History of Economics

obligatory courses

t is desirable for the prospective participants to have:

a / interest in the analysis of economic phenomena in the historical, institutional, and social perspective;

b / interest in interdisciplinary research;

c / interest in the analysis of original texts.

The aim of this course is to teach students the history of economics. Potential effects of education are diversified: a / the ability to localize modern economic theory in its historical context; b / a better understanding of economics as a science, in particular the understanding of social, economic, political and cultural conditions of its development, also c / the ability to formulate and defend the claims and positions in written statements (essays) and oral presentations.The main part of the course begins with the reconstruction of Adam Smith's economics. In subsequent parts of the course the ideas of neoclassical economics, institutionalism, and historical school will be presented. As far as the modern economics is concerded the focus will be on the Keynesian revolution and the monetarist counter-revolution. Assesment on the basis of activity in class, written essay and a final examination

I. INTRODUCTION THE ORIGINS OF ECONOMICS

1. Economics and history of economics

Economics as a science. The development and history of economics. Two levels of analysis: the development of methods and development of economic ideas. Benefits of studies on the history of economics.

2. The origins of economic thought

Xenophon and the economy. Aristotle: economics vs. chrematistics; exchange, money and value; justice in the exchange and sharing. Thomistic Economics: the science of ownership; doctrine of the just price, learning about money.

3. Mercantilism and physiocratism

Mercantilism: power and wealth, money and a source of wealth, the theory of a postitive trade balance. Physiocracy: philosophy of natural order and its practical consequences.

II. CLASSICAL ECONOMICS

4. Freedom and wealth of nations: A. Smith

A. Smith: the wealth of nations, theory of value: the value of factors, the theory of distribution: wages, profits and rent, the theory of production: the resources and capital, productive and unproductive work, money and revenue, social philosophy of A. Smith.

5. The economics of D. Ricardo

The Ricardian economics: the division of wealth. The theory of exchange value: time, cost of capital, the impact on the distribution of exchange relations.The basic law of distribution. Capital accumulation and economic growth. Money and international exchange.

6. Crises and the stability of the economy: Malthus vs. Say

Say's Law: goods exchange for goods. Malthus: arguments against the law, the importance of effective demand. Ricardo: technical unemployment. Keynes on Malthus and Ricardo.

7. Synthesis and decline of classical economics: J.St. Mill

The development of economics after Ricardo. J.St.Mill: the economics of liberal institutions - the role of the state, private property and competition; theory of value, production and distribution rights, social philosophy - social liberalism.

III. Reaction to Classical economics

8. Criticism of liberal institutions and classical political economy

Utopian socialism: the irrationality and unfairness of the market economy; socialist ideas.

The older historical school: the unity and integrity of social phenoma; the development of economic laws.

9. The economics of Karl Marx

Dialectics of social development. The theory of exchange value: the goods and the value of the goods. The theory of surplus value. Conflicts between labor and capital. The value and the price of production. The accumulation of capital and the laws of motion of capitalism.

IV. The Marginalist Revolution

10. The beginnings of marginal analysis

The emergence of marginal analysis: C. Menger, W.St. Jevons, L. Walras. Criticism of classical theory of value and price. The theory of marginal utility. Exchange theory.

11. The development of marginal analysis

Marginal productivity theory. The theory of distribution based on the idea of marginal productivity: Clark, Wicksteed and Wicksell. Ethical implications of the theory of distribution: Clark. Criticism of the theory of marginal productivity. Theories of profit: Clark, Schumpeter, Knight. Theories of capital and interest: Boehm-Bawerk and Fisher.

12. General equilibrium theory: L. Walras

Outline of general equilibrium. Formalization of the model.

V. The neo-classical economics

13. Neoclassical economics: A. Marshall

Theory of value and price: utility and costs. Theory of value: utility and demand, demand and price, price elasticity of demand, the consumer's surplus. Factors of production, supply and costs. Market: demand - supply - price, current price, the price in the short and long run.

VI. Institutionalism and historical school

14. Analysis of institutions and ideal types: T. Veblen and M. Weber

Institutionalism: T. Veblen, criticism of neoclassical economics, institutional analysis of capitalism, the theory of the leisure class, stability and development of capitalism. Historical School: M. Weber, ideal types, Protestantism and the rise of capitalism.

VII. CONTEMPORARY ECONOMICS:

15. Macroeconomics: Keynesian Revolution

Critique of the postulates of (neo)classical economics. The principle of effective demand, the importance of investment. The equilibrium in terms of unemployment. Theory of Employment. Liquidity preference theory. Liquidity Trap. The principles of economic policy: fiscal and monetary policy. Keynesian social philosophy.

16. Neoclassical synthesis

J.R. Hicks: "Mr.. Keynes and the Classics." The beginnings of the IS - LM. Keynes in the interpretation of the Hicks-Hansen. Patinkin in the interpretation of Keynes. Towards a disequilibrium economics.

17. Formalistic revolution in economics

(i) the application of mathematics to economics. The birth and development of econometrics.Game theory and economics. Progress in the theory of general equilibrium.

18. Macroeconomics of unemployment and inflation: moneteristic counter-revolution. M. Friedman's theory of money demand. The mechanism of transmition. Inflation and unemployment in the monetarist view. Theory of the natural rate of unemployment. The principles of economic policy.

19. The new macroeconomics: Classical Vs. Keynesian

R. Lucas and T. Sargent: the development and criticism of monetarism. The importance of the hypothesis of rational expectations. Phillips curve in the interpretation of the new classical macroeconomics. The issue of neutrality of money and economic policy. R. Clower, R. Barro and H. Grossman: disequilibrium economics. New Keynesian macroeconomics: the importance of nominal rigidities and their explanation.

VIII. CONTEMPORARY ECONOMICS: outside the mainstream

20. Coordination and the market process: the Austrian school

C. Menger - Founder of the Austrian School; methodological individualism and subjectivism, the economic analysis of the evolution of the institutions. Followers: Mises and Hayek. The theory of spontaneous law. The renaissance of the Austrian school in America.

21. Trends in institutional economics

(i) From Veblen to Galbraith. Critique of the neoclassical economics. Analysis of the development of economic institutions. Institutions and technology. (ii) New institutional economics: R. Coase and O. Williamson. Transaction costs economics. The importance of institutions for the market.

22. Economics in retrospection

A look back: the logic of development of economics. Cumulative development of methods of economic analysis. Social evolution - development challenges - economic response. Objectives and tasks of the economics in light of the history of economics.

Chapters from the book presented below:

H. Landreth i D.C. Colander, „Historia myśli ekonomicznej”. Warszawa, Wyd. Naukowe PWN, 1998, (LC, henceforth).

M. Blaug, „Teoria ekonomii. Ujęcie retrospektywne”. Warszawa, PWN, 1994 (rozdz.5,7,16), (Blaug, henceforth).

B. Snowdon, H. Vane, P. Wynarczyk, „Współczesne nurty teorii makroekonomii”. PWN, Warszawa, 1998 (rozdz. 5-7), (Snowdon, henceforth).

1. Economics and the history of economics

LC, ch. 1.

2. The origins of economic thought

LC, ch. 2.

3. Mercantilism and phisiocratism

LC, ch. 3.

4. The economics of A. Smith

LC, ch. 4.

5. The economics of D. Ricardo

LC, ch. 5.

6. Malthus vs. Say

LC, ch. 5.

7. The economics of J.St. Mill

LC, ch. 6.

8. The critique of liberal institutions and classical economics

LC, ch. 12.

9. The economics of K. Marks

LC, ch. 7; Blaug, ch. 7.

10. The origins of marginalist revolution

LC, ch. 8.

11. The development of marginalist revolution

LC, ch. 9.

12. General equilibrium theory of L. Walras

LC, ch. 10.

13. The neoclassical economics of A. Marshall

LC, ch. 11.

14. Institutions and ideal types: T. Veblen i M. Weber

LC, ch. 12.

15. Macroeconomics of unemployment: the economics of Keynes

LC, ch. 16; Blaug, ch. 16.

16. Neoclassical synthesis

LC, ch. 16; Blaug, ch. 16.

17. Formalistic revolution in economics

LC, ch. 15.

18. The economics of M. Friedman

LC, ch. 16; Blaug, ch. 16.

19. New macroeconomics

Snowdon, ch. 5-7.

20. The Austrian School

lecture.

21. N. Institutional Economics

LC, ch. 14.

22. Economics in retrospect

lecture

Students can also read:

M. Blaug, Teoria ekonomii. Ujęcie retrospektywne. Warszawa, PWN, 1994.

E. Taylor, Historia rozwoju ekonomiki, TI i TII. Poznań, PWN, 1958.

M. Beaud i G. Dostaler, Economic Thought Since Keynes, Edward Elgar 1995.

B. Snowdon, H. Vane, P. Wynarczyk, Współczesne nurty teorii makroekonomii. PWN, Warszawa, 1998.

Original texts will be available on a special website.

I. In terms of knowledge:

Student:

a / gets to know the economic point of view on socio-economic phenomena by studying the history of economics;

b / knows the basic ideas and economic theories;

c / understands the importance of the history of economics for the later teaching of economic theory.

II. In terms of skills:

Student:

d / can prepare a presentation and write an essay according to writing theses rules in force at the Faculty of Economic Sciences, University of Warsaw

e / learn to take part in in-class discussions.

III. In terms of social skills:

Student:

f/ is able to fine appropriate literature and source materials

g/ can work with other students while preparing in-class presentation.

KW01, KW02, KW03, KU01, KU02, KU03, KU04,

The final assessment consists of two elements - credits from the course (40%) and final exam (60%).

1. Credits from the course

It is based on the presence, activity in class (5%), presentation (15%), and a written essay (20%).

2. Exam

The written exam consists of a test /closed questions/ (50% of total no of points from the exam) and a short essay (50% of total no of points from the exam). In the case of the essay, students choose a theme from at least three proposed by the examiner. Passing the exam is a prerequisite for receiving credit. The pass mark is to get 50% points