FVP:VS24VP030 Economic Style of Thinking - Course Information

VS24VP030 Economic Style of Thinking

Extent and Intensity

26/0/0. 4 credit(s). Type of Completion: zk (examination).

Teacher(s)

doc. Ing. Pavel Tuleja, Ph.D. (lecturer)

Guaranteed by

doc. Ing. Pavel Tuleja, Ph.D.
Institute of Public Administration and Social Policy – Faculty of Public Policies in Opava
Contact Person: Ing. Lucie Wedlich Kamrádová, Ph.D.

Timetable

Tue 9:45–11:20 C208

Prerequisites

• Basic knowledge of economic theories: Students should have a basic overview of the main economic theories and trends covered in previous courses, especially in microeconomics and macroeconomics.
• Interest in the history and development of economic ideas: Students should be interested in understanding the historical context and development of economic theories from their origins to the present.
• Ability to think analytically: Students should be able to analyse different economic systems and schools of thought and apply this knowledge to contemporary economic issues.
• Knowledge of basic economic research methods: Students should understand basic economic research methods, including both quantitative and qualitative approaches.
• Text skills: Students should be able to read and analyse academic texts and literature, with an emphasis on the interpretation of historical and theoretical contexts.

Course Enrolment Limitations

The course is only offered to the students of the study fields the course is directly associated with.

fields of study / plans the course is directly associated with

• Social Politics in Public Administration (programme FVP, SPVS)

Course objectives

The Economic Way of Thinking introduces students to the development of economic thought from its origins to the present day. The course systematically develops the ability to critically analyse and interpret economic processes, market mechanisms, and the role of government in the economy. Students will gain a comprehensive overview of the major economic paradigms. Topics range from the classical political economy of Adam Smith and David Ricardo, through Marx's radical critique of capitalism, to the subjective theory of value of the neoclassical school. The course also covers the Keynesian macroeconomic revolution, the post-war social market order, Hayek's conception of the market, and Friedman's monetarism. Attention is also given to financial crises, platform capitalism, and the economic effects of artificial intelligence. Emphasis is placed on the distinctive features of economic development in the Czech lands, including Rašín's reform, the Baťa system, socialist planning and the post-1989 transformation debate. Economics is presented as a dynamic social science rather than as a set of rigid mathematical formulae. It examines real human behaviour in contrast to the abstract model of homo oeconomicus. Key themes include the role of institutions, moral hazard, information asymmetry, and the relationship between economics and power. On completion, students will understand how economic forces and technological turning points shaped history have, how they affect the present, and how they will shape the future.

Learning outcomes

• Understanding the development of economic paradigms and the behaviour of economic actors: Students will be able to define the main schools of thought from classical economics to neoliberalism and critically explain the theoretical concept of the rational actor (homo oeconomicus) in contrast to the reality of human behaviour.
• Identifying market failures and technological limits: Students will be able to distinguish between private and public goods, analyse the effects of externalities, and evaluate how monopoly power, asymmetric information, and digital platforms contribute to increasingly precarious work, as well as the effects of artificial intelligence on the labour market.
• Analysing the macroeconomic context and crises: Students will learn to interpret key aggregate indicators such as gross domestic product, inflation, and unemployment and use them to analyse the causes and course of cyclical economic crises in their macroeconomic context.
• Evaluating the role of government and the distinctive features of Czech economic development: Students will be able to assess the effects of government monetary, budgetary, and regulatory interventions and critically evaluate milestones in the development of the Czech lands, from the First Czechoslovak Republic through central planning to economic transformation and the middle-income trap.

Syllabus

• The invisible hand and the birth of the market order (the distant past to 1820): Capital, capitalists, and the emergence of capitalism. Mercantilism and protectionism (Colbertism). The Physiocrats and the idea of laissez-faire. Adam Smith: the division of labour and productivity. The invisible hand of the market and the price mechanism. Smith's warning against monopolies and the role of government. Classical political economy: a methodological shift. The theory of comparative advantage and international trade.
• Full steam ahead: the Industrial Revolution and the birth of industrial capitalism (1820–1865): A technological leap: the steam engine, coal, and the birth of the modern world. The transformation of work organisation: the emergence of factories, urbanisation, and the social realities of the working class. The business cycle: Say's law versus Sismondi's discovery of boom and bust. Money creation through the multiplier process and financial panics: fractional reserve banking. Early socialist alternatives: utopian socialism and the cooperative movement.
• Theories of value and capital: Karl Marx and a radical critique of the system (mid-19th century): The historical and intellectual roots of scientific socialism. The labour theory of value: adopting and transforming the classical legacy. The theory of surplus value and the mechanism of exploitation. Capital accumulation and the internal contradictions of the capitalist system. The alienation of labour in the industrial system and historical materialism.
• The age of corporations, monopolies and financial power (1865–1914): The Second Industrial Revolution and economies of scale. The birth of the modern corporation and the separation of ownership and control. The rise of monopolies, cartels, and financial structures. Social Darwinism, the Gilded Age, and workers' struggles. Progressive reforms: antitrust laws and the establishment of the Federal Reserve System.
• The marginalist revolution and neoclassical economics: the mathematisation of the market (late 19th century): A methodological turning point: from political economy to pure economic science. Marginal utility theory and subjective theory of value (W. S. Jevons and C. Menger). Léon Walras and the mathematical model of general equilibrium. Alfred Marshall: the synthesis of supply and demand and Marshall's warning. Perfect competition, market structures, and the homo oeconomicus model. Related neoclassical concepts: elasticity, marginal costs,, opportunity costs and Pareto efficiency.
• When the world collapsed: the war economy and the Great Depression (1914–1939): The First World War and the emergence of the wartime command economy. Postwar trauma: reparations and German hyperinflation. The Roaring Twenties and the emergence of a speculative bubble. Black Thursday and the descent into the Great Depression. Roosevelt's New Deal and new industrial rules. The Keynesian revolution: a theoretical rejection of classical orthodoxy.
• The Keynesian revolution: macroeconomics and a new role for government in the economy (the 1930s–1945): The collapse of classical orthodoxy and the birth of macroeconomics. Aggregate demand and price and wage rigidities. The Keynesian multiplier and deficit financing. The Neoclassical Synthesis and Paul Samuelson. The emergence of macroeconomic statistics: Simon Kuznets and GDP. Comparison of theoretical approaches.
• The postwar order and the golden age of capitalism (1945–1966): The Bretton Woods Conference and a new global financial order. The Marshall Plan and overcoming the post-war debt trap. The emergence of the European welfare state and the social market economy. The post-war golden age, long-term growth, and the liberal consensus. Development economics: the big push theory. Comparison of theoretical approaches and economic reality.
• The era of limits: oil shocks, stagflation, and the crisis of Keynesianism (1966–1980): The Vietnam War, the Great Society, and the collapse of Bretton Woods. Oil shocks, supply-side inflation, and the emergence of stagflation. Debates over the nature of the market: neoclassical models versus the reality of market power (Galbraith, Robinson, Chamberlin). Prophets of freedom: Friedrich Hayek and the market as a complex brain. Milton Friedman, monetarism and limits on government intervention. Japan's industrial miracle and the American deficit.
• The revolt of the rich, financial deregulation, and neoliberal globalisation (1980–2001): Reaganomics, Thatcherism, and supply-side economics. Clintonomics, budget surpluses, and stagnant real wages. Financial deregulation, the dot-com bubble, and corporate scandals. The fall of communism, the collapse of planned economies, and Russian shock therapy. Neoliberal globalisation, the Washington Consensus, and the establishment of the WTO. Comparison of regulatory frameworks: the New Deal versus the neoliberal model.
• The global financial crisis and the Great Recession (2001–2011): The response to 11 September and Greenspan's cheap-money policy. Property bubble and financial engineering (CDOs and CDSs). The collapse of Lehman Brothers and the freezing of the global financial system. The Troubled Asset Relief Programme, bank bailouts, and the socialisation of losses. The euro area debt crisis (Greece, Ireland, Spain).
• From the Great Recession to digital capitalism and polycrisis (2011 to the present): Extraordinary central bank measures: the era of quantitative easing and negative interest rates. Platform capitalism and digital monopolies. The economic effects of the COVID-19 pandemic and global lockdowns. The energy crisis, rising inflation, and deglobalisation. Climate change as a failure of the market and the economic effects of AI.
• Distinctive features of economic development in Czech lands (from Austria-Hungary to the present): The Czech lands as the industrial heartland of the monarchy and the economic success of the First Czechoslovak Republic. The transition to a centrally planned economy and Kornai's theory of shortage. The post-1989 transformation debate: shock therapy versus institutionalism. The course and mechanism of voucher privatisation. EU accession, integration with Germany, and the current middle-income trap.

Literature

required literature
• ACEMOGLU, D. a P. RESTREPO. Tasks, Automation, and the Rise in U.S. Wage Inequality. Econometrica, 2022, roč. 90, č. 5, s. 1973–2016. ISSN 0012-9682.
• ARTETA, C. a kol. Negative Interest Rate Policies: Sources and Implications. Washington, D.C.: World Bank Group, 2016. World Bank Policy Research Working Paper No. 7791.
• BAUER, B. Vyjádření Bernarda Bauera k novému rekordu česko-německého obchodu v roce 2025. Praha: Česko-německá obchodní a průmyslová komora (ČNOPK), 2026.
• BAŽANTOVÁ, I. (ed.). Alois Rašín: český politik, právník a národohospodář. Praha: Karolinum, 2003. ISBN: 80-86547-21-3.
• CEPS. NIRP, Bank Profitability and Risk-Taking: Much Ado About 50 Basis Points. Brussels: European Parliament, 2021. PE 662.919.
• DORLING KINDERLAY LIMITED Kniha ekonomie. Praha: Knižní klub, 2014. ISBN: 976-80-242-4476-3.
• GOODWIN, M. Ekonomix. Jak funguje (a nefunguje) ekonomika. Praha: Paseka, 2014. ISBN 978-80-7432-492-5.
• KLAUS, V. a kol. Kupónová privatizace: Sborník textů. Praha: Centrum pro ekonomiku a politiku, 2002. ISBN 80-86547-15-X
• KORNAI, J. Economics of Shortage. Amsterdam: North-Holland, 1980. ISBN 978-0444860590.
• PRŮCHA, V. A KOL. Hospodářské a sociální dějiny Československa 1918-1992: I. díl období 1918-1945. Brno, 2004. ISBN 80-7239-147-X. info
• PRŮCHA, V. a kol. Hospodářské a sociální dějiny Československa 1918-1992: 2. díl. Období 1945 - 1992. Brno, vydavatelství Doplněk, 2009. ISBN 978-80-7239-228-5. info
• SRNICEK, N. Platform Capitalism. Cambridge: Polity Press, 2017. ISBN 978-1-5095-0487-9.
• STERN, N. The Economics of Climate Change: The Stern Review. Cambridge: Cambridge University Press, 2007. ISBN 978-0-521-70080-1.
• SVAZ PRŮMYSLU A DOPRAVY ČR. Česko v roce 2029: vize hospodářské politiky Svazu průmyslu. Praha: SP ČR, 2026.
• ŠVEJNAR, J. Strategie ekonomické přeměny. Praha: Lidové noviny, 1990. ISBN 80-7106-008-9.
• TOOZE, A. Shutdown: How Covid Shook the World's Economy. New York: Viking, 2021. ISBN 978-0-593-29755-1.

recommended literature
• HOLMAN, R. Ekonomie. Praha: C. H. Beck, 2005. ISBN 80-7179-681-6. info
• TULEJA, P., MAJEROVÁ, I., NEZVAL, P. Základy makroekonomie. Brno: Computer Press, 2012. ISBN 978-80-265-0007-0. info
• TULEJA, P., NEZVAL, P., MAJEROVÁ, I. Základy mikroekonomie. Praha: CP Books, 2011. ISBN 978-80-251-3577-8. info

Teaching methods

• Interactive lectures with discussion: Theoretical explanations of key economic concepts, from Smith's invisible hand to Srnicek's platform capitalism, will be systematically linked to their historical context. Lectures will be supplemented by discussions of current issues such as the economic effects of artificial intelligence, the energy crisis, and the middle-income trap in the Czech Republic.
• Working with accessible and visual materials: Conceptual diagrams and graphics will be used as a key means of visualising complex economic processes. Students will actively work with models including the Marshallian supply-and-demand diagram, the Laffer curve, the money multiplier, the securitisation pyramid (CDOs), and Kornai's model of the shortage economy.
• Analysis of historical and textual sources: Students will be encouraged to engage actively with and critically interpret, key texts by major economic thinkers. Attention will be given to passages from the works of Adam Smith (the division of labour and the role of government), Karl Marx (alienation and surplus value), J. M. Keynes (the liquidity trap), F. A. Hayek (the price mechanism), Milton Friedman (monetarism) and János Kornai (the soft budget constraint).
• Case studies and crisis analysis: Students will analyse specific historical events and institutional failures, applying theoretical knowledge to real data. Cases will include the Wall Street crash of 1929, the savings and loan crisis of the 1980s, Enron's accounting fraud, the collapse of Lehman Brothers in 2008, and voucher privatisation and the banking crisis in the Czech Republic.
• Independent semester projects: Each student will write an academic essay or analytical paper on a selected topic in the history of economic thought or economic history or analyse a contemporary issue. Example topics include increasingly precarious work in the gig economy, Baťa's organisational system, climate change as the greatest market failure, and the Czechia 2029 vision for transforming Czech industry.
• Group debates and presentations: Moderated team discussions in which students will defend different theoretical and institutional approaches to economic problems. The debates will focus particularly on Keynesian demand stimulus versus neoclassical supply-side economics during a recession, or Klaus's shock-therapy approach to transformation versus the institutionalism of Švejnar and Vrba.

Assessment methods

The course is completed by an examination test, which the student takes within the IS SU system. To pass the test successfully, the student must write the test to at least 60%, i.e. 18 out of 30 points.

Language of instruction

Czech

Teacher's information

All necessary information is available in the Interactive Course Syllabus.

Further comments (probably available only in Czech)

The course can also be completed outside the examination period.

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