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| Econ 411 |
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Spring 2023
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| WVU Class and Time |
Reynolds Hall 5225 T-Th 4:00-5:15 |
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| Instructor: | Professor Roger D. Congleton | |
| Office: | 4131 Reynolds Hall | . |
| .Office Phone | 3-7866 (during office hours) |
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| .E-Mail |
roger.congleton@mail.wvu.edu
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| Office Hours: | 2:30-3:30 Tuesday and Thursdays, and most other afternoon times by appointment |
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| Required Texts: | Congleton, R.
D., Solving Social Dilemmas: Ethics, Politics, and
Prosperity. Oxford University Press. (Plus
class webnotes, links provided below) |
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| Optional Texts |
Source Material for the Course* |
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| . | Aristotle (350 bc) Nicomachean Ethics
(Available as an E-book from Google, Liberty Fund, Amazon,
etc.) Buchanan, J. M. (1997) Ethics and Economic Progress. Norman OK: University of Oklahoma Press. Mill, J. S. (1863) On Liberty. Boston: Ticnor and Fields. (Available as an E-book from Google and Liberty Fund). Rand, A.(2005) Atlas Shrugged. New York: Penguin. (Available as an E-book from Google and Amazon). Smith, A. (1776) An Inquiry Into the Nature and Causes of the Wealth of Nations. (Available as an e-book from Google and Liberty Fund). Spencer, H. (1896) Principles of Ethics. Appleton and Company, New York. (Available as an e-book at Liberty Fund and at the Von Mises Institute) Weber, Max (1930) The Protestant Ethic and the Spirit of Capitalism. (Available as an e-book from Google and Amazon.) |
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| Course Description: | Tentative Syllabus (as a PDF) |
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| . | Moral Foundations of Capitalism is a
lecture-based course that explores how some types of
ethical dispositions--internalized rules--allow markets to
become larger and more effective sources of food, material
comfort, and entertainment. They do so by reducing
unproductive conflict, avoiding over use of common
resources, simplifying contract enforcement, internalizing
externalities, reducing team production problems,
encouraging capital accumulation and innovation, and
avoiding counter productive public policies. The great
acceleration of commerce that "took off" during the
nineteenth century that produced the effective markets
that we largely take for granted today was associated with
a shift in norms that generally supported market
activities. |
Whether then we suppose that the End
impresses each man's mind with certain notions not
merely by nature, but that there is somewhat also
dependent on himself; or that the End is given by
nature, and yet Virtue is voluntary because the
good man does all the rest voluntarily, Vice
must be equally so;
Aristotle (2012-05-17). Ethics
(p. 82). . Kindle Edition.
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| For not only is a developed sense of
responsibility absolutely indispensable, but in
general also an attitude which, at least during
working hours, is freed from continual
calculations of how the customary wage may be earned
with a maximum of comfort and a minimum of exertion.
Labor must, on the contrary, be performed as if it
were an absolute end in itself, a calling. But
such an attitude is by no means a product of nature. Weber, Max (2012-10-21). The Protestant Ethic and the Spirit of Capitalism (Kindle Locations 311-314). Vook, Inc.. Kindle Edition. |
The course is divided in
to three parts. (1) The first part reviews theories of
ethics from Aristotle through A. Pigou. This intellectual
history introduces students to several theories of
ethics.The theories demonstrate that ethics is not simply
a gut feeling, but may have rational foundations. The
overview also provides evidence that ethical theories in
the West gradually became more supportive of commerce in
the period before the great acceleration in the West
during the nineteenth century. (2) The second part of the
course uses game theory and economic theory to show how a
subset of ethical dispositions can increase the efficiency
and extent of exchange and production. When such ethical
dispositions become commonplace, trading networks become
more extensive, specialization increases, larger economic
organizations become feasible, and rates of innovation
tend to increase. In this manner, a commercial society can
emerge. (3) The third part of the course explores
how normative theories affect governance and market
relevant public policies. It demonstrates that the ethical
dispositions of voters and rule enforcers can make a
government more likely to be "productive" than
"extractive." Together the second and third parts
show that without supportive norms, markets would be far
smaller and less efficient, and average material welfare
much lower. The main goals of the course are to induce students (1) to the idea of social dilemmas and the manner in which some ethical dispositions solve or moderate them and (2) to increase their understanding of the many ways in which normative theories affect the extent of commerce. (3) The course also will mmake students more familiar with several of the core ethical arguments concerning the proper role of markets in a good life that emerged in the period from 1600-1920,. Overall the course suggests that some societies are richer than others because their normative culture--their most commonplace ethical dispositions--accord a broader role for commerce in a good life and good society than others, and also encourage the behavior that make markets and governments work more efficiently. In other words, it implies that commercial societies have moral foundations. Grades are determined by two examinations (60%), 6 quizzes (15%), and a final paper (25%). |
This exchange society and
the guidance of the coordination of a far-ranging
division of labor by variable market prices was made
possible by the spreading of certain gradually
evolved moral beliefs which, after they had
spread, most men in the Western world learned to
accept. These rules were inevitably learned by all the
members of a population consisting chiefly of
independent farmers, artisans and merchants and their
servants and apprentices who shared the daily
experiences of their masters…. They held an ethos that
esteemed the prudent man, the good husbandman and
provider who looked after the future of his family and
his business by building up capital, guided less by
the desire to be able to consume much than by the wish
to be regarded as successful by his fellows who
pursued similar aims. F. A. Hayek [1979/2011]. Law,
Legislation and Liberty, Volume 3: The Political Order
of a Free People [pp. 164–165]. University of
Chicago Press; Kindle Edition.
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| Tentative Course Outline | . | |
| Dates | Topic |
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| . | I. Commerce
and the Good Life |
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| 0. Introduction to Moral
Foundations of Capitalism |
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| January 10 | Norms as personal motivations and self
restraint. Two approaches to norms: positive--the study of
the effects of norms, and normative--the application of
normative theories to assess private behavior, societies,
and market outcomes. Norms that help and hurt economic
growth. Capitalism as a name for contemporary market-based
networks and lifestyles. (Homo
Constitutionalus) |
Why MBA's Read Plato (WSJ) Vonnegut: Harrion Bergeron |
| January 12,
17 |
1. Aristotle's Ethics with
Applications to Political and Economic Theory Ethics as the pursuit of
lifetime happiness, rather than short term pleasure.
Aristotle's principle of moderation in all things.Wealth
as a means to an end. Aristotlian virtues. Aristotle as
the foundation of contemporary secular ethics. |
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| January 19, 24 |
2. The Early Enlightenment and Market Supporting Ethics. Three major disruptions of the medieval order. Nature law and the moral sense. Markets as a dissipating or supporting system for ethical development. Rising importance of life on earth. Baxter and Barklay on duties on earth. Locke and the division between theological and civil ethics. (E-Campus Homework 1 Due Jan 25) | SSD - Ch 10 Links to Homeworks on Ecampus |
| January 26, 31 |
3. Classical Liberalism,
Ethics, and the Market. Montesquieu and the
importance of political virtue. Franklin and the "spirit"
of capitalism. Smith: moral sentiments and the impartial
spectator as the source of ethics and virtue. Kantian
duties and the moral imperative. Bastiat on market support
for ethics. |
SSD - Ch 11 |
| February 2, 7 |
4. Utilitarianism: Trade Increases
Social Welfare. Another secular core
principle for the development of ethics. Bentham and the
utilitarian revolution, Mill's extensions. Spencer's
evolutionary approach. Do ethics improve survival
prospects? Emergence of social ethics along with
democratic politics. Ideology as social ethics.(E-Campus Homework 2, Due February 9) |
SSD - Ch 12 |
| II. Ethics and the Extent of Commerce | ||
| February 9,
14, 16 |
5. Civil Ethics and Civil
Society: A Game Theoretic Analysis (1) Introduction to Game Theory: Strategy Choice and Nash Equilibrium with Applications to Ethics and Civil Society, (2) Escaping the Hobbesian Dilemma, ethics and law as substitutes. (3) Solving coordination games, (4) Internalizing Externalities (E-Campus Homework 3, Due February 20) |
SSD - Ch 2 |
| February 21 |
Review for Midterm Exam |
Study Guide I |
| February 23 |
Midterm Exam |
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| February 28 |
Exams Returned and Reviewed |
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| March 2, 7, 9 |
6. Market Dilemmas and Ethical
Solutions: The Ethical Foundations of Commerce (1) Economics of gains to trade and trading networks, (2) Problems of Team Production, how the work ethic improves team production and promotes specialization. How selecting ethical persons can improve profits and encourage some types of ethical behavior. (3) Transaction and Enforcement costs as a limit on the extent of trading networks and specialization. How ethics reduces contract complexity and enforcement costs and expand markets. Evidence of the importance of Trustworthiness. (E-campus Homework, 4 Due March 22) |
SSD - Ch 3 |
| March 14, 16 |
No Class Spring
Break / (also public choice society meetings) |
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| March 21 23 are
travel days for Prof Congleton, pre recorded lecture
for 23rd, two others added because he contracted Covid
during his travels. |
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| March 23, 28, 30 |
7. Neoclassical Economics with
Ethics. Bringing ethics into the Marginal
Benefit Marginal Cost Framework, Marginal Revenue Product
as a consequence of team production and private
ethics. Equilibrium investments and
distributions of Virtue. Ethics and Commerce are
co-determined. |
SSD - Ch 4 Recorded Intro Lecture(1) Recorded Lecture (2) Recorded Lecture (3) |
| April 4, 6 |
8. Ethics and Economic Progress. Ethical aspects of progress. Economic growth requires solving social dilemmas associated with specialization, capital accumulation, and innovation. Ethical and/or support for economic development. (E-Campus Homework 5 Due April 9) | SSD - Ch 5 |
| III. Politics, Ethics, and the Good Society | ||
| April 6 |
9. Ethics and Governance. The simplest form of government: customary law enforcement. Corruption and the moral mitigation of corruption. The role of ethics in simple productive governments. Customary and Common Law. Extractive versus productive governance. | SSD - Ch 6 |
| April 6, 11 | 10.
Ethics and Democratic Public Policy.
Norms and Institutions for Good Governance. The median
voter theorem(s). The democratic indecisivenss problem.
The democratic poverty trap. The problem of holding the
next election. Normative solution to democratic
dilemmas..(E-Campus Homework 6
Due April 17) |
SSD - Ch 7 Links to Homeworks on Ecampus |
| April 13 |
11. Ethics and Political-Economy System Choice. Ethics and the relative performance of political and economic systems. On the logic of a bounded domain for governance under different mixes of ethical disposition in government and markets. |
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| April 18 |
Review for Second Midterm |
Study Guide II |
| April
20 |
Second
Midterm Exam |
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| April 25 |
Exams Returned and Reviewed / Paper
Workshop |
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| April 27 |
Last Day of Class, 12.
Overview of Course and Paper Workshop |
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| May 3 |
Papers
Due by Midnight (to be e-mailed
to roger.congleton@mail.wvu.edu) |
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| . | ||
| “Look around
you,” he said. “A city is the frozen shape of human
courage—the courage of those men who thought for the
first time of every bolt, rivet and power generator that
went to make it. The courage to say, not ‘It seems
to me,’ but ‘It is’—and to stake one’s life on one’s
judgment. You’re not alone. Those men exist. They
have always existed. Rand, Ayn (2005-04-21). Atlas Shrugged (pp. 473-474). Penguin Group. Kindle Edition. |
Grades: | |
| Midterm Exam and Endterm Exams |
60.00%
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| 6 Ecampus Quizzes Term Paper |
15.00% 25.00% |
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| Marginal extra credit for extraordinary class participation (up to 5% bonus) | ||
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E Link to WVU Policies and
Syllabus Addenda |