Contemporary Issues in Economic Justice
J.D. Course 141
| 3 credit hours
This course will provide an introduction to the social justice critique of free markets. Our efforts will be guided by economic and social theory, as well as financial regulatory policy. We will establish a foundation for this critique through an introduction to classic economic theories beginning with the theories of human motivation found in Adam Smith and continuing through modern economists including Becker and Friedman.
After the foundation of traditional rationales for free markets has been established, the course will proceed through a series of social justice problems for which the answers of the classic theorists have proved unsatisfactory. We will take up the puzzle of persistent empirical evidence of race and gender discrimination, notwithstanding economic theories that posit the elimination of discrimination by the market itself.
In the fall 2009 semester, the course was concerned with the subprime mortgage crisis and the governmental response to repair the damage done to both the financial sector and the broader economy by the rapid declines in housing values. Each year, this course will feature an important example of a problem that requires careful analysis of the different paradigms of neoclassical economic theories about the operation of markets and the social justice critique of economic reasoning. During the fall 2009 semester an in depth exploration was taken of the current global financial crisis and its origins in the regulatory response to risky innovation in the models for origination, distribution and financing of home mortgages in the United States.
The subprime financial crisis will provide an unparalleled contemporary laboratory for testing alternative economic theories for predicting the economic behavior of actors in a variety of markets. We will investigate and analyze the viability of established economic theories for financial and consumer regulation. We will discuss whether the descriptive and normative models of neoclassical economics failed during the current crisis. Alan Greenspan, a former Chairman of the Federal Reserve, responded to a Congressional Investigation of his role in the collapse of financial markets with the admission that his worldview of economic behavior was “flawed”. Greenspan went on to note that: “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief.”
What do these admissions of ideological failure mean as we seek to shape a recovery from the crisis? What are the alternative paradigms available to reconstruct the U.S. financial regulatory system? Are any of these theories sufficiently advanced to serve as models for implementing reforms?
We will examine the attributes of home mortgage origination markets, public and private policies that supported expansion of the market for homeownership, and the racial and ethnic characteristics of borrowers who were sold high priced home loan products. We will also examine the relationship of legal rules to the distribution of housing wealth.
The course will emphasize the race, gender and other identity variables that work to create and preserve economic inequality. A central exploration of the course will be the problem of race and gender discrimination in the home mortgage lending market and the governmental response to that longstanding economic and social problem. We will make use of a range of materials taken from sociology, economic argument, political theory, constitutional discourse and the critical legal theories of race, gender and social class.
During the semester, I will be incorporating news sources, congressional hearings, and outside speakers, as our schedule permits. This will require your flexibility in working with our reading assignments. Although our assigned texts will provide the conceptual foundation for our work this semester, we will also take advantage of our location in Washington, D.C. to integrate relevant parts of the vast array of reports from think tanks, congressional committees, regulatory agencies, and news organizations.
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|This course is not currently scheduled.