Market, Crises and Sustainability

Introduction

Market, crises and sustainability is about the history of economic theory. It introduces the most important economists and their theories in three parts: markets, crises and sustainability. In the first part which is about how markets functions, we study the foundation for market economies to work well, how actors behave and what the role of the state can and should be. We start with Adam Smith and the classical economists, and demonstrate their relevance for issues in the economy today, as well as modern economic theory. In the second part we discuss the causes of, course of, and consequences of economic crises. Is for instance war and pandemics the main causes of crises, or is it rather the capitalist economic system in itself that causes crises? In the third, and last part, we take on economic theories dealing with how to create a sustainable economy. Can we trust that market mechanisms is the best way, or do we need to push consumers and producers in a sustainable direction, or do we need state regulations in the form of command and prohibition?

Course content

This course is structured around three essay-assignments with deadlines throughout the semester: one about markets, one labour crises, and one about sustainability. Although these essays are thematically differentiated, they also follow a distinct chronology. The first essay on markets targets the classical economists, while the essay on crises highlight John Maynard Keynes and his criticism of how neoclassical economics understood crises, and the essay on sustainability scrutinize newer economic theory developed to give answers on how to create a sustainable economy. During the course period, you might face some of these economists:

1. Adam Smith. Invisible hand and the free market.
2. David Ricardo, Thomas Malthus, John Stuart Mill free trade, protectionism and economic development 
3. Leon Walras, Catl Menger, Stanley Jevons,  Alfred Marshal and Vilfredo Pareto: the neoclassical theory of perfect competition
4. Thorstein Veblen and and John K Galbraith. The critique of neoclassical theory
5. Joan Robinson and the theory of imperfect competition
6. John Maynard Keynes' theory on crises and unemployment. Paul Krugman and The New Keynesian theory
7. Karl Marx and Joseph Schumpeter's view of why crises occur.
8. Alfred Pigou, Roland Coase, William Nordhaus, and recent environmental and ecological economists.
9. Friedrich Hayek, Milton Friedman and neoliberalism
10. Joseph Stiglitz and George Akerlof. The consequence of the lack of information in the markets.
11. Robert Shiller and Hyman Minky.The cause of the financial crisis in 2008.
12. Daniel Kahneman. Bounded rationality.