This section deals with the notion, set forward by Polanyi, accepted by Heilbronner and, in other terms, ennunciated by Marx, that "capitalism" is a relatively recent historical phenomenon, characterized, at least in part, by the "market economy" becoming the dominant vehicle of social organization.
So, you should be familiar with Polanyi's argument, how Heilbronner appropriates it, how their formulation is related to Marx's two chapters on the formation of the labor market and what I have said about these things.
For example, you should be able to answer questions such as these:
How does Polanyi construct his argument that "the market" has been around for a long time but has only recently become the dominant institution in society?
What does Polanyi mean when he says that in pre-capitalist societies the "economy" was run on "non-economic motives"? What were those motives?
What are the roles of "reciprocity" and "redistribution" in Polanyi's analysis of the history of the "economy"? Give some examples.
How does Polanyi use Aristotle's writings to make his case?
What reasons did I give for arguing that Polanyi is wrong to think that "the economy" has always been around but only "the market economy" is modern?
Whereas Polanyi juxtaposes the market to systems of reciprocity and redistribution, Heilbronner juxtaposes it to "tradition" and "authoritarian rule." How do these approaches differ? How do they overlap?
How does Heilbronner's discussion of the emergence of "economic society" bring in changing attitudes toward work? What is the change? How did I use the neoclassical formulation of a "labor supply curve" to discuss this issue? Do you think there was really a change in the attitudes of most people, or merely a change in what Heilbronner calls "the social sanction of gain"?
Heilbronner argues that in the Middle ages (and before) people couldn't envisage how "a general struggle for gain might bind a community together" because "land, labor and capital" did not exist. How does Heilbronner draw on Marx to analyse the coming-into-existence of "labor"? Reading Marx on this subject do you see a "binding together" of a community?
How does Marx's discussion in chapter's 27 and 28 differ from Heilbronner's appropriation? What are the two phases in the creation of a working class?
In my commentary on Marx's discussion of the enclosures, I argued that his treatment ignored the extent and character of resistance to the process. What were some of the examples given of such resistance?
What is the American counterpart to the expropriation of land in England? What land was taken and who was displaced? Was the destiny of those displaced the same as that of the workers in England?
Provide a working class rationale for begging or for stealing (from capitalists) as an alternative to work? Do you think Austin street people have anything in common with the English people against whom the "bloody legislation" was directed?
Turning to the material from ancient Greece, China and the Middle East, you should be able to discuss the ways and degrees in which it illustrates Polanyi's concept that prior to the rise of capitalism "market" activities were marginalized in most places.
You should also be able to compare and contrast the comments on things like money, wealth and profit-seeking in the writings of Aristotle, Confucius, Mencius, the Bible and the Koran.
For example, you should be able to answer questions such as these:
Who were the mercantilists? That is to say what were their characterisic social orgins within their society and how did their ideas reflect those origins? Give some examples of such individuals and their ideas.
What was the general attitude of the mercantilists toward the dominant metal monies (gold and silver) of the time? In what sense were the "bullionists" extremists in this regard?
What method of drawing more "treasure" into a nation was prefered by mercantilits such as Thomas Mun? What were the implications drawn for the policies of the government? vis a vis domestic industry? vis a vis foreign trade?
In what sense might mercantilism be called the "scientific thought of the early British empire"?
How did Mun argue that the bullionists were wrong to oppose the export of gold and silver? How did the examples of Spain and Portugal enter into his arguments? What was his prefered use for exported money?
The bullionists tended to willingly accept the inflation that derived from the import of money. Under what circumstances and for what reasons did Mun's critique such inflation?
What arguments did Mun mobilize in the defense of usurers and bankers? In what sense was he opposed to the manipulation of the value of money in order to affect foreign trade?
In what ways were the personal backgrounds (especially their involvement in the expansion of the British empire) of mercantilists William Petty and Thomas Mun similar and in what ways different? How did the differences influence their respective treatments of government tax policy?
In what ways did Petty's recommendations for changes in English tax policies resemble those of the Reagan-era "supply-siders"?
What were Mun and Petty's views of work and idleness? What advantages did they see in bringing about more of the former and what disavantages did he see in the desires for the latter? What methods did they recommend for encouraging the one and discouraging the other? Include the role of tax policy.
What were John Law's objections to Locke's positions on value and silver money? In what way does Law's understanding of money-as-command shift our understanding of the relationship between value and labor?
Why was John Law supportive of the expansion of banking and why did he embrace the growing role of paper money and credit while not worrying about there being overmuch of it? What did he think were bad ways to increase the money supply and what were good ways? How did he put his theory into practice?
What do you think of the parallel I drew between Law's views on the need of new kinds of money to finance growing trade and the post-WWII evolution of the international monetary system?
What kind of monetary base did Law argue should replace precious metals? What were his arguments as to the advantages of the former and the disadvantages of the latter?
Do my comments about the social origins of the interest of Scottish Banks in replacing coin with paper notes contradict Law's views on Scottish banking? If so how?
Who wrote: "Supposing then, that we had now in England but half as much Money, as we had seven Years ago, and yet had still as much yearly Product of Commodities, as many Hands to work them, and as many Brokers to disperse them, as before; and that the rest of the World we Trade with, had as much Money, as they had before, (for 'tis likely they should have more by our Moiety shared amongst them) 'tis certain, that either half our Rents should not be paid, half our Commodities not vented, and half our Labourers not imployed, and so half the Trade be clearly lost; or else, that every one of these must receive but half the Money, for their Commodities and Labour, they did before, and but half so much as our Neighbours do receive for the same Labour and the same natural Product, at the same time."? What was Cantillon's critique of this formulation and what did he add to more fully develop this theory of the relationhips between money and prices?
Explain Cantillon's distinction between the "intrinsic value" of something and its market price. What was his final "theory of value" and how did he arrive at that theory?
Explain Cantillon's understanding of the working of the "species-flow" mechanism. How did it differ, if at all, from David Hume's?
The Physiocrats emerged as a school of thought in France in the 18th Century --a "school" closely tied to its leading exponent: François Quenay. The historical context was a French economy dominated by the mercantilist policies of Jean Baptiste Colbert finance minister under Louis XIV.
You should be able to answer questions such as these:
What were the primary aims of Colbert's economic policies and in what way were those advocated by Quesnay and his followers diametrically opposed?
In Quesnay's theoretical sketch of society there was only one "productive" class and all others were "sterile." What was the productive class and why did he so label it? Why, in his view, must the others be considered "sterile" or "unproductive"?
Explain the logic of Quesnay's Tableau Economique for which he is famous. To what degree should the Tableau be seen as an absolutely new theoretical innovation, and to what degree as a mere concretization of Cantillon's views on the circularity of economic flows?
What conclusion did the physiocrats draw from their analysis about the proper taxation policies for the state to follow if it wanted to maximize the growth of output and trade?
You should be able to answer questions such as these:
What was the "scottish enlightenment"? What kind of people participated in it? And how was Adam Smith representative? In answering these questions contrast Heilbronner's treatment with mine in Lecture Notes II and class.
Would it be accurate to say that Scotland was a colony of England and that lowland Scots like Adam Smith were essentially local colaborators of an invading imperial power and complicit in cultural genocide against the highland clans? What relationship, if any, was there between the Dutchess of Sutherland, discussed in both Marx and Heilbronner, and Adam Smith?
You should be able to answer questions such as these:
Did Smith accept the usual characterization of mercantilists as believing that money was the only true wealth? Given what you have read of the mercantilists, would you say his views were correct, or not?
Explain that part of Smith's attack on the mercantilists that concerned their motives and the relationship between those motives and the way they formulated their arguments. In what sense did he consider the mercantilists to be sophists?
Did Smith agree with Mun's critique of the bullionists? What did he think of Mun's suggestions as to a more appropriate preoccupation for state economic ministers?
Explain Smith's argument as to why the state need not concern itself with the domestic availability of money. How was this similar to John Law's position?
In discussing the hue and cry sometimes raised over a scarcity of money, Smith offers an explanation that is at once a chiding of those raising the cry and a theory of economic crisis. Exposit his explanation and relate it, if you can to the present situation.
The Wealth of Nations was published in 1776, the same year as the US Declaration of Independence. What were Smith's views on the British trade with the North American colonies?
You should be able to answer questions such as these:
Did Smith's views on work constitute a radical break with those of the mercantilists you have studied, or were they consistent with them? Would Petty have agreed with Smith's views on money-as-capital vs money-as-revenue?
Did Smith consider that all hiring of people to work was "productive"? If not, why not? What was his argument?
What were Smith's views on the best ways to increase the availability of capital? What were the best ways to divert resources from such a purpose?
Compare Smith's views on the "wages of idleness" with Malthus' position on the British Poor Laws.
Would the following statement be correctly attributed to Smith? "A rising quantity of money will bring forth a rising value of the annual produce of a country. The quantiy of money in circulation will determine the value of the consumable goods annually circulated."
Both Locke and Smith condemn "sauntering." Explain what they mean by that term and how what they have in mind differs. To what degree does Smith's cure for "sauntering" involve a Lockean approach to education?
Both Thoreau and Russell praise "sauntering" --each in their own way. In what ways do their treatments differ and in what ways are they similar? Do either of them have a larger purpose, do you think, beyond addressing the merits of non-work time?
You should be able to answer questions such as these:
What is there in Smith's treatment to suggest any agreement whatsoeer with Physiocratic ideas?
What was Smith's main objection to the Physiocrats' analysis of the economy and what arguments did he mobilize against what he saw as their principle error?
What overlap, if any, is there between what the Physiocrats saw as the proper domain of government policy vis a vis the economy and Smith's view on "the duties of the sovereign"?
What did you learn from Heilbronner's treatment of Smith's relation to François Quesnay? How much more did you learn from reading Smith's chapter on the Physiocrats?
You should be able to answer questions such as these:
What if anything did Smith take over from John Locke's discussion of the foundation of "property" that he found of use in his theory of value?
Smith distinguishes between "value in use" and "value in exchange." How does this dichotomy compare with Cantillon's dichotomy between "intrinsic value" and "market price"? Are they the same? If not, how are they different?
Smith also distinguishes between the "real price" of commodities and their "nominal price." What is the relationship between this distinction and the one discussed in the previous question? What does Smith say are the measures of real price and nominal price, and how are they determined?
Does it make sense to apply this distinction between real and nominal price to labor? What are the consequences of doing so for a theory of the wage?
Sometimes Smith speaks of labor determining the value of a commodity; sometimes he speaks of the value of a commodity being determined by the quantity of labor that commodity can command. Are these two different theories of value?
Would it be correct to say that Smith considered profits to be the wages of the capitalist? Either way, what arguments did he muster to decide this question? What in Smith's view determines the size of profits? Does he have a theory of the rate of profits?
In Chapter IV of Book One of The Wealth of Nations Smith analyzes the "price" of commodities into three "components." What is the relation between this analysis of price and his theory of distribution of total output?
You should be able to answer questions such as these:
To what degree does Smith's theory of distribution amount to a theory of social class? And what kind of theory might that be? Does it provide a nice and neat set of categories into which all individuals can be easily fitted?
One set of "capitalists" are merchants, those who buy at one price with a view to selling at a higher price in order to make a profit. Some such merchants, as we have seen, figured prominently in the elaboration of mercantilist views. What did Smith have to say about them, as a class?
What were the reasons Smith gave for warning everyone to closely examine any public policies put forward by industrial capitalists? Were the reason similar to or different from those he have vis a vis merchants?
Along with his views on capitalist influence on public policy, Smith also took the trouble to deal with the class conflicts between capitalists and their workers. What did he have to say on this subject? How did he allocate "blame" for the recurrently intense conflict that characterized England's industrial revolution?
Despite his embrace of labor and the division of labor as essential keys to the "wealth of nations" Smith did not hesitate to describe some of its nefarious effects. What were those effects and how might they be seen as being a an equally key ingredient of class conflict.
What solutions did Smith propose to deal with this conflict?
What were Smith's views on labor "combinations" or "unions"? What did he see as their motives and what did he see as their probability of success?
In the specific domain of class struggle over wages, what forces did Smith see operating to support workers efforts to raise wages and what forces did he see as limiting their chances for success?
Would it be accurate to say that Smith's views on wages and labor market dynamics provided the kernal of Malthus' subsequent treatment?
Explain Smith's views on the growth of banking and the rise and spread of paper money and bank credit. In what ways were those view influenced by the development of those phenomena in Scotland where Smith lived and worked?
Did Smith embrace the "real bills doctrine" concerning the causal relations in the "quantity theory of money"? In the material you have been assigned which variables were most important for him and what arguments did he use to interpret their relationships the way he did?
You should be able to answer questions such as these:
Explain Godwin's reasons for arguing that far from meriting centrality in people's lives, work should be reduced to one activity among many others.
Explain Godwin's arguments as to how it would be possible practically to implement such a dramatic reduction in work time, thus freeing people from servitude to labor (and to capital[ists]).
What methods does Godwin embrace for bringing about such a reorganization of society? Do those methods suggest to you that he anticipates and foreshadows later authoritarian tendencies, such as those in the Soviet Union?
What role does "equality" in income play in Godwin's schemes?
You should be able to answer questions such as these:
Explain Malthus' theory of population dynamics, i.e., his theory of the pattern of growth of population, of subsistence production, and the interrelationship between the two.
What historical observations about demographic trends have called into question the basic assumptions on which Malthus' theory is based? How have changes in gender relationships undercut those assumptions?
What did he think were the inevitable effects of these patterns on on the labor market and wages? What policy conclusions did Malthus draw about the usefulness of efforts by workers to raise wages --as in the conflicts analyzed by Smith and refered to above.
What were Malthus's three arguments as to why the Poor Laws should be abolished? Which of these three depend on his population theory?
How does Malthus weild his population theory against Godwin's proposals for the transcendance of capitalism? If Malthus' theory of the inevitable rise in marriage, procreation and population following income increases has been disproven by history, then what is left of his critique of Godwin?
You should be able to answer questions such as these:
What was Ricardo's reasoning about the determinants of that portion of output that would go to labor in the form of wages? How did his thinking about this issue differ, if at all, from Smith's and Malthus's? What conclusions did he draw for the issues of strikes and British Poor Laws?
How did Ricard's theory of rent differ from Malthus'? What two kinds of circumstances would, according to him, give rise to rent and determine the different levels of rent on different kinds of land?
How did Ricardo combine his theory of wages with his theory of rent to produce a theory of how profits would change over time? Make sure you include a discussion of his arguments as to why it makes sense to discuss profits in general as opposed to the profits of particular firms.
To what degree, or in what ways, do you think Ricardo accepted Smith's analysis of "overtrading" as a theory of crisis or "glut"?
What was "Say's Law" and is it any less applicable to a money economy than to a barter one? If so, why?
Ricardo's embrace of Say's Law led him to admit the possibility of gluts or crisis in particular industries but not in all. Explain his reasoning. What was the one special case in which he admitted such a possibility?
Malthus critiqued Ricardo severely, arguing that he made three "errors" in his reasoning. Explain those three errors. Suppose that Malthus was alive today, and joined in the discussion of economic events in the wake of the terrorist attacks of September 11th. What fourth "error" might he have derived from current discussions of the economy and added to his critique of Ricardo?
Explain the origins, the general lines of controversy around, and ultimate fate of the "corn laws" passed in early 19th Century England. Who was responsible for the creation and who ultimately achieved their removal and why? What impact did their existence and then their removal have on the food problems of the Irish at that time?
Malthus supported the maintenance of the corn laws, and opposed their removal, fully cognisant of how his position contradicted his embrace of the principles of free trade. How did he justify this contradiction?
Ricardo joined in the fight against the corn laws, at least in part by attacking Malthus' arguments. What weaknesses did he see in Malthus' argument and what were the reasons he gave for thinking that they were not convincing?
In the course of his argument against Malthus, Ricardo went beyond simply trying to counter Malthus' "special circumstances" and seized upon the opportunity to blast landlords and rent. What was his reasoning and why do you think he went beyond the scope of the specific debate on the corn laws?
That's it folks. Some of these questions require more detailed answers than others but they are crafted to lead you through the material and to help you be well prepared for the test.