Political Economy 601/602

Political Economy 601/602

POLITICAL ECONOMY II

Fall 2005/Spring 2006 Tuesday 9:00-11:30

Randy AlbeldaEconomics/Public Policy

617-

This course is the continuation of the sequence in Political Economy. The first section dealt with the theories of scientific inquiry and the philosophical underpinnings of freedom and justice. This section introduces you to political economic theories of the economy and the state. We will examine neoclassical, Keynesian and Marxist theories of economic production and their understanding of the role of public policy (broadly defined).

Students will be required to write two 7 page papers and provide comment on weekly readings. Papers will be due December 13 and February 28. Paper topics will be handed out at least two weeks in advance. We will discuss the nature of in-class discussion the first day of class.

You should get the following books (they should be at the UMB bookstore):

Randy Albelda, Robert Drago, and Steve Shulman, Unlevel Playing Fields: Understanding Wage Inequality and Discrimination, Economic Affairs Bureau (Dollars and Sense) First (2001) or Second Edition 2005.

E.K. Hunt. Property and Prophets: The Evolution of Economic Institutions and Ideologies, Updated Seventh Edition, 2002 ME Sharpe.

Gosta Esping-Andersen, Three Worlds of Welfare Capitalism, Princeton University Press 1990.

Milton Friedman, Capitalism and Freedom, University of Chicago Press, 1963. Reprint edition 2002.

John Kenneth Galbraith, The Affluent Society, Hamish Hamilton, 1958. The 40th anniversary edition, Mariner Books 1998.

Arthur Okun, Equality and Efficiency : The Big Tradeoff , Brookings Institute 1975.

Optional book (provides historical and economic context for major economic paradigms):

Douglass Dowd, editor, Understanding Capitalism: Critical Analysis from Karl Marx to Amartya Sen, Pluto Press, 2002.

A copy of the rest of the required readings will be made available electronically or in hard copy.

November 15- 22 Capitalism, Political Economic Thought, and Public Policy

E.K. Hunt, chapters 1-4

Galbraith, Chapters 1-5.

Stephanie Koontz The Way We Never Were, Basic Books, 1992, chapter 3.

Nancy Folbre, The Invisible Heart: Economics and Family Values, New Press, chapter 2.

Optional: Introduction to Understanding Capitalism.

November 29-December13Neoclassical Economics

Hunt, chapter 8.

Milton Friedman,entire book

Albelda, Drago, and Shulman, Chapters 3-4 Unlevel Playing Fields.

Nicholas Barr, The Economics of the Welfare State, chapters 3 and 4, Stanford University Press, 1998.

Optional: Chapter on Amartya Sen in Understanding Capitalism.

For an accessible summary of microeconomics see chapter 4 (“Markets: Guided by and Invisible Hand or Foot?”) of Robin Hannel, The ABCs of Political Economy, Pluto Press 2002. [Available from Albelda.]

For a straightforward contemporary neoclassical perspective see chapters 1-6 of the textbook Public Sector Economics by Randall Holcombe, Pearson/Prentice Hall, 2006. [Available from Albelda.]

Supplemental background reading: A History of Economic Thought by William Barber Part Three: Neoclassical Economics, at

Jan 24- Jan 31: Keynes, Keyensianism, and Liberal Economic Thought

John Maynard Keynes, Chapter 24, The General Theory of Employment, Interest and Money (1935).

E.K. Hunt, chapter 12-13

Albelda, Drago, and Shulman, Chapters 6— including the appendix, Unlevel Playing Fields.

Galbraith, Chapters 7-10, 13, 16-24 The Affluent Society

Richard Parker, “The Legacy of John Kenneth Galbraith” Challenge March/April 2004: 81-89.

Okun, Equality and Efficiency

Supplemental background reading: A History of Economic Thought by William Barber Part Four: Keynesian Economics Economics, at

Optional: Chapter on Thorstein Veblen, Critical Institutionalism, and/or Post Keynesian Economics in Understanding Capitalism.

For an accessible summary of microeconomics see chapter 6 (“Macro Economics: Aggregate Demand as Leading Lady”) of Robin Hannel, The ABCs of Political Economy, Pluto Press 2002. [Available from Albelda.]

Feb 7 - Feb 14: Marx and Class Analysis

E.K. Hunt, chapters 6-7

Marx, Karl Wage Labor and Capital.

Albelda, Drago, and Shulman, Chapters 7 Unlevel Playing Fields.

Gordon, Edwards, and Reich, Segmented Work, Divided Labor, Cambridge University Press, 1982. Chs 1-2.

Clyde Barrow, Critical Theories of the State: Marxist, Neo -Marxist, Post-Marxist, (University of Wisconsin Press, 1993), Introduction, chapters 1 and 2.

Supplemental background reading: A History of Economic Thought by William Barber Part Two: Marxian Economics Economics, at

Optional: Chapter on Karl Marx and Paul Sweezy and Monopoly Capital in Understanding Capitalism

February 21: The Capability and Welfare State Approaches

Amartya Sen, 1993. “Capability and Well-being” in The Quality of Life, edited by Martha Nussbaum and Amartya Sen, Claredon Press (originally published in 1980).

Ingrid Robeyns, “The Capability Approach: A Theoretical Survey” Journal of Human Development 6(1), March 2005.

Esping-Andersen, The Three Worlds of Welfare Capitalism, Princeton University Press 1990. chapters 1-5.

Selected Supplemental Readings:

Capitalism, Political Economic Thought, and Public Policy

Maurice Dobb Theories of Value and Distribution since Adam Smith : Ideology and Economic Theory University press 2002 (reprint form 1970s)

Douglas DowdCapitalism and Its Economics: A Critical History Pluto press 2002

Francis Green and Bob Sutcliffe The Profit System: The Economics of Capitalism (Penguin 1987).

Tony Lawson Reorienting Economics: Economics as Social Theory, routledge 2003.

Karl PolanyiThe Great Transformation: The Political and Economic Origins of Our Time, (originally published 1944), Beacon Press 2001.

Neoclassical Economics

Any introductory Microeconomics textbook and most Public Finance textbooks

James M. Buchanan and Richard A. Musgrave, Public Finance and Public Choice: Two Contrasting Visions of the State MIT Press 1999.

Gordon Tullock, Arthur Seldon, and Gordon L. BradyGovernment Failure: A Primer in Public ChoiceCato Insititute 2002.

Keynes, Keyensianism, and Liberal Economic Thought

Any introductory macroeconomic textbook.

Thorstein Veblen, The Theory of the Leisure Class view it on line! ( originally published 1899.

John Kenneth Galbraith, American Capitalism: The Concept of Countervailing Power
ME Shape 1980 (originally published in 1952)

Marx and Class Analysis

John Ehrenreich and Barara Ehrenreich, “The Professional Managerial Class” in Patrick Walker (ed), Between Capital and Labor South End Press 1979.

Karl Marx, The Communist Manifesto

Richard D. Wolff and Stephen A. ResnickEconomics: Marxian Versus Neoclassical, John Hopkins University 1988.

The Welfare State

Evelyn Nakano Glenn, Unequal Freedom: How Race and Gender Shaped American Citizenship and Labor Harvard University press 2002.

Alexander Hicks Social Democracy & Welfare Capitalism: A Century of Income Security Politics, Cornell University Press 2002

Robert C. Lieberman, Shifting the Color Line: Race and the American Welfare State, Harvard Universitry Press 1999.

Julia S. O'Connor, Ann Orloff, and Sheila Shaver, States, Markets, Families : Gender, Liberalism and Social Policy in Australia, Canada, Great Britain and the United States Cambridge University Press, 1999.

Capability Approach

Sabina Alkire, Valuing Freedoms: Sen’s Capability Approach and Poverty Reduction, Oxford University Press, 2002.

Marianne Hill, “Development as Empowerment” Feminist Economics 9(2/3): 117-135, 2003.

Martha Nussbaum, Women and Human Development: The Capabilities Approach, Cambridge University Press, 2000.

Amartya Sen, Development as Freedom, Knopf, 1999.