Economics 183—Development of Economic Institutions in the United States

Spring, 2002

Prof. N. Lamoreaux

Economics 183—Development of Economic Institutions in the United States

Course Description:

This course builds on students' earlier work in economics by applying basic theoretical insights to three major historical topics: how the United States managed to industrialize during the early nineteenth-century despite its relatively high cost labor and capital; the economics of slavery in the antebellum South; and the causes of the Great Depression. The course will use these topics to analyze the ways in which economic historians have formulated and tested their arguments, how those arguments have been criticized by other scholars, and the ways in which scholarly debate has advanced knowledge. The emphasis will be on bolstering students' ability to read critically, to assess the merits of contending interpretations, and to formulate their own testable hypotheses.

Reading Materials to Purchase:

Course Reader from Course Reader Material (310-443-3303), 1141 Westwood Blvd. (Two copies of the Course Reader are on reserve at the Powell Library. Many of the selections in the Course Reader are also available through JSTOR or on the shelf at the YRL.)

Books to purchase from the Ackerman Bookstore (also on reserve at the Powell Library):

Robert W. Fogel and Stanley L. Engerman, Time on the Cross: The Economics of American Negro Slavery

Peter Temin, Did Monetary Forces Cause the Great Depression?

Class Web Site: http://www.sscnet.ucla.edu/02S/econ183-1/

Please check the course web site regularly for important announcements. Also, please use the site's bulletin-board feature to ask questions about the readings or lectures and to organize study groups to prepare for exams.

Course Requirements and Grading:

Grades will be based on three in-class (open-book) examinations scheduled for April 18, May 9, and June 6. Each examination will count equally in the final grade, and students must take all three examinations in order to pass the course. Students who are ill on the date of an exam, or who have to be absent for unavoidable reasons, may arrange to take a make-up exam as noted below.

The purpose of the course, and of the examinations, is to develop students' critical skills. Each part of the course is devoted to a particular topic, and all of the lectures and assigned readings for that part are geared to helping students understand the general issues at stake and the ways scholars have approached them. Although some lectures will provide students with background information that they need for the topic, most will analyze the assigned readings with the aim of demonstrating how to approach them critically (see the list of basic questions below). As each part of the course unfolds, the lectures and readings will gradually focus on a particular problem. In the first part, this problem will be whether the 'infant industries' argument justified the imposition of tariffs on cotton textiles; in the second part, it will be whether slave plantations were more efficient than free farms; in the third, the role of the stock market crash in causing the Great Depression. In preparation for the examination that ends each third of the course, students will be asked to read and think about a particular article (see the "Schedule of Lectures and Assignments" below) and come to the exam ready to answer a set of essay-type questions designed to elicit a critical evaluation of this work. Students taking make-up exams will be given different articles to prepare. All examinations are open-book.

In order to perform successfully on these exams, students must internalize the critical skills that the course aims to build. In addition, the exams will require students to use the knowledge they obtained from the lectures and other readings in their critiques. Hence it is essential that students do all the required reading and attend all the lectures if they wish to do well in the course.

Critical Questions to Ask When Reading the Assignments:

What general question is the author trying to answer?

How does the author reformulate the question in order to make it analytically tractable? Does this reformulation affect the conclusions we can draw from the author's study?

What alternative hypotheses are being tested? Are there alternatives that the author is not considering?

What data is the author using for the tests? How are the tests set up? Are these choices appropriate? Do the tests clearly discriminate among alternative hypotheses?

Are there other ways to interpret the author's findings? Can the results be explained in other ways? Are they consistent with other hypotheses?

Is the author ignoring data or other evidence relevant to the question?

Can you think of additional ways to explore the question or test the various alternative hypotheses?

Office Hours:

Prof. Lamoreaux

Tues., 3:30 PM to 5:30 PM

Thurs., 3:30 PM to 5:30 PM (or by appointment)

9268 Bunche

x 50225

email: lamoreaux@econ.ucla.edu

Schedule of Lectures and Assignments:

Part I—Early Industrialization

Apr. 2 Introduction

Apr. 4 The Habakkuk Thesis

Reading Assignment: H. J. Habakkuk, American and British Technology in the Nineteenth Century (Cambridge: Cambridge University Press, 1962), pp. 11-63.^a

Apr. 9 The Patent System and the Democratization of Invention

Reading assignment: Kenneth L. Sokoloff and B. Zorina Khan, "The Democratization of Invention during Early Industrialization: Evidence from the United States, 1790-1846," Journal of Economic History, 50 (June 1990), pp. 363-78. ^a

Apr. 11 The Development of a Female Labor Force

Reading Assignment: Claudia Goldin and Kenneth Sokoloff, "The Relative Productivity Hypothesis of Industrialization: The American Case, 1820-1850," Quarterly Journal of Economics, 99 (Aug. 1984), pp. 461-87.^a

Apr. 16 Tariffs and the Infant Industries Argument

Reading assignment: Peter Temin, "Product Quality and Vertical Integration in the Early Cotton Textile Industry," Journal of Economic History, 48 (Dec. 1988), pp. 891-207.^a

Apr. 18 First Examination

Article to prepare: C. Knick Harley, "International Competitiveness of the Antebellum American Cotton Textile Industry," Journal of Economic History, 52 (Sept. 1992), pp. 559-84.^a

Part II—The Economics of Slavery in the Antebellum South

Apr. 23 The Origins of Southern Slavery

Reading assignment: Evsey Domar, "The Causes of Slavery or Serfdom: A Hypothesis," Journal of Economic History, 30 (March 1970), pp. 18-32.^a

Apr. 25 Property Rights and the Meaning of Exploitation

Reading assignment: Robert W. Fogel and Stanley L. Engerman, Time on the Cross: The Economics of American Negro Slavery (New York: Norton, 1995 reissue).^b

Apr. 30 Were Slaveowners Rational Actors?

May 2 Slave and Free Farms Compared

Reading assignment: Gavin Wright, The Political Economy of the Cotton South (New York: W. W. Norton, 1978), pp. 43-88.^a

May 7 The Measurement of Efficiency

Reading assignment: Robert W. Fogel and Stanley L. Engerman, "Explaining the Relative Efficiency of Slave Agriculture in the Antebellum South," American Economic Review, 67 (June 1977), pp. 275-96; and Donald F. Schaefer and Mark D Schmitz, "The Relative Efficiency of Slave Agriculture: A Comment," and Paul A. David and Peter Temin, "Explaining the Relative Efficiency of Slave Agriculture in the Antebellum South: Comment," American Economic Review, 69 (March 1979), pp. 208-18.^a

May 9 Second Examination

Article to prepare: Robert W. Fogel and Stanley L. Engerman, "Explaining the Relative Efficiency of Slave Agriculture in the Antebellum South: Reply," in Without Consent or Contract: Technical Papers, Vol. 1, Fogel and Engerman, eds. (New York: W. W. Norton, 1992), pp. 266-303.^a

Part III—The Great Depression

May 14 The Growing Regulatory Role of the Federal Government

May 16 Origins of the Federal Reserve System

May 21 The New York Stock Exchange and the Great Crash

Reading assignment: Milton Friedman & Anna Jacobson Schwartz, A Monetary History of the United States, 1867-1960 (New York: Princeton University Press for NBER, 1963), pp. 299-419.^a

May 23 Banking Panics and the Great Depression

May 28 Temin's Critique of Friedman and Schwartz

Reading Assignment: Peter Temin, Did Monetary Forces Cause the Great Depression? (New York: W. W. Norton, 1976).^b

May 30 Gold Standard Woes

Jun. 4 Problems in the Real Economy

Jun. 6 Third Examination

Article to prepare: Christina Romer, "The Great Crash and the Onset of the Great Depression," Quarterly Journal of Economics, 105 (Aug. 1990), pp. 597-624.^a

Footnotes:

^aIn Course Reader to be purchased from Course Reader Material

^bAvailable at the Ackerman Bookstore