20080827 Econ 113 Lecture: Administration and Overview

Economics 113: August 27: Introductory Lecture:

Lecture Audio: http://www.j-bradford-delong.net/2008_mov/20080827.mp3

This file: http://tinyurl.com/dl20080827; http://delong.typepad.com/american_economic_history/2008/08/20080827-econ-1.html

J. Bradford DeLong [email protected] Evans 601: Lecture: 4 LeConte; MW 4-5:30

Andrej Milivojevic [email protected]: Sections: T4-5 87 Dwinelle, W8-9 61 Evans
Marc Gersen [email protected]: Sections: F2-3 55 Evans, F3-4 55 Evans
Matthew Sargent [email protected]: Sections: M9-10 85 Evans, Th1-2 45 Evans

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Economics 113 is an upper-division economics course in the study of the history of the U.S. economy that satisfies the political economy historical context requirement. We will survey over three hundred years of history, but inevitably focus more intensely on those incidents that the instructor finds particularly interesting. This is an economics course: we will spend most of our time looking at events, factors, and explanations, using economics to understand history and history to understand economics. Economics 113 must be taken for a grade if it is to be used toward the requirements for the political economy or the economics major.

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We have a textbook--Walton and Rockoff's big book. We have two auxilliary books: Blinder and Yellen, and Friedman. We have a bunch of articles and web readings.

For those unfamiliar with U.S. history, Marty Olney recommends John Faragher et al (2005), Out of Many (New York: Prentice-Hall)

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• Administrivia
• Overview of Course
• Why Are We Here?
  • The Role of the University
  • Relevance of Economic History
  • Studying Economic History
  • Framework: Economic Growth & Development
• Assignments and Cleanup

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Administrivia:

• Course webpage http://tinyurl.com/43sufu http://delong.typepad.com/american_economic_history/

• Staff

  • J. Bradford DeLong [email protected] Evans 601:
  • Andrej Milivojevic [email protected]: Sections: T4-5 87 Dwinelle, W8-9 61 Evans
  • Marc Gersen [email protected]: Sections: F2-3 55 Evans, F3-4 55 Evans
  • Matthew Sargent [email protected]: Sections: M9-10 85 Evans, Th1-2 45 Evans

• Final exam: Th Dec 18 8-11

• Enrollment

  • If you want to take the course, do all the assignments starting now
  • Enrollment through Telebears only
  • If you don't attend the first two sections, the Econ Department will drop you
  • For your first section meeting: a one-page paper in which you introduce yourself to your GSI
    • Include your name and anything else
    • include a photo if you can

• Grading

  • Two grading options:
    • I assign a lot of work--especially reading. You do the work. Course median a low B+
    • I assign a lot of work--especially reading. You don't do the work. Course median a low B
    • This is the finest public university on the planet, and the finest university on the planet for some definitions of "finest"
    • Your choice
    • Exams:
    • Final: 20%
    • Midterms: 20% each
    • We will grade hard, but drop your lowest
      • Yes, this includes scores of 0...
    • Problem sets and papers, et cetera: 20%
    • Lecture reactions: 10%
    • Section participation: 10%
    • A word about section coordination:
    • Section week starts Thursday morning...
    • General assignments due Wednesday at lecture...

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Overview of Course:

• Overview (Aug 27)
• Before the Civil War (Settlement, Slavery, Growth, Political Economy) (Sep 3-22)
• Instructor-Reality-Check Midterm 1: September 24
• America Becomes an Industrial Society, 1870-1950 (Technologies, Factories, Workers, Depressions, New Deal, World War II, Cold War) (Sep 29-Oct 15)
• The Triumph of Social Democracy: Inclusion, Redistribution, and Stabilization, 1950-Present (Oct 20-Nov 10)
• Midterm 2: November 12
• The Crisis of Social Democracy (Reagan, Pensions, Doctors, the New Economy, Oil Shocks, Global Warming, Limits to growth) (Nov 17-Dec 10)
• Final Exam (Dec 18)

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The Role of the University:

• Why are we here?

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The Relevance of Economic History:

Economic history sheds light on:

• The role of education in the economy
• The nature and causes of economic growth
• Boom and bust cycles--in high tech and elsewhere
• The pros and cons of immigration
• Work and opportunity
• The appropriate size and role of the government
• Economic theory in general: theory is crystalized history, boiled down, and it is important to check that the right ingredients have been thrown into the mix
• The economic history of the United States is particularly interesting for two reasons:
  • We are here...
  • It has been for two centuries a very special country...
    • Politics
    • People

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The Method of Economic History:

• Economics: concerned with averages
• Cases are useful in that they shed light on what average numbers mean, but unrepresentative cases are--to me, and us, at least here--uninteresting
• Not facts but interconnections and patterns are interesting
• History is key for understanding economic theory: theory is crystalized history, boiled down, and it is important to check that the right ingredients have been thrown into the mix
• Economists ruthlessly abstract from details
• Economists model
  • Words
  • Equations
  • Graphs
• Clometrics: economic theory and statistical reasoning to understand history
• Counterfactual: how would things have been different if X had happened differently?
• Models we will use:
  • Demography
  • Growth accounting
  • Competitive market equilibrium
  • Tariffs and trade
  • Returns to factors of production
  • Investment and economic growth
  • Interest group politics
  • The quantity theory of money
  • Manias, panics, and crashes
  • Keynesian models of output determination
  • Increasing returns and technological change
  • Unions and union threat
  • Discrimination
  • International migration
  • Institutions and incentives
  • Resource scarcity and energy shocks
  • Climate change
• The Framework of questions
  • Growth
  • Distribution
  • Markets
  • Institutions
  • Politics

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Section assignment for first section meeting:

A one-page paper in which you introduce yourself to your GSI

• Include your name and anything else
• include a photo if you can
• Submit at section (or via email)

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For you to think about over the next week:

Roughly 14000 years ago rough 100 humans made it to the Americas across the Bering Land Bridge.

A Malthusianly-unstressed preindustrial human population with reasonable access to food (whether hunter-gatherer, herder, or settled agriculture) roughly doubles in a generation of 25 years or so.

If the incipient Amerindian population had remained unstressed, how many American Indians would there be today?

What implications does this have for how we think about the human history of the Americas between ca. 12000 BC and 1492?

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Readings for September 3:

Required:

• Walton and Rockoff, "The American Economy in Historical Perspective"
• Six Families Budget Their Money, 1884
• Walton and Rockoff, "Founding the Colonies;" *Bartholomew Gosnold Sails Along Northeastern North America, 1602:;
• Jared Diamond (1987), "The Worst Mistake in the History of the Human Race," Discover;
• Jared Diamond (2008), "Why Did Human History Unfold Differently On Different Continents For The Last 13,000 Years?"

Comments

[Brad DeLong]

Welcome to Econ 113!

[Deep Bhatt]

I attended lecture. I enjoyed the discussion on why we have lectures and their origins. I hope the rest of the class is based on a similar narrative lecture style.

[Andreas Gross]

Andreas Gross SID: xxxxxxxx
Entering this class I actually didnt quit know what to expect. I am an International Student from Germany and I actually dont have much prior knowledge on the American History. I think today gave me a good idea what will be happening, which was very helpful. However I am actually paying almost as much as a Stanford student, but nether-less I found your story on the investment of every Californian in most students very interesting. Probably the most interesting moment of lecture today was when you mentioned that there was only a 30% wage difference 30-40 years ago in having a college degree or just a high school degree.

[Michael Morales]

I thought today was a good start for the semester. I was especially interested in the effect that the printing press had on on education over 500 years ago and how it operates today. The fact that so much is invested in our education makes me feel priviledged and nervous at the same time.

[Joseph Chang]

Joseph Chang (SID: xxxxxxxx)

Professor, I was very disappointed by your comment that Gutenburg might have gotten the idea of metal movable type from sources originating in China. Many credit a person that lived in Koryo (Goryeo), a Korean Dynasty, with this invention. Actually, according to Wikipedia, metal movable type in China was first employed after Gutenburg's invention.

I'm really looking forward to the 1870-1950 part of the class and how as you mentioned that dynamic continues to play a large role in the politics of today, especially with the upcoming presidential election set to take place right around the time of the second midterm.

[Isaac Hernandez]

This one of many "lecture reactions" I will be posting this semester. This is a response to then first lecture we had in class today. This one definetly one of the most interesting lectures I have had all day. Mainly because I found myself laughing where is in other class found myself trying to stay awake. What I found most interesting was Professor De Long speal about the book prices in the 1,000; and how that the word "lecture" originated from a time where books were read by a professor to the a class that visciously took notes. I hope this is one of many great lecture reactions and look forward to posting many more!

[Agnes Zau SID: xxxxxxxx]

I thoroughly enjoyed today's first lecture, as I have heard great things about this class from my friend who took it a year ago. I was especially curious about the professor, as having a good, engaging professor makes lecture very pleasant. I was not disappointed and am looking forward to taking this class this semester. I enjoyed the digressions during lecture, such as when the professor mentioned he graduated when the unemployment rate was around 9% and rising. However, when his sister graduated a few years later, the unemployment rate was around 7% and falling. It just goes to show that a lot of things are sometimes out of your control when graduating from college and entering the real world, which means luck certainly plays a part.

[Casey Jue]

Casey Jue
xxxxxxxx
Econ 113

The most interesting part of today's class was learning about "lectures" in the past. It was fun to learn that the textbooks used to cost (in today's dollars) approximately $50,000, and thus the speaker would read from the textbook to the entire lecture auditorium.

Thank you for today's class,
Casey Jue

[Tran Ngo]

I thought today's lecture was really interesting. Professor was really funny and engaging and I loved listening to the little stories he had to tell including the one about failing the quantum physics midterm. I'm really looking forward to this class!!! :D

I'm also excited to write the paper on immigration!!

Tran Ngo
SID # xxxxxxxx
August 27, 2008

[Tran Ngo]

Today's class was really interesting and I look forward to the rest of this semester! Professor told engaging and funny stories!

[Spencer Gunderson]

i am very interseted in learning of the pre-civil war economy.

[Ayo Camara SID: xxxxxxxx]

I'm amazed with the ease that you pull out all these figures from past decades and random years. It seems to be a semester that will be full of trinkets of information and a lot of critical thinking when it comes to analyzing the US market throughout various points in history. All-in-all, I hope the rest of the semester is as interesting as the first day and that you continue to engage students. By the way, feel free to digress as much as you please because the little anecdotes are interesting and a nice break from the monotony of historical and economic data.

[Bret Bumerts SID: xxxxxxxx]

This lecture was a great intro to what looks like a very interesting course.

[Chang Chen]

Hello, I was in the lecture.

[Gwen Lee SID: 17921541]

I attended lecture today and I look forward to taking this class!

[Sakya Duvvuru]

I attended the August 27th lecture of Economics 113, American Economic History. I particularly enjoyed learning about the history of universities and was intrigued by your comparison of educational institutions of 1000 and 2008. However, I was less excited to find the 1500 word assignment that is due toward the end of the semester.

[William Grover]

It was interesting to learn the origins of "lecture" and how expensive books were in the year 1000.

[Niki Desai SID: xxxxxxxx]

Being a senior who is about to graduate in May, I found the discussion regarding today's unemployment rate noteworthy. However, the most interesting topic had to be education's effect on the economy. As students of a public university, the state of California is essentially responsible for our education. Every day people invest their money in us as students, while this is not the case at private universities, which is why resources are sometimes very limited. I thought that this direct relationship between education and the economy was interesting.

[Niki Desai SID: xxxxxxxx]

Being a senior who is about to graduate in May, I found the discussion regarding today's unemployment rate noteworthy. However, the most interesting topic had to be education's effect on the economy. As students of a public university, the state of California is essentially responsible for our education. Every day people invest their money in us as students, while this is not the case at private universities, which is why resources are sometimes very limited. I thought that this direct relationship between education and the economy was interesting.

[Niki Desai SID: xxxxxxxx]

Being a senior who is about to graduate in May, I found the discussion regarding today's unemployment rate noteworthy. However, the most interesting topic had to be education's effect on the economy. As students of a public university, the state of California is essentially responsible for our education. Every day people invest their money in us as students, while this is not the case at private universities, which is why resources are sometimes very limited. I thought that this direct relationship between education and the economy was interesting.

[Niki Desai SID: xxxxxxxx]

Being a senior who is about to graduate in May, I found the discussion regarding today's unemployment rate noteworthy. However, the most interesting topic had to be education's effect on the economy. As students of a public university, the state of California is essentially responsible for our education. Every day people invest their money in us as students, while this is not the case at private universities, which is why resources are sometimes very limited. I thought that this direct relationship between education and the economy was interesting.

[Nicholas Kessler]

Hello Professor,

Just wanted to say that I enjoyed today's lecture. Although we have only just started the course, I believe this class will be both insightful and entertaining, and I feel it will provide me with a better perspective of economics and how it relates to the rest of society. Even today's brief talk about the costs and benefits university education and the historic roll of public universities was very engaging and provided me some new insight. I look forward to the rest of the semester.

[Niki Desai SID: xxxxxxxx]

Being a senior who is about to graduate in May, I found the discussion regarding today's unemployment rate noteworthy. However, the most interesting topic covered had to be the relationship between education and the economy. As students of a public university, our education rests on the support of the state. Each resident of California invests their money in us as students, which does happen at private universities. As a result, our resources are often limited. I think that this relationship between our education and the fact that it has a direct correlation to the economy is interesting.

[Allan Woodworth]

Attended the lecture today. I Thought the info on why Stanford has so much money was interesting and appreciated the dismal prediction regarding the job market for us graduating seniors.

[Jennifer Chen]

Hello Professor Delong,

What caught my attention the most in lecture today was when you said that the students of the University of California owe it to state taxpayers, who contribute to our education, to work hard in college and use our knowledge to do good for the public.

Looking forward to this class,
Jennifer