197N HIST SEM 1: Undergraduate Seminar: The Business of Economic Development
T 03:00P -- 05:50P BUNCHE 3165
T 03:00P -- 05:50P ROLFE 3120
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History 197B yeager Syllabus
Business, Governments and the International Economy
This seminar is designed to familiarize students with the modern integrated
corporation and the environment in which corporations exist and operate:
the changing economic, political and social forces, and the institutions
and policies through which different communities control the activities
of business. To understand the role played by business in the processes
and outcomes of economic development, it treats the environment as a system
that needs to be analyzed holistically over time. The course assumes
that the nation-state remains a useful unit of analysis. Historically,
nations have developed strategies which have been reflected in goals and
policies that are defined by governments and subject to historical analysis.
The actions and behavior of national governments have influenced the business
environment in various ways over time. It considers the strengths and weaknesses
of the comparative method in understanding the behavior of nations
and delineates an alternative, based on an evolving concept of a ‘global
economy.’ The term globalization, and the process and
consequences of economic integration across national boundaries will be
discussed and debated.
The seminar is organized in three parts: Part I introduces country
analysis as a tool for studying national strategies and various concepts
and approaches to economic development. In the first segment,
Constitutions are used to introduce the concept of national economic strategies.
The second segment explores the evolution of economic policy in the United
States. This case frames the contexts for discussions about particular
problems. Next, country analysis is used to explore the high-growth
, export oriented strategies of Asia and the import-substitution and structure
adjustment programs that typify Latin America. Part II begins with
several cases of foreign direct investment (Arsarco in Mexico and patrochemicals
and CVRD in Brazil; automobiles in Brazil and Mexico).
Next, the course examines the international trading system, from the
traditional theory of comparative advantage, through various forms of mercantilism
and protectionism , to the current issues of industrial policy and strategic
trade theory. It examines the process and problems of
economic integration in several industry-based studies of trade liberalization
and NAFTA.
REQUIREMENTS: Intelligent, consistent and active participation
in disscussion (50% of the total grade). One 15-20 page research
paper, dealing with a central problem raised by the readings. The
paper topics will be selected by week IV, in consultation with me.
PART I. NATIONAL STRATEGIES.
Weeks 1-2. Economic Management
Week I. Constructing Nations: The United States
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What are the critical economic policy questions facing authors of the Constitution
in 1787?
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Evaluate the Constitution as an ‘economic strategy.
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Should the US Congress adopt Hamilton’s proposal to fund the state and
federal debts? Should payment be made to the original or the
ultimate creditors? Should the debt be funded at par?
Readings:
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The Constitution of the United States
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®Mira Wilkins, “Political Independence/Economic Dependence: 1776-1803,”
in The History of Foreign Investment in the United States to 1914,
pp. 28-48.
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®John Steel Gordon, “The Hamiltonian Miracle,” in, HAMILTON’S BLESSING,
pp. 11-42.
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®North and Weingast, “ Constitutions and Commitment: The
Evolution of Institutions Governing public Choice in Seventeenth-Century
England,” in Alston, Eggertsson, and North (eds.), Empirical Studies
in Institutional Change.
Week II. Constructing Constitutions: Mexico and Brazil
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What are the critical economic policy questions facing authors of the Mexican
Constitution, 1917?
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Evaluate the Constitutions as economic strategies.
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Mark Wasserman, “Enrique C. Creel: Business and Politics in Mexico,
1880-1930,” Business History Review 59 (Winter 1985): 645-662.
Week III. Constructing Firms
What is a Firm?
Readings:
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Alfred D. Chandler, Jr. “What is a Firm?” European Economic Review,
vol. 36 (1992): 483-492.
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Alfred D. Chandler, Jr. “The Emergence of Managerial Capitalism,” Business
History Review 58(winter 1984):474-503.
Weeks 3-6: Development Strategies: Growth and Structural Adjustment
Week III. Depressions and Growth Srategies : The United
States and Latin American in the 1930s
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With Hoover’s policies having failed to end the economic crisis, FDR tries
to work a classic turnaround. What were his assumptions? How
can he produce a coherent program, in the absence of a consensus about
the causes and cures of the depression? How does the political-economic
structure of the U.S. help or hinder his efforts?
Week IV. Japan’s High Growth Strategy
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Japan: A strategy for Economic growth. This session describes
the Japanese economic strategy and organization that resulted in the country’s
extrardinary postwar economic performance.
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Evaluate Japan’s economic performance from 1954-1971.
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If one viewed Japan as an enterprise, how would you describe its development
strategy, in terms of markets, products, finance, and controls?
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What were the distinctive institutional arrangements and the organizational
structure that facilitated the implementation of this strategy?
Readings:
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®Jeffrey R. Bernstein, “Japanese Capitalism,” in Thomas K. McCraw,
ed. Creating Modern Capitalism, 441-489.
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®Helen Shapiro and Lance Taylor, “The State and Industrial Strategy,
in World Development, vol. 18, no. 6, pp. 861-878.
PART II. GLOBALIZATION
Week V. Direct Investment in the United States
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Mira Wilkins, “Japanese Multinationals in the United States:
Continuity and Change, 1879-1990,” in Business History Review 64
(Winter 1990): 585-629.
Week VI. US Direct Investment in Brazil and Mexico
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®Peter Evans, “The State and the Multinationals,” in Dependent
Development, 213-273
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®Thomas F. O’Brien, “The Americanization of the Mexican,” 251-311,
in The Revolutionary Mission: American Enterprise in Latin America,
1900-1945.
Week VII. Trade: Free Trade or Protection:
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® Henry J. Bruton, “A Reconsideration of Import Subtitution,” in
Journal of Economic Literature, vol. xxxvi (June 19988): 903-936.
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®Carolos Alberto Primo Braga, “U.S. Policies and the Prospects
for Latin American Economic Integraton,” in United States Policies
and the Latin American Economies, ed. Werner Baer and Donald V. Coes
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®Candace Howes, Ann R. Markusen, “Trade, Industry, and Economic
Development,” Trading Industries, Trading Regions, ed. By Helzi
Noponent, Julie Graham, and Ann R. Markusen, pp. 1-44
Week VIII. NAFTA
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Mexico, the US, and Canada have negotiated a North American Free trade
Agreement (NAFTA) that would create the largest free trade zone in the
world. The union builds on the three year old Free Trade Agreement
between the US and Canada. Proponents claimed that NAFTA was a win
win situation, but its detractors argued that it would reduce wages, create
unemployment, and generate environmental problems. NAFTA’s easy ratification
has been called into question by the election of President Bill Clinton
in the US and the resignation of Prime Minister Brian Mulroney in Canada.
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Why did Bush, Salinas, and Mulroney support the North American Free Trade
Agreement?
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Should Clinton have supported it in its current form?
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What is the essence of the controversy around the NAFTA? Is free
trade the major issue?
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How does the NAFTA compare to the EC, and what are the implications of
the differences between them?
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Would there have been serious ramifications if NAFTA had not been ratified?
As a potential investor in Mexico, does it made a difference to you whether
or not NAFTA was approved?
Week IX. Global Competition
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Bruce Mazlish, “An Introduction to Global History,” in Conceptualizing
Global History, ed. Bruze Mazlish and Ralph Boultijans
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®Peter Lindert, “International Economics and the Historian,” in Economics
and the Historian, 209-237, ed. Rawski, et.al..
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Alfred D. Chandler, Jr. “The Competitive Performance of US Industrial
Enterprises Since the Second World War,” in Business History Review
68 (Sprin 1994): 3-70
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®Helen Shapiro, “Automobiles; From Import Substitution
to Export Promotion in Barzil and Mexico,, in Beyond Free Trade:
Firms, Governments, and Global Competition, David Yoffie, ed.,
pp. 193-248.
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®Candace Howes, “Constructing Comparative Disadvantage:
Lessons from the U.S. Auto Industry,” Trading Industries, Trading Regions,
ed. By Helzi Noponent, Julie Graham, and Ann R. Markusen
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®Anthony P. D’Costa, “State-Sponsored Internationalization:
Restructuring and Development of the Steel Industry,” in Trading Industries,
Trading Regions, ed. By Helzi Noponent, Julie Graham, and Ann R. Markusen,
pp. 92-140
Week X: Paper Outlines
