ECONOMICS 315: THE HISTORY OF ECONOMIC THOUGHT
Wellesley College, Spring 1999

Julie Matthaei
304 Pendleton East
x2181 h 617-868-6133
jmatthaei@wellesley.edu

Course Description: In this course, we will study the history of Western economic thought, not as the gradual emergence of objective truths about the capitalist economy, but as the development and interaction of a variety of different economic theories. After studying the early "classical" economists and Marx, we will focus on the development of mainstream or "neoclassical" economic theory, and on its critics -- institutionalists, Marxists, feminists, and environmentalists.

In the course of a one semester class, we cannot hope to "cover" the entire field of the history of economic thought. I have selected six key themes upon which to focus our reading and study this semester: the essential nature of capitalism; economic analysis of the individual, choice, and consumption; the economics of the family and feminist theory; economic analyses of income inequality and poverty; the economics of race, gender, discrimination, and development; and economic analysis of capitalism and the environment. Through reading of the original texts, we will examine different theoretical perspectives on these issues. This focus on comparative theory will compel us to grapple with the complexity of economic theorizing, as well as sharpen our abilities to think critically.

The structure of the course is presented in detail in the attached course outline. If there is strong student desire to explore other topics, the outline can be altered.

Course Requirements:

1. Regular class participation. Class attendance is compulsory. Students who miss more than four classes will not receive credit for the course (whatever the reason); plan ahead and save your absences in case of illness, religious holidays, or outside commitments. Regular, informed, and constructive class participation is very important: it may improve a borderline grade. Questions are always welcome. Please stop me if you are lost; you are probably not the only one.

2. Reading of original texts and selected secondary sources, as specified in the following outline of readings. Each number represents a class period, and the readings to be done for that class. Readings should be done before class as preparation for class discussions. Please bring your packets or copies to class the days they will be discussed.

3. Presenting a short biography of one of the economists studied in class. Biographies should also be written up (including references consulted) and copied for distribution in class. The in-class presentation should be 10 minutes maximum. I will give you comments on your presentation, but it will be ungraded.

4. Completion of a 1-2 page (typed, double-spaced) response paper each week, on the readings for one of the class meetings. Half of the students will write up each Wednesday's readings, while the other half will write on Friday's readings (no response paper is necessary during the week you present a biography). The response papers are free-flowing commentaries on the readings, which will help provide a basis for in-class discussion. I will give you comments on these, but not grade them; however, if your response papers are late, you will lose points toward your final grade as follows: for the first late paper, no points off; for any late after the first, 1 point off your final grade; for any response papers not handed in at all, 2 points off your final grade.

5. Participation in one of the nineteenth or twentieth century debates (March 12 and May 5). Debates will be introduced in the first class; they will be based on the common required readings for the class. Students will debate in teams of two. Each team will give a five-to-seven-minute presentation defending their school's position and/or criticizing that of the alternative position. After both sides have given their presentations, students will rebut each others' arguments. Then we will open up the debate to discussion by the entire class. Hand in your preferences--including your preferences for a partner, if any--by Feb. 19, and I will assign you a debate and side by Feb. 24.

6. Completing one of two take-home, open-book written assignments, of about 5-7 double-spaced typed pages, due March 17 and May 5. The first assignment is on nineteenth century theories and the second on the twentieth century; you will do the written assignment for the century you are not debating on. You can write on a set of questions that I hand out, or develop one of your response papers into an essay. Assignments which are handed in on time may be rewritten and resubmitted within one week of being handed back; the rewrite will count for 40% of your assignment grade and the original, 60%. You may work on these assignments alone or in pairs; if you work in a pair, each must work on each question, and each will receive the same grade. I encourage you to work on these assignments with your classmates, whether or not you decide to write them together.

7. There will be a final take-home examination covering the entire course. This examination will give you a chance to review and synthesize the material from the course. Essay questions from which the examination essay questions will be chosen will be distributed during the last week of classes; there will also be some short, identification questions. The examination will be open book and notes and time-limited. It will be available for pick-up by Friday, May 7, and will be due the last day of exam period.

Other Information

Grading Valued will be level of understanding, coherence, clarity, depth, and originality. In the computation of grades, the debate, the written assignment, and the final examination will each count for one-third of your grade. Class participation may improve a borderline grade. Grading will not be on the curve; work will be graded on a scale of 0-100 where <60 = F, 60-62 = D-, 63-66 = D, 67-69 = D+, 70-72 = C-, 73-76 = C, 77-79 = C, 80-82 = B-, 83-86 = B, 87-89 = B+, 90-92 = A-, >92 = A.


Office Hours You are welcome to come to see me during my office hours (which I will announce during the first week of classes), or by appointment (see me before or after class, email me, or call me at x2181 if you need to make an appointment). My office is Room 304, Pendleton East. You are also welcome to email me at JMATTHAEI with questions or comments, and I will use email to communicate with you. You can also call me at home if you can't reach me at the office.

Class List, Lunches and Party Learning at its best is a cooperative effort. I enjoy getting to know students more informally, and will distribute a class list to help put students in touch with one another. I will be organizing lunches in the dorms after class, and we'll have a class dinner party and viewing of "Who's Counting?" in early April. If you come across something on the Internet or elsewhere that you'd like to share with your classmates, forward it to me via email and I'll forward it on to the class.

Course Outline, Readings, Books: A detailed course outline is attached. Readings marked with * are optional; all others are required. All readings are on reserve in Clapp Library. Required readings that were written before 1923 are in your packets, as noted above; those written later are on electronic reserve. Readings for a class should be done BEFORE the class meets.
To make the required readings more accessible to you, I am using a combination of packets and reserve. Readings written more that 75 years ago (i.e. before 1923) do not need copyright permissions, and are being distributed in packets. If you can not afford to purchase the packets yourself, consider purchasing them with one or two others; I will also put 2 copies of the packet on regular, hard-copy reserve in Clapp Library. I will take orders for packets during our second class. Readings written after 1924 are on hard-copy reserve in Clapp Library, Knapp Media Center. Readings that are recommended but not required will be on regular reserve in Clapp Library.

THE HISTORY OF ECONOMIC THOUGHT
COURSE OUTLINE AND READINGS

NOTES:
1) readings without an asterisk are REQUIRED
2) required readings before 1924 are in packets; those after 1924 are on reserve

1. Brief Introduction to the Course, to One Another, and to the History of
Economic Thought; Information on Debates; Discussion of Course Outline and other Possibilities (1/27)

Readings for Class 2 and 3 handed out to all
Response paper days assigned; bio for Smith assigned

I. CLASSICAL POLITICAL ECONOMY

2. The Origins of Wealth: Adam Smith: Why do you think that Smith focuses his study on "the nature and causes of the wealth of nations"? What is the source of wealth, in his opinion? (1/29)
Adam Smith, An Investigation into the Nature and Causes of the Wealth of Nations (1776), "Introduction and Plan of Work" (Smith's Introduction), and Book I, Chs. 1-3. (Handed out on 1/27)
Malthus reading handed out; bios assigned

3. Population, Food, and Wages: Malthus' Law of Population: What limits does Malthus see on population growth? Does he prove his point? What does his theory imply about the level of wages? (2/3)
T.R.Malthus, "A Summary View of the Principle of Population," (1830)
from D. V. Glass, Introduction to Malthus. (handed out on 1/29)
* Mark Blaug, Economic Theory in Retrospect, Ch. 3.
* Nancy Folbre, "The Improper Arts": Sex in Classical Political Economy," History of Political Economy 18:1 (March 1992), especially pp. 112-15.

II. MARX'S ECONOMICS

4. The Labor Theory of Value, Exchange, and Capital. What does Marx mean by a "commodity"? Why, according to Marx, is labor the source of value? How are use value and exchange value different? What are the two primary motivations behind exchange? What does Marx mean by capital? (2/5)
Karl Marx, Capital (1867; this is 1887 edition), Vol. I, Ch. I,
"Commodities," excerpts from Sections l and 4; Ch. III, "Money, or the Circulation of Commodities," Section 2 a., Ch. IV, "The General Formula for Capital," and Ch. V, "Contradictions in the General Formula of Capital."

5. The Economics of Class and Exploitation: What is surplus value, and how is it generated? In what ways are workers and capitalists at odds with one another? How does Marx's explanation of poverty differ from that of Malthus? (2/10)
Karl Marx, Capital (1867), Vol. I, Ch. VI, "The Buying and Selling of Labor Power;" Ch. VII, "The Labor Process," Section 2 only; Ch. VIII, "Constant Capital and Variable Capital," pp. 199 and 208-9 only; Ch. IX, "The Rate of Surplus Value," Section 1 only; and Ch. X, "The Working Day," Section 1, and 2 (skim).
* John Gurley, "The Theory of Surplus Value," reading 3.1 in Edwards, Reich, and Weisskopf, The Capitalist System, (1978) 2nd edition, pp. 80-83.

6. Wealth and Growth: How and why does economic growth occur, according to Marx? How does capital change qualitatively during the process of growth? What role does the reserve army of the unemployed play? What limits, if any, does Marx see on the growth of capital? (2/12)
Marx, Capital (1867), Vol. I, Ch. XXV, "General Law of Capitalist Accumulation," Sections 1 and 2, Section 3 excerpts; and Vol. III, Ch. XIII, "The Law as Such," pp. 211-13; Ch. XIV, "Counteracting Influences"; Ch. XV, "Internal Contradictions." p. 247-250; and Vol. I, Ch. XXXII, "Historical Tendency of Capitalist Accumulation."
* Phyllis Deane, Evolution of Economic Ideas, Ch. 3, "Origins of Modern Growth Theory."

III. THE DEVELOPMENT OF NEO-CLASSICAL THEORY, 1870-1930

7. Utilitarianism and the Economics of Utility: What is the principle of utility, according to Bentham? How does Jevons incorporate Bentham's theories? How is his focus different from the classicists? What view does he have of human needs? Of social life? (2/17)
Jeremy Bentham, "An Introduction to the Principles of Morals and
Legislation," Chapters 1, 3 and 4, in Bentham, A Fragment on Government and an Introduction to the Principles of Morals and Legislation (first published in 1789; this is 1823 edition).
Stanley Jevons, The Theory of Political Economy (1871), Ch. II, "The
Theory of Pleasure and Pain", and Ch. III, "The Theory of Utility", pp. 37-49 only.

8. Scarcity and Allocation: The Neo-Classical Position: Where does
scarcity come from? What is the purpose of economic life, i.e. of the market economy? (2/19)
Carl Menger, Principles of Economics, Ch. II, "Economy and Economic
Goods", Parts l A&B and 3A.
Leon Walras, Elements of Pure Economics (first edition appeared in
1874; this is a translation of the 1926 edition), Lesson 3, Paragraphs 21-26.

DISCUSSION OF DEBATES; DEBATE PREFERENCES DUE

9. Subjective Value Theory: Early Formulations Why is this theory
called "subjective value theory"? Why does exchange take place? How can demand also be supply? (2/24)
Menger, Principles, Ch. IV, "The Theory of Exchange," and Ch. V, "The Theory of Price", Intro and Section 1, "Price Formation in an Isolated Exchange."
* Jevons, Theory of Political Economy (first edition published in 1871), Ch. IV, "Theory of Exchange," pp. 75-101 only.
* Kurt Wicksell, Lectures on Political Economy (1934), Part I, Chs. 3, 4, and 7.

DEBATES ASSIGNED

10. Marginal Productivity and Income Distribution: How does Clark "disappear" class? What does Neo-Classical theory have to say about
the fairness of income distribution in capitalism? (2/26)
John Bates Clark, The Distribution of Wealth (1902), Chs. l and 12.

IV. OTHER VIEWS: INSTITUTIONALISTS AND FEMINISTS

11. Thorstein Veblen on Conspicuous Consumption: How does Veblen's analysis of consumption differ from that of the Neoclassical economists? How does he criticize our capitalist economic system? (3/3)
Thorstein Veblen, The Theory of the Leisure Class (1899), Ch. IV, "Conspicuous Consumption."
* John Kenneth Galbraith, The Affluent Society, Chapter XI, "The

12. Thorstein Veblen's Critique of Marginal Utility Analysis. What criticisms does Veblen have of neoclassical analysis of the individual and consumption decisions? What alternative does he propose? (3/5)
Thorstein Veblen, "Limitations of Marginal Utility" Journal of Political Economy (1909), also in The Place of Science in Modern Civilisation
* William Dugger, "Radical Institutionalism: Basic Concepts," Review of
Radical Political Economics 20 (Spring 1988).

13. Early Feminist Economics: Charlotte Perkins Gilman How does Gilman's view of economics differ from that of the classicists, Marx, and the neoclassicists? (3/10)
Charlotte Perkins Gilman, Woman and Economics (excerpts)

NINETEENTH CENTURY WRITTEN ASSIGNMENT HANDED OUT (F0R THOSE NOT DEBATING ON 3/17); DUE CLASS 15 (3/17)

 

V. NINETEENTH-CENTURY DEBATES

14. Nineteenth-Century Debates: Clark vs. Marx on Income Distribution in Capitalism, Fair or Unfair; Classical/Marxists vs. Marginalists on the Proper Focus of Economic Theory (On Growth and its Limits vs. On Scarcity and Resource Allocation); Veblen vs. Neoclassicists on Consumption (3/12)

VI. TRANSFORMATIONS OF NEO-CLASSICAL ECONOMICS, 1930-1980

15. Gary Becker on Wage Inequality: Human Capital and Discrimination What do Becker's human capital and discrimination theories have to say about the causes of gender, race, and earnings inequality? (3/17)
Gary Becker, The Economics of Discrimination (1957), Ch. 10, "Summary."
Gary Becker, Human Capital (1964), Excerpts.

WRITTEN ASSIGNMENT DUE

16. Gary Becker on the Economics of the Family and Marriage: How does Becker's "new home economics" extend the boundaries of economics? What reasons does he give for women's traditional specialization in home work, and men's higher earnings in the labor force? (3/19)
Gary Becker, "A Theory of Marriage" (1973), in Theodore Schultz,
Economics of the Family, pp. 299-308 only.
Gary Becker, A Treatise on the Family (1981), excerpts.
* Francine Blau, Marianne Ferber, and Anne Winkler (1998), The Economics of Women, Men and Work, Chs. 3, 4, 6, and 7.

!!!*** SPRING VACATION --- ENJOY THE BREAK !!!***

17. Milton Friedman on Capitalism, Individual Freedom, the State, and Economics: Why is capitalism tied to freedom, according to Friedman? Why is socialism by definition undesirable? What should the role of the state be? To what extent does monopoly pose a problem? (3/31)
Milton Friedman, Capitalism and Freedom (1962), Chs. l, 2, and 8.

VII. CHALLENGERS OF NEOCLASSICAL ECONOMICS AND OF CAPITALISM: NEO-MARXISTS, FEMINISTS, AND MARXIST-FEMINISTS

18. Monopoly Capital. How do Baran and Sweezy build on Marx's analysis? What changes does they make? How does their analysis of consumption differ from Neo-Classical theory? To what extent does it build on or conflict with Veblen's? (4/2)
Paul Baran and Paul Sweezy, Monopoly Capital (1966), Excerpts.

19. Marxist-Feminist Economics. How is our capitalist economy also patriarchal? What economic institutions serve to reproduce gender inequality? (4/7)
Heidi Hartmann, "The Unhappy Marriage of Marxism and Feminism: Towards a More Progressive Union," (1981) in Lydia Sargent, ed., Women and Revolution.
* Marilyn Waring, If Women Counted
* Lydia Sargent, ed., Women and Revolution

++++ SCHEDULED DURING THIS WEEK: CLASS DINNER PARTY
AND MOVIE ON FEMINIST ECONOMIST MARILYN WARING, "Who's Counting?"
(if you can not attend party, you will need to view the video on your own)

20. Capitalism, Socialism, and Democracy: The Radical View. Why do capitalist economic institutions prevent the achievement of democracy, according to radicals? What democratic economic alternatives do they suggest?
(4/9)
Richard Edwards et al, "Class Conflict and the State," The Capitalist
System, 3rd edition, Chapter 5, pp. 167-74 only.
Alec Nove, Feasible Socialism (1983), Conclusion, "Feasible Socialism"
* Julie Matthaei and Teresa Amott, "Beyond Racist Capitalist Patriarchal Economics" (1997)
REVIEW Marx, Capital, Vol. I, Ch. XXXII, "Historical Tendency of Capitalist
Accumulation"

VIII. TWENTIETH-CENTURY DEBATES ON RACE, DEVELOPMENT, AND THE ENVIRONMENT

21. Racism, Colonialism, and the Development of Underdevelopment. How are capitalist development, and racial and international inequality connected, according to these theorists? (4/14)
Oliver Cox, Caste, Class, & Race (1948), Part III, "Race," Introduction and
Chapter 16, "Race Relations."
Andre Gundar Frank, "The Development of Underdevelopment," (1966) in Charles Wilbur and Kenneth Jamison, The Political Economy of Development and Underdevelopment

22. Development Theory: Early Mainstream Writing. (4/16)
W.W. Rostow, "The Five Stages of Growth," (1960) in Mermelstein, Economics: Mainstream Theories and Radical Critiques
Albert Hirschman, The Strategy of Economic Development (1958), Ch. 1.

WEDNESDAY, APRIL 21: NO CLASS, MONDAY SCHEDULE

23. Neo-Classical Theories of Economics and the Environment: What is an externality? What government actions do mainstream economists advocate in response to them? How does Coase's analysis differ? (4/23)
REVIEW discussion of externalities from your introductory or intermediate micro text
Ronald Coase, "The Problem of Social Cost," Journal of Law and Economics (Oct. 1960) from Robert and Nancy Dorfman, eds., The Economics of the Environment, 109-38.

24. Twentieth-Century Malthusians vs. Coase and the Neo-Classicists How does Daly criticize capitalism? the Neo-Classical paradigm? What economic changes does he advocate? How would Coase and the Neo-Classicists respond? (4/28)
Herman Daly, "Introduction to the Steady-State Economy," in Herman
Daly, ed., Economics, Ecology, Ethics: Essays Toward a Steady-State Economy (1980)
* Paul and Anne Ehrlich, "Humanity at the Crossroads," and Nicholas Georgescu-Roegen, "The Entropy Law and the Economic Problem," all in Daly, ed. (see above)
* Julie Matthaei, "Rethinking Scarcity: Neo-Classicism, Neo-Malthusianism, and Neo-Marxism," Review of Radical Political Economics (Summer/Fall 1984).

TWENTIETH CENTURY WRITTEN ASSIGNMENT HANDED OUT (FOR THOSE NOT PARTICIPATING IN DEBATES ON CLASS 26): DUE CLASS 26 (MAY 5)

25. Sen's Critique of Rational Economic Man (4/30) What weaknesses does Sen identify in the mainstream formulation of individual behavior as "rational choice"? Do you see any similarities to Veblen's critique?
Amartya Sen, "Rational Fools: A Critique of the Behavioral Foundations of Economic Theory," Philosophy and Public Affairs, 6(4), (1977).

VIII. TWENTIETH-CENTURY DEBATES

26. In-Class Debates among Twentieth Century Economists. Neoclassicals/Coase vs. Neo-Malthusians on capitalism and the environment; Becker vs. Cox and/or Hartmann on gender and/or race inequality; Becker vs. Hartmann on marriage; Friedman vs. Nove and the Radicals on capitalism, socialism, democracy, and/or freedom; Rostow vs. Frank on Development (5/5)

SECOND WRITTEN ASSIGNMENT DUE IN CLASS

FINAL TAKE-HOME EXAMINATION, COVERING ENTIRE COURSE