Assignment: Write a short essay (approximately 2,000 to 2,500 words) answering one of the following questions:
1. When economists try to persuade other economists of the validity of their arguments they often employ “counterfactuals”. A counterfactual is a comparison case or example where all factors influencing an outcome remain the same except one factor that is of particular interest to the economist. In this sense, a counterfactual is the analog to a “control group” in an experimental setting which economists rely on because we generally don’t have access to experimental data. The differences in outcomes between the case of interest and the counterfactual can help us to infer the relationship between the factor that is not held constant between the two cases and the outcome. Thomas Malthus uses the United States as a counterfactual at two points in the readings discussed in class. Please explain in detail:
a. Malthus’s use of the United States as a counterfactual in his essay on population. How was the United States different from Europe? How was it the same? What outcome was Malthus interested in explaining and how did he justify his arguments using the United States as a counterfactual?, and
b. Malthus’s use of the United States as a counterfactual in his discussion of economic crises in his Principles of Political Economy. How was the United States different from Great Britain? How was it the same? What outcome was Malthus interested in explaining and how did he justify his arguments using the United States as a counterfactual?
Be sure to use quotes from Thomas Malthus in a well-written and properly cited presentation of your arguments.
2. David Ricardo takes formal modeling of the economy a step farther than either Adam Smith or Thomas Malthus and lays a foundation for formal economic theory that will last at least until the 1870s. A critical component of any economic model is a theory of the determination of factor prices, and therefore the distribution of national income. Please explain in detail:
a. Ricardo’s theory of the determinants of wage rates. How is this similar to or different from the theories of Adam Smith and Thomas Malthus on the subject?
b. Ricardo’s theory of the determinants of profits.
c. Ricardo’s theory on the determinants of rent. The rent of landlords is the least important factor income for modern economists. We don’t even consider it in our models! Yet Ricardo’s theory of rent is considered to be one of his most important contributions. Why?
Be sure to use quotes from David Ricardo in a well-written and properly cited presentation of your arguments. Quotes from Adam Smith and Thomas Malthus are not strictly necessary but they would certainly be appropriate to include as well.
3. We discussed on the second day of class that Thomas Jefferson was personally acquainted with many of the Physiocrats (such as Turgot), and that he shared important social biases with Adam Smith. Jefferson also read Malthus with great interest, and maintained a correspondence with Jean Baptiste Say in France. In 1804, Jefferson wrote to Say about his thoughts on Malthus’s theory of population. Please read the letter (in the Content folder on Blackboard), and write a response to Jefferson, from the perspective of Malthus (as if Say had [with Jefferson’s permission, of course] shared the contents of the letter). Please address:
a. A basic restatement of Malthus’s theory of population.
b. Where you think Malthus would agree with Jefferson’s analysis and where he would disagree.
c. A discussion of the portions of the essay on population (the sixth edition is fine to cite, even though it came out after Jefferson’s letter) that are relevant to Jefferson’s arguments.
Be sure to use quotes from Thomas Jefferson and Thomas Malthus in a well-written and properly cited presentation of your arguments.