Seminar in Political Economy
     - Political Science 6448, Fall 2009 -

   Dave Robertson, Office: 801 Tower, Ph: 314-516-5855, Fax: 314-516-7236,
    email: daverobertson@umsl.edu
    Office Hours: 7:00-8:00 pm Wednesday; 9-12 am Thursday, I'm happy to meet at other times to suit your schedule
    Class meets in the Political Science conference room, Mondays, 6:55-9:35 pm

·         "No nation was ever ruined by trade"    --- Benjamin Franklin

·         "The merchant has no country"               --- Thomas Jefferson

·         "Follow the money"                                   --- "Deep Throat" [W. Mark Felt] to Bob Woodward, in All the President's Men

·         "Microsoft and the government were the perfect opponents. The government has some power,
    but Microsoft has at least as much. Anyone else facing either one of them would have been overmatched." 
                      --- David Boies, lead trial lawyer for the U.S. government in the Microsoft anti-trust case
                           (quoted in the New York Times, June 9, 2000, page 1)

·      “Unlike other financial sectors that have evolved over time to include some degree of Federal and State regulation, States alone continue to have the primary authority to regulate insurance today. For that reason, Congress has historically only passed insurance legislation to respond to a crisis, address a market failure, or adopt narrowly-focused insurance reforms … The events of the last year have demonstrated that insurance is an important part of our financial markets. … The bond insurance crisis showed that even small segments of the industry can have a large economic impact. AIG taught us that the business of insurance has become complex and no longer always fits nicely into the State regulatory box.”.”

                              --- Opening Statement, Chairman Paul E. Kanjorski,
                            Subcommittee On Capital Markets, Insurance, and Government Sponsored Enterprises,
                            Hearing On “How Should The Federal Government Oversee Insurance?” May 14, 2009

1. Course Description. These quotes suggests the conflict, contradiction and ambiguity that result when the words "politics" and "economics" are thrown together. Conflict, contradiction and ambiguity result when the words "politics" and "economics" are thrown together. The intersection of politics and economics raises questions - and sparks conflicts - about the fundamental issues of politics: freedom, security, order, sovereignty, fairness, and democracy. In  Political Economy & Public Policy, we will examine how the struggles for power and for wealth affect one another and the realization of these values. Specifically, we will compare and contrast political and market solutions to collective problems; the politics of economic crises; corporations and labor in the political economy; regulation, monetary policy; and fiscal policy

2. Books. The following books are required for the course:

• James P. Caporaso and David P. Levine, Theories of Political Economy (New York: Cambridge University Press, 1992)  ISBN 0521425786
• Peter A. Gourevich, Politics in Hard Times (Cornell University Press, 1988)  ISBN: 0801494362
• Douglass North, Institutions, Institutional Change and Economic Performance (New York: Cambridge University Press, 1990). ISBN: 0521397340
• Monica Prasad, The Politics of Free Markets: The Rise of Neoliberal Economic Policies in Britain, France, Germany, and the United States (University of Chicago Press, 2006)(Paperback) ISBN-10: 0226679020
• Kathleen Thelen, How Institutions Evolve: The Political Economy of Skills in Germany, Britain, the United States, and Japan (Cambridge University Press, 2004) (Paperback) ISBN-10: 0521546745

 3. Grading. Grades will be allocated in the following way:

-         Participation                        20%

-         2 Short Papers                    10% each

-         Long Paper                         40%

-         Final Exam                          20%

4. Participation. You are expected to attend all seminar sessions, to have the readings for each session prepared, and to contribute thoughtful and informed questions comments to the discussion. If you do so you will receive an "A" for this part of the grade. Remember, this seminar will succeed only to the extent that you participate. Its success depends on you. Everyone is especially expected to participate actively on November 30.

You will be responsible for preparing one or two questions for each seminar.  To prepare questions for class, be ready to talk about why the question is important, two alternative answers to the question, and the reason that you think one answer is better than others. The discussion questions will be available at the preceding class, and placed on the "Detailed Course Outline," below.

5. Short Papers. There will be two short (6-10 page, typed) book reviews for the course. These papers are due September 21 and October 19.  You should choose books that you are eager to read, and/or are critically important for your research paper. You should get these books approved no later than 2 weeks before the papers are due.

As you read a scholarly book and write a review, you should answer the following questions: (1) What is the main topic of the book?  (2) What central point does the author want readers understand?  Why? (3) To what other scholars or arguments is the author responding? (4) How does the author prove her point? What logic or evidence does she use? (5) How does she structure the book?  Why?

 

To write the book review:

 

a. Summarize the book’s content (no more than half the paper) by answering the following questions: (a) What is the topic? (b) How would you summarize the key arguments and the evidence for them? (c) What does the author conclude? (d) how does this book relate to other scholarly works or literatures?

 

b. Analyze the book by answering the following questions: (a) Does the author make a persuasive case for her central point? (b) Is the evidence adequate? (c) does the author use evidence and treat other authors in a fair way? (d) What parts of the argument are most effective? Which are least effective? (e) What are the implications of this argument for understanding politics?

6. Seminar paper. This is a conventional research paper on a topic of interest to you. Topics should be arranged with me by September 14 at the latest. An annotated bibliography and an outline are due on November 2. The paper is due on December 9.

7. Exam. There will be a take home final exam. You will have the questions in advance, and you will have a week to compose your answers. It is due Monday, December 14.

8. Additional Information on Political Economy. For a more extensive bibliography with some links to major sources of information, go to The Political Economy Bibliography.

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The Course in Brief

Click on date for details for each class; "[MG]" indicates a document in the "My Documents" section of My Gateway

August 24:            Introduction: Politics and Markets

• Read: Caro, "The Sad Irons" [MG]; Kingdon, "America the Unusual"  [MG]         

August 31:            How the Economy is Political -- and Why

• Read: Caporaso & Levine, vii-55; North, 3-45; 92-104;
            Lindblom, Politics and Markets [MG]; Kuttner, "Markets and Medicine" [MG]  

September 7:         Labor Day; class does not meet.

September 14:            Foundations of American Political Economy

• Read:  North,  46-69, 118-130;
             Polanyi, "The Self-Regulating Market and the Ficticious Commodities" [MG];
             Novak, "Political Economy: The Well-Ordered Market" [MG]; Pollack, "War and the Development of the American State" [MG];       
             William Cronon, "Rails and Water" [MG]  

          Paper Topic Due

September 21:          Systems in Crisis: Industrialization

• Read: Caporaso & Levine, 55-78; North, 73-91, 107-117; Gourevich, 1-123
  
  Short Paper 1 due  

September 28:          Business, Labor, & Progressivism

• Read: Caporaso & Levine, 79-99; Daniel Yergin, "Our Plan" [MG]; David Halberstam, "The Founder" [MG];
              Robertson, Capital, Labor, and State, chapters 3-5 [MG];
              Eisner, "Progressivism and the Political Economy," 98-124 [MG]

October  5:          How Institutions Evolve

• Read: Thelen, xi-214   

October 12:   Systems in Crisis: Depression and New Deal

• Read: Caporaso & Levine, 100-125; Keynes, General Theory, 128-131 [MG];
            Gourevich, 124-180; Schumpeter, "Creative Destruction," 81-86 [MG];
            Eisner, "Political Responses to the Great Depression," 160-192 [MG]  

October 19:  The Golden Age of Managed Capitalism 

• Read: Schonfield, "The Signs of Change," 3-17 [MG]; Jacobs, "Pocketbook Politics" [MG];
           Harris and Milkis, The Politics of Regulatory Change, 22-96 
   

• Short Paper 2 Due

October 26:    Systems in Crisis: Stagflation and the Economic Approach to Politics

• Read:  Gourevich, 181-240; Caporaso & Levine, 126-158; Yandle, "Baptists and Bootleggers" [MG]
        

November  2:       Varieties of Capitalism & The Rise of NeoLiberal Politics in the U.S.

• Read:  Laitin, "Forms of Capitalism," 650-659 [MG]; Thelen, 215-296; Prasad, vi-98

        Research Outline / Bibliography due

November  9:           The Rise of NeoLiberal Politics Abroad      

• Read:  Prasad, 99-286;

November 16:                Power, the State, and Contemporary Political Economy

• Read:  Caporaso & Levine, 159-196; Economist, "Efficient Market Theory" and "Macroeconomic Theory," [MG];
            Irwin and Paley, "Greenspan Says He Was Wrong on Regulation" [MG];
            Ferguson, "Safe as Houses" [MG]; Gjerstad and Smith, “From Bubble to Depression”

November 30:                The Budget Deficit

• Read:  Brady & Volden, 12-78 [MG]; CBO Budget Options; handout on budget roles [MG]

December  7:     Globalization and Justice

• Read:  North, 131-140; Caporaso & Levine, 197-225; Smeeding, "Public Policy, Economic Inequality, and Poverty:
            The United States in Comparative Perspective"  [MG]; Kelly, "The Political and Ideological Divide..." [MG]

December  9 (Wednesday):       Paper due by 5 pm

December 14 (Monday):      Take Home Exam Due

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Detailed Course Outline

August 24: Introduction: Politics and Markets

• Read: Robert Caro, "The Sad Irons," from The Path to Power [MG]
           John Kingdon, "Describing the Comparisons," from America the Unusual, pages 7-22 [MG]

August 31: How the Economy is Political -- and Why

Read:  Caporaso & Levine, Theories of Political Economy, vii-55;
           North, Institutions, Institutional Change and Economic Performance, 3-45; 92-104;
           Charles E. Lindblom, Politics and Markets, chapters 5 & 6 [MG];
           Robert Kuttner, "Markets and Medicine," chapter 4 from Everything for Sale [MG]

 

Discussion questions:
 

1)  What are the three conceptions of the political, according to Caporaso and Levine? How are these applied to explaining politics and economic policy? Illustrate with examples from a policy area with which you are familiar, or contemporary economic issues.

2)   What are the three conceptions of economics, according to Caporaso and Levine? How are these applied to explaining politics and economic policy? Illustrate with examples from a policy area with which you are familiar, or contemporary economic issues.

3)  What should be the role of the state in economic policy, according to the classical tradition in economics?  How does this concept affect health policy in the U.S.?

4)   Explain the importance of North’s behavioral assumptions. Give real world examples of the problems he identifies on page 24 Why is cooperation a problem?

5)   Why are transaction costs so important to North? Why are informal constraints so important to North?

6)   What is path dependence and why is it so important to North?  What are the implications for understanding the economy and the impact of economic policy?

7)   What are the strengths and weaknesses of authority systems for making collective choices, according to Lindblom?  Following this logic, why do people find government an attractive solution to their economic problems? Use health policy to illustrate.

8)   What are the strengths and weaknesses of market systems for making collective choices, according to Lindblom? Following this logic, why do people find markets an attractive solution to their economic problems? Use health policy to illustrate.

September 14:                   Foundations of American Political Economy

Read:  Douglass North, Institutions, Institutional Change and Economic Performance 46-69, 118-130;
           Karl Polanyi, "The Self-Regulating Market and the Ficticious Commodities: Land, Labor, and Capital" [MG]
           William Novak, "Political Economy: The Well-Ordered Market," from The People's Welfare: Law and Regulation in Nineteenth-Century America [MG]

           Sheldon Pollack, "War and the Development of the American State," from War, Revenue, and State Building [MG];       

           William Cronon, "Rails and Water," from Nature’s Metropolis [MG]   
 
 

September 21:                  The Challenge of Industrialization

Read:  Caporaso & Levine, Theories of Political Economy, 55-78;
           North, Institutions, Institutional Change and Economic Performance , 73-91, 107-117;
           Gourevich, Politics in Hard Times 1-123

            Paper 1 due   
 

Discussion questions:

 

 

September 28:                Business, Labor, & Progressivism

• Read: Caporaso & Levine, Theories of Political Economy, 79-99;
            Daniel Yergin, "Our Plan," The Prize [MG];
            David Halberstam, "The Founder," from The Reckoning [MG];
            David Robertson, Capital, Labor, and State, chapters 3-5 [MG];
            Marc Allen Eisner, "Progressivism and the Political Economy," from The State in the American Political Economy, 98-124 [MG]

 

Discussion questions:

 

October 5:    How Institutions Evolve

• Read: Kathleen Thelen, How Institutions Evolve: The Political Economy of Skills in Germany, Britain, the United States, and Japan, xi-214   

 

Discussion questions:

 

 

October 12:       Systems in Crisis: Depression and New Deal

• Read: Caporaso & Levine, Theories of Political Economy, 100-125;
            John Maynard Keynes, General Theory 128-131 [MG];
            Peter Gourevich, Politics in Hard Times, 124-180;
            Joseph Schumpeter, "Creative Destruction," from Capitalism, Socialism, and Democracy, 81-86 [MG];
            Mark Allen Eisner, "Political Responses to the Great Depression," The State in the American Political Economy, 160-192 [MG]  

 

Discussion questions:

 

 

October 19:     The Golden Age of Managed Capitalism

• Read: Caporaso & Levine, Theories of Political Economy, 100-125;
            Andrew Schonfield, "The Signs of Change," from Modern Capitalism: The Changing Balance of Public and Private Power
                              (New York: Oxford University Press, 1965), 3-17 [MG]
            Meg Jacobs, “Pocketbook Politics: Democracy and the Market in Twentieth-Century America,” in The Democratic Experiment:
                               New Directions in American Political History (Princeton: Princeton University Press, 2003), pp. 250-275.
            Richard A. Harris and Sidney M. Milkis, The Politics of Regulatory Change: A Tale of Two Agencies, 2^nd ed. 22-96 [MG]

 

Discussion questions:

 

 

October 26:     Systems in Crisis: Stagflation and the Economic Approach to Politics

• Read:  Gourevich, Politics in Hard Times, 181-240;
             Caporaso & Levine, Theories of Political Economy,126-158;
             Bruce Yandle, "Baptists and Bootleggers" [MG]

 

Discussion questions: (sign up for questions 1, 3, 4, or 5; and also for one country from Gourevitch)

 

November  2:  Varieties of Capitalism & The Rise of NeoLiberal Politics in the U.S.

• Read:   David Laitin, "Forms of Capitalism," from "Comparative Politics," in Ira Katznelson and Helen V. Milner, eds.,
                  Political Science: The State of the Discipline, 147-171 [MG];
              Kathleen Thelen, How Institutions Evolve, 215-296;
              Monica Prasad, The Politics of Free Markets, vi-98

 

Discussion questions:

November  9:   The Rise of NeoLiberal Politics Abroad      

• Read:  Prasad, The Politics of Free Markets, 99-286

Discussion questions:

 

 

November 16:          Power, the State, and Contemporary Political Crisis

• Read:  Caporaso & Levine, Theories of Political Economy, 159-196;
             The Economist, "Efficient Market Theory" and "Macroeconomic Theory," [MG];
             Neil Irwin and Amit R. Paley, "Greenspan Says He Was Wrong on Regulation" Washington Post October 24, 2008 [MG];
             Niall Ferguson, "Safe as Houses," from The Ascent of Money [MG];
             Steven Gjerstad and Vernon L. Smith, “From Bubble to Depression,” Wall Street Journal, April 6, 2009 [MG]
     

Discussion questions:

 

 

November 30:          The Budget

• Read: Brady & Volden, Revolving Gridlock, 12-78 [MG];
            CBO Budget Options; handout on budget roles [MG]

 

December 7:          Inequality

• Read: North, Institutions, Institutional Change and Economic Performance, 131-140;
            Caporaso & Levine, heories of Political Economy, 197-225;
            Nathan Kelly, "The Political and Ideological Divide..." [MG]
            Timothy Smeeding, "Public Policy, Economic Inequality, and Poverty: The United States in Comparative Perspective"  [MG]

  

Discussion questions: