EC 301 - Dr. Parker's Comparative Economic Systems Homepage

EC 301 - Comparative Economic Systems Ansari Business (AB) Bldg. Room 212	Professor Elliott Parker Office: AB 319-F
Spring 2003 TR 11:00 AM - 12:15 PM	Office Hours: TWR 4:00-5:00 PM. or email me for an appointment

(one-page Short Syllabus for printing)

Paper Assignments: Paper 2 is now due on May 6

Note: if you find any broken links in this page, or have any suggestions for useful additions, email me!

Course Description:

This course examines the major economic systems of the world, in both theory and practice. The approach will generally focus on encouraging a general understanding of how economic systems work and how economic theory interacts with government policy, history, and culture to explain economic performance. Economies examined in some detail will include several advanced market capitalist countries (e.g., the U.S., Japan, France, Sweden, and Germany), the former socialist economies (e.g, the former Soviet Union, Poland, and China), and other East Asian economies (e.g., South Korea, Taiwan, and Singapore).
Prior study in economics is required (EC 101 and EC 102), but this course will be less quantitative than other theory courses. As a course which spends substantial time focused on the diversity of economies, EC 301 meets the diversity requirement of the University Core Curriculum. One component of the diversity requirement is a rigorous writing requirement.

Books:

David Kennett (Aug. 2000), A New View of Comparative Economics, Harcourt College Publishers, ISBN 0-03-018959-4, Required.

Olson, Mancur (2000), Power and Prosperity, Basic Books, paperback, ISBN: 0-46-505196-0, Required. This book is also on reserve, and one former student suggests that you can read it online (for a fee) at Questia.com.

Robert L. Heilbroner & Milberg, William (2001), The Making of Economic Society (11th Edition), Prentice Hall, paperback, ISBN: 0130910503, Optional but highly recommended by former students.

These books are available at the ASUN Bookstore in Jot Travis Student Union (JTSU), or you can order them online through companies like Amazon.com, Varsitybooks.com, or ecampus.com. You might go first to Bigwords.com, which compares prices for you.

Other readings listed in the schedule are available for Getchell library use only at the reserve desk, next to the main checkout desk.

Grading:

This course requires a significant amount of writing, and your ability to express yourself clearly in writing will significantly affect your grade. Grading will depend on:

Questions of the Week -- worth 10%

Three Examinations (Two Midterms and a Final) -- each worth 20%

First Paper -- worth 10%

Second Research Paper -- worth 20%

Exams will be long, in-class, and closed-book mostly essay exams, requiring both an ability to express yourself in writing and a good understanding of the lectures and the assigned readings. Papers will be assigned at least three weeks in advance of their due dates, and are expected to be in formal academic style; the first paper is 6-7 typed pages requiring some outside research, whereas the second paper is a more formidable research paper of 12-15 pages in length.
Would you like to see samples from past semesters?
Spring 2002: Exam 1, Exam 2, Paper Assignments, and an "A" First Paper.
Fall 2001: Exam 1 and Exam 2.
Fall 1999: Exam 1, Exam 2, and Exam 3.
Fall 1998: First Exam, the Second Exam and the Final Exam.
What is the Difference between A and C students?
Want to know how to cite sources from the internet? Professor Hoelzer in Biology has some nice tips on technical writing, a number of which apply to economics as well.

Questions of the Week
(I will ask these in class at random, and grade your answer)

Week 11:

What are the Pareto Conditions, and what did Barone and others see as the role of the central planner in optimizing economic performance?
What is Material Balance Planning? How does it work? What are its major weaknesses?
What are Kornai's five blocks of the classical socialist economy?
How is the Soviet-style economy supposed to work in theory? What are its major components? How did it actually work?
What is the Fel'dman approach to rapid economic growth? What are the major components of this policy, and how do they fit together? Is this approach possible in a market capitalist economy? Is this approach consistent with extensive growth or intensive growth?

Week 12:

Contrast the systems and policies of War Communism and the New Economic Policy under Lenin. What purposes was each of these systems designed to serve? What effects did they have on economic performance?
What led to the end of the NEP? What replaced it?
Explain the debate between the teleologists and the geneticists after the death of Lenin. What role did Bukharin, Trotsky, Preobrazhensky, and Stalin play in this debate?
In What is to be Done?, what strategy did Lenin argue was necessary for revolution to succeed, and why? How might this help explain the Bolshevik Revolution?
What is the historical record of the Soviet economy's development and performance, both in industry and agriculture? How was each organized and coordinated?
What is the difference between intensive and extensive growth?
Why did growth in the USSR slow after the 1960s?
What were the major economic and political events in China under Mao Zedong? How did Chairman Mao's vision of Chinese development differ from most other socialist economies?

Week 13:

How is market socialism different from classical socialism? What contradictions are inherent in market socialism?
How does the labor-managed economy work in the theory of the Ward-Vanek-Domar model? What are the major hypotheses of the model?
How might the labor-managed firm differ in a capitalist economy versus a socialist economy?
Describe the major economic policies of Tito's Yugoslavia before the breakup. How did this economy differ from the classical socialist economy? How did it perform, and how did the design of its economic institutions lead to its peculiar problems?
How did Poland, Chechoslovakia, and Hungary attempt to move away from the Soviet model in the years between Stalin and Gorbachev? To what extent were they successful? Explain.
What was the Brezhnev Doctrine?
To what extent was the Soviet Union able to reform its political and economic system in the years between Stalin and Gorbachev?

Weeks 14-15:

What were the five policies of Uskorenye in Gorbachev's 12th Five-Year-Plan? What role did Glasnost or "openness" play? Why were these policies of "acceleration" unsuccessful? How did the "basic theses" (Osnovanye Polozheniya) of 1987 represent a shift in thinking about reform in the Soviet Union? Was the new policy of Perestroika or "restructuring" successful? Explain.
Discuss the major economic reforms in China under Deng Xiaoping. Contrast reforms in agriculture and industry.
What is the significance of China's "Socialist Market Economy," and what reforms and policies does it entail?
What are the causes of the current crisis in China's state-owned enterprises?
How was China affected by the Asian Financial Crisis?
What were the major political and economic events of the collapse of the classical socialist economies? Consider in particular the events and policies after the end of the Brezhnev Doctrine.
How does a strategy of transition differ from the "perfection of control" or other policies of economic reform within the socialist economy?
How does the "big bang" approach differ from gradualism?
What are the major elements required of a strategy to transition to a market economy? What problems are likely to be experienced along the transition path?
Why is a socialist economy in transition likely to suffer a dramatic initial economic decline? What political and social difficulties are likely to be encountered?
After the collapse of the Soviet Union in 1991, what general approach and specific policies did the Yeltsin government take to Russia's economic transition? What political and economic difficulties did it encounter? How did it reform the Central Bank, and why?
What caused the Russian financial crisis of 1998, and what impact did it have on Russia's economy?
Describe the major political and economic events of Poland's break from the traditional socialist economy and its transition towards a market economy.
Describe Hungary's efforts to reform its economy since the 1950s. What were the major policies and events?
Compare and contrast the policies of economic transition after the fall of communism in Russia, Poland, and Czechoslovakia. Pay particular attention to how these economies performed in transition, and why.

First Midterm: Questions of the Week 1-5
Second Midterm: Questions of the Week 6-10

Schedule:

SCHEDULE OF READINGS AND LECTURES

I. INTRODUCTION TO COMPARATIVE ECONOMIC SYSTEMS (5 lectures)

A. The Classification and Comparison of Economic Systems -- 2 lectures
Read Kennett, ch. 1; Milberg & Heilbroner (M&H), ch. 1; my lecture notes on classification and comparison; and a recent Table of statistical data for comparison countries.
Kennett has a website with information on Areas of the World, and another on International Agencies (good sources of information).
Angus Maddison has an impressive review of the last two thousand years of economic growth, including history and many tables full of population and GDP estimates. This OECD publication, The world economy : a millennial perspective (2001) is available online and in the library.
Powerpoint: Lecture 1 and Lecture 2
B. The Roots of Modern Economic Systems -- 3 lectures
1. Classical and Marxist Theories of Economic Change
Read M&H, ch. 11, and the first part of my lecture notes on economic change.
Powerpoint: Lecture 3
2. The Historical Development of Capitalism
Read Kennett, ch. 2; M&H, ch. 2, 3, 4.
Powerpoint: Lectures 4(a) and 4(b)
3. The Marxist-Leninist Critique of Capitalism
Read Gurley, J. (1980), Challengers to Capitalism, 2nd Edition (on reserve), ch. 2 & 3. Also see my EC 481 lecture notes on Marx.

II. THE ECONOMIC THEORY OF CAPITALISM (4 lectures)

For an introduction, albeit simple, to the market economy, see What is a Market Economy, by Michael Watts, produced in cooperation with the Joint Council on Economic Education.

A. The Theoretical Efficiency of the Market -- 1 lecture
The Five Theorems. Market Distortions. The Austrian Critique. Macroeconomic Stability. International Trade and Finance.
Read Kennett, ch. 3; Hayek, F.A. (1945), "The price system as a mechanism for using knowledge," American Economic Review 35,4: 519-30 (on reserve); and my lecture notes on market efficiency, market failure, government intervention and public failure.
Powerpoint: Lectures 5(a), 5(b), and 5(c)
B. Market Failure and Government Intervention -- 1 lecture
Read Kennett, ch. 4, 5; M&H, ch. 7. Also check out Serendip's simulation of a Prisoner's Dilemma game to understand this very important model of cooperation versus self-interest.
C. The Problem of Social Choice -- 1 lecture
Read Olson, ch. 1-5; and my lecture notes on social choice.
D. Neoclassical Growth Theory and the Hypothesis of Economic Evolution -- 1 lecture
Read my lecture notes on growth and evolution. Also, just for fun, you might want to check out Serendip's version of Conway's Game of Life to get a sense of how mathematicians might simulate chaotic interactions without using math.
Powerpoint: Lecture 6

FIRST EXAM -- SCHEDULED FOR THURSDAY, FEBRUARY 20

III. MODELS OF CAPITALISM (8 lectures)

A. European Capitalism -- 5 lectures
Read M&H, ch. 8, 11.
1. The United Kingdom
Read Kennett, ch. 19; Department of State Country Background Report for the United Kingdom; and Peter Drucker, "Beyond the information revolution," in the Atlantic Monthly, Oct. 1999.
2. The Republic of France
Read Kennett, ch. 6; and the Country Background Report for France.
3. The Federal Republic of Germany (Deutschland)
Read Kennett, ch. 18, 20; Country Background Report for Germany.
4. Sweden
Read Kennett, ch. 7; and the Country Background Report for Sweden.
5. The European Union
Read Kennett, ch. 8, 9; and my lecture notes. See also the NY Federal Reserve's Fedpoint 25: European Monetary Union.
B. Asian Capitalism -- 3 lectures
1. Japan
Read Kennett, ch. 10; my EC403 Lecture on Japanese development through WWII; and the Country Background Report for Japan. See also the Financial Times article by Gillian Tett, "Pressing need for a second 'Restoration'."
2. The Four Tigers (the Republic of Korea, Taiwan, Hong Kong, and Singapore)
Read Kennett, ch. 11, 13; and the Country Background Reports for Hong Kong, Singapore, Taiwan, and South Korea. See also the Foreign Affairs Reader (1999), Asia: Rising or Falling? (on reserve).
3. The Asian Miracle and the Financial Crisis
Read Kennett, ch. 14. Also, Professor Roubini of NYU has a great collection of materials on the Crisis of 1997.

SECOND EXAM TENTATIVELY SCHEDULED FOR TUESDAY, APRIL 1

IV. SOCIALISM AND TRANSITION (10 lectures)

A. Classical Socialism -- 4 lectures
1. Central Planning and the Institutions of the Classical Socialist Economy
Read Kennett, ch. 15; my lecture notes on Material Balance Planning; Olson, ch. 6-8; and Kornai, J. (1992), The Socialist System: The Political Economy of Communism (on reserve), ch. 15.

2. Revolution and Central Planning in the Soviet Economy
Read Kennett, ch. 16; and IMF, et al. (1991), A Study of the Soviet Economy (on reserve), ch. 1-3.
3. Maoism in the People's Republic of China
Read Kennett, ch. 12.
B. Economic Reform in Eastern Europe and China -- 3 lectures
1. Revolt and Reform in Eastern Europe
Read Kennett, ch. 23.
2. Yugoslavia and the Theory of Market Socialism
Read Kennett, ch. 17, 18.
3. China under Deng: Development of the Socialist Market Economy
Re-read Kennett, ch. 12; my MGRS 470 lecture on China; Parker, E. (1995a), "Prospects for the state-owned enterprise in China's Socialist Market Economy," Asian Perspective 19,1: 7-36 (on reserve); Parker, E. (1995b), "Schumpeterian creative destruction and the growth of Chinese enterprises," China Economic Review 6,2: 201-224 (on reserve), and Cargill, T., & E. Parker (2001), "Financial liberalization in China: Limitations and lessons of the Japanese Regime," Journal of the Asian-Pacific Economy 6,1: 1-21 (on reserve). Also see the Country Background Report for the Peoples Republic of China, and the New York Times has a Timeline of China's Last 50 Years.

C. Socialism's Collapse and Transition -- 3 lectures
1. The Transition Process
Read Kennett, ch. 21; Olson, ch. 9-10.
2. The Troubled Transition of the Russian Economy
Read Kennett, ch. 22; and the Department of State Country Background Report for the Russian Federation.
3. Transition in Central and Eastern Europe
Poland, the Czech Republic, and Hungary
Re-read Kennett, ch. 23, and the Country Background Reports for Poland, Hungary, and the Czech Republic.
Powerpoint: Lecture on Central and Eastern European (CEE) Transition

FINAL EXAM FIRMLY SCHEDULED FOR THURSDAY, MAY 8, 7:30-9:30 A.M.
(Don't blame me -- I don't pick the time)

Links:

The Dismal Scientist has an economics site at www.dismal.com it calls "the best free lunch on the web." Check it out and let me know what you think.

This class is about the role of government, among other things. Ted Halstead recently wrote an article in the Atlantic Monthly on the Generation X Political Agenda. Read it and let me know if you think he has a point.

The San Francisco Fed has a good site summarizing the great economists and their times (including the major schools of economic thought).

Check out the links at the websites of the:

Also, search the UNR Library through Wolfpac for books or journals. If you are looking for a book that isn't in the library, check out Books in Print -- you can order it through interlibrary loan; if it isn't in print, it might be available online at the Gutenberg Project.

The UNR library has a long list of business/economics databases for article citations, abstracts, and statistical information, including a good index of economic journals (Econlit) from the Journal of Economic Literature, and a lot of other good reference information. Many economics journals now have websites (the library has a different list of online business/economic journals), and you can find an article, read its abstract, and order it if you want the whole thing For example, I manage the China Economic Review website.

Good international information may be found at the World Bank website, the Economist website, the Financial Times website (Check out their country briefs), the International Center for Economic Growth, et cetera (more will be added). Would Business Week interest you?

You can find the written works of Marx and Engels online, as well as a site devoted to the works of Friedrich Hayek.

There is also a website devoted entirely to Milton Friedman. See also the economics section of the Idea Channel.

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