Saturday, July 11, 2009

schumpeteresque intro to econ 362

Economic history can be studied from a variety of perspectives. Much of the difference in these perspectives is derived from the wide spectrum of ways in which economists define "economy". While individuals and market behavior have played a central role in the development of the U.S. economy, analyzing only these aspects will give us an incomplete history. This is true for two reasons. First, the market mechanism has not always succeeded in promoting social welfare in the way in which utilitarian classical and neoclassical economists and other liberal philosophers have argued it would. Second, the success of the market mechanism has often relied on regulation by law and aid from the state.

Thus, the concept of “autonomous market forces” is a myth. It is a myth considering the state of things now, and it is a myth considering the state of things in 1800. This is not to make a blanket argument against the market mechanism; it is only to shed light on the historical nature of all market processes, and to point out that in order for a market to be properly functioning in the capitalist ideal you first need a lot of outside help. Therefore, a central focus of the syllabus will be how the market interacted with these historical forces and institutions, and examining both the successes and failures of these interactions: when and where did the market methdology triumph? When and where is state enforcement/history still a central part of the institution?

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