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

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

·         "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)

·         “Competition is not something anybody likes. I didn't like it when I was in the business community.
      I thought my competitors were always unfair, and I wished they would go elsewhere.”

                              --- Alan Greenspan, in testimony before the Joint Economic Committee, June 9, 2005

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:

• David W. Brady and Craig Volden, Revolving Gridlock: Politics and Policy from Jimmy Carter to George W. Bush (Westview Press, 2005) ISBN 0-8133-4320-8
• 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 April 21.

5. Short Papers. There will be two short (6-10 page, typed) book reviews for the course. These papers are due February 11 and March 10.  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 February 4 at the latest. An annotated bibliography and an outline are due on March 31. The paper is due on May 5.

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 will be due Thursday, May 9.

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.

The Course in Brief

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

January 14:            Introduction: Politics and Markets

• Read: Robert Caro, "The Sad Irons" [MG] Gordon Thomas and Max Morgan-Witts, "Crash" [MG]         

January 21:         Dr. Martin Luther King memorial; class does not meet.

January 28:            How the Economy is Political -- and Why

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

February 4:            Foundations of American Political Economy

• Read:  North 46-69, 118-130;
             Robertson, "Madison and the Democratic Party" [MG];
             Karl Polanyi, "The Self-Regulating Market and the Ficticious Commodities: Land, Labor, and Capital"
             William Cronon, "Rails and Water" [MG]  

          Paper Topic Due

February 11:          Systems in Crisis: Industrialization

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

February 18:          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, The State in the American Political Economy, 98-124 [MG]

February 25:          How Institutions Evolve

• Read: Thelen, xi-214   

March 3:   Systems in Crisis: Depression and New Deal

• Read: Caporaso & Levine, 100-125; Keynes, General Theory 128-131 [MG];
            Gourevich, 124-180; Schumpeter Capitalism, Socialism, and Democracy, 81-86 [MG];
            Eisner, The State in the American Political Economy, 160-192 [MG]  

March 10:  The Golden Age of Managed Capitalism 

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

• Short Paper 2 Due

March 17:    Systems in Crisis: Stagflation and the Economic Approach to Politics

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

March 24 - Spring  Break

March 31:       Varieties of Capitalism & The Rise of NeoLiberal Politics in the U.S.

• Read:  Laitin, "Comparative Politics," 650-659 [MG]; Alt, "Comparative Political Economy" [MG];
              Prasad, vi-98; Woodward, Maestro 138-144 [MG]

        Research Outline / Bibliography due

April 7:           The Rise of NeoLiberal Politics Abroad      

• Read:  Prasad, 99-286

April 14:                Power, the State, and Contemporary Political Economy

• Read:  Brady & Volden, 1-42; Caporaso & Levine, 159-196;
             Thelen, 215-296

April 21:                The Budget Deficit

• Read: CBO Budget Options; handout on budget roles [MG]

April 28:     Policy-making, Globalization and Justice

• Read:  Brady & Volden, 43-182; North, 131-140; Caporaso & Levine, 197-225; Smeeding, "Public Policy, Economic Inequality, and Poverty:
             The United States in Comparative Perspective"  [MG];

May  5 (Monday):       Paper due by 5 pm

May  9 (Thursday):      Take Home Exam Due

---

Detailed Course Outline

January 14: Introduction: Politics and Markets

• Read:     Robert Caro, "The Sad Irons," from  [MG] "
                Gordon Thomas and Max Morgan-Witts, "Crash" [MG]

January 28: 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, ch 5-6 [MG];
            Robert Kuttner, Everything for Sale, ch 4 "Markets and Medicine," [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.

9)   How would North react to Lindblom’s analysis? What would he agree with?