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POLITICAL ECONOMY AFTER THE CRISIS

SPRING 2014

SOCIETIES OF THE WORLD - 31
PED - 233
LAW - 2390
THURSDAY 5-7PM, LANGDELL SOUTH
AND A WEEKLY SECTION MEETING

Roberto Mangabeira Unger (Law School)
Areeda 226
Telephone: 617-495-3156
E-mail: unger@law.harvard.edu
Office Hours: Fridays 2:00pm-4:00pm
Faculty Assistant: Kevin Doyle, 617-496-1764,
kdoyle@law.harvard.edu

Michael Woolcock (Kennedy School)
Littauer 116
Telephone: 617-495-8270
E-mail: Michael_Woolcock@hks.harvard.edu
Faculty Assistant: Julie DeBenedictis, 617-495-8660,
julie_debenedictis@hks.harvard.edu


This course will explore alternative ways of thinking about contemporary
market economies and their reconstruction. It will do so by addressing three
connected themes: the worldwide financial and economic crisis and the response to
it, the effort to advance socially inclusive economic growth in richer as well as in
poorer countries, and the past, present, and future of globalization. In addressing
these themes, it will ask what economics is and should become. For 2012-2013, the
central topic will be crisis and the struggle for recovery as provocations to insight
and as opportunities for reform.
Students should have some previous acquaintance with economics, but no
advanced economic training is required. The course is addressed to undergraduate
and graduate students outside as well as within economics.
Readings drawn from the classic and contemporary literatures of economics,
philosophy, and social theory.
2
Extended take-home examination. Jointly offered by the Law School, FAS,
and Kennedy School.

ASSIGNED BOOKS

There are seven assigned books, all available in paperback, for purchase at
the Harvard Square Coop or on Amazon.

Agnar Sandmo, Economics Evolving: A History of Economic
Thought, Princeton University Press

Bayly, C.A., Vijayendra Rao, Simon Szreter and Michael
Woolcock (eds.) History, Historians and Development Policy:
A Necessary Dialogue, Manchester University Press

Robert Skidelsky, Keynes: A Very Short Introduction, Oxford
University Press

Mark Mazower, Governing the World, Penguin Books

Dani Rodrik, One Economics, Many Recipes, Princeton
University Press

Roberto Mangabeira Unger, Free Trade Reimagined: The
World Division of Labor and the Method of Economics,
Princeton University Press

Roberto Mangabeira Unger, Democracy Realized: The
Progressive Alternative, Verso


The reading assignments not contained in these books are available on the internet
or will be posted on the course website.

WRITING REQUIREMENTS

During the semester undergraduates and Kennedy School students will write
two brief papers. The first paper will be due in class on February 27. The second
paper will be due in class on April 3.
3
Each of papers, on topics to be set, will respond to a major problem or idea
discussed in the course up to that time. Each will be between 6 and 10 double-
spaced pages long. Each will count for 20% of the final grade.
In lieu of a final examination, all students will write an extended take-home
examination. This final paper or examination will provide them with an occasion
to respond to a central aspect of the argument of the course. It should have a
minimum of 15 and a maximum of 20 double-spaced pages. The topic or topics
will be described in class on April 3. The paper will be due by 4 p.m. on April 30
(no extensions). The final examination paper will count for 50% of the final grade
for undergraduates. 10% of the final grade for undergraduates will be attributed to
participation in section.
The grade for all graduate students, except Kennedy School students, will be
based entirely on their final take-home examination, which will be for them the
only writing requirement in the course.

COURSE STRUCTURE, CLASS SEQUENCE, AND READINGS

Part I: The Workings of Contemporary Economies

January 30: Introduction, overview, logistics. The worldwide financial and
economic crisis: what do the crisis and its aftermath teach us about the nature and
defects of contemporary economies?
Simon Johnson, The Quiet Coup
TL and RMU, Crisis, Slump, Superstition, Recovery
Henry Farrell and John Quiggin, Consensus, Dissensus and Economic
Ideas: The Rise and Fall of Keynesianism During the Economic Crisis,
March 2012 (http://www.henryfarrell.net/Keynes.pdf)

February 6: The past and future of economic growth. Contending perspectives on
why economies grow, stagnate and fail

DR, One Economics, Many Recipes, introduction, chapters 1
DR, The Past, Present, and Future of Economic Growth, November 2012.
Daron Acemoglu, Root Causes: A Historical Approach to Assessing the
Role of Institutions in Economic Development, Finance & Development,
June 2003
(http://www.imf.org/external/pubs/ft/fandd/2003/06/pdf/acemoglu.pdf)
Bayly et al., History, Historians and Development Policy, chapters 1, 2, 3

4
February 13: The institutional organization of the market economy. How should
we think about the relation of economic ideas and principles to economic
institutions? What ideas, assumptions and historical conjunctures shaped the
current institutional architecture we have for managing the global economy?

DR, One Economics, Many Recipes, chapters 5 and 6
RMU, Democracy Realized, 133-237, 263-287
Edward Lopez and Wayne Leighton, Madmen, Intellectuals, and Academic
Scribblers, Stanford University Press, 2013, chapter 1
Mazower, Governing the World, chapters 1, 5, 7


Part II: Economic Ideas and Realities in Comparative Perspective

February 20: Europe and European Social Democracy

Hall and Soskice, Varieties of Capitalism, chapter 1
RMU, The Left Alternative, chapter on Europe and introduction to the
German edition
Vivian Schmidt, What Happened to the State-Influenced Market
Economies (SMEs)? France, Italy and Spain confront the Crisis as the Good,
the Bad, and The Ugly, in The Consequences of the Global Financial
Crisis: The Rhetoric of Reform and Regulation. eds. Graham Wilson and
Wyn Grant. Oxford: Oxford University Press, 2012.
(http://blogs.bu.edu/vschmidt/files/2012/05/What-Happened-to-the-State-
final.pdf)
Mazower, Governing the World, chapter 14

February 27: The United States

Alpert, Hockett, and Roubini, The Way Forward
Daron Acemoglu, James Robinson and Thierry Verdier, Cant We All Be
More Like Scandinavians?
Daniel Markovits, Snowballing Inequality and the Crisis of Capitalism

March 6: The BRIC economies

DR, The Globalization Paradox, chapter 7
Pranab Bardhan, Awakening Giants, chapters 2, 6, and 10
RMU and Cui, China in the Russian Mirror
5

March 13: Low-Income Countries how three crises (1989, 9/11 and 2008)
changed the means and ends of development

RMU, Free Trade Reimagined, chapter 5
Pranab Bardhan (2013), Little, Big: Two Ideas about Fighting Global
Poverty, Boston Review, (http://www.bostonreview.net/world-books-
ideas/pranab-bardhan-little-big)
Lant Pritchett, Michael Woolcock, and Matt Andrews (2013) Looking like
a state: techniques of persistent failure in state capability for
implementation Journal of Development Studies
Mazower, Governing the World, chapters 9 and 10

March 20: Spring Break

March 27: The new economy as practical opportunity and intellectual challenge;
the limits of virtual solutions to political problems

Fred Block, Innovation and the Invisible Hand of Government, in Fred
Block and Matthew Keller, eds., State of Innovation: The U.S.
Governments Role in Technology Development, Paradigm Publishers,
2011, chap. 1.
Alexis Magrigal (2013), Toward a Complex, Realistic and Moral Tech
Criticism The Atlantic,
http://www.theatlantic.com/technology/archive/2013/03/toward-a-complex-
realistic-and-moral-tech-criticism/273996/


Part III: Economics and the Economy

April 3: Economics its nature, method, powers, and limits, from the Marginalist
Revolution to today. Its uses in illuminating the substantive themes of this course.

Milton Friedman, The Methodology of Positive Economics
Agnar Sandmo, Economics Evolving, chapters 9, 17, 18, and 19
RMU, Free Trade Reimagined, chapter 2

April 10: Alternatives from the history of economics Hayek, Keynes, Marx

Agnar Sandmo, Economics Evolving, chapters 6 and 14
6
Robert Skidelsky, Keynes: A Very Short Introduction

April 17: Economics today and the argument about its future. Economics as an
empirical science, as a social science. Economics, policy, and institutional design.

Dani Rodrik, Blame the Economists, Not Economics
RMU, Free Trade Reimagined, pp. 90-109
Mark Blyth, Powering, Puzzling, or Persuading? The Mechanisms of
Building Institutional Order, International Studies Quarterly, vol. 51, 2007,
761-777 (http://onlinelibrary.wiley.com/doi/10.1111/j.1468-
2478.2007.00475.x/full)


Part IV: Conclusion

April 24: The alternative futures of the market economy and the ideas we need.