Comparative Politics Notes Part 2 - I got a 4.0 in this course

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Political Science
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Building Blocks of the Modern World The Nation and The Market STATE ? NATION MARKET The Industrial Rev • A period of sustained and unprecedented economic growth starting in the mid eighteenth century and continuing through the present time Malthusian Crisis • Population grows exponentially • Food supply grows arithmetically ~ Human crisis • War • Famine ~“Regulates” population growth “By sustained economic growth, I mean that output has grown at a more rapid rate than population” -North, “Structure and Change” Industrial Rev - produced period of sustained economic growth and has AVOIDED Malthusian Crisis Three theorists Adam Smith • • Spontaneous (Exponential) Growth • Douglas North • State-promoted Growth • Karl Polanyi State-regulated Growth • Theorists all attempt to explain how today, in this world, we have managed to sustain this level of growth Adam Smith • Division of Labor - specialization, more efficient and more production, branches of operation •Dividing even the most basic product into different jobs - * assembly line * industrial rev •“What it would have taken an artisan a week to do, will happen in a factory 10 times a day” •Exponential growth of product •No longer producing for your own needs - you produce labor and you receive $$ (wages) Natural Inclination to Barter • •Wage system • Minimal/No economic role for the state •“No regulation of commerce can increase the quantity of industry in any society...” - Smith •State should not be making economic decisions at all • Invisible hand of the market •Belief in the power of markets to spontaneously produce economic growth “Public good” - ex. Sagamore bridge •Tool that everyone can use but no individual can pay for ~~ OK by Smith Commercial regulation is NOT OK by Smith - ex. “Bank of Obama” (Sept 18, 2013) ** Response Papers Question distributed Friday by 5 pm Paper due Monday by 12:20 pm •Submit electronic copy on Moodle •Submit hard copy to TA before class 800 word limit - strictly enforced ** Building Blocks of the Modern World The Nation and The Market Con’t Douglas North: State-promoted Growth • Role of the State in creating the market •Makes the Law •Enforces the Law • “The Market” cannot exist without the state • Division of labor remains a critical element of economics to ALL THREE theorists INSTITUTIONAL The Market has been created. It is not natural and cannot exist without the state. It must be regulated by the state. CLASSICAL The Market is a natural force that has integrated itself into culture. Markets • Subsistence production - not production for others. Supports you and your family and whoever else is in your small unit of kinship. • Based on personal exchange of goods - barter EX. Goat for wheat. Know who you are exchanging with. • Scope is local and immediate - not exponential. Markets vs The Market “Dense” social network and cost of transacting is low - shaming element in practice. If someone brings you a goat and you do not bring your wheat, everyone in the small town will know. Enforcement of contracts. Not expensive to show up on someone’s door and make sure your exchange goes through as promised. Costs increase sharply because dense social network is replaced. More resour
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