Professor Rae uses the Merck-Vioxx business case to highlight political elements of U.S. capitalism, including government regulatory agencies, federalism, lobbying, regulatory capture, tort law and liability, and patent law. Professor Rae discusses the importance and influence of concentrated business interests in Washington DC. The Merck legal battles underline how important political and judicial details are in the operation of capitalism. The case also shows the constraints that reform-minded politicians face in attempting to change the status quo.

Reading assignment:
Case: "Merck and Vioxx" Yale School of Management Case 08-016 (2008).

1. Exploding Worlds and Course Introduction
2. Thomas Malthus and Inevitable Poverty
3. Counting the Fingers of Adam Smith's Invisible Hand
4. Karl Marx, Joseph Schumpeter, and an Economic System Incapable of Coming to Rest
5. Property, Freedom, and the Essential Job of Government
6. Rise of the Joint Stock Corporation
7. Can You Sell a Scheme for Operating on Beating Hearts andMake a Business of It?
8. Mortal Life Cycle of a Great Technology
9. Guest Lecture by Jim Alexander: Managing the Crooked E
10. Guest Lecture by Richard Medley: Entrepreneurship in Business Information
11. Guest Lecture by Will Goetzmann: Institutions and Incentives in Mortgages and Mortgage-Backed Securities
12. Accountability and Greed in Investment Banking
13. The Mortgage Meltdown in Cleveland
14. The Political and Judicial Elements of American Capitalism
15. Mass Affluence Comes to the Western World
16. Braudel's Bell Jar
17. The Case of Mister Balram Halwai
18. Microfinance in South India
19. Plight of the Bottom Billion
20. Policy Targets for Capitalist Development
21. Guest Lecture by Paolo Zanonni, Part I
22. Guest Lecture by Paolo Zanonni, Part II
23. Marrying the Devil in Texas
24. Capitalist Enterprise and Clean Water for a Bolivian City

In this course, we will seek to interpret capitalism using ideas from biological evolution: firms pursuing varied strategies and facing extinction when those strategies fail are analogous to organisms struggling for survival in nature. For this reason, it is less concerned with ultimate judgment of capitalism than with the ways it can be shaped to fit our more specific objectives – for the natural environment, public health, alleviation of poverty, and development of human potential in every child. Each book we read will be explicitly or implicitly an argument about good and bad consequences of capitalism.

Course Structure:
This Yale College course, taught on campus twice per week for 50 minutes, was videotaped for Open Yale Courses in Fall 2009.