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ILS4330 Economic Explorations in History (Thralls): Content Outline

American Economic History: A Dictionary and Chronology

Panic, Prosperity, and Progress : Five Centuries of History and the Markets

Content Outline

1.  The Mercantilist Fallacy

            a. The Cost of Colonies and Empire

            b. International Flow of Goods and Gold

            c. The Story of Money – Nails and competing currencies

d. Harsh economic constraints sowing the seeds of revolution

                        i. A word on British Monopolies as fundraising for the Crown

                        ii. The Technology of Taxation – The ability to locate and extract wealth

                                    1. The Whiskey Rebellion

            e. Difference between American and British Average Age of Marriage

                        i. Benjamin Franklin, T.R. Malthus, Children as wealth.

            f.  British Economic Control of the Colonies and the Seeds of Revolution.

2.  The Constitution as a Constraint

            a. Trade between the colonies before the revolution

            b. The importance of the commerce clause in elimination trade barriers

                        i. Early America as a large Free Trade Zone

            c.  The British Experience with smuggling and the Corn Laws

                        i. Death as little deterrent

            d. Why the Executive branch negotiates trade treaties

                        i.  Using mutual constraints to promote the common good

3.  Agrarianism and Manifest Destiny

a. Explanation of the Various Homestead acts and Settler Programs.

                        i.  Planting Trees, Johnny Appleseed, and creating property rights

            b. Tragedy of the Commons and taking from public/communal resources

                        i.  Native American hunting and trapping Norms

                        ii. Open Grazing – Effective Management before fences

            c. Establishing a National Currency

            d. Establishing a Central Bank

                        e. Jackson’s Dissent.

            e. Moving Forward in time but staying with Theme

                        i. Gold Rush – Claiming Claims

                        ii. Water Rights and Irrigation

4.  Slavery

            a. The Economics of Slavery

                        i. Simplified Production Functions

                        ii. Incentives Matter

            b. A system doomed to failure?

                        i. Robert Fogel on slavery as an institution

c. Contrasting the British vs the American experience with ending slavery

5.  Transportation! Canals, Turnpikes, the steam engine and the locomotive

            a. Toll Roads, Private Roads and the private provision of public goods

                        i. Explanation of Public Goods

                        ii. Explanation of Externalities

            b. The Rise of Textile Mills

            c. The Great Stockyards of the Midwest

                        i. Chicken, Beef and Pork

                        ii. Tinned Beef - Upton Sinclair ‘The Jungle’

            d. A Modern Tale – Transportation Subsidies, Interstate Highways, Light Rail.

6.  The Industrial Revolution

            a. Urbanization and Immigration

                        i. The rise of the great cities

b. The Changing Nature of the Family

                        i. Production in the Home vs Out of the Home

                        ii. The Changing Role of Women

            c. The Robber Barons

            d.Trust and Anti-Trust

                        i. The Case of Standard Oil

            e. A Note on quality of life

                        i. The Death of a President’s Son – Calvin Coolidge and antibiotics

7.  Socialism

            a.  The Roots of Socialism

            b. Marx and the labor theory of value

                        i. Marx’s theory of interest

            c. Marxism and the critique of the market

                        i. Strong claims about the productive power of socialism

                        ii. Socialism, Materialism and the lives of the Worker

            d. The Socialist Calculation Debate

            e. Market Socialism & The Third Way

                        i. Planning and the War Effort

                        ii. John Dewey

8.  Prohibition

            a. The Progressive Era and the Anti-Saloon League

                        i. The Social Ills of Alcohol and Drink

            b. Ratifying the 18 Amendment & The Volstead Act.

                        i. Private Consumption of Alcohol

            c. The Rise of the Mafia and Organized Crime

                        i. The Economics of Black and Grey Markets

                        ii. Increased potency

                        iii. The Feds poisoned alcohol and killed people

9.  The Great Depression

            a. The Phenomenon of the Trade Cycle

                        i. Instances of past booms and bust

            b. Conditions leading up to the Depression

                        i. Stock Trading and Financial Markets

            c.  Milton Friedman and ‘A Monetary History of the United States  1867-1960’

                        i.  Brief Explanation of Quantity Theory of Money

                        ii.  Fed Policy leading up to and after the Depression

            d. Horrific Policy Responses – Burning Food while people starved

10.  Stagflation, Nixon and Wage and Price Controls

            a.  The fall of the Philips Curve, Pump Priming, and Inflation

                        i. High Unemployment, High Inflation

                        ii. The Destructive and Distorting Nature of Inflation

            b. Recycling failed economic policies from WWII

                        i.  OPA – The office of price administration

                        ii.  Roofs and Ceilings – Stigler and Friedman on post war housing prices

            c. Price Controls and the oil embargo

                        i. Explaining long lines at the pump

                        ii. Banks giving away toasters

                        iii.  Employment and Health Insurance

                        iv. Perquisites and the Tax Code

11.  Bluechips, Biotechs, and Internets – Some of the Greatest Booms & Busts of the Last 40 years

            a. Barbarians at the gate, leveraged buyouts, corporate raiders and poisoned pills

                        i. Why I love and hate the movie ‘Wallstreet’ the genius and folly of Oliver Stone.

            b. Insider Trading and Executive Compensation – The Market for Leadership

                        i. Golden Parachutes, Stock Options and Incentive Compatible Compensation

            c. Scam! Worldcom, Enron, and Bernie Madoff

                        i. Brief Explanation of Who, What and Why of the Scam

                        ii. The Importance of selling the market short

            d. The Housing Bubble and Financial Crisis

                        i. Fannie, Freddie and the conjunction of monetary and social policy.

                        ii. Lending and Moral Hazard

                        iii. The Failure of modeling and ratings agencies to catch the error