Exam 1
Contemporary Political Economy
Universe of Essay Questions
The following questions cover the assigned readings, films and classroom discussion through the first four weeks. Specifically, J.B. Foster's Introduction in Marx's Ecology, Richard Wolff's Capitalism Hits the Fan (pp ix-98), Nomi Prins It Takes a Pillage (Intro. & chs 1-4), Mathew Stewart The Management Myth (pp 1-60) and the films, Manufactured Landscapes and The Take. We didn't discuss Stewart's book in class and so there will be only a few questions from that text. However, this class is not based on lectures but on a conversation between people who have all read (and seen) the same material and therefore thought about a common set of ideas, events and characterizations of the economic landscape. Here is your opportunity to demonstrate what you have understood and synthesized about these authors' writings and arguments. Your essays will be evaluated on how accurately you recall the authors' arguments and the soundness of your response to those arguments. Mischaracterizations or simple misreading of meaning will be noted. These are provocative readings which can raise questions about the purpose of one's college experience. The design of the course was purposely intended to expose students to ideas they may have never entertained. As someone important once said, "Let all the flowers bloom together, let the differing schools of thought contend". Indeed.
1. Wolff writes about the government's role from the Great Depression of the 1930s through the transformation of that role beginning in the middle of the 1970s. Provide specific details about the policies of the Federal government in affecting the economic conditions from the 1930s to the present and discuss the change that Wolff describes took place since the mid-1970s. There are three parts to this essay: First, what particular economic policies were implemented; second, what were the economic conditions they were meant to address and third, what political and social forces attended those policy choices?
2. Wolff states that the wages of workers have been stagnant since the 1970s. The economy, however, has managed to survive without a serious crisis until recently. First, discuss the contours (i.e. specific statistics and facts) and the causes of the wage stagnation, then explain how the American economy has been able to avoid a serious collapse and lastly, why the solution (the fix that addressed the growing inequality in incomes) has been the cause of the current crisis.
3. According to Wolff and the filmmakers of The Take, what is the nature of the economic crisis we face and what is the solution to that crisis? Why does Wolff think that we are at a moment in history when the solution he professes is more possible to implement than at any time in the past? Evaluate his perspective and that of those who have undertaken that set of actions as presented in the film.
4. Wolff and Prins seem to agree on the motives of Paulson, Geithner, Summers and Bernanke in how they have managed the financial crisis. They differ in what ways the country could address (or could have addressed) the unfortunate ineffectiveness of financial policy implemented by these powerful authorities. Describe the contours of the financial crisis as discussed by both Wolff and Prins, the roles of these four horseman of the apocalypse (Paulson et al -- a few details as to who they are is sufficient) as they addressed the crisis, and provide a comparative evaluation of Wolff's and Prins' analysis of how things might have been different, i.e. how would they have likely done things differently.
5. How does Foster's discussion in Marx's Ecology about the relationship between thought and practice (the way we think about nature and how we organize our productive lives, and how we struggle with nature to gain our subsistence) relate to the meaning we can draw from the movie Manufactured Landscapes? Finally, is capitalism compatible with a sustainable relationship between humans and nature?
6. Prins discusses the broad outlines of the housing bubble, the legislation that affected the mortgage lending process, the forces that brought about the securitization of sub-prime mortgages, the reasons lenders didn't care about borrowers' credit-worthiness, the role of rating agencies and the insurance companies that finally underwrote the whole mess. In an essay, discuss how all this happened. Tie up as many threads of the story as you can so an intelligent reader can make sense of it. After all that, take a position on the question of whether it happened because responsible people were not doing their jobs, whether it was a crisis born of misguided ideology, or whether it arose from a deeply flawed economic system.
7. Both Prins and Wolff refer to Bush's "ownership society". Wolff argues that promoting homeownership was a conscious political strategy after WW II. How was this strategy supposed to work and how did homeowners' property value expectations and equity financing play a role in bringing the dreams of many Americans to an end? Prins brings up specific legislation that might have prevented the crisis or protected Americans in danger of losing their homes. What were these measures and why weren't they passed?
8. Support for social programs and democratic reform declined during the same period that the income distribution in the United States was growing more unequal. According to Wolff, what were the causes of the political realignment that allowed this seeming contradictory phenomena to occur?
9. On December 5, 2008 260 workers at Republic Windows and Doors in Chicago occupied their plant after Bank of America shut down a line of credit to the firm and the owners told the workers they would be closing the plant. The occupation of the plant stirred support across the country as the in-coming President, numerous senators and congresspersons, civil rights leader Jesse Jackson and activist Michael Moore hailed the workers' action. Over a year later and after a California firm purchased the plant to manufacture green window products only five of the workers have been rehired. Richard Wolff argues that without boards of directors comprising the collectivity of workers, bosses will "continue to run their enterprises undemocratically, will maintain economic inequalities, and will continue to generate economic crises..." Meanwhile in Argentina many more factories have been occupied and are being operated by their workers. Recalling the film The Take, and what you have read about the political and social forces in the U.S. what are the odds that workers in shuttered plants in the United States might take action like the workers in Argentina? In the context of your answer assess Wolff's claim -- without collective ownership we will continue to experience growing inequality and deeper economic crises.
10. Describe the economic process of expansion, recession, followed by another expansion, i.e. the business cycle as explained by Wolff. How are the seeds of expansion sown in the economic recession and the seeds of recession sown in the process of recovery and expansion? Wolff cites the example of GM as the archetype of employers who have contributed to this process and blocked efforts to achieve collective solutions to the transportation needs of Americans. Place the GM example in the long-term tendencies of the economic system to produce successive crises.
11. Mathew Stewart describes Frederick Winslow Taylor's principles of scientific management. Explain the Taylor story. What according to Stewart was the ultimate purpose of Taylor's system? In what sense is Stewart's assessment of Taylor in line with Wolff's description of capital-labor relations and in what sense does Stewart depart from Wolff's position?
12. Stewart, once a consultant himself, is very critical of the management consulting trade. What is the nature of his criticism? Even though he seems to consider Taylor to have been a fraud he provides a vivid example (and certainly not the only one) in the case of the Ford Motor Co. of a firm that carried out much of the objectives of the Taylor system. How was Henry Ford's production process and management style typical of Frederick Winslow Taylor's principles?
13. Scientific management was an assault on labor and an affront to capital according to Stewart. Explain both positions.
14. In the short clip of Bernie Madoff discussing the operation of the financial sector we are afforded the opportunity to hear directly from someone who committed outright fraud in bilking investors of billions of dollars in what was a Ponzi scheme. Recall Madoff's description of the regulatory system and, given what we have read in Prins', how the system really operated. Lastly, compare the scheme Madoff pulled off with the Troubled Asset Relief Program, in particular the role that the regulatory apparatus and self-interest has played in the government's solution to the financial crisis.