Essay Prompts
1. Instead of specialists devoted to narrow tasks like cutting wire, the modern economy appears to reward generalists able to adapt their skills to a variety of tasks. Should we temper Smith’s enthusiasm for division of labor when considering the modern economy?
2. We now have computing technologies far more powerful than anything Hayek could not have envisioned. How should we evaluate his arguments about the feasibility of economic planning in light of these developments?
3. Clark observed that following large disasters in history, the next generation was especially well-off in material terms, creating temporary periods of wealth. Could our modern prosperity, while much larger, also be a historical aberration soon to end?
4. T.S. Eliot writes in Murder in the Cathedral, “The last temptation is the greatest treason / To do the right thing for the wrong reason.” Are there examples where this is true? Could a thorough-going deontologist or consequentialist make such a claim?
5. Perfect competition – the basis for the First Welfare Theorem of economics – relies on several assumptions. With one or two of these conditions in mind, to what extent do they describe the modern economy, or perhaps parts of it?
6. Sometimes innovation and new technologies may alleviate existing externalities or other create new externalities. Which effect dominates? For focus, discuss a specific industry (transportation, entertainment, agriculture, healthcare, etc.).
7. A public good is non-rivalrous and non-excludable. To what extent is entrepreneurship a public good? Would Cowen or Freidman agree with you?
8. A prosperous society requires widespread cooperation and coordination. Does this problem better reflect a Prisoner’s dilemma or a stag hunt? What are the implications of your view?
Sample Thesis Statements
Prompt 1
Smith’s enthusiasm should be tempered because the modern economy rewards generalists that are able to adapt to different jobs while maintaining some specialization.
Division of labor has helped economies across the world grow in the past, but economies are changing and our ideas should change with them.
Smith is right about the economy today as well because specialized skills are most valued by employers.
Prompt 2
Hayek’s antiquated beliefs regarding the unlikelihood of economic planning fail to account for technological developments which make data collection and aggregation practical today.
Although computing efficiency has increased, there is also more information to collect and Hayek’s arguments apply as forcefully today as ever.
Hayek’s argument is invalid because technology has advanced at a rate faster than humans and should be in charge of them.
Prompt 3
History repeats itself and this time will be the same; our current prosperity will soon cycle back to poverty.
We have overcome the Malthusian Trap for good by innovating faster and faster.
Our modern prosperity will end quite soon due to overpopulation and the ensuing collapse of natural resources.
Prompt 4
A deontologist would contemn the actor for bad intentions though a consequentialist would applaud.
Eliot’s quote encapsulates the view that morality trumps outcome.
Consequentialists will argue that the ends justify the means and strongly disagree with the position implied by the quotation.
Prompt 5
The modern economy accurately reflects price-taking behavior and free entry and exit of businesses.
Transaction costs continue to rise in the modern economy so that perfect competition is a poor model.
Products today are too diverse to be described by the homogeneity perfect competition assumes so that the Welfare Theorem fails.
Prompt 6
In transportation, the advent of cars imposed new externalities, tipping the balance toward more problems.
Agriculture now produces more food with spillover benefits for culture and human flourishing.
Clean energy has the potential to eliminate externalities without creating new ones.
Prompt 7
Everyone benefits from the work of entrepreneurs and so, like other public goods, it is underproduced.
Too many individuals selfishly pursue entrepreneurship for status and wealth, take unwarranted risks, and impose negative externalities on society as a whole.
Entrepreneurs capture the value that they create, so it is not a public good.
Prompt 8
A prosperous society reflects a stag hunt because cooperation is sustainable.
People in fact cooperate successfully, evidence that prosperity is more like a stag hunt than an intractable prisoner’s dilemma.
The underlying problem is correctly thought of as a prisoner’s dilemma because individuals always have an incentive to cheat and break their agreements.
