International Economic Policy

ECON 385-A01 M,W,F  7:00 PM – 10:05 PM, May 18^th – June 19^th

Instructor: Daniel J. Smith

Office Hours: By request    Email: Smith.dan.j@gmail.com    Webpage: www.DanielJosephSmith.com

"One of the principal problems in learning indeed is how to destroy illusions of perspective, the belief that faraway things are in fact small...expose the students to whole areas of thought which have become unfashionable and hence help him transcend limitations which are imposed on him by the fashions of his own time."

- Kenneth Boulding 

"It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a “dismal science.” But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance."

- Murray Rothbard

Course Introduction:

This course is designed to introduce you to the economic way of thinking, and its application to international trade and development.  Economics is a highly specialized field, which often leads one to counter-intuitive and not-so-readily apparent results. This course will provide you with the tools necessary to examine these “unseen” consequences of international policy.

Grading:

Your grade in this class is based off 11 two-question quizzes that will cover the material covered in the previous class’s lecture and the assigned readings for that day. I do not take attendance; however, in order to participate and take the quizzes, you must be present and on time, as they will usually be administered at the beginning of class.  At the end of the semester, I will drop your two lowest quiz scores. There are no make-ups.  There is no final exam; instead, there will be a five-page paper (12 point, Times New Roman font; 1-inch margins; separate title page).  You will choose one of the assigned or supplemental reading books and read it in its entirety, and then write a paper summarizing the main findings of the book, applying the concepts you learned from the book to your choice of topic concerning international policy. The paper should demonstrate your understanding and command of the economic concepts in employed in the book you chose. The paper should be sent via email to Smith.dan.j@gmail.com by 10:05 PM, June 19^th. No extensions, no exceptions.

Collectively, the quizzes will make up 40% of your grade. The final paper will also make up 40% of your grade. The remaining 20% of your grade will come from class participation.

There is no extra credit.

The grading scale is as follows:

A 90-100 B 89-80 C 79-70 D 69-60 F <60

Cheating/Plagiarism:

George Mason University has a rigorous Honor Code. Please consult the student handbook (available at: http://catalog.gmu.edu/) to review the applicable policies related to the Honor Code. Neither cheating nor plagiarism will be tolerated and can result in a failing grade, dismissal from class, and expulsion from the university. If I believe you have cheated or plagiarized any part of your work I will seek the appropriate punishment under the guidelines of the student handbook.

Textbooks:

These books are available in the GMU bookstore as well as through Amazon (any edition will work, but the pages and chapters correspond to the editions available in the bookstore):

Required:

 Bauer, Peter T. (2000). From Subsistence to Exchange and Other Essays.

Princeton: Princeton University Press.

Easterly, William (2002). The Elusive Quest for Growth: Economists’ Adventures

and Misadventures in the Tropics. Cambridge: MIT Press.

Gwartney, James, Richard L. Stroup, and Dwight R. Lee (2005). Common Sense Economics

:St. Martin’s Press.

Norberg, Johan (2003). In Defense of Global Capitalism. Washington, DC: Cato

Institute.

Not Required to Purchase (Available Online):

Hazlitt, Henry. (1979). Economics in One Lesson. New York: Three Rivers Press.

Available online: http://jim.com/econ/

Mises, Ludwig. (2005). Liberalism.  Indianapolis: Liberty Fund Inc. Available

online: http://mises.org/liberal.asp

Supplemental Readings:

Listed under the day the topic is discussed, these books are not required, and the information contained will not be on the quizzes. I recommend these books for students looking to gain further knowledge about the topics discussed that day.

Schedule and Assigned Readings

Each day’s readings should be read prior to that day’s class. The readings for May 20^th are heavy, and I apologize for that, but I need to bring the class up to a basic level in order to facilitate class discussion.

May 18^th

Topics: Introduction & Syllabus; EWOT; Invisible Hand, Incentives, MC/MB

Readings: None

May 20^th

Topics: Supply & Demand, Price Floors, Price Ceilings, Profits and Losses, Creative Destruction, Knowledge Problems, Subsidies

Readings: CS (pages 5-31) & EQG (Chapter 9)

Introduction, section 2, “Material Welfare,” from Liberalism by Ludwig von

Mises. Available Online: http://mises.org/liberal.asp

Chapters 1, 2 & 3 “The Lesson,” “The Broken Window,” and “The Blessings of

Destruction,” from Economics in One Lesson by Henry Hazlitt. Available online:

http://jim.com/econ/

Supplemental Reading:

            Knowledge and Decisions, by Thomas Sowell

May 22^nd

NO CLASS PER UNIVERSITY SUMMER SESSION A CALANDER 

May 25^th

NO CLASS PER UNIVERSITY SUMMER SESSION A CALANDER 

May 27^th

Topics: Sweatshops, Opportunity Costs, Free Trade, Globalization, MNCs, Immigration,

Comparative Advantage, Environmentalism, Tragedy of the Commons, Luddites

Readings: CS (pages 63-70); DGC (pages 113-150 & 210-222 & 224-238); SE (I); EQG (pages 53-54 &

Chapter 3.7, “Free Trade,” from Liberalism by Ludwig von

Mises. Available Online: http://mises.org/liberal.asp

Henry Hazlitt. Available online: http://jim.com/econ 

Supplemental Reading:

            Free Trade Under Fire, by Douglas Irwin

Free Market Environmentalism, by Terry Anderson and Donald Leal

    The Ultimate Resource 2, by Julian Simon 

May 29^th

Topics: Interventionism, Law of Unintended Consequences, Regulation (health, safety, business), Taxation

Readings: DGC (pages 69-71); EQG (Chapter 11) &

Chapter 2.5, “Interventionism,” from Liberalism by Ludwig von

Mises. Available Online: http://mises.org/liberal.asp

Supplemental Reading:

A Critique of Interventionism, by Ludwig von Mises

June 1^st

Topics: Institutions, Legal Systems, Causes of Growth

Readings: SE (Chapter III & IV); EQG (Chapter I); DGC (pages 90-98)

Supplemental Reading:

Wealth of Nations by Adam Smith

June 3^rd  

Topics: Foreign Aid, Conditionality

Readings: SE (Chapters V & VI); EQG (pages 101-120);

Supplemental Reading:

White Man’s Burden by William Easterly

June 5^th

Topics: Market Failures, Robber Barons

Readings: EQG (Chaptes12 -13) &

Chapter 2.7, “Cartels, Monopoly and Liberalism,” from Liberalism by Ludwig von

Mises. Available Online: http://mises.org/liberal.asp

Supplemental Reading:

Myth of the Robber Barons by Burton Folsom

Capitalism and the Historians, edited by F.A. Hayek

Second Thoughts: Myths and Morals of U.S. Economic History, edited by

McCloskey

June 8^th

Topics: Capitalism and Socialism

Readings: DGC (20 - 59) &

Chapters 2.4 & 2.6, “The Impracticability of Socialism,” and “ Capitalism: The

Only Possible System of Organization,” from Liberalism by Ludwig von

Mises. Available Online: http://mises.org/liberal.asp

Supplemental Reading:

Socialism, by Ludwig von Mises

Road to Serfdom, by F.A. Hayek

June 10^th

Topics: Public Choice Problems, Democracy, Voting, Personal Rights, Media Rights, Concentrated Benefits, Dispersed Cost

Readings: CS (pages 75-119) &

Chapters 4.2 & 4.4, “Political Parties,” and “Liberalism and the Parties of

Special Interest,” from Liberalism by Ludwig von Mises. Available Online: http://mises.org/liberal.asp

Supplemental Reading:

Government Failure: A Primer in Public Choice by Gordon Tullock

June 12^th

Topics: Global Financial Markets, ABCT, Current Financial Crisis, Regime Uncertainty

Readings:

Chapters 23 & 24, “The Mirage of Inflation,” and “The Assault on Savings,” from

Economics in One Lesson by Henry Hazlitt. Available online:

http://jim.com/econ/

June 15^th

Topics: Polycentrism, War, Foreign Interventionism, Reconstruction, Terrorism, Ethno-Linguistic Fractionalization, Signaling

Readings:

Chapters 3.4, 3.5 & 3.6, “Nationalism,” “Imperialism” and “Colonial Policy,”

from Liberalism by Ludwig von Mises. Available Online:

http://mises.org/liberal.asp

Supplemental Reading:

            Anarchy and the Law, edited by Edward Stringham

            After War, by Chris Coyne

            Nation, State and Economy, by Ludwig von Mises

            Death by Government, by R.J. Rummel

June 17^th

Topics: Review / Paper Help

Readings:

Chapter 25, “The Lesson Restated,” from Economics in One Lesson by

Henry Hazlitt. Available online: http://jim.com/econ/

June 19th

Paper Due via Email to Smith.dan.j@gmail.com by 10:05 PM – NO EXCEPTIONS or EXTENTSIONS!