History of Economics Class notes
History of Economics Class notes Eco 323T
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This 5 page Class Notes was uploaded by Cameron Vine on Tuesday February 2, 2016. The Class Notes belongs to Eco 323T at University of Texas at Austin taught by Patrick Van Horn in Winter 2016. Since its upload, it has received 42 views. For similar materials see in Economcs at University of Texas at Austin.
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Date Created: 02/02/16
History of economics Wealth, Expansion, and Removal 02/03/2016 ▯ Wealth, Expansion, and Removal ▯ ▯ Review of productivity Growth What was the main driving force behind the economic growth of the British colonies? o Better system of property rights What institutional developments were crucial? How did this compare with those of the Spanish colonies? ▯ Important Dates to Remember th July 4 , 1776 Declaration of Independence April 1775 Revolutionary war 1777 Articles of confederation 1787 Constitutional convention ▯ ▯ The Constitution Replaced the articles of confederation o Free-rider problems o Need for more clarification regarding rights Strengthened the states ‘ “reserved rights” o Local rules, laws, and ordinances that included licensing, inspection, and regulating local commerce o Common law o Constitution grants states rights, anything not stated was assumed to be granted to the states Powers given to Congress o Federal Taxation o Borrowing for govt o Regulate international trade o Create money o Patents and copyrights o Crimes on high seas o Declare war o Martial law o Provide for militia o Govern the militia o Sovereign power over federal govts installations o Make laws to carry out all of the above The Constitution o The Atlantic slave trade would continue for 20 years The practice of slavery would be allowed to continue Dred scott decision on this matter later leads to civil war o “…nor shall private property be taken for public use without just compensation.” o In Other words, the constitution provided the continuation of property rights that the colonies developed over time ▯ Economic Development Followed o Preserved states’ rights in commerce and sovereighty o Secured property rights o Calculable law o Lawmakers and judges used the constitution for maintaining orderly growth and development of the economy Commerce, contracts, reserved rights, and due process Land Settlement of 1783 o After the revolutionary war, Britain ceded land to the United States o New land ranged from Wisconsin to Mississippi and as far west as the Mississippi River o New land brought a new dilemma: Who owned the new land? How would it be settled? The new land policy would determine future economic growth and who would ultimately benefit from that growth Northwest Ordinance of 1785 o Provided a one-time source of revenue through land sale. No further payments to governments once sold o Modern survey system to be used, cut out future disputes over property boundaries o Land tracts of all sizes meant affordability for pioneers as well as the wealthy o Set aside land for schools, government buildings, and other public facilities ▯ Northwest Ordinance of 1787 o Set up the political structure for the new territories o First organized as a district with a governor and judges appointed by congress o Once population reaches 5,000 an elected legislature would handle local matters. A non- voting delegation would go to D.C. to lobby o Once population reaches 60,000 the territory became a state and had full representation in Congress o The benefit of reaching statehood was local choice in representation. Governors and judges were appointed at the federal level Economic Institutions and the Ordinances o After only ten years that Britain cedede Rationale for Indian Removal o Jackson based the idea of removal on efficiency and land use o Claimed that thinning game herds and the inability of the Cherokee to farm meant future perils for their quality of life o Moving the Cherokee to land where game was plentiful would enable them higher standard of living o Opening their land to more advanced farmers meant more output and growth Early Cherokee Institutions o Early settlements were scattered and several languages were spoken o Clan System of ownership o Communal farming and local chiefs o Subsistence farming and some hunting/ fishing meant no surplus o No surplus meant no trade Changes in Cherokee institutions o Moved towards commodity trading and incorporated slavery into agricultural production o George Washington provided training for agricultural methods o Tribes to be organized under a system of governors that meant a centralization of political structure Results of these changes o New political structure meant written laws, formal guidelines on property rights o Settled on one formal language Made communication and trade easier amongst tribes Leads to the development of written articles that are spread to make farming more efficient Were the Cherokee really Inferior? o Given that the main reason for removal was efficiency and the ability to support themselves, the actual production of the Cherokee is an important issue to study o The Cherokee Census 1835 Household level data Agricultural data for corn and wheat on number of acres farmed, bushels raised and sold, bushels purchased Physical capital data on number of houses, mills, and boats Human capital data on skills and literacy rates in English and Cherokee Recall Arguments on Removal o Supporters of removal claimed that the Cherokee had made no improvements to the land, were not adopting more efficient farming methods o Opponents said that they were getting better Estimating the Efficiency of the Cherokee o Calculate the amount of food needed for subsistence o If the production of wheat and corn was close to this amount, then the total production was more than enough to live on Census results and jacksons claims o High levels of corn output o Many households produced goods other than farm products o Levels of human/physical capital were high o Idle land owned mainly by elderly Cherokee o Establishment of an elite class of Cherokee who owned farms and slaves meant there was a surplus Results o Overall, results suggest that the Cherokees were more advanced that suggest and that they were more than able to produce enough goods and food to survive ▯ Early success in the U.S. o While the articles focus on the later time period than we are at now, what implications does it have for the current era under study? Innovation Technology Property Rights? o ▯ ▯
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