ECON 305 - Comparative Economic Systems
Fall 2006
Professor Elliott Parker
Office: AB 319-C
TR 9:30 - 10:45 AM
AB 201
Office Hours: TWR 11:00-11:50 AM.
or email me for an appointment

  Description  | Books  |  Grading  |  Study Questions  |  Schedule  | E-mail List

For Printing: a one-page Short Syllabus

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

First Midterm with Key  |  Second Midterm with Key

Second Paper Assignment

Topic:  Why do some economies grow faster than others?  Consider the major theoretical reasons given in lecture, in the textbook, and in the book you used for your first paper.  You might do some extra outside research on the question, and you should go beyond the superficial explanation.  Next, choose two countries which have had substantially different growth results in the past fifty years, but which you can argue share a number of similarities.  Briefly describe these two countries, explaining their important similarities and differences, and explain why their growth performance was different.  Finally, explain how your results from these two cases fit in with your discussion of the theory you described.

Don’t choose the U.S., Russia, or any country which has been torn apart by war, and before you make a final decision you should make sure you can find enough sources in the library.  You must use a significant amount of outside research in addition to any relevant assigned readings, and all references must both be cited (Name year: pages) in the text and listed alphabetically in a bibliographic section at the end entitled "References."  Use a variety of sources, including books, journal articles, newspaper articles, and official websites.

This is a research paper worth twice as much as Paper 1, and should be approximately 12-15 pages (not including the cover page, references, and tables). Use the same basic format as in the first paper assignment.

Paper Due Date:  Thursday, December 7, 2006.  Also turn in a disk with your paper on it.  Late papers will lose one full grade per week, and all papers must be turned in by December 20.

Course Description:
ECON 305 examines the major economic systems of the world, in both theory and practice. The approach will generally focus on encouraging a general theoretical understanding of how economic systems work, of how the major economies of the wold have performed historically, and how economic theory interacts with government policy, history, and culture to explain economic performance.  We will examine in some detail several Western European economies (France, Sweden, the United Kingdom, and Germany), the major Asian economies (Japan, South Korea, China, Taiwan, Singapore, Hong Kong, and Indonesia), the economies of the former Soviet Union and Yugoslavia, and the transitioning economies of Russia, Hungary, Poland and the Czech Republic.

Prior study in economics (ECON 102 and 103) is required, but this course will be less quantitative than other theory courses. As a course which spends substantial time focused on the diversity of economies, ECON 305 meets the diversity requirement of the University Core Curriculum. One component of the diversity requirement is a rigorous writing requirement.


Books:
REQUIRED TEXTBOOK:
PLUS AT LEAST ONE OF THE FOLLOWING FOUR SUPPLEMENTAL BOOKS:
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 or ecampus.com.  You might go first to Bigwords.com, which compares prices for you. 

Other readings listed in the schedule will generally be available online, or in Getchell library 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: Exams will be long, in-class, 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.  You will find them challenging.  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.  More instructions for the papers will be given in the assignments, but you can look at prior assignments for what I usually expect.  One-Minute Essays will be due at the end of class each day, and are a new experiment for me.  I will usually want you to tell me something interesting you learned from the lecture, but sometimes I may ask other questions.

Would you like to see sample assignments from past semesters?

 
:Fall 2005 First Paper Assignment, Second Paper Assignment, Final Exam
Fall 2004
 Exam 1 (with answer key), Paper Assignment 1, Exam 2 (no key available), Paper Assignment 2 (here is my grading sheet), and Exam 3 (no key available).
Spring 2003: Exam 1, Exam 2 (not available), Paper Assignments, and Exam 3.
Spring 2002: Exam 1, Exam 2, Paper Assignments, and an "A" First Paper.
What is the Difference between A and C students?

Study Questions
  1. What are the Pareto Conditions?  What did Barone and others see as the role of the central planner in optimizing economic performance? 
  2. What is Material Balance Planning?  How does it work?  What are its major weaknesses? 
  3. What are the major institutions of the classical socialist economy?
  4. How is market socialism different from classical socialism?  What contradictions are inherent in market socialism? 
  5. What are Kornai's five blocks of the classical socialist economy?  How do they fit together as a system? 
  6. 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? 
  7. 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? 
  8. What led to the end of the NEP?  What replaced it? 
  9. 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? 
  10. What is the historical record of the Soviet economy's development and performance, both in industry and agriculture?  How was each organized and coordinated? 
  11. What is the difference between intensive and extensive growth? 
  12. Why did growth in the USSR slow after the 1960s? 
  13. To what extent was the Soviet Union able to reform its political and economic system in the years between Stalin and Gorbachev?
  14. 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. 
  15.  Prior to 1957, what was the Chinese approach to creating socialism
  16. What was the Great Leap Forward?  How did this approach differ from more traditional socialist approaches?  What did it try to do?  What were its effects?
  17. What was the Cultural Revolution?  How did it affect the Chinese economy?
  18. What were the major economic and political events in China under Mao Zedong? 
  19. How did Chairman Mao's vision of Chinese development differ from most other socialist economies? 
  20. Discuss the major economic reforms in China under Deng Xiaoping.  Contrast reforms in agriculture and industry. 
  21. What is the significance of China's "Socialist Market Economy," and what reforms and policies does it entail? 
  22. What are the causes of the current crisis in China's state-owned enterprises? 
  23. 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. 
  24. How does a strategy of transition differ from the "perfection of control" or other policies of economic reform within the socialist economy? 
  25. How does the "big bang" approach differ from gradualism? 
  26. 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? 
  27. 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? 
  28. How is market socialism different from classical socialism?  What contradictions are inherent in market socialism? 
  29. 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? 
  30. What caused the Russian financial crisis of 1998, and what impact did it have on Russia's economy?
  31. How does the labor-managed economy work in the theory of the Ward-Vanek-Domar model?  What are the major hypotheses of the model? 
  32. How might the labor-managed firm differ in a capitalist economy versus a socialist economy? 
  33. 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?
  34. What was the Brezhnev Doctrine? 
  35. 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. 
  36. Compare and contrast the policies of economic transition after the fall of communism in Russia, Poland, Hungary, and Czechoslovakia.  Pay particular attention to how these economies performed in transition, and why. 
(Click Here for Past Questions)


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, and  my lecture notes on classification and comparison.  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, though you must get the proper permissions to access it since it is only available to UNR faculty, students, and staff.

(PDF lecture notes, part 1.a )

B.  The Roots of Modern Economic Systems -- 3 lectures

(PDF lecture notes, part 1.b )

1.  The Historical Development of Capitalism -- 1 lecture

Read Kennett, ch. 2.  I also encourage you to read the first section of Bernstein's book. 

2.  Classical, Marxist, Neoclassical, and Evolutionary Theories of  Economic Change -- 1 lecture

Read the first part of my lecture notes on economic change, and you could also review the New School's website on the Classical Ricardian School.  Read also my lecture notes on growth and evolution, and see Schumpeter, J.A. (1942), Capitalism, Socialism, and Democracy.  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.

3.  The Marxist-Leninist Critique of Capitalism -- 1 lecture

Read The Communist Manifesto, by Karl Mark and Friedrich Engels (1848), and review the New School's website on the Marxian School.
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.

(PDF lecture notes, part 2.a )

A.  The Theoretical Efficiency of the Market -- 1 lecture
The Five Theorems.  Market Distortions.  The Austrian Critique.  Macroeconomic Stability.

Read Kennett, ch. 3; the classic article by Hayek, F.A. (1945), "The use of knowledge in society," American Economic Review 35,4: 519-30 (online); and my lecture notes on market efficiency, market failure, government intervention and public failure.

B.  Market Failure, Government Intervention, and the Problem of Social Choice -- 1 lecture 
Read Kennett, ch. 4, my lecture notes on social choice, and I encourage you to read chapters 1-6 of Olson's book.  Also check out Serendip's simulation of a Prisoner's Dilemma game to understand this very important model of cooperation versus self-interest.
(PDF lecture notes, part 2.b )

 C.  The Institutions of a Market Economy -- 1 lecture 
Read Kennett, ch. 5.  I will use the United States as a basis for comparison.
D.  Globalization and the Impact of International Trade & Finance -- 1 lecture
I suggest you read Friedman's book, especially chapters 1-9.  You might also want to read these reviews of his book:
Thomas Frank (1999), The Lexus and the Olive Tree: Understanding Globalization. - Review, Harper's Magazine.
Paul Krugman (1999), Understanding Globalization, Washington Monthly.
Scott Whitney (1999), THE LEXUS AND THE OLIVE TREE," Salon.
By the way, Thomas Friedman came to speak at UNR on Sep. 16, 2005.  He has a new book out, The World is Flat, which is interesting to read, sometimes praised but occasionally savaged on both the left and the right:
John Gray (2005), The World Is Round, The New York Review of Books 52(13).
David Hazony (2005), His World is Flat, Policy Review.
Robert Wright (2005), The Incredible Shrinking Planet:  What liberals can learn from Thomas Friedman's new book, Slate.
Kevin Drum (2005), Falling Flat:  Thomas Friedman's recycled view of globalization, Washington Monthly.
After reading some of these reviews, my comments in red ink on your exam papers will seem positively glowing.
FIRST EXAM -- THURSDAY, SEPTEMBER 28


III.  ALTERNATIVE MODELS OF CAPITALISM (8 lectures)

A.  Western European Capitalism -- 5 lectures

(PDF lecture notes, part 3.a )
1.  The United Kingdom
2.  The Republic of France
3.  The Federal Republic of Germany (Deutschland)
4.  The Kingdom of Sweden
5.  The European Union

Read Kennett, ch. 6-11.

Note:  I strongly recommend that you review The U.S. State Department's Country Background Reports and/or the CIA's World Factbook for each of the countries covered in each of these sections.

B.  Asian Capitalism -- 3 lectures
1.  Japan
2.  The Four Tigers:  South Korea, Taiwan, Singapore and Hong Kong
3.  Indonesia and the Asian Financial Crisis

Read Kennett, ch. 12-15; and my EC403 Lecture on Japanese development through WWII. 
Remember to review the U.S. State Department's Country Background Reports and/or the CIA's World Factbook for each of the countries covered.

SECOND EXAM CURRENTLY SCHEDULED FOR THURSDAY, NOVEMBER 2

IV.  SOCIALIST ALTERNATIVES  (4 lectures)

A.  Theories of the Classical Socialist Economy  -- 1 lecture
Read Kornai, J. (1992), The Socialist System:  The Political Economy of Communism (on reserve), ch. 15; my lecture notes on Material Balance Planning; and the New School's Essay on The Socialist Calculation Debate.  I also encourage you to read Olson, ch. 6-8.
B.  Revolution and Central Planning in the Soviet Economy  -- 2 lectures
Read Kennett, ch. 16 & 17.
C.  China under Chairman Mao  -- 1 lecture
Read Kennett, ch. 23.
(PDF lecture notes, part 4.b )


V.  ECONOMIC REFORM AND TRANSITION  (6 lectures)

Remember to review the U.S. State Department's Country Background Reports and/or the CIA's World Factbook for each of the countries covered.

A.  China under Deng:  Development of the Socialist Market Economy  -- 1 lecture
Re-read Kennett, ch. 23; 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; 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).
B.  Problems of Economic Reform and Transition  -- 1 lecture
Read Kennett, ch. 20.
(PDF lecture notes, part 5 )

C.  Reform Efforts in the Soviet Union, and the Troubled Transition of the Russian Economy  -- 1 lecture
Read Kennett, ch. 21.  I would also encourage you to read chapter 9-10 of Olson's book.
D.  Labor Management, the Yugoslavian Alternative, and the Third Way  -- 1 lecture
Read Kennett, ch. 18 & 19.
E.  Reform and Transition in Central and Eastern Europe  -- 1 lecture
Read Kennett, ch. 22.

FINAL EXAM FIRMLY SCHEDULED FOR FRIDAY, DECEMBER 15, 7:30-9:30 AM
(Don't blame me, I don't make the schedule.)
The San Francisco Fed has a good site summarizing the great economists and their times (including the major schools of economic thought).  You can find the written works of Marx and Engels online, as well as a site devoted to the works of Friedrich Hayek.  See also the economics section of the Idea Channel.

ECON305 Listserver / Newsgroup

I have set up a "List Service" mailing list for the purpose of conducting group discussions via email, using the Majordomo software, and I will ask for your e-mail address during the first week of class, and sign you up myself.  If you find that you are not receiving e-mails from me, e-mail me to tell me and I will add you to the list.  If you are on the list and still not receiving messages, please check your spam filter since list messages are often blocked.
Only people actually subscribed to the list may send any email to the list.  To send an email to the everybody on the list, send an e-mail to econ305@unr.edu.  The message you send will go to everybody who has subscribed, including me.  Try to keep the spam down.  Be thoughtful of others, keep on the subject as much as possible, and do not carry on private, irrelevant conversations on the list.  If you wish to make a reply to an individual, be careful not to send a copy to the list.  Also, do not flame!  Give other students the respect you would demand of them; do not insult them explicitly or implicitly, and do not say anything vulgar or improper.  Remember that I will read your messages, and even if you send something to an individual it is easy for him or her to forward it on to me.

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