (where applicable), journal title (where applicable), publication date and pages. A presenter will be expected to give a summary presentation, and then lead discussion on one of the topics listed in the annotated reading list. The presentation should be on the same topic as the research paper, but the presentation should be more self-consciously designed so that all reasonable positions on the topic are given a credible defense.

Most presentations should consist of a 20-30 minute presentation, in which you state your thesis, hypothesis, or research question. Why is your topic important? What about it is controversial, or unresolved? What method or type of evidence will you bring to bear to try to resolve the controversy? In addition to discussing your topic and your plans for your paper, you should also briefly discuss the readings that you assigned for the evening. You should have some questions prepared for your fellow students on the readings that focus their attention on the central message of each assigned reading and on the reading’s importance.

Some specific suggestions:

1. Make sure your photocopies are legible.

2. Make sure you have all reference information on the first page of your reading, including the author, title, year and, where applicable, volume, number, month, etc.

3. If you find a reading that is relevant, but dated, be sure to use the Social Science Citation Index to try to find an equally relevant, but more recent, reading.

4. Begin your search early enough to be able to acquire items through interlibrary loan, if necessary.

5. Make sure to include in the copy of your reading, all footnotes and references that are referred to internally in the body of your reading.

GUIDELINES FOR 426 BRIEF PAPERS

The paper should be a critical review either of an article (or book) listed in the annotated reading list. Articles preceded by the plus symbol (+) have been pre-certified as appropriate for this assignment, but other articles (and books) may be used, subject to my approval. The content of the critical reviews will be left largely to the student's own judgement. At least a couple pages of the paper should be an informative summary of the paper that highlights the paper’s structure, central message, and the main arguments in defense of the central message. The paper should also include at least a couple of pages of evaluation. This would normally include some comments on style, but would focus most on the substance of the paper’s argument and central message. As you might suppose, however, reviews that merely rephrase the introduction and conclusion of the original paper will be valued less highly than reviews that evidence well-spent mental effort. The short paper should be 5-6 pages of double-spaced, typewritten text (not including any footnotes and references). At the end of the paper there should be a full bibliographic citation to the article or book that is being critically reviewed. The text of the paper should be double-spaced and should have inch and a half margins on the top, bottom, right and left. The font size should either be 10 point or 12 point in size. Please do not put your paper in a special binder that would limit the space for my comments. Instead, staple or clip it together. The ultimate arbiter for reference format is style “A” described in the latest edition of The Chicago Manual of Style.

GUIDELINES FOR 826 TERM PAPERS

The research paper should argue for a particular thesis related to one of the topic areas and should reflect critical thought instead of a mere summary of the positions of the published authorities. (With permission, the student may select a relevant topic that is not included on the reading list).

The paper should be written at a consistent level of difficulty. In most cases, the paper should be written to be understandable by a conscientious undergraduate economics major. That means you should assume that you are writing for someone who is intelligent, interested, short on time, and does not have a deep knowledge of science or the higher level technical details of economics.

The "core" sections of the paper should sum to approximately 20-25 pages. A few pages extra will not be penalized if the extra pages are truly needed (i.e., not "padding").

The paper should have a title page including the title, your name, the name of the course, the course number and the date on which the paper is turned in. Following the title page, on a separate page should be a 100 word abstract. Neither the title page nor the abstract page counts toward the page limit of the paper. Pages in the body of the text (beginning with the Introduction) should be consecutively numbered. The text of the paper should be double-spaced and should have inch and a half margins on the top, bottom, right and left. The font size should either be 10 point or 12 point in size. Please do not put your paper in a special binder that would limit the space for my comments. Instead, staple or clip it together.

Use endnotes rather than footnotes. (But endnotes should be used only if really necessary.) When a source is used in the text, internal references should be given in the text that consist of a parenthetical mention of the author's last name, the date of the publication and a specific page number (if appropriate). For each brief parenthetical reference, a complete bibliographic reference should be provided in the Bibliography (that is not counted in the page limit). The ultimate arbiter for reference format is style “A” described in the latest edition of The Chicago Manual of Style.

Before you turn in your final draft, be sure to submit it to a spell-checking program (available with all major word-processing programs).

As you work on the text of your paper, be sure to periodically backup your latest draft onto a floppy disk. Also be sure to keep a clean copy of your paper for your files---the copy you turn in to me will be marked-up in red ink.

In your introduction, you should describe your problem and your thesis. This might be a good place to mention the contents of any broadly relevant articles that you turned up in your UNCOVER, EconLit and other literature searches. If there is no relevant material on UNCOVER or EconLit for your topic, mention the absence of relevant material (and include in the appendix, a list of the keywords that you used to search under and the articles that resulted). (That is, it would be very unusual to have no relevant articles appear, so if you claim that there are none, the burden of proof is on you.) Briefly (in a few sentences) summarize what you will be doing in the rest of the paper.

a. The paper should have inch and a half margins on the left hand side, top and bottom. (Ample margins make it easier for me to jot down comments.)

b. Attempt to write as McCloskey suggests in "Economical Writing".

c. Do not place your paper in a plastic cover.

d. Make a photocopy of your paper before turning it in.

e. The paper is due at the beginning of the last regular class session (i.e., 6 pm on Weds., April 28th).

Sample Presentation/Paper Topics from Previous Years:

Graduate students, and undergraduates who choose to give a presentation, have a choice of topics. Some of the topics from past years have been:

"The Application of Economic Theories in the Making of Public Economics: The Case of the Fair Labor Standards Act"

"History of Economists' Views on Currency Without Debt Backing"

"The Role of Mathematics in Economics."

"Did Henry George have an Influence on William Jennings Bryan and the Politics of the 1890's?"

"Does the Study of Economics Make People More Conservative?"

"What is the Value to Having an Article Placed First in a Journal?"

"Have Economists Influenced Economic Policy? The Case of Keynes and The Economic Consequences of Peace"

"Economics and the Gods: the Impact of Theology on Early Economic Thought”

"Anticipations of Keynes's General Theory, with Special Attention to the Scandinavian School of Economic Thought"

"Have Economists Influenced Economic Policy? The Case of Keynes and the New Deal/Great Depression Era"

"Does Economics Have a Useful Past?"

"Can Chaos Theory be Fruitfully Applied to Economics?"

"How Did Early Economic Thought Influence the Founding Fathers of the U.S.?: the Case of Thomas Jefferson"

"Is an Economist's Biography Important in Understanding an Economist's Work"

"Was Smith a Closet Utopian?"

"Economics from a Psychological Point of View" or "Economics, Psychology: What's the Difference?"

"How has Outside Funding Affected the Course of Economic Research?"

"Marx on the Civil War"

"The Editions of Samuelson's Economics Text: What Can We Learn About Samuelson, the Changing Course of Economics and the Economics/Sociology of Textbook Writing?"

"Does Merit Determine Who is Elected President of the American Economic Association?"

"Have Economists Influenced Government Economic Policies in the Past? The Case of the English Corn Laws"

"Have Scientific Revolutions Occurred in Economics?"

"Did The Wealth of Nations and Early Economic Analysis Have Any Impact on the Founding Fathers of the United States?"

"Do Events Influence the Development of Economic Theories or Does it Evolve According its Own Dynamic? The Case of Keynes and the Great Depression"

"Do the Sources of Financial Support Influence the Economics Produced?"

"What Was the Impact of Veblen's Ideas on Economics and What Were the Arguments Between his School of Thought and the Neoclassicists?"

Important Dates:

March 10: midterm (tentative date).

March 15‑19: Spring vacation; no classes.

April 2: Last day until 5:00 PM to drop seminar with a grade of "W".

May 5: Final exam 6:00 PM‑8:40 PM.

The following sample bibliography is intended to illustrate the preferred reference format for several different kinds of publications.

SAMPLE FORM FOR BIBLIOGRAPHIC REFERENCES

Ackermann, Robert John. Data, Instruments and Theory. Princeton, N.J.: Princeton University Press, 1985.

Acs, Zoltan J., David B. Audretsch and Maryann P. Feldman. "Real Effects of Academic Research: Comment." The American Economic Review 82, no. 1 (March 1992): 363-367.

Adams, James D. "Fundamental Stocks of Knowledge and Productivity Growth." Journal of Political Economy 98, no. 4 (August 1990): 673-702.

Alchian, Armen A. "Private Property and the Relative Cost of Tenure." In Economic Forces at Work. Indianapolis: Liberty Press, 1977 (essay originally published in 1958).

American Chemical Society. Directory of Graduate Research 1989. Washington, D.C.: American Chemical Society, 1989.

Becker, William E., Jr. "Maintaining Faculty Vitality through Collective Bargaining." In Clark, Shirley M. and Lewis, Darrell R., eds. Faculty Vitality and Institutional Productivity: Critical Perspectives for Higher Education. New York: Columbia University, Teachers College Press, 1985, pp. 198-223.

Davis, Elizabeth. "Compensation Gains of Faculty Unions and the Unemployment Effect of Extending Unemployment Insurance Coverage." (PhD Dissertation, University of Michigan, 1988).

Diamond, Arthur M., Jr. "Age and the Acceptance of Cliometrics." The Journal of Economic History 40, no. 4 (December 1980): 838-841.

. "The Career Consequences of Accepting a Scientific Mistake." working paper, 1992.

Friedman, Milton. "An Open Letter for Grants." Newsweek (May 18, 1981): 99.

Garfield, Eugene, (chairman). Science Citation Index. Philadelphia: Institute for Scientific Information, Inc., 1961-present.

Lucas, Robert E., Jr. "Incentives for Ideas." New York Times (April 13, 1981): 23.

In future be sure to adopt DOVER edition of Veblen (it is the $2 edition, not Penguin).