PAPM 1000 Study Guide - Winter 2018, Comprehensive Midterm Notes - Free Market, Economic Equilibrium, Political Economy
12 Oct 2018
School
Department
Course
Professor
PAPM 1000
MIDTERM EXAM
STUDY GUIDE
Fall 2018
Main notes
● Veblen’s analysis of capital accumulation: Rockefeller style wealth is not an accumulation of
good for society it is accumulation of power to increase gains. These types of businesses can do
much more harm to society than capitalist theory might suggest. (Prof applied these ideas to
pharmaceutical industry and depreciating health outcomes--> companies making more and more
products that do not benefit society but are marketed to reap profit)
● For pharmaceuticals demand is prescriptions and doctors don’t care about cost so it’s an ideal
market for capitalists--almost perfectly inelastic demand
● Outline for this lecture: methodological debates in economic thought, aristotle
● Economic thought evolves with society itself (time and place is relevant to theory)
● History of economic thought can be seen retrospectively (seeing which theories each philosopher
added to create the “truth”, or what is in microeconomics textbooks). Who contributed to what
● Contextual approach sees authors in their time/place. Talks about what problems the author was
originally approaching, not so much their legacy. (ex. Adam Smith arguing against mercantilism
and colonial economics)
● Materialist approach looks at the motivation and interest of authors to propose/analyze why they
are arguing what they are. Common in marxist analysis (although not exclusive)
● Athens, IVth Century BC. 399 BC Socrates on trial. He is condemned to kill himself.
● In the aftermath, Plato writes The Republic and writes about his ideal state (abstract rationalism).
His republic has philosopher kings (rulers), guardians, commoners
● Aristotle (384-322 BC) says Plato’s pure system exists in the supralunar world (world of gods,
outside of human reach). Instead he takes a more naturalistic/imperialist approach that comes
from real life, and develops theory instead of applying abstract theory to real life (rationalism)
● Nature--> key word for Aristotle. We need to observe the nature of things, natural laws, how the
world actually is. This nature is determined by their purpose (teleos). All action has a final cause.
● Purpose of living is to find good life--> virtue, wisdom, philia (care/love for others that is not
based in self interest)
● Root of ‘economics’ is (ancient Greek) Oikonomia: (1) management of household, husbandry, (2)
regulation/plan/administration, (3) arrangement, market, fair, (4) scheming
● Chrematistics: (Thales of Miletus) the art of getting rich. Q: How is this related to
economics/oikonomia?
● Emergence of coin money allows for accumulation of wealth (remember Locke?) which creates
the illusion that maximizing wealth will lead to the good life. Wealth is the means to a good life
(some wealth) but not the end.
● Measuring wellbeing of a nation by GDP is chrematistic analysis
● Use value (what you can do with something) vs Exchange value (what something is worth in
relation to other things). How do we compare two unlike things and come up with an exchange
value? Aristotle says it is based on social need. If X is needed 4 times as much as Y, X’s
exchange value is 4Y.
● Nomisma: money in ancient Greece
● Questions: Aristotle’s definition of:
○ The state
○ Economy
○ Accumulation
find more resources at oneclass.com
find more resources at oneclass.com
○ What does it mean for the economy to live in a world focused on economic growth?
Course notes
● Include papm 1000 in subject of emails to prof
● Two 25% essays, 40% exam, 10% tutorial
● this course will focus on five specific elements:
1. How do different economic theories define the concept of property and social justice?
2. What is value and how do we measure it?
3. How is the concept of capital defined and articulated in different economic theories?
4. How is the economic surplus distributed? (wage, profits and interests).
5. Are markets efficient?
Margin notes
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Veblen"s analysis of capital accumulation: rockefeller style wealth is not an accumulation of good for society it is accumulation of power to increase gains. For pharmaceuticals demand is prescriptions and doctors don"t care about cost so it"s an ideal market for capitalists--almost perfectly inelastic demand. Outline for this lecture: methodological debates in economic thought, aristotle. Economic thought evolves with society itself (time and place is relevant to theory) History of economic thought can be seen retrospectively (seeing which theories each philosopher added to create the truth , or what is in microeconomics textbooks). Contextual approach sees authors in their time/place. Talks about what problems the author was originally approaching, not so much their legacy. (ex. Adam smith arguing against mercantilism and colonial economics) Materialist approach looks at the motivation and interest of authors to propose/analyze why they are arguing what they are. In the aftermath, plato writes the republic and writes about his ideal state (abstract rationalism).
