PECN 6000: Are Capitalism and Democracy Consistent

PECN 6000

Finally … Are Capitalism & Democracy Consistent

Professor: Douglas Nelson

Office: Tilton 308

Office Hours: Tuesday and Thursday, 3:30-5:30

email: dnelson@tulane.edu

Webpage: https://nelson.wp.tulane.edu/

The history of capitalism, at least industrial capitalism, until the New Deal was a history of recessions, “panics” and depressions. These were not popular with the average citizen but, until the emergence of democratic political systems, this did not pose a serious problem for the liberal political economies that broadly characterized these national systems. However, with the emergence of democratic political systems, the consistency of capitalism and democracy became a matter of considerable concern. With the New Deal, that concern essentially disappeared (replaced by other concerns). Since the 2007/08 financial crisis and the attendant “great recession”, and the COVID pandemic, this concern has returned. It is to this question that we address ourselves in this seminar. We start by developing the basic concepts: democracy; capitalism; civil society; and state; and the relationship between those concepts in modern, capitatist democracies. We then look at broad attempts to understand the consistency before and during the New Deal. The remainder of the course will take up a number of key issues in the contemporary political economy of capitalist democracy.

Readings:

Wolf, Martin (2023). The Crisis of Democratic Capitalism. New York: Penguin Press.

Milkis, Sidney M. and Scott C. Miller (2025). Can Democracy and Capitalism Be Reconciled? New York, NY: Oxford University Press.

Acemoglu, Daron (2026). What Happened to Liberal Democracy?: Remaking a Politics of Shared Prosperity. New York, NY: Dutton.

Muirhead, Russell and Nancy L. Rosenblum (2024). Ungoverning: The Attack on the Administrative State and the Politics of Chaos. Princeton, New Jersey ; Oxford: Princeton University Press.

Galston, William A. (2018). Anti-Pluralism: The Populist Threat to Liberal Democracy. New Haven: Yale University Press.

Rodrik, Dani (2011). The Globalization Paradox: Democracy and the Future of the World Economy. New York: W. W. Norton & Co.

Boix, Carles (2019). Democratic Capitalism at the Crossroads : Technological Change and the Future of Politics. Princeton: Princeton University Press.

 

There are many readings and all required readings (marked with “■”), that are not books, will be available linked from this syllabus or on Canvas. Optional readings are marked with “▫”. There are far more readings (even required readings) than we can read for most weeks. Thus, before each week, I will limit the readings to 3 or 4 articles. The others are there should the topic be of interest (and to remind me of things I need to read).

Capstone courses. This course is a senior seminar for the Murphy Institute. 1) Prerequisites. In addition to the exposure to a broad range of perspectives in the Murphy core courses, I will presume familiarity with microeconomics at the intermediate level (i.e. Economics 3010) and a level of familiarity (and comfort) with formal and statistical analysis at the same level. 2) Participation. This course will be run as a seminar which means attendance and active participation are mandatory. I will expect all members of the seminar to have read, and be prepared to discuss, all the assigned readings before the date on which we discuss them. The analytical comments (see below) are an aid to this.

Evaluation: Your performance in this course will be evaluated on the basis of weekly reaction papers (worth 100 points), and one research paper (worth 100 points). To receive an A, you must earn at least 90 percent of the points available. To pass the course you must earn at least 60 percent of the points available. Grades between these limits will be determined on the basis of your performance relative to that of the class as a whole.

Policy on analytical comments. Each analytical comment will be marked on a 100 point basis, but the final analytical comments marks will be the average of your individual analytical comment marks. The analytical comments are written assignments consisting of two parts: a comment on the assigned reading for the week (90 of 100 points); and 5 questions raised by the assigned reading for the week (10 of 100 points). The comment should be about 3 double-spaced pages long. Do not waste time summarizing the reading. The goal is to identify some aspect of the reading that strikes you as particularly interesting and to explain why you find it interesting. The questions should identify things you would like to see discussed in class. The comments are due on, or before, the start of the class in which the material is discussed. Late comments will not be accepted. I will drop the two lowest analytical comment scores.

Research papers. Every member of the seminar is required to produce a research paper on some aspect of the current political economy (broadly related to the subject matter of the course). These papers must be original work, plagiarism will not be tolerated. Broadly speaking, I expect papers in the 25-35 page range. To ensure that topics are well-established and suitable for the course, I require a proposal due no later than the fifth meeting of the course (21 September). Late proposals will result in a 10 point penalty to be assessed on the paper’s final score. Research papers are due at the last regular meeting of the course (30 November). Late papers will not be accepted, and will earn a score of 0 points.

            These papers must be original work, plagiarism will not be tolerated. This includes: unattributed appropriation of someone else’s work; and excessive use (whether or not attributed) of a secondary source [including, in particular, any of the above survey articles.] If you are unclear as to what constitutes plagiarism, consult the Tulane University Honor Code on plagiarism.

            On references: You must provide your references in the APA/Chicago Author-Date format.  That is, inline you provide a reference like (Jones, 1965, pg. 23) and a reference list at the end.  If you fail to provide page numbers, I will treat that as “no reference”.  I expect your references to be appropriate to an academic paper (i.e. no encyclopedia, Wikipedia, etc. references).  I reserve the right to require an oral paper defense.

 

SACS-Related Material

I am aware that Tulane students are able to read a standard university syllabus and determine the content of the course and its relation to the major and the individual student’s course of study. However, the administration of Tulane University, along with the Southern Association of Colleges and Schools (SACS–which “accredits” primary and secondary schools as well as all varieties of 2 and 4 year undergraduate programs [with very little in the way of adjustment in rubrics, metrics, etc.]), has determined that you require additional information. I collect this material in a separate section so that you can refer to it, or discard it, as you consider appropriate.

STUDENT OBJECTIVES/OUTCOMES: By the end of the course, the student should be able to think, speak, and write fluently and competently about the ideas and issues covered in the course (as reflected in the course description and the syllabus). The student should have a solid understanding of the social, political, economic, and philosophical significance of ideas and concepts in the analysis of social networks and they should be familiar with major ideas and theories regarding explanations, interpretations, applications, and criticisms of work on social networks. The student should be able to formulate critical views concerning these issues and respond fluently and competently to questions concerning these views.

1. Students will be able to identify and recognize major themes, ideas, and concepts.

2. Students will analyze, interpret, and discuss these ideas in a scholarly and coherent manner.

3. Students will construct, formulate, and develop creative and critical scholarly assessments.

4. Students will appraise, evaluate, and appreciate the values and consequences of these ideas.

“Tulane University recognizes the inherent dignity of all individuals and promotes respect for all people. As “One Wave,” Tulane is committed to providing an environment free of all forms of discrimination based on race, ethnicity, creed, religion, gender, gender identity and sexual orientation, as well as all forms of sexual harassment, including sexual assault, domestic and dating violence, and stalking. If you (or someone you know) has experienced or experiences discrimination, domestic violence, sexual assault or sexual harassment, know that you are not alone. Resources and support are available.  Learn more at onewave.tulane.edu.  Any and all of your communications on these matters will be treated as either “Strictly Confidential” or “Mostly Confidential” as explained in the chart below.”

 

 PECN 6000                                    SYLLABUS                                        Fall 2026

 

I. Defining Capitalism & Democracy as a System

A. What is Capitalism?

▪ Braudel (1979). “Capital, Capitalism, Capitalism”. Civilization and Capitalism, 15th-18th Century, Vol. II: The Wheels of Commerce. New York: Harper & Row, pp. 232-249.

▪ Schumpeter (1942/1975). Chapter VI & VII from Capitalism, Socialism, and Democracy. New York: Harper & Row, pp. 72-86 (pp. 63-75 in the linked version).

▪ Collins (1980). “Weber’s Last Theory of Capitalism: A Systematization.” American Sociological Review, V.45-#6, 925-42.

▫ Kocka (2016). Capitalism: A Short History. Princeton: Princeton University Press.

B. What is Democracy?

▪ Schumpeter (1942/1975). from Capitalism, Socialism, and Democracy. New York: Harper & Row, pp. 243-283 (218-251 in the linked version).

▪ Przeworski (1999). “A Minimalist Conception of Democracy,” in I. Shapiro and C. Hacker-Cordón eds, Democracy’s Value. Cambridge, UK: Cambridge University Press, 23-55.

▪ Dahl (1998). “What Political Institutions Does Large-Scale Democracy Require”. Chapter 8 in On Democracy. New Haven: Yale University Press, pp. 83-99.

▫ Collier, Hidalgo and Maciuceanu (2006). “Essentially Contested Concepts: Debates and Applications.” Journal of Political Ideologies, V.11-#3, 211-46.

▫ Breuer (1998). “The Concept of Democracy in Weber’s Political Sociology,” in R. Schroeder ed Max Weber, Democracy and Modernization. New York, NY: St. Martins Press, 1-13.

C. General Political Economic Structure

▪ Mann (1993). “Economic and Ideological Power Relations”. The Sources of Social Power. Volume II: The Rise of Classes and Nation States, 1760-1914. Cambridge: Cambridge University Press, pp. 23-43.

▪ Bowles and Carlin (2026). “The Governance Triangle: Economic Interactions in Civil Society, the State, and the Market.” Annual Review of Economics, pp. 49-79.

▫ Habermas (1975). Legitimation Crisis. Boston: Beacon Press, pp. 33-94.

D. Civil Society as an Essential Element in the Analysis

▪ Kocka (2006). “Civil Society in Historical Perspective,” in J. Keane ed Civil Society: Berlin Perspectives. New York: Berghahn Books, 37-50.

▪ Calhoun (2011). “Civil Society and the Public Sphere,” in M. Edwards ed The Oxford Handbook of Civil Society. Oxford, UK: Oxford University Press, 311-23.

▫ Habermas (1975). Legitimation Crisis. Boston: Beacon Press, pp. 1-31.

E. Relative Autonomy & Democratic Legitimacy of the Capitalist State

▪ Mann (1993). A Theory of the Modern State”. The Sources of Social Power. Volume II: The Rise of Classes and Nation States, 1760-1914. Cambridge: Cambridge University Press, pp. 44-91.

▪ Rueschemeyer, Stephens and Stephens (1992).”Introduction: The Problem of Capitalist Development & Democracy”. Capitalist Development and Democracy. Chicago: University of Chicago Press, pp. 1-11.

▫ Habermas (1975). Legitimation Crisis. Boston: Beacon Press, pp. 95-143.

II. Are Capitalism & Democracy Consistent: General Arguments

A. Classic Positions on Consistency

▪ Schumpeter (1942/1975). “The Civilization of Capitalism”. Chapter 11 from Capitalism, Socialism, and Democracy. New York: Harper & Row, pp. 121-130 (107-115 in the linked version) .

▪ Wolf (2023). Chapters 2 & 3 in The Crisis of Democratic Capitalism. New York: Penguin Press, pp. 13-78.

B. Classic Positions on Inconsistency

▪ Schumpeter (1942/1975). Chapters 12-14 from Capitalism, Socialism, and Democracy. New York: Harper & Row, pp 131-163 (116-146 in the linked version).

▪ Polanyi, Karl (1944/2001). The Great Transformation: The Political and Economic Origins of Our Time. Boston, MA: Beacon Press.

▪ Wolf, Martin (2023). Chapters 4 & 5 in The Crisis of Democratic Capitalism. New York: Penguin Press, pp. 83-174.

 III. Contemporary Accounts of Tension between Capitalism & Democracy

A. The General Problem

▪ Milkis and Miller (2025). Can Democracy and Capitalism Be Reconciled? New York, NY: Oxford University Press.

▪ Acemoglu, Daron (2026). What Happened to Liberal Democracy?: Remaking a Politics of Shared Prosperity. New York, NY: Dutton.

B. Globalization & Technological Change

▪ Rodrik, Dani (2011). The Globalization Paradox: Democracy and the Future of the World Economy. New York: W. W. Norton & Co.

▪ Boix, Carles (2019). Democratic Capitalism at the Crossroads: Technological Change and the Future of Politics. Princeton: Princeton University Press.

▫ Krueger, Anne O. (2020). International Trade: What Everyone Needs to Know. New York, NY: Oxford University Press.

▫ Baldwin, Richard E. (2016). The Great Convergence: Information Technology and the New Globalization. Cambridge, Massachusetts: The Belknap Press of Harvard University Press.

▫ Acemoglu, Daron and Simon Johnson (2024). Power and Progress : Our Thousand-Year Struggle over Technology and Prosperity. New York: Public Affairs.

▫ Frey, Carl Benedikt (2019). The Technology Trap: Capital, Labor, and Power in the Age of Automation. Princeton, NJ: Princeton University Press.

C. Liberalism v. Populism

▪ Galston, William A. (2018). Anti-Pluralism: The Populist Threat to Liberal Democracy. New Haven: Yale University Press.

▪ Wolf (2023). “The Perils of Populism”, Chapter 6 in The Crisis of Democratic Capitalism. New York: Penguin Press, pp.175-214.

▫ Rosanvallon, Pierre (2021). The Populist Century: History, Theory, Critique. Cambridge, UK: Medford, MA: Polity.

D. Elites, Experts and Democratic Capitalism

▪ Muirhead, Russell and Nancy L. Rosenblum (2024). Ungoverning: The Attack on the Administrative State and the Politics of Chaos. Princeton, New Jersey ; Oxford: Princeton University Press.

▫ Tucker, Paul M. W. (2018). Unelected Power: The Quest for Legitimacy in Central Banking and the Regulatory State. Princeton: Princeton University Press.

▫ Mashaw, Jerry L. (2018). Reasoned Administration and Democratic Legitimacy : How Administrative Law Supports Democratic Government. New York: Cambridge University Press.

▫ Brown, Mark B. (2009). Science in Democracy: Expertise, Institutions, and Representation. Cambridge, Mass.: MIT Press.

▫ Oreskes, Naomi (2019). Why Trust Science? Princeton: Princeton University Press.

 IV. Key Issues for Discussion

A. Embedded Liberalism & Stabilization of a Capitalist Democracy

▪ Keynesianism and Macro Stabilization

▪ Regulation and Micro Stabilization

▪ Redistribution and Political Economic Stabilization

B. On Market Failures

▪ Capitalism and Instability

▪ Capitalism and Inequality

C. On Civil Society Failures

▪ Communitarian critique of liberalism & “Bowling Alone”

▪ Polarization & “Bad Civil Society”

D. On State Failure

▪ Keynesian Guardrails & Their Problems (Barro et al on inflation)

▪ Experts, Elites and Democratic Legitimacy