The purpose of this course is to help you learn to use economics (and other decision making principles) to come to better decisions about hard economic problems.
Whatever your business is, you face hard dilemmas. When you create a budget, for example, you have to reconcile dozens, or even hundreds of conflicting needs. Even when you face a seemingly minor problem- like how to cope with a shortage of parking space at your company's office building- the more you examine the problem the more you find complex dilemmas waiting for you. Your job in business is to find wise solutions to these sorts of large and small dilemmas. Our goal is to learn to do it better.
To do that, we'll study a large number of dilemmas in business and public life. For example, how do you decide on a budget when there are so many competing needs and groups involved? What can we do about overuse of company business expenses, African Elephants, the Long Island Expressway, and clean water? How can your industry develop if growth threatens to destroy the environment but failure to grow could destroy your business and the local economy? How do you decide whether to sue or settle? Whether to lay off workers? How do firms and governments cope with the hard dilemmas of economic life?
Inevitably, we'll find a lively debate about the validity and the assumptions of economics, a debate I'll be challenging you to think about. For example, what is a rain forest worth? What, exactly, is a 'cost'? A 'benefit'? Where does fairness fit in? Are there dangers in the economic approach? In the process, you'll learn to look at an economic problem from several perspectives and think critically about them. You'll discover complexities, false conflicts, useful tools and decision making traps. Most importantly, you'll develop your ability to think rigorously and creatively about dilemmas- a crucial skill for managing hard business problems in a complicated world.
I will assume that you are somewhat familiar with basic micro and macroeconomic concepts but you do not need advanced economics training. The course will not be quantitative; we will only use a few charts and graphs and we will use few if any equations. Mostly we will work with economic theory conceptually. I will also assume that you have not studied law before (though it's fine if you have).
I hope that you take from the course an ability to think more fully about legal and economic problems and the effects they have on your business and your community. As we'll see, using economics and other thinking tools together can give you fresh insights which you can use to contribute more wisely to the people you serve, which is the underlying purpose of the course.
Grading
35% Optional Midterm*
35% Final
5% Class participation
25% Optional Writing Assignments*
*You will have the option of waiving the midterm or waiving the writing assignments or doing both. If you waive the writing assignments, the midterm and the final will each be worth an additional 12% (i.e, 47% each) and I will ask you to answer several more questions on each. If you waive the midterm, the writing assignments and the final will each be worth an additional 17% (i.e., 37% for the writing assignments and 52% for the final, which will include a few additional questions). You must decide before the midterm by submitting a note to me in Class 6.
A Note About The Exams
My purpose for the exams is to make sure you understand broad themes and the use of specific analytical tools. To do that, the exams will generally consist of short answer and essay style questions, with few multiple choice or true false questions. These exams let me get out of your way so you can tell me what you've learned. Also, unlike a multiple choice test, they allow me to give you partial credit for a partially correct answer. As a result, students usually do better than they would on multiple choice exams.
A Note about Class Participation
Please do not feel you must speak a lot in class to satisfy the class participation requirement. I realize that not everyone is very verbal and that speaking a lot in class does not necessarily mean you are contributing a lot. I do expect you to attend each class. A significant portion of your grade for class participation will depend on your attendance. Please let me know if you expect to miss more than three of our 20 class sessions. I hope that you will be actively engaged in the discussion and that your questions and comments reflect this. Class participation most definitely includes question asking, which I encourage. 'Dumb' questions are quite welcome- often they're the best ones of all.
Notes On the Writing Assignments
You have a choice of doing any of the following three things: (1) One or Two Very Short Essays. Write one or two 3-5 page single-spaced essays about specific economic dilemmas in the manner and format I describe below; or
(2) One Term Project. Create a term project in the form of a paper (10-12 double spaced pages with standard margins and 12 point type), a video or presentation (25-40 minutes long with a written copy of talking points included) or other undertaking that looks at a significant economic problem in public or private life and a possible policy for addressing the problem from an economic perspective and at least one other perspective;* or
(3) Waive the Paper. Skip the writing assignment and let your grade be determined largely by your performance on the exams. Please note, though, that if you do waive the paper I will ask you several more questions on the exams.
How Do the Very Short Essays Work?
The very short essays will work like so: during the semester, I will ask you to suggest a specific economic dilemma in public or private life which you would like to write on. I suggest you pick a fun, timely topic which has been discussed in thoughtful publications such as The Economist, The New Yorker, or the Wall Street Journal. Once I have approved the topic, read one or two other detailed articles on the subject- preferably from different perspectives. (By "other perspective" I mean such things as social justice, ethical analysis, philosophy, politics, technology, integrative problem solving, etc.) Then write and submit an essay in 12 point type within four classes after I approve the topic. You may write one essay or a second if you want to improve your grade from I will only count the better of the two essays.
The grade on Very Short Papers will be based on the following formula: 20% writing or presentation (style, grammar, spelling, format, clarity), 10% research (use of published works, interviews, experiments, etc.) and 70% analysis (insight, accurate use of economic tools, critical thinking, organization).
The Very Short Paper(s) should be written in memo form like so:
To: Professor Freeman
From:
Date:
Re: [The specific economic dilemma]
Introduction. [Here, in your own words briefly summarize the specific facts and the law (if you've learned of any) for the dilemma based on your reading and note that a copy of one of the articles is attached as an appendix to your essay. Then tell me who are the key people or groups involved in the dilemma, what their respective interests are, and any other background insights you think are relevant based on your use of the I FORESAW IT mnemonic. (We will discuss I FORESAW IT in one of the early classes.)]
Economic Solution(s) [Here, propose at least one fairly specific solution to the dilemma that harnesses neoclassical economic ideas (such as the free markets using the price mechanism, incentives, private property rights, and so) and one fairly specific solution that relies on another economic approach (such as classical regulation, communal control, open access, etc.) You should be able to sketch each idea in a paragraph or two.
Creative Solution(s) [Here, briefly propose at least two other plausible solutions that might satisfy the main interests of the main parties to the dilemma other than strictly neoclassical or regulatory solutions. Look beyond the traditional debate for innovative solutions. You should be able to sketch these ideas in a paragraph or two.]
Pros and Cons [Here, select the solution you are most interested in and briefly discuss (1) two good arguments for the idea and (2) two good arguments against it. Think critically. Use both economic and noneconomic arguments in this section. (By "noneconomic arguments" I mean such things as arguments about social justice, ethical analysis, philosophy, politics, technology, integrative problem solving, etc.) To make your essay manageable you should not cite more than one or two sources. (I will, though, give a significant amount of extra credit if you test your idea with someone who has expertise on the subject.)]
Closing Thoughts [Here, state what your conclusion is- would you use the idea you have critically assessed if you were the decision maker? Then add any other thoughts you wish.]
Appendix [Here attach the first article you read on the subject.]
What Should the Term Project Be About? If you elect to do the project, it should demonstrate economic, creative, and critical thinking. You do not need to follow the format for the Very Small Papers, but you should consider similar ideas to the extent they are applicable. Some examples of good topics:
This is merely a list of examples. Your project should draw on a topic you are really interested in. Usually it's best to start with a narrow topic (e.g. the economics of the Troy, New York vagrancy law of 1978) and broaden it as needed. I suggest this because it's usually easier to broaden a topic than to narrow one and because a broad topic can leave you feeling overwhelmed, which will only discourage you. You should submit a project topic with a one paragraph description by Class 10. The project is due the last day of finals. If you create a video or a presentation, you should schedule a meeting time so I can review it with you on or before the last class.
The grade on the Term Project will be based on the following formula: 25% writing or presentation (style, grammar, spelling, format, clarity), 25% research (use of published works, interviews, experiments, etc.) and 50% analysis (insight, accurate use of economic tools, critical thinking, organization). You should seriously use at least five separate sources in your research; don't be content to simply read one work and comment on it. In citing these sources, you may use footnotes at the bottom of the page, endnotes at the back of the paper or any other formal or informal citation method as long as it's clear who said and thought what. One way is to refer in the text to a work like so: (Biko, 1996) and then at the end give a bibliography alphabetized by author.
If you are thinking about using the same project for two courses, please speak with me first. Please also let me know if you have prior experience or expertise on the topic you select.
Hopefully it's unnecessary to say the following: please don't plagiarize. By 'plagiarize' I mean claiming the ideas or words of another person as your own. If I suspect plagiarizing I will do all I can to find out. If I discover plagiarizing I will assign an F for the paper.
Handouts- You'll find handouts for the day's class in a stack on a desk near the door as you walk in. Please take one of each handout. (Please don't take anything from the Professor's desk.) If you wish to take an extra handout for an absent friend, just be sure to take it from the bottom of the stack. (Otherwise you may inadvertently throw off one of our in class simulations.) If you miss a class, you can pick up handouts for that class from me. To help us make the best use of our time, please only ask me for back copies after class.
Getting Assignments Between Classes- The syllabus lists when I'll hand out each assignment and when each is due. However, if you miss a class, you may miss the assignment itself. To make sure you know what you missed before it's due, please exchange your phone number(s) and E-mail addresses (if any) with at least two classmates before you leave class tonight. (I've created a phone sheet below for you to record them on.) You can, of course, contact me with any questions you have about announcements or assignments (or anything else, for that matter), but for basic information please check with your classmate first.
Web Page- This semester for the first time, I will be posting class outlines and other word-processed materials on my Web page for the course. These items will be available one week after the class. Since sometimes I also distribute articles which I can't post on the web yet, you should check the outline and check with a classmate to see if you need to get these articles separately.
Office Hours You can speak with me after any class. In addition, I hold office hours after class on Monday evening. Since my office upstairs is rather small, I am making arrangements to reserve an empty classroom where we can have more space and privacy; I'll announce the room number later. If you would like to schedule an appointment, simply call or E-mail me by early afternoon. Or you can let me know after class that you would like to meet and we'll work out a time. Office hours are a time to talk about things related to the course and other things you are grappling with.
When and How to Reach Me Outside of Class: Phone: You are welcome to call me with questions, comments and problems any time from 11:00 a.m. to 11:00 p.m. any day but Sunday. My phone number is (718) 575-8597. Please do not call me to tell me you'll miss class. E-Mail: You are also welcome to write to me by E-mail. My E-mail address is seth.freeman@gte.net. Please don't submit writing assignments via E-mail without my prior permission.
Trading Classmates' Names and Numbers. Before you leave class tonight, please get the names and numbers of at least two (2) classmates and keep them here for your reference:
Classmate's Name Telephone Numbers E-mail address
1.
2.
I. Thinking About Choices- Basic Principles of Economics and Other Decision Making Tools
| Class 1 (5/17) |
Introduction to the Course- Economy; Economic Thinking and the practice of Economy in a Complicated World No assignment |
| Class 2 (5/19) | The Budget Dilemma; Key Premises of Economic Thinking; 'Efficiency' and Fairness Manager as Decision Maker; Introduction; Chapter 1- readings on Microeconomics and its Critics (don't read passed the Wall Street Journal article) |
| Class 3 (5/24) |
Marginality; Budget Dilemma at DowPonto; I FORESAW IT and its applications to decision making. Chapter 1- rest of chapter (readings on Other Things to Consider When Making Decisions; The Principles Applied: A Budget Negotiation at DowPonto; I FORESAW IT: A Way to Learn To Think Broadly About Business Decisions) Pick up: the Parking Lot Problem assignment |
| Class 4 (5/27) |
How Do Creative Decision makers Find Better Ideas? Ideo and the Deep Dive Process; the Parking Lot Problem Debriefing Do The Parking Lot Problem Assignment and be prepared to discuss (not submit) your answers to it. (No class 5/31) |
| Class 5 (6/5) | Law, Legal Reasoning, and Critical Thinking; Introduction to the Legal System Manager as Decision Maker Chapter 2 |
| Class 6 (6/7) | Economics of Private and Common Ownership; The problem of Overusage and the Tragedy of the 'Commons' Manager as Decision Maker Chapter 3- An Economic Theory of Property; (skip the reading on the Coase Theorum for now), Resource Management Regimes |
| Class 7 (6/10) | What If My Use Hurts Your Stuff? Property and the Problem of Conflicting Use; Coase and others; the Economics of
Pollution and Ways to Control it Manager as Decision Maker Chapter 3- The Coase Theorum |
| Class 8 (6/14) | The African Elephant Problem; Implications for decision making generally Manager as Decision Maker Chapter 3- Materials on the African Elephant Problem in Manager as Decision Maker; be prepared to discuss (not submit) the African Elephant assignment |
| Class 9 (6/14) |
Regulating the Economy- Laissez Faire Market Economics and Market Failures; the Reasons for and Effects of Industrial Regulation Manager as Decision Maker Chapter 4- The Rise of the New Industrial Order, the Progressive Era, the Good Old
Days- They Were Terrible! |
| Class 9 (6/16) |
How Does the Government Control Business Decisions? Classical and Alternative Regulation Manager as Decision Maker Chapter 4- Regulation and Deregulation in the United States Pick up essay on how to prepare for the midterm |
| Class 10 (6/21) |
Should Body Parts be Salable? Free markets and their critics; Reprise of the Parking Lot problem- the political economy of a 'simple' economic problem Manager as Decision Maker Chapter 4- The Buying and Selling of Human Body parts If and only if you wish to do the paper, submit a paragraph describing your paper topic in class and stating
whether you also wish to take the midterm. If you do not submit this I will assume you are taking the midterm in
lieu of the paper. |
| Class 11 (6/23) |
Midterm No assignment Pick up readings for next class |
| Class 12 (6/28) |
Taylor, Coase, Peters, and the Organization of the modern firm Manager as Decision Maker Chapter 5- Introduction, Taylor-Made; also read materials distributed at the midterm Pick up additional readings for next class |
| Class 15 (6/30) |
Economics of Firms; Decision Rules; Economics of the Decision to Incorporate; Who Really Owns a Corporation? What is the Purpose of a Corporation? Manager as Decision Maker Chapter 5- Corporations, Selection of the Most Appropriate Business Form; Separation of Ownership and Control. Also read other readings distributed last class. Pick up readings for next class |
| No class 7/3 | |
| Class 16 (7/7) |
Economics of Corporations, continued Readings distributed last class Pick up readings for next class |
| Class 17 (7/12) |
Economics of Securities Markets and Regulation Readings distributed last class Pick up rules for Sue or Settle |
| Class 18 (7/14) | Psychological games; Sue or Settle; the Economics of Litigation and its alternatives Manager as Decision Maker Chapter 6; rules for Sue or Settle distributed last class. You may also want to begin reading Chapter 7. |
| Class 19 (7/19) |
Win As Much As You Can; The Trust Dilemma; Trust Substitutes and Trust Building and their application to Economic life Manager as Decision Maker Chapter 7 Pick up rules for Trust Substitute Jeopardy |
| Class 20 (7/22) |
Trust Substitute Jeopardy; thoughts about the final; Conclusion to the course Read the rules to Trust Substitute Jeopardy and be prepared to play Final Exam Wednesday, July 28 5:30 -7:30 room 3-60 |
Professor Freeman graduated in 1981 from Cornell University with a degree in Economics. His areas of practice as a lawyer included aircraft leveraged leases, initial public offerings, real estate finance, private placements, interest rate swaps, leveraged buyouts, and other mergers and acquisitions. He is also a trained mediator who has done volunteer, training, and board work for several non-profit organizations devoted to conflict management and reconciliation.
Professor Freeman also trains and consults with corporations such as UBS AG (formerly Swiss Bank Corporation) and Stew Leonard's on matters relating to negotiation.
A. The Beauty and Centrality of Economy in Human Affairs
1. Economy- Doing more with less with simple, powerfully effective, thoughtful choices
2. Learning to see the beauty and pervasiveness of economy in different fields
C. Economy and the manager's dilemma
D. Economy and the policy maker's dilemma
E. Dilbert and the absurdity of business
F. Peck on decision making and suffering
G. How do you make wise choices in a complicated world?
II. Economic Thinking- One Way to Deal with Complicated Choices
A. Simplifying assumptions about human nature
B. Powerful, counterintuitive, predictive
C. Example- Opportunity Cost
D. Using Opportunity Cost in Your Real Life
E. Are there Consequences Economics Ignores?
II. Exercise- The Budget Dilemma
III. The Ultimatum Game
V. Reprise of the Budget Dilemma
VI. The Problem of Competing Norms- Efficiency, Equity, Equality, Anchoring
VII. Implications for Regulating and Managing in a Complicated World
A. The hard work of thinking about complicated choices
B. The value of different approaches (economics, creativity, empathy and humanity, critical thinking)
C. The need to integrate different approaches
D. Goal of the course- developing the ability to think deeply, broadly, discerningly about problems